Chris McGrath's Blog Posts

About Chris McGrath

I'm a Carmel, Indiana business attorney providing business counsel, commercial litigation and mediation services based on over 20 years of experience. My firm is founded on a principle of supporting others' advancement and achievement, and my core values are service, passion, faith & loyalty.Chris McGrath's Google+ Profile

Commercial Courts Established in Indiana

On June 1, 2016 the following courts began accepting specialized dockets of business cases.  Known as “commercial courts,” they are part of a pilot project in which business parties can agree to have their disputes resolved.

  • Allen Superior Civil Division Judge Craig Bobay;
  • Elkhart Superior 2 Judge Stephen Bowers;
  • Vanderburgh Superior Judge Richard D’Amour;
  • Floyd Superior 3 Judge Maria Granger;
  • Lake Superior Judge John Sedia; and
  • Marion Superior Civil Division 1 Judge Heather Welch

This pilot project, established by the Indiana Supreme Court, aims to (1) establish judicial  structures  that  will help  all court users  by  improving court efficiency;  (2)  allow  business and commercial  disputes  to  be  resolved  with expertise, technology, and  efficiency;  (3) enhance the  accuracy, consistency, and  predictability of decisions  in business and commercial cases; (4) enhance economic development  in  Indiana by furthering the efficient, predictable resolution of business and commercial law disputes; and (5) employ and encourage electronic information technologies, such  as  e-filing,  e-discovery, telephone/videoconferencing, and al employ early alternative dispute resolution interventions.

Commercial courts are relatively new, having first appeared in 1993.  They are available in about 20 states.

The Power Behind a Simple Question

Stuck in a rut? Need to brainstorm? You can do this simple exercise with a friend or colleague, or even by yourself.

  1. Ask: “What is on Your Mind?” What are you wondering, dreaming, and/or concerned about? Some people also may say, “what keeps you up at night,” but my thought is that question unnecessarily steers the response to the negative.
  2. Ask: “Why?” Prepare to spend some time on this one. It is helpful to have someone who knows you and with whom you’re comfortable in the conversation—to help define, but also to possibly challenge and then affirm your response. 
  3. State what you want
  4. Ask: What are you going to do to get what you want? I prefer trying to identify this in terms of what is the least you could do in furtherance of what you want?
  5. Ask: What do you need to stop doing?

Finally, ask for some support, it helps to have someone to check in with.

I used the process with a friend recently, concerned that I needed to be more efficient with my time in order to attract and retain the types of clients I want to work with. Among other things, I resolved to: 1) blog regularly, and 2) to unsubscribe from emails that, while perhaps interesting, distract me from my work in favor of those that provide benefit to my life and work.

Hope that helps.

Alternatives to Lawsuits for Homeowner Association Disputes

Dealing with homeowner’s association (HOA) disputes can be tough.  People just want to go home and enjoy it and their neighborhoods.  But disputes can arise, and they can be time-consuming, expensive, and frustrating for all involved.  

Alternative dispute resolution methods can help quickly resolve these kinds of issues.  These include arbitration, mediation and even online dispute resolution. Arbitration is like court but the parties typically select an arbitrator or arbitration panel, and the matter is tried in in private, instead of in a public court.  Mediation is where a neutral third party, again selected by the parties, helps the parties reach a mutually acceptable agreement to resolve their issues.  Online dispute resolution (ODR) is a small but growing area that can help smaller HOA disputes, like dues. Parties typically submit a single issue to an online platform that facilitates the negotiation process.  

Some advantages to these approaches include:

  • Parties Decide Outcome. Especially with mediation, the outcome is decided by the parties, instead of handed to them by a judge or jury.  Despite advances and experience, litigation outcomes are largely unpredictable, and can lead to unintended consequences. Control is an important hallmark of alternative dispute resolution.
  • Less Delay & Expense. Litigation is time consuming and expensive. Alternative Dispute Resolution methods are often not. And they take less time to complete.
  • Dispute is not Public Record. Typically only settlement agreements are put in writing, proceedings are not a matter of public record, like lawsuits are
  • Cooperation: Most people see solutions to HoA problems as win/win, or win/lose. The mediation process affords the opportunity to explore and fashion solutions that can maximize outcome satisfaction.

So when your neighborhood struggles with that fence, outbuilding or late paid dues, consider whether alternative dispute resolution can resolve the situation, before calling in the “big guns.”

Ruh Roh: Indiana’s RFRA

In response to a number of inquiries over the past week or so, following is some background and context for business owners regarding the Indiana Religious Freedom Restoration Act.

Indiana’s RFRA aims to prevent governmental entities of the State of Indiana from discriminating against those who exercise their religious rights. It does not authorize or provide license in any way for businesses to discriminate against gay, lesbian, bisexual, transgender, or any other, Hoosiers.

Background. 

In 1993, then-President Bill Clinton signed the Federal Religious Freedom Restoration Act. Known as the “Federal RFRA,” it allowed the federal government to substantially burden a person’s exercise of religion only if it (1) demonstrates that application of the burden to the person is in furtherance of a compelling governmental interest; and (2) it demonstrates that the burden used is the least restrictive means of furthering that compelling governmental interest.

Constitutional law folks refer to this as “strict scrutiny,” one of a few different balancing tests used to determine the validity of a particular law. Law schools teach this to all first year law students, regardless of whether they intend to practice constitutional law or not. Simply put, constitutional balancing tests are conducted to make sure that the government doesn’t always win.

The Federal RFRA applies to all religions, but was enacted amidst concerns largely pertinent to the Native American community, which was experiencing points of conflict with the federal government over use of its lands—especially those parts involving religious ceremonies.

In 1997, in a case called City of Boerne v. Flores, the U.S. Supreme Court held that the Federal RFRA was unconstitutional as applied to laws passed by state and local governments. The conflict in City of Boerne was between the Catholic Archdiocese of San Antonio, which had plans to enlarge a church in Boerne, Texas and the City of Boerne, which had an ordinance that prevented the existing church building from being torn down because it was a historical landmark. After City of Boerne, the States could enact their own provisions regarding their own state laws on the point of religious freedom.

A number of states did. Some developed religious protections through state court decisions. Others, like Indiana, adopted specific laws. Courts that developed RFRA-like protections used the balancing test codified by both the federal and state laws.

Context.

One characteristic of Indiana, which seems to have touched off the vitriol both at and inside the state, has less to do with the language of the state’s RFRA than it does the fact that Indiana, both at the State and many local levels, does not recognize sexual orientation as a class protected from discrimination.

Indiana has a longstanding policy, codified in Ind. Code 22-91-12, against discriminating upon race, religion, color, sex, disability, national origin, ancestry or military service, as such is contrary to the principles of freedom and equality of opportunity and is a burden to the objectives of the public policy. It is also the policy of the state to protect employers, labor organizations, employment agencies, property owners, real estate brokers, builders, and lending institutions from unfounded charges of discrimination.

However, some other states that have RFRA laws, like Kansas, also protect sexual orientation from discrimination. The absence of a similar protection has led some to see the Indiana RFRA as creating a loophole to allow Hoosier business owners to discriminate against those in that class. This is the common “gay wedding photographer” and “cupcake” hypothetical.

In fact, Indiana’s RFRA statute is nearly the same as Federal RFRA. As of July 1, 2015, an Indiana governmental entity may substantially burden a person’s exercise of religion if it demonstrates that the burden to the person: (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.

Last Friday, lawmakers amended the law to clarify that Indiana’s RFRA does not: (1) authorize a provider to refuse to offer or provide services, facilities, use of public accommodations, goods, employment, or housing to any member or members of the general public on the basis of race, color, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity or United States military services; or (2) establish a defense to a civil action or criminal prosecution for refusal by a provider to offer or provide services, facilities, use of public accommodations, goods, employment, or housing to any member or members of the general public on the basis of race, color, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity, or United States military Service.

The clarification adds a couple classes to the others mentioned at the outset.

 

The RFRA is being touted as good for business by larger corporate stakeholders and the convention and sports industry.  While the RFRA looks to some like a niche issue involving the Amish, bakers and wedding photographers, its yet to be seen what happens when the discussion moves to pharmacies, doctors, and real estate, to name a few.  While the law on its face applies only to dealings between governmental entities and businesses, and does not create wholesale causes of actions or defenses, its well to note that it was modified at warp speed in the midst of the Final Four, amidst great pressure and a threatened mass corporate exodus. Some uncertainty can be anticipated, so business owners concerned about the potential impact of a decision about with whom they will do business are best to get some guidance before implementing a particular plan.

Definitions of what a small business is vary according to industry type, sales, growth, employees, ownership, gross income, net income, and profitability.  It varies by who is doing the defining (bank, SBA, VC, etc), and the list goes on.

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But while they fail at an alarming rate (80% don’t’ reach their 18 month birthday), small businesses drive the economy.  Their number has increased significantly since 1982 and small businesses have been creating more than half of all jobs in the United States since the seventies.  In fact, since 1990, corporate America eliminated 4 million jobs; small businesses added double that many to the economy. 

Paul Fouts, dean of the Ageno School of Business at San Francisco’s Ageno Golden Gate University accurately summed it up when he noted “[s]uccessful small businesses are the unsung heroes, because small business is the driving force in the economic community.” 

At first blush it seems hard to reconcile the alarmingly high failure rate with the job contribution.  But if we ask a different question, e.g. “what makes a successful small business,” the answer is clearer. 

Every day in my practice I deal with small businesses owners in a range of industries.  They are men, women, young and not so young, and ethnic backgrounds vary.  Indeed, any number of criteria can be used to differentiate them. 

But the one common denominator, uniquely and somewhat intangibly tied to success, is purpose.  One fellow expressed it in terms of being a good dad.  Another described it as his desire to inspire others to change the world.  I define my as helping others’ advancement and achievement.  Some small businesses aim to be big, others to put food on the table.  Still yet, some to provide for employees.  

What these folks do and what their companies look like may change over time.  How they do what they do may change, too.  But in the end, those who understand their purpose are best equipped to navigate the myriad variables that can grab and tear at our enterprises.  

Thanks for the photo Julia!

https://chrismcgrathlaw.com/627/

Revisiting the Three Laws of Performance

I’m a huge fan of the Three Laws of Performance, by Dave Logan and Steve Zaffron. It deals with what it takes to create sustainable change, and has lessons that apply to both individuals and institutions.

Let’s put this in context.  The three laws are set against the backdrop of what the authors refer to as our “default future,” the product of a complex set of variables inside us, or inside our organizations.  Examining that default is valuable, as it identifies opportunities for change or (better) improvement.  Application of the three laws helps us figure out how to get there.
The first law:  how people perform correlates to how situations occur to them.  It answers questions about “why people do what they do.”  Reflection on this alone can be transformative, considering research on our ability to “rewire” our own brains.
The second law:  how situations occur to people arises in language (verbal and non verbal).  It offers us insight as to “how we improve.”
The third law:  Language that is future-based, or “generative,” transforms how situations occur to people.  When we use generative language, we transform and shape the future, as opposed to simply describing what is occurring or has occurred in the past and predicting the future.
Three Laws has excellent examples to illustrate its theory and some hard acquired research to support it.  Here at the law factory, we’re using the Three Laws to build a law practice that authentically supports the advancement and achievement of our clients.  Just making that statement changes how we approach new clients, and how we counsel them.  Staying true to that sometimes requires us to make some tough choices, such as not taking on matters that are not within the firm’s four core offerings of business counsel, commercial litigation, mediation and family law.  Or adding people who share the essential value of supporting the advancement and achievement of others.
Putting the three laws on your radar seems transformative in and of itself; people thereafter tend toward trying to use generative language.  But there are deeper questions there that challenge leaders to first look inward.
How do the Three Laws play out for you?  Is it the same in all environments?

Tips for Hiring the Right Business Attorney

There is a venn diagram on the back of my door.  One circle has “what lawyers put in their biographies.”  The other has “what clients look for in lawyer biographies.”  In the intersecting area are only two things:  email address and phone number.

Below are some considerations for hiring an attorney for your business, based on my experience as an entrepreneur and attorney.

1. Just the Facts.  There are a lot of “slam dunk” situations.  Most of them appear as such in the initial interview.  Meaning sometimes solutions are positioned as a “slam dunk” and sometimes the facts indicate the matter is a “slam dunk.”  Accurately portray your situation and carefully consider solutions that are unqualified.  Simple transactions can become complicated; hard cases can resolve easily.

2. Specializations & Scope.  Sometimes hiring an attorney with a specialization in a particular area is preferred or necessary.  On the other hand, a generalist (in my practice I call it “outsourced general counsel”) that understands your business and whom you trust can help you with everyday matters and to spot issues that require specialized engagement.  With more complex matters, however, that generalist should help you select specialized counsel, direct their services and manage the engagement to an efficient end.

Some owners need attorneys that help them do legally what they want to do.  Others want advice and help setting that course.  Your attorney can help in non-legal areas too, applying business experience, helping source capital, and making introductions to CPA’s and other advisors a successful enterprise needs, among other things.

3. Rates, Retainers and Second Opinions. No attorneys I know are afraid to discuss their rates, but some are apprehensive being the first one to raise the topic.  You should not be afraid to ask what they charge, whether (and if so) what payment terms are available, or if your matter is suitable for an alternative fee arrangement.  Some engagements do not require a retainer, in others, some payment photo copyup front is necessary.  Ask about the basis for the retainer, how it is paid in, and how it will be paid out.

Don’t be afraid to seek a second opinion.  If you’re going to get one be sure to include all the facts.  When I provide them in my practice, we often simply provide peace of mind to the client.  Sometimes a second opinion can offer an additional tactic, deal structure, or strategy.  Regardless, retainers should be in line with the complexity or time involved with the work.  And we recommend that all fee agreements be in writing.

4. Don’t Hire A Jerk.  Unless you Want to.  Ebert & Friss point out that “professional chemistry” is important.  Think about how you make decisions.  Do you build consensus?  Do you want a counterpoint?  Are you searching for better solutions?  Are you outgoing, or reserved?  Who are you negotiating with, or up against?  Your attorney should compliment or match your style.

 5.  When to Hire.  Sometimes that issue we try to handle on our own gets out of control and we need to call someone that spends a lot of time in that area.  Other times we can handle it just as well on our own.  There is little risk in seeking counsel early as its usually more expensive to engage counsel later in the game, when facts have matured, evidence lost, or positions galvanized.  In some situations, you can obtain legal advice behind the scenes, and manage the situation and interaction on your own.  In others, like litigated matters, direct involvement is necessary from the outset.  Early consultation, even if you keep them inactive, is preferred.

 6.  Don’t Count BigLaw Out.  Experienced, well trained lawyers at big firms with (generally) more expensive rates can solve problems efficiently given firm resources and can be appropriate depending on the complexity of the transaction, parties involved, what is at stake, etc.  They can also become expensive quickly where multiple resources are deployed to address singular issues.  Defining the scope of work, setting economic parameters, and managing the process are important.

6 Tips: Youth and Entrepreneurial Success

A birthday card from my in-laws (thanks Jan & Russ—Russ owns A+ Handyman of Noblesville) included three tips for staying young:

  1. Exercise Regularly;
  2. Maintain a Balanced Diet; and
  3. Lie About Your Age
The card provided a good chuckle and an opportunity for some morning reflection.  So, I grabbed my MacBook Air and some local Brunchies Blend brew and sat down to pen some “brilliance.”  Or step back and see how things are going.My Christmas list included three things.  One, to get back to my triathlon training weight.  This is and is not overly aggressive, something attainable by simply increasing training time and adding variety.  My daughter is rehabbing from an injury so we added time together at the gym, doing some swimming, cross training, weights and spinning.  But last month, bronchitis and the flu slowed things down; recovery and base building are on the menu this month.

Item two was eating healthier.  I seem to be a groundhog in a family of squirrels.  I eat a cookie and gain a pound, they eat a box of cookies and lose one.  Even so, Ive noticed how much processed stuff I eat.  So for Christmas I decided that this year, I was going to eat stuff that comes from the earth (for the most part) for thirty days.  This will be a challenge in a family that includes 5 outings for soccer a week, 2 for basketball, 3-4 for cheerleading, 1 for tennis, all on top of piano, homework, church related events, etc.  That means I haven’t started yet; check back this summer!

I started my first business after getting a regular paycheck for less than 9 months.  My second company came after being on the payroll for less than 24 months.  And there have been others along the line as well, short and long runs, successes and failures.  It can be said a million ways, but the benefits of entrepreneurship hinge on belief, hope and love.  Belief in yourself, and why you do what you do; hope in the success of the venture (or adventure); and love of what you’re doing, and those you’re doing it for.

Without those, it can feel like just hard work.

Using the Three Laws of Performance to Transform the Future

I’m a huge fan of the Three Laws of Performance, by Dave Logan and Steve Zaffron. It deals with what it takes to create sustainable change, and has lessons that apply to both individuals and institutions.

The context is important.  The three laws are set against the backdrop of what the authors refer to as our “default future,” the product of a complex set of variables inside us, or inside our organizations.
The first law:  how people perform correlates to how situations occur to them.  It answers questions about “why people do what they do.”
The second law:  how situations occur to people arises in language (verbal and non verbal, e.g. all communication).  It offers insight as to “how we improve.”
The third law:  Language that is future-based, or “generative,” transforms how situations occur to people.  When we use generative language, we transform and shape the future, as opposed to simply describing what is occurring or has occurred in the past and predicting the future.
Practical application of the three laws gives us the opportunity to help others see the world differently, and bring about change.
Three Laws has excellent examples to illustrate the theory and some hard acquired research to support it.  Here at the law factory, we’re using the Three Laws to build a law practice that authentically supports the advancement and achievement of our clients.  To us, just making that statement transforms how we approach new clients, counsel those who’ve engaged us, and how we solve problems.
How do you use the Three Laws?

Hamilton County Scam Alert

I received this from a couple folks, and thought it might be of interest –Chris

FOR IMMEDIATE RELEASE Deputy Bryant Orem, PIO

2014-008 (317) 776-4104

January 29, 2014 Bryant.Orem@hamiltoncounty.in.gov

New Variation of Old Scam in Hamilton County

Last year, con artists attempted to scam Hamilton County residents by calling and threatening arrest, claiming

victims were delinquent in paying taxes. A new variation of this scam has popped up in Hamilton County

with thieves now calling and threatening arrest because victims did not appear for jury duty. In an even more

interesting twist, the callers may be using names of courthouse employees to lend credence to their calls.

The scam works like this: A victim answers the telephone and the caller says a warrant is being issued for not

appearing for jury duty (or paying taxes or another offense). The caller may give the name of a courthouse

employee or a name similar to an employee. Caller ID may even show the call originating from a local number

as these ID’s are easy to fake with current technology. The caller then states that the victim can avoid the arrest

by paying a fine submitted by wire transfer or pre-paid credit card. Pressure is put on the victim to pay quickly

in order to avoid jail time since once paperwork is submitted the arrest is imminent. The caller may even

provide another telephone number to call to verify the offense and pending arrest.

As a reminder, arrest warrants in Hamilton County are not served over the telephone. If you are ever in doubt

that you are speaking with an official county employee, hang up the telephone, research the appropriate number,

and contact the agency directly. Do not call a number given by the person on the telephone as it probably is

not a correct number. If you owe money to the county or to any government agency, contact the office directly

to determine how the money should be paid. Most government agencies do not use wire transfers or pre-paid

credit cards. It is almost impossible to track or recover money if the victim falls for the fraud.

If you receive one of these scam phone calls, or one similar to it, please report it to the appropriate law

enforcement jurisdiction. Hamilton County Communications at 317-773-1282 can direct you to the appropriate

agency to determine if a report should be filed.