Do You Have A Business Dispute? Consider Commercial Courts.

On June 1, 2016 Indiana’s commercial courts project went live. Businesses can benefit from streamlined procedures to resolve disputes. In general, Indiana’s commercial courts can address the following types of cases:

  • Incorporation: formation, governance, dissolution, liquidation
  • Ownership: Rights, and obligations, liabilities and indemnification of limited liability company owners, corporate shareholder, and the like
  • Internal Operations: agreements involving owners, shareholders, employees, etc.
  • Disputes: issues between two or more companies in specifically enumerated areas

Commercial courts do not handle consumer, personal injury, family, and wage/hour cases, as well as other types of cases. Procedural rules unique to the commercial courts also apply. An attorney with business and commercial litigation experience can help your business sift through these issues.

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.

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/

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.