Category: Business Law Blog

Key Benefits of Outsourced General Counsel

Put simply, Outsourced General Counsel is an extension of your team. Like an in-house general counsel, an outsourced general counsel is a business’ chief lawyer or legal advisor. And other than the fact they don’t typically work ON the premises of your business, an outsourced general counsel really owns the same duties and responsibilities of an in-house counsel. Those duties and responsibilities include (but are not limited to) the identification and oversight of all legal issues across the company and its various departments, as well as the provision of key advice to the business’ key decision-maker

This proactive approach to the law solves business’ needs  by providing a cost-effective solution. It’s a way to have an experience closer to the in-house model while also getting a broader knowledge base.

Some of the key reasons to consider outsourcing your general counsel include:

  • Fixed Budget and No Surprise Legal Bills – your business’ legal budget for next year does not need to be a guess. When outsourcing your general counsel, you know, with certainty, what you will spend next year on legal services.
  • Responsive Service – Your outsourced general counsel will become an integral part of your team. Fr example, contracts can be reviewed before signed, HR questions can be discussed, and HR policies would always be up to date in one flat rate.
  • Proactive Risk Management – Imagine having your attorney on speed dial, for answers to issues before they become problems. Imagine being proactive rather than reactive. Being proactive ultimately saves time and money.

Typically clients who utilize these services develop a close relationship with one attorney but have access to all attorneys in the firm to handle specialized needs. The close relationship ensures priority service and the backing of the firm ensures broader expertise.

An outsourced general counsel will protect your company and ensure your business is staying on the right side of the law.

If you have questions or would like to learn more, you can contact us here. 

 

About the Author

Attorney Kevin Eismann

Kevin Eismann

Kevin is the founding partner at Epiphany Law, LLC. He enjoys building comprehensive strategies with his clients that allow them to reach their personal and business goals. Kevin has been providing business owners practical, cost effective solutions since for over 20 years.

 

Reasons to Outsource Your General Counsel

Put simply, Outsourced General Counsel is an extension of your team. Like an in-house general counsel, an outsourced general counsel is a business’ chief lawyer or legal advisor. And other than the fact they don’t typically work ON the premises of your business, an outsourced general counsel really owns the same duties and responsibilities of an in-house counsel. Those duties and responsibilities include (but are not limited to) the identification and oversight of all legal issues across the company and its various departments, as well as the provision of key advice to the business’ key decision-maker

Outsourced general counsel services solves business’ needs  by providing a cost-effective solution way to have an experience closer to the in-house model while also getting a broader knowledge base.

Some of the key reasons to consider outsourcing your general counsel include:

  • Fixed Budget and No Surprise Legal Bills – your business’ legal budget for next year does not need to be a guess. When outsourcing your general counsel, you know, with certainty, what you will spend next year on legal services.
  • Responsive Service – Your outsourced general counsel will become an integral part of your team. Fr example, contracts can be reviewed before signed, HR questions can be discussed, and HR policies would always be up to date in one flat rate.
  • Proactive Risk Management – Imagine having your attorney on speed dial, for answers to issues before they become problems. Imagine being proactive rather than reactive. Being proactive ultimately saves time and money.

Typically clients who utilize Epiphany Law’s outsourced general counsel services develop a close relationship with one attorney but have access to all attorneys in the firm to handle specialized needs. The close relationship ensures priority service and the backing of the firm ensures broader expertise.

An outsourced general counsel will protect your company and ensure your business is staying on the right side of the law.

Epiphany Law Welcomes Attorney Robert Macklin

Appleton, WI – Epiphany Law, LLC, is pleased to announce that Attorney Robert Macklin has joined the firm. The addition of Robert Macklin is due to the firm’s ongoing growth and commitment to provide valuable service offerings to its clients.

Rob brings over 20 years of experience advising clients of all sizes, both domestic and international on complex business matters. Serving as General Counsel to several successful private and public companies, in industries including manufacturing, medical, telecommunications, healthcare and consumer goods has given Rob knowledge on what a business needs to be successful. In addition, Rob took time from his legal career to serve with the US Navy as Part of Operation Iraqi freedom, running intelligence operations for SEAL Team 8.

Epiphany Law’s founder, Kevin Eismann said, “The volume and complexity of our transactional work continues to grow. Our clients can benefit tremendously from the vast business experience that Rob brings to the team.”

As an experienced lawyer, small business owner and Department of Defense certified interrogator, Rob’s diverse skill set can help business owners mitigate risks and promote business success. More specifically, Rob focuses on the areas of proactive law, commercial contracting, mergers and acquisitions, compliance and investigations, business processes, strategic governance and capital formation, and international law.

 

Attorney Robert Macklin

 

Rob earned his J.D. from the one of the top law schools in the country, the University of Chicago Law School and his undergraduate from UCLA. To learn more about how Rob’s expertise can benefit your business, please contact us.

5 Tips to Avoid Business Litigation

In business, lawsuits aren’t uncommon. Many successful executives and business owners will face a lawsuit at some point in their careers.  While you may not always be able to avoid litigation, there are steps you can (and should) take to best protect your interests when disputes arise.

1 – Improving Communication is Key to Avoiding Business Litigation 

If you want to avoid disputes with clients, employees and competitors, good communication is essential. You should always take time to clarify expectations and make a habit of doing the following.

  • Never over promise.
  • Keep the promises that you make. However, if you cannot keep your promise for some reason, let the person know. Offer a plan on how you will resolve the issue and make it right. Call first and then be sure to follow up with an email detailing whatever agreement was reached.
  • Be proactive. Don’t avoid difficult situations or conversations. Avoidance is more likely to cause the problem to escalate.
  • Evaluate how your tone may be perceived. And remember that email can make it difficult to effectively convey your desired tone.
  • Don’t be afraid to swallow your pride. Doing so could help you resolve an issue before it becomes a legal matter.
  • Evaluate and enforce best practices regarding how your employees should communicate.

2 – Make Documentation a Priority

To help protect yourself and your business, take time to document important communications and commitments. The following suggestions are some best practice tips for keeping up with appropriate documentation.

  • Keep all your emails organized in a good filing system.
  • Don’t do handshake deals this includes both business and personal agreements.
  • Avoid using templates you find via Google search to create your agreements/contracts. Each state has different legal aspects and you don’t know if the templates are accurate or current.
  • Be sure to have key contracts, including vendor agreements, reviewed by counsel, in order to help you understand the relevant provisions. It is also best to hire legal counsel for, at a minimum, reviewing and/or drafting of custom deal contracts, settlement agreements, employee handbooks, document retention policies, sexual harassment policies, and non-compete agreements.
  • Save what is important, such as contracts, loan documents, key documents underlying contracts and relevant negotiations, proof of payment, calendars, and tax information.

Important note – If you are anticipating business litigation, you must implement a litigation hold (also known as a preservation order or hold order).  Once you know of the existence of a dispute or even a potential dispute, hold onto all information so that nothing gets deleted. The loss of relevant evidence because of failure to institute a litigation hold can result in negative sanctions against you by the Court in any related litigation.

3 – Review Your Insurance Policies

Insurance isn’t a popular topic of conversation, but it is an important aspect of risk mitigation. Review the following points to help ensure your business is accurately covered.

  • Make sure that all current policies are correct and appropriate for your organization.
  • Investigate your options with multiple brokers.
  • Determine if the insurance company you are working with focuses on your niche business needs. Are they industry-specific to you?
  • Understand your potential need for multiple types of policies, including general commercial liability, errors and omissions, auto, property, workers comp, product liability, and other riders/endorsements.
  • Understand the obligations you owe to your insurance company, such as notice requirements, providing documents and cooperating fully in any investigation. Be sure not to settle with the other side without first getting your insurance company involved.

4 – Review Your Business Formation

Occasionally, business owners are surprised to learn their business structure is not appropriate to their type of work. To help minimize liability, you will want to engage counsel to help determine the appropriate corporate entity for your business. You will also want to keep corporate records, annual reports, and minutes if your business formation requires it. Make sure to follow all the formalities in order to ensure protection from personal liability. This step is key in avoiding business litigation.

5 – Work with the Right People

This is easily the most important tip on the entire list. The best way to protect yourself and your business is to make sure you are surrounding yourself with the right people. As the great Albert Einstein once said, “A clever person solves a problem. A wise person avoids it.”

To learn more about business litigation and how you can proactively protect your business, visit https://epiphanylaw.com/practice-areas/litigation/ or call us at 920-996-000.

 

About the Author

Heather J Macklin, Business Litigation Attorney

Heather J. Macklin

For nearly 20 years, Heather has focused her practice on complex commercial litigation. She has represented clients from a broad spectrum of industries, including financial institutions, luxury good retailers, real estate developers and small, closely held corporations. Contact Heather here. 

Avoiding the Top 7 Landmines in M&A

If you’re a baby boomer and you’re a business owner, chances are you’re starting to think about selling your business. So many unknowns surround the sale process, but one thing is for certain–you will want to be confident about whatever decision you make.  Confidence starts with knowledge of the sale process and an understanding of how costly shortcuts can be. You only have one chance to sell your business and there are no do-overs. What follows is a brief summary to help you learn–and avoid–the top seven landmines we see in Mergers and Acquisitions (M&A) transactions.

Landmine #1 – Not appreciating the state of the Mergers and Acquisitions market.

The M&A cycle has large ups and large downs. This is out of your control. However, understanding the market allows you to be proactive and take the best course of action. Currently, the market is hot and buyers are overpaying for desired targets.  The M&A market won’t stay like this forever and the time to sell may very likely be now.

Landmine #2 – Not Understanding Business Valuations

Could a mother or father put a price tag on a child? For the owner, selling their business almost seems like a similar struggle. Owners have poured their blood, sweat and tears into building and running their company; making it difficult for them to be objective.  A Business Valuation, even a short form valuation, will help the owner get a true understanding of what value a buyer would attribute to the business.

Landmine # 3 – Not Understanding Net Value

Much time is spent negotiating the purchase price, but what should really matter to a seller is how much money they will put in their pocket at the end of the transaction.  The net value should always be computed on the front end. To avoid disappointment, you need to keep in mind how different the sales price can be from the net value. Just some examples of items that needed to be deducted from the sales price are as follows:

  • Transaction expenses (including broker, lawyer and accountant)
  • Equipment financing
  • Lines of credit
  • Working capital
  • Taxes (including depreciation and recapture)
  • Escrow
  • Seller Note

Landmine #4 – Not Understanding Risk Allocation

Warranties and representations are the promises the seller makes to the buyer as to the condition of the business. They tend to make up the bulk of the long purchase agreement that will be signed between the parties.   Common examples include:

  • Ownership of Intellectual Property
  • Proper Classification of Employees
  • Binding Contracts
  • Environmental Condition of Property

Another important aspect of risk allocation is indemnification.  Sellers must pay attention and heavily negotiate how much post-closing risk they will bear.  The seller and the buyer must negotiate complicated matters such as a cap on post-closing liability, how long representations and warranties will continue after closing, and if a deductible applies to minor claims that arise following closing.

Landmine #5 – Not Planning Ahead

The value of proactive planning cannot be overstated.  Identifying and fixing a problem before a buyer discovers it will have very real positive impact upon the value the buyer will pay and the amount of post-closing risk a seller will bear.  If you plan to sell your business in three years, the time to start planning is now.  (Somewhat) simple steps you can take to increase value include:

  • Increase EBITDA
  • Reduce working capital
  • Lock in key employees
  • Reduce long-term contractual obligations/buy-outs
  • Eliminate risks found in due diligence
  • Clean up financials
  • Ensure contacts are binding and assignable

Landmine #6 – Short cutting the process.

It is also essential to let an experienced advisor guide you through the sale process. Short-cutting the process can lead to leaving money on the table or blowing up the entire deal.

Landmine #7 – The Wrong Players

Understanding the nuances of the M&A world takes years of learning.  Buyers can identify an educated and committed Seller by the team they assemble around them.  Do not leave the sale of your most important and valuable asset to a general practitioner.  Having an experienced M&A attorney will translate into improved economic consequences, less risk, and a smooth closing.  A buyer’s counsel will spot an inexperienced advisor a mile away. And, they’ll negotiate accordingly.

If you are thinking of buying or selling a business, it’s important to be proactive. Advanced planning now will mean the difference between achieving your business goals or missing the opportunity. To learn more, you can email info@epiphanylaw.com or call us at 920-996-000.

 

About the Author – Kathryn M. Blom is an attorney with Epiphany Law. Her practice focuses on complex business law, contracts, exit planning, securities, mergers and acquisitions. She advises her clients on how to identify effective solutions and achieve their business goals.

There’s No Time Like the Present

Business Owners: There’s No Time Like the Present

I’ll figure it out when I’m ready to retire, which is the day after never …. That is the response we get from business owners when we ask how much their business is worth.

The wealth of nearly two-thirds (70%) of all small business owners is tied up in their business. For many of those individuals, the business becomes the personal retirement savings vehicle. Those individuals, however, could be driving blind. Without knowing the value of the business, how will they know when they can stop working or the lifestyle to expect in retirement?

Having the information needed to prepare adequately for retirement is just one of the many benefits to a business valuation. Here are several others:

  • Increase value. What is measured improves, and valuation is no different than establishing and overseeing a sales quota. A comprehensive business valuation will provide owners with a clear explanation of the value of the business along with evidence to support the result. It can tell an owner if efforts need refocusing, or … even better .. if the company is headed in the right direction. The data helps guide strategic decisions and business development plans and can even help an owner determine whether the right people are in place to support long-term goals.
  • Mergers, acquisitions or share-swaps. A business valuation facilitates a negotiation between entities entertaining a possible merger, acquisition or share-swap.
  • Dissolution of partnership or partial exit by an owner. When a business partnership goes bad or partners agree to part ways, the parties have to find a fair and equitable split of interests. Whether the weighting shares changes, one partner buys the other out, or the partnership gets dissolved, a business valuation will facilitate the process.
  • Business interests represent marital assets and could become part of an owner, partner, or shareholder’s divorce settlement. Both spouses may approach the settlement proceedings with independent business valuation reports, so historical valuations could provide valuable insights.
  • Tax strategies. A valuation report can lead to tax benefits an owner might not otherwise claim. A current valuation is also required for estate tax settlements, to calculate capital gains tax liabilities, and for income or property tax disputes.
  • Employee incentive programs. A company must disclose its value to employee to satisfy annual requirements for Employee Stock Ownership Plans.
  • Insurance planning. Nearly three-quarters (70%) of small businesses do not have adequate insurance coverage. When an owner doesn’t know the value of his/her business, it is challenging to determine how much insurance is needed. Also, if an owner is injured or wrongfully distracted from business, a historical valuation could help recover losses.

The real reason most business owners put off knowing the value of their business could have less to do with timing than an error in perception. Traditional business valuations involved an extensive, expensive, and seemingly invasive process. Thanks to innovative technology, however, those barriers no longer exist. An online valuation cost a fraction of what traditional business valuation specialists charge, and can be completed in minutes, not weeks.

While business owners are often stretched for time, when it comes to discovering how much the business is worth, there’s no time like the present.

Morning Business 60 – Estate Planning for the Business Owner

Our Mission at Epiphany law is to positively impact lives through education, empowerment, and an innovative approach to problem solving.  One of the ways we live our mission is to host meetings that allow business owners to share ideas, learn about various business topics, and share best practices relevant to business professionals. The goal of Morning Business 60 is to provide information to business owners which will assist them in running their business effectively and efficiently. It is free advice, networking, and includes a light breakfast and coffee all at no cost to you.

At  our December Morning Business 60 we will discuss estate planning for the business owner. Business law and estate planning are often viewed as separate and distinct. But for the owner of a closely held business, the two must, but often fail to, overlap. The best planning results from a team approach which efficiently combines both.

Empower yourself as a business owner and join Epiphany Law for Morning Business 60 – Estate Planning for the Business Owner on December 6, 2018 from 7:30 – 8:30 am at Epiphany Law in Appleton (2800 E. Enterprise Ave). Registration is required; contact Epiphany Law at 920-996-0000 or marketing@epiphanylaw.com to register or for more information.

ALERT: Payment Fraud Warning

fraud alert

It is no secret that schemes and scams designed to fraudulently separate you from your money abound.  Every day it seems we learn of new and creative ways criminals have devised to defraud innocent people. Sometimes the schemes are brand new, sometimes they are recycled.  Whether new or old, however, they can hurt the people who fall prey to them.

Recently, we have learned that banking institutions have seen increased activity surrounding a fraud scheme that has been around for a while.  You may be aware of this particular scheme, but we believe it can’t hurt to remind you to be vigilant and use best practices to protect yourself from fraud.

Here’s how the scheme plays out: You receive an email or regular mail from someone disguised as one of your current suppliers.  In the communication, the “supplier” informs you that they have recently changed their payment processes or their banking relationship and provides new wiring, ACH or other payment information to be used on all future orders.  The communication seems entirely legitimate, so you direct your accounting department to input the changes and your next payment is made accordingly.  Unfortunately, the criminals now have your money and it will be withdrawn from the account before you catch on and can get it back.

How you can protect yourself: ALWAYS double-check directly with your suppliers BEFORE you change any information in your company’s payment system.  Make a phone call directly to a trusted contact at your supplier to confirm whether the communication and new payment instructions are legitimate or not.  A phone call to a direct contact is better than email.  Email can be hacked and/or redirected.  A phone call will take only minutes but will provide you with significant protection.  It will also signal to your suppliers that you are vigilant and care about your relationship with them.

Long story short: Do NOT make any changes to how you pay your suppliers or vendors until you first confirm with them that the change of payment instruction is legitimate.

We’re Moving!!

We’ve outgrown our current  office and we are relocating on July 27, 2018 into a larger building with advanced technology just a few blocks from our existing location. The move will house our growing staff and will have the space to host seminars, workshops, and CLE classes for attorneys and advisors.

Our founder Kevin Eismann expressed, “I’m so proud of our team and the tremendous growth we’re experiencing.  I’m looking forward to the opportunities that lie ahead. The new building will accommodate our clients more effectively and will give us additional space to continue to host educational events.”

The new state of the art training center will regularly be used by our team to empower clients, advisors, and business owners.

Since the firm was founded in 2004, the team has grown to over 20 employees. The entire staff will make the move from our current 3600 square foot location at 4211 North Lightning Drive to the 8400 square foot location at 2800 East Enterprise Avenue.

A ribbon cutting ceremony and open house will be held August 15, 2018 from 4pm-6pm at 2800 East Enterprise Avenue, Appleton.  The ribbon cutting will be at 4:30pm. Everyone is invited to attend.

Exit Planning: Emotions Matter

“75% of owners who successfully exit their business ‘profoundly regret’ their decision to exit within 12 months of their retirement.” – Exit Planning Institute

Why do business owners so often regret their exit?

In reality, there can be any number of reasons for regret following such a monumental occasion. Of course, the most obvious source of regret applies to owners who make mistakes/oversights prior to an exit that negatively impact their financial well-being (they don’t get as much money as anticipated). It may surprise you to know, however, that just as frequently the main source of pain for the departing owner is purely non-financial.

At Epiphany, we seek to predict and eliminate mistakes that would otherwise result in “profound regret” for business owners. It’s a big part of what we do. We feel strongly that emotional preparedness in Exit Planning is JUST AS IMPORTANT as growing business value. Why?

Business owners who aren’t emotionally prepared for life after work end up sitting on a pile of money – miserable.

The following are common areas in which departing owners are emotionally unprepared for an exit:

Control issues. 

Many business owners have a difficult time delegating authority. Owner dependence is a major limiting factor when it comes to valuation of a business entity. Owner dependence refers to the amount of time an owner-operator must spend working in the business, as well as the unique knowledge, skills, and relationships the owner-operator has that are not documented, repeatable, and/or transferrable. An owner who is unwilling to begin relinquishing control will face a disappointing fate as they begin to navigate purchase offers.

Doing your planning in a vacuum. 

Departing business owners are notorious for wanting to handle their planning behind closed doors – and it makes sense. There are certain risks that can be avoided by using discretion with sensitive information. In this case, employee retention, supplier/customer relations, and market timing are all valid reasons to keep your intentions closely held.

At the same time, a plan is no plan at all when it is not communicated to the key stakeholders that it depends on. A classic example of this is the family business owner who assumes their kids are set to take over the family legacy, only to find out later that the kids want nothing to do with it. In this light, don’t be overly-paranoid about limiting information to everyone. People aren’t stupid; your suppliers, customers, and employees are probably wondering about your retirement already. Certain situations may lend themselves to being open and honest with many of these people; they may be extremely grateful for your honesty.

All in all, safe and open communication can prevent exit planning disaster. The conversations may not be easy, but then again, those things that are worth doing are rarely ever easy.

Not defining your purpose in life after work.

MANY people attach their self-worth to their work. Business owners are no different. If anything, they are more prone. The countless hours spent building, the struggles and sacrifices made, and the good times enjoyed are extremely difficult – nay, impossible – to say goodbye to. It’s who you are. Saying goodbye to who you are is a daunting task at any stage of life. It’s a task that should not be taken lightly.

Business owners who don’t take the time to understand and accept the loss of identity are very likely to experience a stage of depression after selling their business. Only after the owner has accepted a new reality can they begin to define a new purpose in life. Some will know immediately and some will take time to discover it, but all need to seek and discover a new purpose in order to truly experience a happy, healthy, and productive next stage of life.

“Business owners who aren’t emotionally prepared for life after work end up sitting on a pile of money – miserable.”

Not creating bucket list.

Nondescript ideas rarely come to fruition. As an example, the person who says “I’ll travel more” is likely to end up sitting at home pondering the past. By contrast, the person who says, “I want to see the Grand Canyon with my grandchildren in 4 years; at that time, the youngest will be able to remember the trip and I’ll still have the energy to do it!” will experience a much happier retirement. Whether or not they achieve those activities is irrelevant. The victory is in the thought, planning, and excitement to do something more in life.

Creating a bucket list is a fun way of kicking off your retirement. It can help you build excitement for the next chapter of your life. Further, it is something that should be referenced frequently in the future when you need to re-energize.

Not creating a detailed list of activities.

Similarly, you should take the time to think through the day-to-day activities that will get you through the “quieter” periods of life. What will you do on your typical Tuesday morning? If you are satisfied sipping coffee and watching day shows with your spouse, great! If you would rather be out to brunch with a group of friends, be intentional about organizing it and making it happen!

Not involving the spouse.

We are huge advocates for heavily involving your “better half” in this process. Why? 1) They know you better than anyone else – including, perhaps, yourself. 2) You will be spending a lot of time together in the next chapter of life. 3) They often help to keep things in perspective during what can be a complex and difficult process.

Ignoring your conscience.

It happens more often than people know – a business owner will feel some level of guilt related to their retirement, and promptly ignore it. Maybe it’s an employee that they made a promise to or a loyal supplier that they know will be in a bad spot after the sale. Whatever the feeling is, a common tendency is: ignore – proceed – regret. That is no way to begin your next chapter. We encourage you to listen to your own intuition in these matters and do what you can to make them right. You will be very glad that you did later.

Not defining key non-financial outcomes.

Business owners who do not engage in an exit planning process have a tendency to ignore or de-value outcomes that are not directly related to “cash in hand”. Frequently, these outcomes are only uncovered after the sale process has completed, becoming a substantial area of regret for the recently retired owner. Examples may include:

  • Protect / reward employees
  • Keep business in the community
  • Continue commitment to sponsorships / charities
  • Provide a job for a family member

You can learn more about Epiphany Law’s Exit Planning Services, and find a registration link to our FREE Exit Planning Webinars by clicking here.

If you have questions or comments, feel free to get in touch!