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Attorneys are all about money, right?

Were the ones who cue our families for photographs with, Everybody smile and say, Fees! Go ahead. Insert your own joke here. We can take it. But despite the jokes and our reputation, most of us are businessmen, too. We understand the need to control costs. We dont like wasting anyones time, either.

Were just like you. We thrive on referrals and return business. If we gouge clients, a lot of people hear about it.

So Im here, as an attorney, to tell you how to keep your legal costs under control. Ive enjoyed twenty years in my career with firms ranging in size from more than 500 lawyers to firms with less than five attorneys. Its this simple: When companies follow these nine keys for hiring and using legal counsel, they crunch their legal costsand actually increase the quality of their legal representation.

Key #1. Get the right lawyer for the job.

Get the lawyer whose practice focuses on the narrow area of law in which you need assistance. (This almost always means you need more than one law firm doing your legal work, by the way.)

Choosing the right lawyer can save you big money in the long run. The focus of my practice is international dispute resolution. Many times, the best way to collect a debt owed by a foreign company (particularly if that company is based in an emerging market country) is to seize an asset of that company in a foreign country. Suing these companies in the United States is very expensive. Many countries do not fully recognize U.S. judgments. You sue here and take the judgment there, only to learn you essentially need to sue again and win in your debtor companys home country. Seizing your debtors valuable asset in a neutral third country can oftentimes be the best solution.

The problem is that many, if not most, of the contracts my clients or their attorneys ask me to collect on outside of the United States werent written with that in mind. Why not? Because they werent written by an international lawyer. In these cases, Im only brought in as the specialist to do damage control long after the agreement is executed. Many of these contracts state very explicitly that the clients home city is the only jurisdiction in which any lawsuit might be brought. So what happens? Such a provision can preclude action in some foreign countries and make seizure in all of them more problematic.

I had a recent case where I am certain we could have collected a million dollars for the client in an overseas jurisdiction had there not been a provision requiring litigation in an East Coast state. My East Coast client may have saved a few hundred dollars by having his regular lawyer draft the contract, but in the end, it may have cost them a million dollars.

Choosing the specialist usually saves money in the short term as well. My next door neighbor asked me to be her lawyer in purchasing a house from her parents. (A reminder: I do international dispute resolution.) I made clear I had absolutely no real estate background and that this transfer would be far more complicated than she probably realized.

My neighbor needed an attorney with experience in these deals. I knew such a deal should be structured to legally minimize various taxes and I told her that if she used someone without experience in this specific arealike meshe increased the likelihood of missing out on some tax benefit. Still, the clincher was when I told her that it would take someone like me around 30 hours to do such a project, while someone who was familiar with the legal territory would probably get it done in half the time.

I recommended a top-flight real estate lawyer with a tax background and told my neighbor she should expect legal fees of at least $3,500. She mentioned that the lawyer Id recommended had completed the job, tax benefits intact, for much less.

I was shocked by the low fees and called the real estate lawyer for an explanation (I actually thought he had cut my neighbor a break as a favor to me). The lawyer told me it had taken him only three hours for the job because he does about twenty of these transactions a year. That means there is no need for him to research the tax laws each time so what would take me 30 hours takes him three.

This illustrates an old adage about the best way to find the best lawyer for your particular matter: solicit suggestions from your regular lawyer, or a friend who is an attorney. However, you need to ask for more than, for example, someone who has ever done a trademark registration. In that case, youll probably be passed off to another lawyer in his firm that has handled a few trademarks rather than getting the name of a well-respected trademark lawyer outside the firm. Using the in-firm corporate generalist for your trademark work will prove mighty expensive if that generalist misses something in the registration.

Key #2: Stay in constant communication with your lawyer.

It may seem completely counter-intuitive that constantly communicating with your lawyer will save you money, but it almost surely will.

In reality, staying in good communication with your lawyer is the rough equivalent of regularly changing the oil in your car. It costs money each time, but a blown engine or (in the case of legal services) a big lawsuit is going to cost you a lot more in the long run than a few oil changes or phone calls along the way.

This brings me right to the next key:

Key #3: Know your goals and tell your lawyer [WHAT THEY ARE}.

This is an ouch item. Remember the old Rolling Stones song You Cant Always Get What You Want? With your counsel, You Wont Ever Get What You Want if you dont know what you want to achieve through legal representation.

Its your lawyers job to explain various possible outcomes of a case or transaction, but its your job to know what your goals are. You are always going to know your business better than your lawyer.

Many years ago, a client came to me about six months into some highly contentious litigation with his business partner. The client had already spent around $50,000 on this case he had brought, but he had a vague sense of uneasiness about it. His regular corporate counsel had referred him to me for a second opinion regarding the litigation.

I met with the client for a few hours and learned that he wanted me to make sure his lawyers were handling the case properly. During this conversation, the client must have told me at least ten times that he never wanted to do business with his partner again. I told him I would review the entire case file and get back to him in a few days.

When we met again a few days later, I told him that his lawyers had been doing a fine job. Again, he kept mentioning how he never wanted to do business with his partner again.

I then asked him whether he realized that no matter what happened in his lawsuit against his business partner, they would still be partners at the end. Heres the ouch: it turns out the client had thought that victory in his lawsuit would remove his partner from the partnership. The client had fifty grand into this process, and that goal of dissolving the partnership just wasnt going to happen.

I then spoke with litigation counsel who confirmed the lawsuit could never achieve that objective. The lawsuit was just to seek compensation from the partner for business he had allegedly diverted to another of his companies that should have gone to the partnership. We met a few times with his partner (who actually wanted out of the partnership). Within a few weeks, we achieved a settlement that removed the partner from my clients businessand ended the litigation that should never have been started in the first place.

Key #4: Avoid Litigation.

Being sued or finding yourself in a position where you have no real choice but to sue should almost always be avoided. This is easier said than done, but by living up to your agreements (and getting them in writing), spending a little up-front in legal fees and consulting with lawyers, you can go far in avoiding most lawsuits.

However, litigation is often necessary and should even sometimes be employed to further broad strategic business objectives. Nonetheless, once litigation has begun it is time consuming, difficult to control, and very expensive.

Regular communications with your lawyer will better enable her to head off problems before litigation becomes the only solution. It will also enable her to better position you to prevail in any such litigation, if it cannot be avoided.

I have found that the clients who are best at communicating with me have gone through litigation and truly understand the need to avoid it. Concentrate your efforts close to home. While great time and effort are spent on protecting against injury lawsuits (hot coffee and the like), that risk for most businesses is relatively small and, more importantly, can be insured against. For most businesses, employee and contract issues present a greater danger of getting out of hand. Ironically, these are precisely the issues that are easy to avoid up-front with proactive employment policies and clear written contracts.

Key #5: Use a law firm that appropriately outsources.

The big firms are usually set up in such a way that the profits of the partners come from the work of their associates. These associates are often recent law graduates who are likely to be far less efficient than a more senior lawyer. Put simply, 20 hours at $200 will cost you more than 10 hours at $300.

Associate time is often a lousy value. Law firms love having their associates doing legal research. The associate conducts highly profitable legal research and the law firm avoids having an inexperienced lawyer making strategic decisions. In the meantime you are paying to help train that associate. In seven years or so, hell be ready to become a partner and use a new associate to do the same thing to some other client.

How can you avoid putting too much of your legal budget into associates? On each matter ask your lawyer whether it would be possible for her to subcontract out some of the research work by using a part-time contract lawyer or even an overseas research service.

In Seattle there are many lawyers who, for whatever reason, do not wish to work full time and so contract out their legal research services for anywhere from $30 to $70. Though your law firm will justifiably mark up these charges to cover their normal overhead, you still should expect substantial savings. There is even the possibility of using overseas lawyers to assist in initial research of some matters. With competent lawyers in India charging as little as $7 an hour for computerized legal research, there is no reason not to give them the first crack at research that your lawyer will have plenty of time to review and supplement.

The outsourcing used by your law firm should not be confined just to lawyers, either:

• Good Japanese translators are in great demand in this country and so they are quite expensive. For years we have been successfully e-mailing Japanese documents to excellent translators in Russia who charge 1/5 as much.
• We realize substantial savings for our clients by having our Chinese documents translated in China, rather than here.
• We have used Korean engineers for initial engineering review on cases, saving at least 30%.

We even encourage Vancouver or Toronto, Canada, arbitration provisions in our clients international contracts because Vancouver arbitrators, though quite competent, generally cost about half of those in the locales most commonly used for international arbitration (London, New York, and Stockholm).

Key #6: Explore alternative fee arrangements.

It almost always makes sense to at least discuss with your lawyer billing arrangements other than straight hourly fees.

Perhaps youll both benefit from a fixed fee arrangement. Here, you and your lawyer agree on a fixed fee that covers legal services. The real advantage in this arrangement, for both counsel and the client, is the ability to budget in advance and so limit billing surprises for both of you.

Contingent fees are another alternative option. Simply stated, the law firm is paid contingent upon the results they achieve. Although you often hear If we dont win, you dont pay on TV commercials, the more common arrangement in business cases is to use contingent fees in combination with cost-reduced or limited-number hourly fees.

There are also a number of hourly billing variations to consider. One common option is to negotiate a reduced hourly rate plus bonus. Here, an agreement can put your counsel at a reduced hourly rate plus bonuses to be paid for meeting or exceeding deadlines you agree upon.

Key #7: Have your lawyer give you an estimate of the fees and costs.

Its in your best interest to get an estimate of your legal fees.

An estimate is just that: an estimate. Legal fees are often difficult to predict, particularly in litigation where the opposing partys tactics greatly influence what your lawyer is required to do. However, you still need an idea of the legal costs youre about to encounter.

From my perspective as counsel, I have learned that it is always a good idea to give an estimate because sometimes clients truly have no idea exactly what is involved in handling a particular matter. Years ago, a client called me wanting to seize the assets of a Russian company that owed his company about $350,000. Because this was the first time I had worked with the company, I wanted to impress the client and I told him that I would use my contacts throughout Asia to determine whether this company had any assets there that could be seized. I also told him I would be working with a Russian law firm to explore the likelihood of success if we needed to sue in Russia. When he agreed to that strategy, my firm did all of these things, incurring $5,000 in fees and costs. About half of that went to lawyers/agents in Korea, China, Hong Kong, and Japan and to the lawyers in Russia who had written a very good four-page memorandum outlining what would likely happen if we were to sue in Russia.

I reported back to the client within a week and gave him very clear directions on what we needed to do to recover the debt. I then sent out the bill for approximately $5,000, believing we had done a great job very quickly and efficiently. I assumed the client was very happy with our work and would gladly pay the bill. (I can assure you that my clients for whom I regularly do this sort of work would not have batted an eye at the bill.)

My assumption was wrong. The client called and said he had no idea that it would cost so much. This struck me as curious, since the client was a rather sophisticated business person whose company uses one of the big firms in town. Yet he told me that he thought that my search for assets, and my working with Russian lawyers, would basically consist of one afternoons worth of phone calls. Because the miscommunication regarding fees was more my fault than his, I drastically cut the bill. But from then on Ive tried to always give an estimate up front and then continue to update that estimate as the work progresses.

Key #8: Dont focus too much on the attorneys hourly rate.

An in-house counsel for one of the largest corporations in America once told me that, no matter what the hourly fees were at the various firms used by her company, in the end, most of the firms tended to charge similar amounts. According to her, the firm whose partner billed out at $250 per hour simply billed more time than the firm whose partners billed out at $350. At the $350 per hour firm, more work would go to associates.

So heres the principle behind the key: Focus on lowering your total bill, not on the fees charged by individual lawyers.

Key #9: Dont forget about insurance.

One of the best investments against monumental legal fees is insurance.

Carry liability insurance and, if feasible, carry directors and officers liability insurance. Discuss your various insurance options with both your broker and your lawyer. Then, if you do get sued for any reason, have your lawyer check your policy to see if you have coverage. Too many times, companies have assumed their policy could never cover a particular matter when in fact it either might or it does.

These nine keys combined can form a powerful strategy to significantly control your legal costs. You may never be able to smile with your lawyers when they say Fees! for the firms holiday photo, but youll know youre making the most of your legal budget.

Dan Harris is an attorney with the international law firm of Harris & Moure, pllc., which focuses on assisting businesses in or involved with Asia, Eastern Europe, or North America. http://www.harrismoure.com

Emerging markets are high risk and high reward. In my work as an attorney representing Western companies in emerging markets, I have concluded there are four essential elements to emerging market success: a good partner, an open mind, active participation, and extreme patience.

I have seen enough essential similarities between such diverse countries as Russia, Korea (ten years ago when it was still an emerging market country), Vietnam, and even the Gambia and Papua New Guinea, to believe certain core generalizations hold true for all or nearly all emerging market nations. Just as a good concept, a strong market, and good execution are necessary in all countries, so too are these four simple principles the keys to success in emerging market nations.

PRINCIPLE ONE: A Good Partner is the sine qua non of Success.

The quality of the local partner is the indispensable element for emerging market success. So where do you begin?

Start with due diligence. Before doing business with anyone, you must first determine what you need from your partner in the particular country in which you will be conducting business. In my experience, foreign companies need a local partner who is effective, cooperative, and (most important of all) trustworthy.

Emerging market countries almost always have less-than-fully-formed legal systems. Their laws are oftentimes slanted towards the government and away from free markets. Their courts are slow and often corrupt. Form takes precedence over substance in ways completely unfamiliar to Westerners. One small technical miscue on your part might eliminate your right to sue your partner for having stolen all of your money. It might even lead to you and your company being kicked out of the country, while your assets remain.

Of course you should do your best to avoid technical miscues, but the better strategy is to pick your partner well.

So what should you look for in a local partner? Political connections? Yes and no:

• Yes, because you probably will need someone with sufficient dexterity to maneuver around often-suffocating business laws and a bureaucracy that may try to cut in on your business at every turn.
• No, if you think that is all you will need. Just as in the West, the politically connected are usually more a “government type” than a business person. Partnering with someone in an emerging country with whom you would never consider partnering back home is a mistake.

Political clout in emerging market countries is often more effective for avoiding legal responsibility for something like a debt than it is in generating business revenues. I have seen countless instances where a foreign company partners with someone because he “is tight with the governor,” only to see the business crushed by the new governor as part of his house cleaning. The best partner is politically connected only to the extent necessary for business success.

Your partner’s character and reputation are your protection in countries where the court system is not. Do not partner in any sense of that term without having conducted thorough due diligence.

Get to know your potential partner. If he is legitimate and wants to work with you for the long term, he will expect you to want to get to know him better and think nothing of your wanting multiple meetings before signing any deal.

Use every source you have to find out about your potential partner. Check his references, particularly those of other foreign firms with whom he has worked. Hire a local lawyer or investigator to confirm he and his various businesses are in good standing with all creditors and taxing authorities. If your potential partner is in Vladivostok, Russia or Qingdao, China, hiring a lawyer in Moscow or Shanghai will probably not be good enough. Find someone you can trust with contacts where your potential partner conducts business.

PRINCIPLE TWO: Keep an Open Mind. Assume Nothing.

Doing business in an emerging market means taking nothing for granted. I have a mantra for my own legal work in these countries that translates well to the business world: “Assume nothing, but assume that you are assuming things without even realizing you are doing so.”

Things will be different. Very different. Things you take for granted in your home country might not exist in the emerging market country. Things you take for granted in your home country might be the exact opposite in the emerging market country. Things you think will be totally different in the emerging market country may be exactly the same. Things you thought you knew about emerging market countries based on what you know from another emerging market country may be completely different in a neighboring country, or even in another region within the same country.

The principle, one more time: Keep an open mind, and assume nothing.

PRINCIPLE THREE: Participate in Everything.

In many emerging market countries, local businesses take advantage of corruption to avoid complying with laws. This may work for the locals, but it won’t work for you. The easiest way for a local rival to drive you out is for you to do something illegal. Neither you nor your government will have good grounds to complain if your rival gets your business closed down due to your illegal activity. It might even be your own partner who reports you so he can assume full ownership and control of your business.

You must have your own people on the ground, leading, training, and instructing on business methods, business ethics, efficiency, and quality control, among other things.

We have a saying in our law office that one day of face-to-face meetings with local counsel is equivalent to one month of telephone calls and e-mails in terms of getting things done. This is equally true on the business front.

PRINCIPLE FOUR: Exercise Extreme Patience.

This principle stems from the maxim that everything takes twice as long as you think it will. If it takes twice as long in the West, triple that in emerging market countries. You’ll go in both as a businessperson and a teacherand in both roles, the learning curve of your partner will almost certainly take way more time to deal with than you think.

For example, many emerging market countries have a history where “bad business” meant “thinking long-term.” A year or two after the fall of Soviet communism, I was involved in a matter where an investor put $250,000 into a Russian joint venture. The business very quickly was making good money and all indicators pointed towards steadily increasing profitability. But, quite quickly, the Russian company stole the $250,000. Was it so irrational for him to think so short term in a country where the government and tax systems had such a history of unpredictability?

Remember: It takes patience to encourage change of mindset. Extreme patience.

EMERGING MARKET SUCCESS

Emerging markets cannot be approached with a quick-kill mentality. Above all else, emerging market success demands a good partner, an open mind, a high degree of participation, and extreme patience.

It is certainly risky. It can also be very profitable.

Dan Harris is an attorney with the international law firm of Harris & Moure, pllc., which focuses on assisting businesses in or involved with Asia, Eastern Europe, or North America. http://www.harrismoure.com

In the old days of legal billing, lawyer’s invoices usually a single page of elegant letterheadcontained only the phrase, “legal services rendered,” and a hefty dollar amount. No time breakdowns, no list of activities performed or equipment and supplies usedjust a final, usually shocking, charge.

But client demands and the evolution of sophisticated billing software have led to more detailed invoices today. Itemized statements have triggered discussion among businesses about whether hourly billing is the best way to be charged for legal services. As the legal profession becomes more competitive and dependent on high quality customer service, lawyers need to embrace alternate billing methods.

Fixed or flat fees, contingency fees, non-refundable retainers with discounted hourly fees, blended hourly fees and variations on those themes are becoming increasingly common. But many law firms have been slow to join this trend lawyers still perform approximately 95 percent of their corporate legal work on an hourly basis.

What does that mean for your small business? If your company is currently working with a law firm or looking for legal counsel, try requesting alternate billing options. While many law firms rarely initiate different options, they’ll negotiate when brought to the table. If you want something better than the old “bill by the hour” deal, try presenting one of these billing structures:

Project billing for routine issues

If your legal needs include large but repetitive tasks, consider a flat-fee approach, also known as project billing. If you need legal assistance on a large research project involving several repetitive tasks with a fair amount of predictability for cost estimation and time duration, request a dollar cap for predetermined services. Be sure to compare estimated costs at the equivalent hourly ratea projected cap that far exceeds any likely bill is really no cap at all.

Once you get a project billing estimate, don’t hesitate to shop around. Making an informed decision shopping around, comparing prices and services with other law firms is good business sense, especially if you intend to hire a firm for a single project. If you anticipate establishing a long-term relationship, mention this as you’re negotiating a project amount a firm may provide a better deal if it expects future work from your company.

Results-oriented options

Forget the image of personal injury attorneys taking a third of any verdict or settlement. Consider instead contingency fees fees based on the outcome of the case and the performance of your counsel. Creative use of contingency fees can create efficiencies in even the most high-level corporate settings. If you retain a lawyer to help your company avoid litigation, couple a reduced hourly rate with a bonus for successfully lowering your litigation outlays.

You also can establish an incentive based on a percentage of money won or saved in trial. If you’re a defendant in a case where the plaintiff has a strong shot at a $1 million settlement, negotiate a flat fee if the case goes to trial, plus a bonus if the plaintiff ends up getting less than $1 million. If you’re a plaintiff and estimate your case is worth between $1 and $2 million, you might negotiate services for a flat fee plus a percentage of any settlement over $1 million.

Contingency fees turn the matter into a shared risk or shared incentive, making the law firm your business partner, not just representation. Contingency fees can work well with both flat fee and reduced hourly fee arrangements. Because a number of variations on the “pay-according-to-success” theme exist, you should ask firms for the options they’re willing to discuss.

Multi-layered tasks

If you’re shopping for a firm for substantial legal work involving a number of legal specialties, consider using blended hourly fees. Rather than each attorney billing at the usual hourly rate, the firm calculates in advance an “average” rate based on the anticipated time each attorney spends on the matter.

The value of this arrangement is twofoldit helps define responsibility in a project and it provides a fair price schedule for the client, who avoids paying a senior partner’s hourly rate for research that should be conducted by a junior associate

Legal “Insurance”

Firms without in-house counsel that frequently hire legal services might consider contracting with a firm. In this legal billing option, firms and clients agree to a specific charge per month in exchange for a predetermined set of legal services. The contract fee permits the client to pick up the phone and talk to the attorney without needing to eye the clock. This approach works like a legal insurance policy. It encourages companies to contact their counsel on non-litigation, non-crisis matters, and to save money in the long run by engaging in more preventive legal action.

Just as in business, the impetus for change comes from consumer demand. The sooner businesses take the lead in securing more effectively tailored billing methods from their legal counsel, the sooner they’ll get better, more cost-effective legal assistance.

Dan Harris is an attorney with the international law firm of Harris & Moure, pllc, which focuses on assisting small and medium sized companies doing business in or involved with Asia, Eastern Europe, or North America. http://www.harrismoure.com

Due to the dramatic increase in technology, business professionals now have the ability to outsource their skills and earn extra money working from home as a bankruptcy forms processor. Unlike an attorney or notary public, a bankruptcy forms processor does not have jurisdictional limits. In other words, a bankruptcy forms processor could live in Yellow Springs, Ohio and prepare bankruptcy petitions, pleadings, Motions and other court documents for attorneys practicing in California, New York or any other U.S. state.

In fact, a bankruptcy forms processor can set up a bankruptcy business in their home with very little money and earn a full-time income very quickly. This concept has also opened the door for attorneys practicing in other areas of law to open a sideline bankruptcy practice, and many of these attorneys seek a freelance forms processor to process their paperwork for them.

This is where you as a bankruptcy forms processor can fill a need that is becoming more popular as electronic filing procedures become more the norm. In fact, some states now require electronic filing of all court documents. Paper documents are only accepted by the court from consumers or in other rare circumstances. It will not be long before all the states will have electronic filing procedures in place and those resisting the change will be left behind.

A typical bankruptcy forms processing business might operate like this:

1. Client either downloads or is emailed a set of Client Intake Forms in PDF format to print and fill out at their leisure.

2. Client will fax or email their completed forms to the attorney or forms processor for review. If the attorney decides to accept the bankruptcy case, the forms processor can begin drafting the bankruptcy petition from the information provided on the Client Intake Forms.

3. Areas of the Client Intake Forms that are not properly completed by the client or containing statements that require a more detailed answer would be easy to take care of. The forms processor or attorney will simply call up the client and obtain the information. No appointment would be necessary.

4. After the drafting of the bankruptcy petition, the forms processor saves the document in PDF format and sends it to the attorney as an attachment on an email.

5. At this point the attorney may wish to meet with the clients to review their bankruptcy petition before filing, but it is not absolutely necessary. Some attorneys I worked for never meet the client face-to-face except when they showed up at court. They communicated with the client by email or telephone.

Note: Electronically filed documents do not require the clients signature so it is not necessary to meet the clients face-to-face before filing the bankruptcy petition. An attorney is provided with an electronic signature by the court that he uses to sign all electronic documents filed on behalf of the client he or she represents.

6. After the attorney receives the bankruptcy petition by email, he or she will save it on their computer under the client file name and begin the review. The attorney can either print out the bankruptcy petition and make changes with an ink pen, or review it on the computer screen and note any changes in an email to the forms processor.

7. After the attorney has approved or made changes to the bankruptcy petition, he or she will email it back to the forms processor. The forms processor will make the changes and prepare a final bankruptcy petition ready for electronic filing. The forms processor emails the final petition to the attorney for final approval.

8. Upon approval by the attorney, the forms processor will electronically file the bankruptcy petition with the proper court or email to the attorney for printing, copying and filing.

As you can begin to see, it would be very easy to start a forms processor service working from home. So if you were like me and are tired of the office politics and playing the mental games, you now have the opportunity to work from a peaceful home environment where you can focus more on each case and give your clients the personal touch that will set your business apart from the big companies.

** This article is a book excerpt from, How to Start a Bankruptcy Forms Processing Service by Victoria Ring, Certified Paralegal. More information is available online at http://www.50statenotary.com/bankruptcybook

Victoria Ring is a Certified Paralegal and Notary Signing Agent. She started the first electronic bankruptcy paralegal service on the internet (The Lawyer Assistant) to serve attorneys nationwide. Visit her website at http://www.50statenotary.com/bankruptcybook

You could save hundreds of dollars by incorporating yourself without a lawyer. How? Is it advisable to do so?

1. This is Not Legal Advice!

The only ones who should be giving legal advice are those licensed to practise law (in other words, only lawyers). This article is not legal advice. If you need legal advice, consult a lawyer.

This article is being written simply to inform you that it is possible to form a corporation or limited liability company without a lawyer.

2. Why Use a Lawyer?

First of all, if you make a mistake incorporating yourself, who do you sue? You only have yourself to blame. On the other hand, a lawyer has insurance to cover errors and omissions.

Secondly, you could benefit from the expertise of your lawyer. Perhaps a corporation isn`t the right vehicle for you under your circumstances. Be aware that there can be disadvantages as well as advantages to incorporating. Your lawyer can consider commercial law, securities legislation, limited liability, tax factors, estate planning, share structure, and a myriad of other business considerations. Sometimes the advice of a good lawyer can save you thousands of dollars.

3. Is it Advisable to Incorporate Yourself?

Is it advisable to perform surgery on yourself? It is illegal to perform surgery on someone else unless you are licensed to practise medicine, but perhaps in a wilderness survival scenario, self-surgery might be your only option. However, is performing surgery on yourself really a good idea in most instances?

Likewise, just because it is possible to incorporate yourself without a lawyer doesn`t mean it is always a good idea.

In some jurisdictions, only lawyers can incorporate others. For a paralegal or other person to incorporate a company for you could be considered unauthorized practise of law. Thus, it may be legal to incorporate yourself but not others.

Some factors you might consider are: Am I really that short of cash that I can`t spend the extra money for good legal advice that may save me thousands of dollars? Am I confident that my situation is one that really doesn`t need the services of a lawyer to incorporate? Can the money saved on legal fees be better utilized in financing other aspects of my business?

Each person will have to make their own decision on whether or not to seek the services of a lawyer in forming a corporation.

“He who has himself as a lawyer has a fool for a client.” I have often thought that perhaps a law firm originated this common expression.

4. How To Incorporate Yourself

Many books have been written by lawyers on how to incorporate yourself.

For example, in Canada, M. Stephen Georgas, LL.B., has written books on the subject of forming your own corporation. Published by International Self-Counsel Press Ltd., he has authored “Incorporation and Business Guide for Ontario” (”How to form your own corporation Includes tax advantages to incorporating”) and “Federal Incorporation And Business Guide” (”How to form your own Federal corporation under The Canada Business Corporations Act”).

The same publisher sells forms and minute books as well as titles for incorporating in other provinces of Canada.

Forms, corporate supplies, name searches, and kits are available from legal stationers and other sources.

In the United States, there are likewise many manuals available for incorporating yourself in various states. “How To Form Your Own Corporation Without a Lawyer for Under $75.00″ by Ted Nicholas is one such book.

Sometimes helpful information on this subject is available from federal, provincial and state governments for free or nominal cost.

You can sometimes locate incorporation manuals at your local library for free. Be careful. Legal manuals become outdated very rapidly. You might consider very seriously purchasing the most up-to-date manual available; it might also include helpful reference material on maintaining corporate minutes and other helpful suggestions on operating your corporation.

Buy the appropriate manual and supplies and then follow the instructions. With a little effort, you could save hundreds of dollars incorporating yourself without a lawyer.

For further resources on incorporation, please visit: http://www.yenommarketinginc.com/incorporation.html

RESOURCE BOX

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years.

For valuable Work at Home Small Business Ideas, visit http://www.yenommarketinginc.com/

Trademark law gives companies the exclusive right to use a given name or design, called a mark, for the purpose of identifying the source the of that companys goods or services. Trademark law is an incentive-based system. Because it gives companies the exclusive right to use a mark in connection with certain goods or services, the company can create a brand that is recognizable by the consuming public. That trademark would be associated with and incorporated into every advertisement the company runs for its goods or services. Repetition of those advertisements containing the trademark causes consumers to associate the mark with the goods and, with enough repetition, consumers buy the goods.

A brief, but related, digression. We all know that if you see a product advertised frequently enough, the product will sell. You might even be one of the people who buys the product. The thinking process by which you reached the decision to buy the product is not an intellectual, logical process. Its a function of the way the human mind works. Continually hearing a repeated message makes the message more familiar, more real, and, eventually, more true. As the adage says, even the boldest lie becomes the truth if you scream it loud enough and long enough. I call this the Lie = Truth Adage. Sadly, I frequently encounter the Lie = Truth Adage in litigation. I also know of some politicians and terrorist masterminds who are experts at exploiting this fact of human nature.

Back to trademarks. The advertising departments at most companies know the Lie = Truth Adage can be very successful in advertising. The cynic would pump his fist in the air yell Down with the corporations, and power to the people! All the corporations care about is taking our money at all costs! While we can point to some recent examples that might make it challenging to argue against this viewpoint, as to the overwhelming, vast majority of companies, that view simply cannot be supported.

Trademark law creates very strong incentives for companies to make the highest quality product possible and to advertise their merits and attributes accurately. Aside from the fact that companies invest anywhere from tens of thousands to millions of dollars into their trademark(s), all it takes is one bad product line to tarnish a companies image in the mind of the consumers who buy their products. Both of these factors hit companies where it hurts them most: in the pocketbook. So, while companies clearly have to perform a balancing act of creating a high quality product, keeping costs down, and pulling in as many purchasers as possible, they have very strong incentives to create a quality product that they will associate with their trademark.

To be eligible for any level of trademark protection, a mark must be distinctive and not merely descriptive of the goods or services. Whether a mark is distinctive and how distinctive or strong the mark is can be determined by a sliding scale. Marks can be (1) fanciful; (2) arbitrary; (3) suggestive; (4) descriptive; or (5) generic. Whether a particular mark is protected by trademark law depends on the strength category into which it falls.

A fanciful mark is one that is invented for the sole purpose of being a trademark. For example, EXXON is a fanciful mark. It is a word that does not exist in the English language and was created only for the purpose of identifying the oil and gas company.

An arbitrary mark is typically an existing word that is arbitrarily applied to a product or service that has nothing to do with the word. For example, the mark APPLE as applied to sales of computers.

A suggestive mark is a mark that suggests a quality or characteristic of the goods or services. Suggestive marks require some level of imagination to bridge the connection between the mark and the product. For example, the mark PENGUIN as applied to refrigerators.

A descriptive mark is a word that merely describes a quality or characteristic of a product. Descriptive marks are not entitled to trademark protection unless they have obtained secondary meaning under the trademark law. An example of a descriptive mark would be LIGHT to identify a lightweight notebook computer.

A generic mark simply identifies by name a particular product. Generic marks are never entitled to trademark protection. An example of a descriptive mark would be MODEM in connection with modem sales. If trademark protection were allowed in this instance, the company could essentially remove the word modem from the English language.

Henry J. Fasthoff, IV
Principal & General Counsel
HoustonBusiness.com

It is important for any prospective business purchaser to perform due diligence in researching a potential target business. Some of the documents you will need to collect and review in your analysis of whether a particular business would be a good acquisition include the following types of documents.

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

1. Corporate and Organizational

o Certified copy of articles of incorporation and bylaws of company and subsidiaries as currently in effect;

o Partnership agreement and any amendments thereto;

o A copy of the most current organization chart available of the company;

o A list of states and foreign countries (if any) in which the Company is

qualified to do business; and

o All names under which the company has done business in the past five years; this includes registered and unregistered trademarks, fictitious name statements (commonly referred to as d/b/a filings).

2. Financing Documents

o All loan agreements, debt instruments, and other financing instruments, and all related material documentation, to which the company is a party.

o A list of all mortgages, liens, pledges, security interests, charges, or other encumbrances to which any property (real or personal) of the company is subject and all related material documentation;

o Schedule of all short-term and long-term debt (including capitalized leases, guarantees, and other contingent obligations).

3. Financial Statements

o All audited and un-audited financial statements;

o Brief description of contingent liabilities involving the Company, such as pending lawsuits and threatened litigation;

o Name of accountants and length of relationship with accountants; indicate whether the accountants own any interest in or hold any position with the Company or its subsidiaries;

o Budgets, business plans or projections (for the Company and any of its subsidiaries) made on a quarterly, annual or other basis during the past 3 fiscal years.

4. Contracts & Leases

o Real estate leases. Consider the term of the lease and the quality and location of the space and decide whether your business needs would be satisfied;

o Equipment leases;

o Purchase and sale contracts for goods and services [uniforms; food suppliers]

5. Tax Matters

o Are back taxes owed?

o Are there any pending tax suits?

o Does any local, state or federal taxing authority have any liens against the real property or business personal property you would be acquiring? If so penalties, interest and attorneys fees could greatly increase the cost of satisfying the tax lien.

6. Identities of All Directors, Officers & Shareolders

o You ought to perform a background check on each of these people to see whether there is any pending litigation against them.

7. Owned Real Estate

o Need a list of owned real estate to help in valuing the business and determining liabilities.

8. Insurance

o You would want to have copies of the insurance policies, as well as the name and contact information for the insurance agent, going back four years from the time of purchasing the business. Check to see whether the insurance policies would cover you, as the new company, for any damages alleged to have occurred before you acquired the business.

Finally, many other factors related to financial and other matters must be considered before taking the plunge.

Henry J. Fasthoff, IV
Principal & General Counsel
HoustonBusiness.com

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

There are numerous legal considerations every entrepreneur must face when starting a new business, and raising startup capital is one that can be fraught with danger. Hiring a qualified securities attorney is not a luxury; its a necessity for businesses seeking to raise capital from third parties. Some of the key general considerations are:

Properly organizing the company as business entity under state law;

Ensuring the company has issued enough authorized shares of stock of the same type that will be offered to investors;

Make sure that any existing and potential legal problems are resolved before issuing stock to investors;

Have an experienced securities attorney examine the federal securities laws, as well as the securities laws of any state in which stock may be offered to prospective investors, to make sure the company and its investment offer complies with those laws;

Have your attorney explain in writing the potential personal liabilities of the companys officers and directors if the company violates any federal or state securities laws in raising capital. Potential penalties can be very serious, ranging from civil fines to jail time;

Make sure that your written investment prospectus contains all required state and federal disclosure language in the appropriate places;

Your attorney should review the business plan and financial statements for possible untrue and/or misleading statements; and

Obtain a written opinion from your attorney whether your particular investment opportunity is required to be registered with the appropriate regulatory agencies.

Henry J. Fasthoff, IV
Principal & General Counsel
HoustonBusiness.com

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

Electronic communications–particularly email–may contain a treasure trove of evidence in commercial litigation matters. There are three key reasons for this fact. First, email is a very informal means of communication. Why? I don’t know, it just is. Though I personally insist on specific grammer and sentence structure in my “hardcopy” written correspondence, court pleadings, etc., in emails I sometimes choose not to follow the rules of written English.

Second, though intellectually many of us know it is not, email “feels” anonymous. I’m sure there have been studies conducted in effort to understand why email feels anonymous. Maybe it’s because of the instantaneous nature of email–you can simply vent your emotions and knee-jerk reactions immediately and press the send button, rather than having time to reflect on your written thoughts as you otherwise would if you were forced to sit down and write a letter; sign it with your own hand; put it in an envelope; put a stamp on in it; and take it to the mailbox and mail it. Whatever the reason(s), the fact of the matter is that email does feel anonymous.

The third reason email evidence can contain critical evidence in a commercial litigation case: permanence and retrievability. Most people don’t realize that when they “delete” an email from their email program it actually remains on the computer or network unless and until the portions of the computer’s memory containing the email are overwritten by other information. You can be certain, however, that every single electronic commuincation you make–email or otherwise–is being recorded somewhere. Perhaps on your company’s network server, perhaps at your Internet service provider, or perhaps on your own computer’s hard drive. Savvy litigators know this fact and, depending the stakes of the case, you could end up receiving a letter such as this should your business find itself in a business dispute:

Dear Mr. John Doe:

This is a notice and demand that evidence identified below in paragraphs 2 through 5 must be immediately preserved and retained by you until further written notice from the undersigned. This request is essential, as a paper printout of text contained in a computer file does not completely reflect all information contained within the electronic file.

The continued operation of the computer systems identified herein will likely result in the destruction of relevant evidence due to the fact that electronic evidence can be easily altered, deleted or otherwise modified. THE FAILURE TO PRESERVE AND RETAIN THE ELECTRONIC DATA OUTLINED IN THIS NOTICE CONSTITUTES SPOLIATION OF EVIDENCE AND WILL SUBJECT YOU TO LEGAL CLAIMS FOR DAMAGES AND/OR EVIDENTIARY AND MONETARY SANCTIONS.

For purposes of this notice, Electronic Data shall include, but not be limited to, all text files (including word processing documents), spread sheets, e-mail files and information concerning e-mail (including logs of e-mail history and usage, header information and deleted files), Internet history files and preferences, graphical image format (GIF) files, all other graphical format images, data bases, calendar and scheduling information, computer system activity logs, and all file fragments and backup files containing Electronic Data.

1. Please preserve and retain all Electronic Data generated or received by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

2. Please preserve and retain all Electronic Data containing any information about the following subjects:

Emails sent to or received from any employee or representative of ABC Company, DEF Company, or XYZ Company.

3. You must refrain from operating (or removing or altering fixed or external drives and media attached thereto) standalone personal computers, network workstations, notebook and/or laptop computers operated by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

4. You must retain and preserve all backup tapes or other storage media, whether on-line or off-line, and refrain from overwriting or deleting information contained thereon, which may contain Electronic Data identified in paragraphs 2 through 4.

In order to alleviate any burden upon you, we are prepared to immediately enlist the services of a computer forensic expert to image and examine all drives and media in your custody and control which may contain Electronic Data relevant to this matter. If you enlist your own computer forensics expert to generate evidentiary images of all electronic evidence identified above, demand is made that such expert utilize industry standard computer forensic software in order to facilitate and enable the processing and exchange of such evidence in this matter.

Should your company receive a letter like this, you should take it extremely seriously. Continuing to use any computers or other devices identified in such a letter will result in data being overwritten, which the courts would interpret as destruction of evidence. Destroying evidence can not only result in serious sanctions against the company or individual in the case at hand, as we saw during the Enron mess it can also result in criminal prosecution.

Henry J. Fasthoff, IV
Principal & General Counsel
HoustonBusiness.com

If your business runs into serious difficulty, will

it bring you down too? For example, what if one of

your employees got involved in a serious car accident

while working for you? Will the resulting lawsuit

bankrupt you personally?

Here are just a few ways of protecting yourself

against catastrophic losses and lawsuits.

1. Obtain Adequate Insurance Coverage

If someone slips on the sidewalk of your home and

injures himself, he could sue you for damages. Your

tenant`s or homeowner`s policy may cover you for

liability in such an event.

However, what if it is your customer who falls on his

way to visiting your home-based business? You will

need an extra rider on your house insurance to cover

such incidental business use. The extra charge for

this additional coverage is well worth it.

If you use a car for business use, insure it for such.

Some people think that they are being clever writing

off automobile expenses for income tax purposes but

at the same time not informing the insurance company

that the car is being used for business.

This is false economy. If you ever get into an

accident, police and insurance investigators will

certainly find out that you used the vehicle for

business purposes. If you`re not paying for

business coverage, why would the insurance company

cover your claim?

As well, what do you think an income tax auditor would

think of your claimed business expenses on the vehicle

when your insurance policy indicates personal coverage

only? Avoid this additional exposure to tax liability.

Be sure to obtain required workers` compensation

coverage. Some have been held responsible for all the

medical and other expenses of an injured worker, as well

as fines for non-compliance to the law. These costs

can be quite substantial and even bankrupt you.

Consider obtaining product liability insurance. This

applies not just for any products you manufacture but

also for products you sell that are made by others.

2. Incorporate Your Business

Insurance may give you some protection against loss.

However, you may suffer business losses and lawsuits

that may not be covered by your insurance fully. What

then?

An extra level of protection can be obtained by forming

your own corporation. Even though incorporating

yourself will result in extra paperwork and costs, it

could be the best insurance you ever bought.

This is because the corporation is a seperate legal

entity or person. Even though you may own the

corporation, if the corporation operates the business,

it is the corporation that will be sued or suffer loss.

If, for example, the corporation had severe business

losses resulting in debts that could not be repaid,

the corporation would be insolvent. You, as a

shareholder, would lose your investment in the company

but would generally not be responsible for any of its

debts. Thus, you would not have to sell your home or

other personal assets to cover the corporation`s

liabilities.

On the other hand, there are cases where directors of

a corporation can be held responsible for liabilities

if they didn`t act responsibly. You can`t hide behind

a corporation, commit criminal acts and expect to

escape accountability.

For more information about incorporation, visit:

http://www.yenommarketinginc.com/incorporation.html

3. Protect Yourself With Legal Agreements

Properly drafted written agreements can protect you in

many ways. First of all, they can sometimes prevent

misunderstandings that can lead to legal problems.

Secondly, they may limit your exposure to lawsuits and

losses.

Contracts can limit your exposure to liability by

including provisions restricting the scope of your work

and responsibility, having disputes handled by arbitration

rather than through the Courts, and specifying that the

maximum damages payable shall not exceed the amount of

the contract.

A special area to watch out for is the Internet. There

are many laws that impact on websites including

matters affecting children, privacy, earnings claims,

and unsolicited e-mail (”spam”). Certain agreements

and notices on your website may help to protect you.

For more information about Internet law, visit:

http://www.yenommarketinginc.com/internet-law.html

Protect yourself from catastrophic losses and lawsuits.

Take steps today to protect your assets by limiting

your exposure to liability.

J. Stephen Pope, President of Pope Consulting Inc., http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years.

For valuable Work at Home Small Business Ideas, visit: http://www.yenommarketinginc.com/