by eclewis | Nov 9, 2009 | Business News, Misc. Legal Tidbits, Random Thoughts
As individuals and families get ready for the holidays and parties that come with this time of year, it is important for business owners to do their own preparation. For most small businesses, December 31 isn’t just the time to pop the cork on the champagne bottle, but also time to make sure that the year-end business tasks are finalized and start preparations to have a great 2010.
Maintaining and finalizing the year-end books and records can be a tedious task for small business owners, but it is also one of the most important. As soon as the Christmas wrapping paper is thrown away, tax season begins. For companies that have employees or independent contractors, it is important to talk to your tax preparer to ensure that W2s and 1099s are mailed to those individuals by the IRS deadline. By having all payroll records organized, you can make things easier for your accountant and your wallet. For companies with or without employees or independent contractors, having organized books and records (including receipts, mileage logs, and entertainment logs) ensures that your accountant can correctly prepare the business return and, many times, prevents having to file for an extension.
The end of the year is also a good time to have your company records reviewed by an attorney. For companies that are set up as sole proprietorships, a good business attorney can help you decide whether setting up a corporation or LLC can provide legal or tax benefits that you may be missing out on. A review of client contracts, lease agreements, and other legal documents can ensure that they comply with any changes in the law that may have come up in the last year (or longer if its been a while since you’ve had a good review).
Many business owners write a business plan when they start up and never review it again. For businesses that slow down during the holidays, it may be the perfect time to dust off that old business plan sitting on your shelf. Review it to determine whether you are where you want to be and, if you aren’t, what you need to do to get there. For most businesses, this has been a tough year; however, that doesn’t mean that you can’t look forward to building your business next year. Reflecting on what marketing has worked and what hasn’t can help you brew up new ideas to use next year. Whether it is a Facebook fan page for your business or sending holiday cards to clients, a renewed sense of purpose will give you something to work on while waiting for business to pick up. For business owners struggling, the Small Business Development Center and SCORE can both be great ways to get free help with business planning.
As always, this article is for informational purposes only and does not contain legal or tax advice. Please consult with your attorney or accountant for legal or tax advice to ensure that you end this year on the best possible note – and have a great 2010!
by eclewis | Jan 2, 2009 | Business News, Misc. Legal Tidbits, Random Thoughts
The New Year is the perfect time to start thinking about your legal resolutions for the year. Just like individuals make resolutions to get in shape, stop smoking, or reach new goals, business owners should make resolutions about their financial, marketing, or legal goals for the year. Setting goals can help your business succeed regardless of the economic times we are living in.
Legally, you should consider making goals that will help you both increase your profit and decrease you liability. The following are just some of the goals you may want to consider. If you are currently operating as a sole proprietor, you may want to consider incorporating or forming and LLC to receive legal and tax advantages. If you are currently using a tradename, trademark, or other intellectual property that is not currently registered or copyrighted then it may be time to ensure the property steps are taken to protect your rights. If you are contracting with clients, it may be time to consider either using contracts if you currently are not or having your contracts reviewed.
To determine what services would be most beneficial to your company to help you be profitable in 2009, please contact me today for a business assessment.
by eclewis | Dec 15, 2008 | Business News, Misc. Legal Tidbits
Along with cork popping and fireworks, the New Year brings a new tax return. To ensure that you are ready for this year’s tax season, start gathering your receipts and categorizing them now. If you are working on a calendar year, pay any bills by December 31 to ensure that you can deduct them this year.
The New Year brings a time to reflect on the past and prepare for the future. If you have insurance, it may be time to review your policy to make sure it adequately covers your business. An additional vehicle, employee, or owner may mean that you need additional coverage. If you do not have an insurance agent, or just want a second opinion, please call me and I’d be happy to recommend one. As you prepare for the tax season, it is always a good idea to contact your CPA to ensure that he or she knows that you are planning to use him or her this year. Your CPA can help you identify how to categorize your records and get information if you qualify tax breaks. If you do not have a CPA, or just want a second opinion, please call me and I’d be happy to recommend one.
Finally, if you haven’t had an attorney review your business for legal issues recently, please call me for a business assessment. I will go over your business structure and current operation with you and identify areas that may need attention in 2009 and help make sure you are on the right track to a happy and successful New Year!
by eclewis | Nov 4, 2008 | Misc. Legal Tidbits
Many new business owners have never dealt with an attorney before. If you happen to be one of the lucky people who have never needed legal help, you may not understand the way that legal fees work. To help make sure that you are not surprised when meeting with an attorney for the first time, here are the most common fee arrangements and some basic information about each.
Contingent Fee
A lawyer typically charges a contingent fee in litigation with the likely potential of a large award such as personal injury or product liability cases. A lawyer will prepare and litigate a case for a certain percentage of the award – typically anywhere from 25% to 40%. An attorney will typically only take a contingent fee case when the possibility of a jury or judge awarding a large sum is high. The client typically pays for all fees and costs associated with the matter – for example, court costs and filing fees, copy charges, private investigation fees, expert witness fees, etc. If the client does not win the case, typically the client only pays for the costs. The client will usually pay the contingent fee whether he or she settles out of court or if a jury or judge awards a client an amount for his or her case. The advantage to the client is that he or she does not have to pay a large sum to have a case taken. The disadvantage to the client is that he or she will have to pay a large percentage of whatever a judge or jury awards him or her to his or her attorney.
Hourly Rate
This is probably the most popular type of attorney fee arrangement. An attorney usually charges an hourly rate for litigation matters other than personal injury or other high-dollar award cases. Hourly fees are also popular for many other types of cases including business, divorce, employment, intellectual property, real estate, and tax just to name a few. Attorneys charge clients in six-minute increments. The client typically pays for all fees and costs associated with the matter – for example, court costs and filing fees, copy charges, private investigation fees, expert witness fees, etc. The advantage to the client is that he or she can find an attorney to handle almost any matter if he or she pays an hourly rate. The disadvantage is that it may be expensive to pay an hourly rate for a case as there is no telling how much as case may costs (even if an estimate is given, due to the uncertainty of handling many legal matters, fees may always be more than estimated).
Flat Fee
Flat fees are becoming popular for attorneys (but are not quite as popular as hourly rates yet). Although attorneys rarely every take a litigation matter on a flat fee basis, contracts, business agreements and setup documents, wills and estate work, and bankruptcy cases are increasingly done with a flat fee. The client typically pays for all fees and costs associated with the matter – for example, filing fees for business documents, copy charges, private investigation fees, accounting fees, etc. Flat fees are popular with new businesses as it gives a definite amount due for services provided and allows new businesses to budget better. The advantage to the client is that he or she knows exactly how much he or she will spend on legal services (with the exception that fees and costs associated with the matter may vary). The disadvantage is that paying an hourly rate may sometimes result in a lower dollar figure as flat fees are usually an average of the hourly costs estimated over time (although by that same token, it may be more expensive if done on an hourly rate).
Hybrid
Lawyers usually use hybrid agreements in litigation cases where the chances of receiving a large award are low, but not out of the realm of possibilities. It allows the attorney to receive any hourly rate for work in return for receiving less than the typically contingent fee. For example, an attorney may discount the hourly rate by 25% in return for taking 25% less in the contingent fee than normally would be charged. The client typically pays for all fees and costs associated with the matter – for example, court costs and filing fees, copy charges, private investigation fees, expert witness fees, etc. The advantage is that the client knows the attorney will handle the case. The disadvantage is, unlike contingent cases, the client will have to pay attorney fees regardless of the outcome of the case.
Retainer
A retainer is a pre-paid amount given to an attorney. In Colorado, the attorney must place the funds in a trust account overseen by the Colorado Bar Association. The attorney is to withdraw money only for work done. The lawyer is to return any amount left over upon settlement of the matter to the client. Many lawyers will not provide any work without the client providing a retainer upfront. The amount of retainer varies from lawyer to lawyer and may depend on the type of fee agreement. For example, a retainer may not be required for a contingent fee agreement. A large retainer may be required for complex litigation matters handled on an hourly basis. The flat fee may be required for any flat fee agreements.
Conclusion
Each attorney has his or her own preference on fee agreements. In addition to personal preference, an attorney’s firm or state’s ethical rules may require a certain type of fee agreement. For example, many times attorneys cannot charge a contingent fee in divorce cases in many states. Personally, I like flat fee agreements for the initial business setup if there are only one or two members and hourly rates for additional services. However, most personal injury attorneys I know swear by the contingent fee for all matters. Before determining which fee agreement is best for you, it is best to talk to your attorney about the options, determine whether the attorney you want to deal with even offers the option you want (or if for your matter, even can), and determine what your best option given the whole situation is.
If you have any questions about fee arrangements, please call me at 720-258-6647 or email me at Elizabeth.Lewis@eclewis.com
by eclewis | Oct 30, 2008 | Misc. Legal Tidbits
So here is the funny part about my jury duty service. When I went to law school, I was told to say goodbye to ever serving on a jury. The reasoning was that lawyers hate performing in front of other lawyers and know that lawyers know too much about the law to be good jurors. Well, I thought I would probably be off the jury for that alone.
If that wasn’t enough, when the judge asked if anyone on the panel knew the defendant or either of the attorneys, I had to raise my hand. While the rest of the jury was wondering about the defendant, I was wondering about the defense attorney. I politely told the judge, and the attorneys, that I had gone to law school with the defense attorney, and we were even in the same class. I thought that would definitely mean I wouldn’t be serving.
Well as you can probably guess from my post yesterday, I was wrong about being kicked off for being an attorney and wrong about being kicked off for knowing the defense attorney. In fact, I was surprised because there were not one, but two attorneys on this jury.
I must say though that I enjoyed being a juror. Even though it came at a very inconvenient time for me both professionally and personally, I liked seeing what it was like to be on the other side of the juror box. I don’t know that I want to do it again anytime soon, but I am glad to have done it once in my life.
Now that my jury duty is over, I will again go back to blogging about business topics. But until then, don’t forget to fulfill your civic duty and vote and have a Happy Halloween!!!
by eclewis | Oct 29, 2008 | Misc. Legal Tidbits
For those of you following my Blog, this post is on a subject completely unrelated to business law: What to expect while serving on a jury. While some of you may be wondering why on earth is she talking about this, the answer is easy. Yours truly is serving on a two-day criminal trial. While I cannot talk about the specifics of a trial, should you end up in a position similar to mine, you may appreciate knowing what the process is.
In most counties, the morning begins with the potential jurors assembling in a room waiting for their numbers or names to be called. Some of them are dressed up in suits and dresses (typically those that are older), others show up in jeans. The first thirty minutes to an hour (or more) may be boring waiting for your number to be called or for you to be dismissed. During this time they go over the basics – how much you get paid, parking info, etc.
If your number (or name) is called, you proceed with a group of people to a courtroom. The judge will give you some basic info and begin the process of voir dire. During voir dire, you (and the rest of your peers on the potential jury) will be asked a number of questions. First comes the statutory disqualifications. Do you have medical problems? Do you live in the county you were called to serve in? Are you related to the parties or witnesses in the case? Are you involved in a different proceeding with any of the parties or witnesses in the case? Have you been in the past? In addition, you may be asked if you know any of the parties, witnesses, court personnel, or attorneys. Depending on your answer you may be disqualified without any further questions (i.e. you live in a different county) or stay on for further voir dire (check my blog tomorrow for more info and a funny story about this once the case is over).
After the judge goes through statutory disqualifications, the real work begins. You will be asked lots of questions (i.e. what you do, whether you have served on a jury, etc) by both the judge and the attorneys. The attorneys will probably ask specific questions to find out if you are prejudiced against either side in any way (i.e. if it is a domestic violence case, if you have been the victim of domestic violence). After several hours, depending on the number of potential jurors, the attorneys and judge will meet privately to determine who both attorneys would like to dismiss (for example someone that has a religious conflict of interest). The preemptory challenges, those that are done by only one side, may be done privately but usually are done publically. If you are dismissed, it does not mean you are a bad person just that the attorney disqualifying you was afraid you would go against his or her client (i.e. you stated you think all police officers are liars so the district attorney disqualifies you). After this, the jury is whittled down to the correct number plus an alternate or two and the case begins.
The case is pretty much just like on TV, both sides try to prove their side. However, unlike on TV, you get to break several times and for lunch. You cannot discuss the case with anyone except to say you are on a jury (like I did above) until the case is finished. And with that, I am off to bed to be awake for the rest of the trial tomorrow and can’t wait to blog about the full experience!!!
