A Solo Legal Practice May Afford More Flexibility, Balance of Work and Lifestyle

If you’re an avid fan of the television drama “The Good Wife,” you may sometimes wonder what it’s like to work for a large legal firm. Yes, the hours do seem long and grueling, yet there’s that attraction of a high salary plus the glamor of high-profile litigation and courtroom challenges. I will admit that television does a fair job of portraying the ambiance of large legal practices, but as they say, the devil is in the details.

Here in Seattle, a partner in a larger firm must generate about $200,000 of billable hours just to cover overhead costs — associates, paralegals, secretaries and office leasing — before he or she starts yielding any individual profit. That’s a lot of financial posturing for the luxury of serving a larger practice with staff and office overhead. Still, bigger firms do provide valuable training for attorneys just beginning their careers. They learn the practice of law in their chosen niche or specialization, and they gain valuable experience in developing a clientele base.

My legal career, too, essentially began in a large firm, but I felt somewhat trapped in a field of practice that was heavily litigious and full of conflict. I didn’t like the combative nature of the litigation process, and I really felt I would be happier if I were working with people to avoidproblems in the first place, rather than solving them later down the road. So I approached my litigation clients, informing them of my decision to leave the firm and go “solo.” Basically, I said, “I want to help you grow as a business and be successful in business. You’ve hired me before to defend you in litigation. Why not consider me as your business attorney?” With this convincing premise, I hit the ground running with no interruption in business activities or income and have never looked back!

Having the freedom and independence as a solo practicing attorney is truly incredible. In one sense, you are tied to your practice because you must be available 24/7 for clients, but your workday is your own. You can create the hours that you work and the hours that you don’t. Although my work day may often be interrupted with phone calls or emails from clients, I also have the flexibility to work 12 or 13 days straight and then take a week off. More importantly, I’m able to balance my personal lifestyle with the enjoyment of my practice by working from several different locations, including Seattle and Whistler, British Columbia. I have done that since the 2010 Olympics, when I served as a volunteer for the event and realized that I could practice effectively from both locales with some help of modern technology.

Over the last five years of operating my solo practice, I’ve encountered other attorneys, too, that have successfully established their own practices with better incomes, leaving behind the larger high-profile firms and their overhead pressures. Why not? A big office tower with high-figure floor rents and maintenance costs is no longer necessary to practice law. Technology has revolutionized the legal marketplace. All you need is a desktop or laptop computer, a printer, a scanner and some mobile communication equipment, and your office can be any size anywhere, even at home. And when scheduling clients, you now have the flexibility of visiting their offices. In fact, I actually think clients are more appreciative of the fact that an attorney is willing to come to them on their turf. Instead of being preoccupied with billable hours at high rates, clients can now develop more cost-effective business relationships withtheir attorneys, where they feel more like partners rather than line items on a profit statement.

Even today I’m still surprised when new clients tell me of their disappointment with previous attorneys who were not responsive in returning phone calls or emails, or who scheduled meetings and then failed to show. I don’t understand it, especially with all the modes of communication technology available. Moreover, this behavior delivers a poor impression of the legal profession to the public. What are these attorneys thinking? Success only prevails when clients are serviced in a respectful manner. If we can provide this service to our clients from our home offices, so much the better.

                                                          

Reflections of “Man’s Best Friend” in Protecting Client Interests

Most avid dog owners will admit their canine companions are creatures of habit, comfortable in their routines, yet still guided by instincts of which we as humans are basically clueless. The moment you “think” you have figured out all this instinctive behavior can often have surprising consequences. Fortunately for me and my dog Eddi, a German short-haired pointer, we haven’t become candidates quite yet for America’s Funniest Home Video, but there’s still time.

Early one morning recently, I let Eddi out in the backyard to do her normal “business,” something that generally takes about 2 or 3 minutes. When she didn’t return on time as usual, I became a little anxious. As it turns out, she was gathering an opossum — undoubtedly a valued gift for her master. I must note that I have received this same gift several times over already. Her strong instincts to hunt and track game don’t end with unsuspecting opossums, however.

This past summer, Eddi resorted to chasing small black bears. After numerous encounters with chasing these wild animals up trees and through the lowland forests, I knew I had to address her uncontrollable behavior, mostly for her own protection. So, I invested in a shock collar to help reinforce my stop commands, which she had obeyed previously, in addition to developing some new commands to help guard against her sometimes out-of control behavior.

By now, you’re probably wondering where I am headed with this personal tale. It’s simple. Out of love and fondness for our four-legged companions, we often assign them human traits, mostly the ability to think and reason, but what about man? Do we not sometimes exhibit that same lack of control of our behavior that we witness in our pets? We don’t have full reign over our lives entirely; we depend on others, much like our pets depend on us. Attorney-client relationships should be built on the premise of trust and dependence to consult with each other and openly discuss issues before chasing that proverbial bear up a tree.

My clients that have the most control over their businesses and the fewest legal conflicts are the ones that come to me early on to discuss potential problems before they escalate into legal dilemmas. In promulgating contractual relationships, we can modify documentation where necessary to protect clients’ interests, making sure they fully understand all pertinent issues beforehand. Those who instinctively feel they can handle their own legal matters or sign contracts without first consulting an attorney are the ones who usually end up in litigious situations because they don’t understand the ramifications of their decision.

Of course, I must confess that perhaps some of my clients occasionally gaze upon me unknowingly like my dog Eddi, asking herself, “What is he doing?” After the recent encounters with bears, she took on a new challenge a couple of times — herding elk. She gets behind the herd and chases them towards me, which is probably instinctual, encircling game and bringing it back to the hunter, waiting for the hunter to kill it. Well, I am no hunter, so she probably thinks I am the most inept owner in the world because she’s doing all the work and I’m not finishing the task. As Eddi’s master, though, it is my responsibility to protect her and safeguard her behavior as much as possible, particularly with new experiences, such as chasing elk. I have that same obligation to my clients.

Just as I have to constantly retrain Eddi to keep her clear of harmful encounters with other animals, I try to continually steer my clients in the right direction. In fact, it is often my role to discuss clients’ new business proposals. We review contract language; we talk about potential risks and rewards; we examine ways to avoid risk; and we look at how to increase the opportunities for more business and further benefits. I believe that all successful businesses, like pets and our selves, should require the same consideration of their well-being.

An Ideal Client Brings New Challenges, Cooperation . . . and Excitement!

You know the old saying: “You can choose your friends but not your family”? Well, what about clients? Someone asked me the other day, what is my ideal client? That’s an easy one. They are a client I recently picked up from a referral, which is how I develop a majority of my business.

My new client is an asbestos abatement company located in south King County here in Washington. They were contracted by a very large company in China, to train and certify their workers to become licensed asbestos handlers. The Chinese operation must put together a team of workers to abate asbestos on worldwide ocean-going vessels. As you might expect, China can perform the abatement tasks at about two-thirds the cost of doing the work in Seattle.

This is exciting territory for me! Thanks to this American enterprise, it’s a great opportunity for the Chinese company, and I’m right in the center of the action, serving as a legal liaison. I just love it! Initially, I drafted the letter of intent outlining basic parameters and the provisions for a confidential non-disclosure agreement regarding the business venture. I just finished the third phase, which is the training service agreement. My client will be dispatching four or five instructors to China to reside there full-time and train workers.

I also drafted the licensing agreement for the use of the manuals and training materials by the Chinese, assuring that the American company will keep full ownership of its intellectual property. There is going to be a host of other contracts to develop, too, as we move forward with this business arrangement.

So far, my observations are quite optimistic. I am seeing firsthand how this business is going to evolve. I have a very good relationship with my client and an equally good relationship with the party in China. Fortunately, this is not a case where you are battling with the terms of agreement. This is the ideal situation in which you’re discussing matters of importance with both sides — what they each want to accomplish with the agreement. And I get to memorialize it in simple, easy-to-understand language that is going to help everyone move forward and understand their working relationship

In terms of the business contract, all legal provisions are based on American law via a choice-of-law provision, which is why it was very wise of my client to take the initiative in developing the first round of draft agreements. This entire process will be governed by Washington state law, and we’ve placed a choice-of-law provision in the contract, to guarantee this. Not only is this good business sense, it is a sound practical move. Licensing for asbestos abatement falls under the strict guidelines of the U.S. Environmental Protection Agency, and the Chinese company is seeking accreditation under an American licensing system. This, of course, will give the Chinese more credibility when they’re marketing their services to international shipping companies.

As part of my oversight responsibilities, trust is a vital issue. We have incorporated provisions into the contract regarding payment and have clearly set forth an agreement that payment is due within 15 days upon invoicing. I consider this matter to be the most contentious, potentially speaking. If there’s a dispute along the way, it will probably be over payment issues.

The larger concern focuses on the intellectual property rights to the manuals and training materials that are being licensed. You quite often hear about the Chinese knocking off other companies’ research, patents and property rights. Again, there’s the matter of trust; we are hoping that this Chinese company is not going to mass-produce these manuals and materials, thereby undercutting my client’s ability to do business in China.

To contractually safeguard against this violation, we have assigned this business arrangement a finite two-year term, with the ability to renew or not renew after that period of time. Within two years, we’ll certainly know whether any piracy issues have surfaced. If any do, we’ll just pull the plug on the contract. However, I believe it is beneficial for the Chinese to work with my client and abide by the rules, so I’m going to keep an optimistic outlook.

Reviewing Compliancy with Employment Laws Can Help Mitigate Your Legal Risk

As a responsible member of the legal profession, I sometimes have to remind clients of the value in preventing disputes before they escalate into something more serious. And one of the most effective ways for businesses to be proactive in avoiding unnecessary legal risk is to periodically self-examine their organizational structure and operations, to safeguard their compliance with state and federal employment laws.

An area of compliance often vulnerable to legal repercussions is the typical employee file. What information are you or your human resources department storing in these files, and how is this information organized? Although common practices may suggest that one umbrella file for each employee containing all data is the most centralized solution, that approach may not legally satisfy some compliance standards. For instance, did you know that the Health Insurance Portability and Accountability Act of 1996 requires companies to maintain separate files for employees regarding their health insurance benefits package and medical history? Unfortunately, some businesses could inadvertently be sharing this data in the same file with general information relating to hiring agreements, performance evaluations and disciplinary actions. As a side note, it’s also a good idea to know the time expiration statutes for retaining employee documents within your state.

Another compliance pitfall is Form I-9: Employment Eligibility Verification, which is issued by the U.S. Department of Homeland Security, containing citizenship and immigration information. Aside from errors in completing these forms, I have sometimes observed vulnerabilities in the security and storage of these documents. As with maintaining separate health insurance and medical history files for each employee, I suggest that I-9 forms be placed in secure binders and locked in storage. I also recommend that these documents be electronically scanned for backup purposes and stored in separate, secure locations. I might note, too, that there are paperless methods for completing I-9s and safely storing them off-site.

Company pension and retirement investment reforms over the last decade have also introduced new areas for compliance. Today, you must assure your employees they are receiving updated, clear reporting of their vested financial benefits. This not only requires proper documentation, but it also calls for opening lines of communication that are easy for employees to comprehend. They should always have access to business financial advisers to explain any concerns and answer questions regarding their benefits.

Businesses also occasionally overlook another compliance detail: the displaying of posters pertaining to U.S. labor laws. Although it’s easy to forget this small task, these posters are mandatory and must be placed in conspicuous workplace areas where they can be easily viewed by employees. Similar posters issued to certain organizations by the Occupational Safety and Health Administration and other state and federal agencies also usually fall under the same mandatory rules for compliance.

Finally, have you reviewed or updated your employee handbook lately? I can’t stress enough the importance of maintaining and disseminating this informational guide to everyone in your organization, including high-level management. If you represent a smaller organization, one that doesn’t have a formally published handbook, your employees or co-workers should have an alternative access to pertinent information, such as your organizational mission and values, performance goals and objectives, use of company resources for personal use, standards of conduct and behavior, and disciplinary and termination policies. A well-designed handbook that is regularly updated for employee orientation, retention, and development and training serves as a valuable tool in lowering the risk of company liability in the event of an employee lawsuit.

Mediation: A Simple, Effective Approach for Resolving Complex Issues

No doubt, many of you have watched a few evening television dramas depicting the mediation process. Scurrying from one conference room to another numerous times, sometimes carrying sandwiches and beverages, the mediator attempts to settle the differences between disputing parties to stave off an impending courtroom battle.

Believe it or not, except for a few embellishments, the television portrayals of mediation are fairly accurate — or at least more believable than the courtroom antics often aired. There is, of course, more detail to the mediation process than what I just described, but the salient point is that mediation can be a valuable tool in settling legal claims before they escalate to the trial level. In fact, in states where mediation is regularly deployed, there has been a 95 percent success rate of resolving conflicts prior to litigation, making it one of the more popular forms of alternate dispute resolution.

Aside from being a positive, upbeat approach for settling legal claims through discussion, negotiation and compromise, the mediation process is quite expedient and cost-effective as compared to lengthy and expensive courtroom litigation. Consequently, to help streamline the legal process, many jurisdictions across the United States are requiring that all disputed claims defer to mediation first before considering any litigious action in a courtroom. In all of the contracts I draft for business or transactional clients, I build in a provision requiring neutral third-party mediation as a preventative measure to avoid litigation.

Neutral mediators can be retained from several sources. For instance, local attorneys who have quality reputations as problem solvers are always a good choice. I often use the mediation services of Christopher Soelling, a well-respected Seattle lawyer. Retired judges, local or statewide, that are trained and experienced in dispute resolution are other prime sources for neutral mediators. There are also professional mediation services available statewide or regionally, or you can contact the American Arbitration Association regarding their professional mediators who serve nationwide.

In all mediations, preliminary documentation is required of all parties to a dispute, including an exchange of position papers or mediation briefs. Generally, two separate sets of mediation briefs are distributed, one for the parties undergoing mediation and the other specially earmarked for the mediator. And as you would expect, there are basic ground rules for conducting mediation.

Ethicsl rules prevent the sharing of confidential information between disputing parties by the mediator. However, with permission, a mediator may share information to encourage settlement. Also, joint sessions of the disputing parties are permitted, but most attorneys involved in mediation waive that right, preferring the process to be conducted in separate rooms with the mediator acting as the “go-between” in negotiations. It is important to note, too, that a mediator does not decide the outcome of any mediation, but acts more like a facilitator working toward solving problems.

Sometimes, mediation is not successful initially, and there can be occasional roadblocks. When dealing with construction claims cases, for example, you need to have an insurance adjustor available on site to make decisions. The same goes for large corporations or multi-claim disputes. You must have someone with authority present during a mediation to sign off on any conditions for settlement.

Eventually, though, perhaps after several attempts, mediation will usually result in a successful compromise between disputing parties. And in some states, like Washington, once a settlement is reached and general terms are accepted, the provisions of a mediation agreement can be legally binding and enforceable when a prepared document is signed jointly by all parties of the mediation.

The Value of Mediation: Your Opportunity to Control the Outcome of a Dispute

What if you had a crystal ball that could predict the outcome of your pending litigation in court or even a proposed legal action? Would you do things differently? Oh, don’t you wish! The stark reality is that once you go to trial, the resolution of a dispute is out of your hands. You are essentially waiving your control of any legal settlement to an unfamiliar third party, whether it is a judge, a judicial panel or a jury. You do, however, have an alternative to this litigious situation: mediation. The process involves the selection of a neutral third-party that attempts to resolve a legal dispute through discussion, negotiation and, hopefully, a mutually acceptable compromise.

Yes, I did say “compromise,” but that is actually a good thing. All parties in a dispute need to regard compromise as a means for resolution, not confrontation or disappointment. It is the last point in litigation in which you still have control of your decisions before someone else steps in and takes over completely. At that point, all disputing parties must face the truly unknown consequences of a trial procedure. Unfortunately, in a courtroom you don’t know what’s going through a judge’s mind or through the minds of jury members. In fact, the expected outcome of a judge’s determination or a jury’s deliberation can sometimes be quite the opposite. But when you are arguing the merits of your case or defending your position during the mediation process, you have a prime opportunity to influence the outcome with your decisions — and your compromises.

In the state of Washington, whether in a federal or state court, all disputed claims or actions must defer to mediation first before a judge will even allow a case to go to trial. This is a systematic approach I strongly support. I often find that clients, even if they are sophisticated business clients, don’t always understand what mediation is or its benefits. So in all of of the contracts that I draft for my business or transactional clients, I insert a mediation provision requiring all parties in a dispute to engage in mediation before they can even file suit in state or federal court. I rarely receive an objection to this provision, because all clients at least ponder the idea of settling a case before entering litigation. A neutral third-party can provide a fresh perspective on the merits of your case and your defense, as well as the weaknesses of your case and your defense.

Occasionally a client may have a corporate policy barring the use of mediation, but overall, I have found the process to be a valued alternative to lengthy litigation in court, and mediation can be applied to virtually all types of legal disputes — large and small. Of course, mediation is not always successful the first time out of the gate. I have encountered this often in multi-party construction claims cases, in which the initial mediation doesn’t solve the issue, and nobody wants to settle. However, as the trial deadline approaches, everybody realizes that this opportunity to determine and control an equitable outcome is fast-disappearing, so they call back the mediator in an attempt to reach a settlement. That scenario, unfortunately, is becoming more and more common. Perhaps people think they can gain bargaining power as a case proceeds, but more often than not, their bargaining power actually dwindles as the trial date gets closer. Inevitably, most will go back to the mediator.

Mediation agreements are not without recourse either, should a stakeholder default on the terms of the settlement. In Washington, for instance, the provisions of a mediation agreement can be legally binding and enforceable when a prepared document is signed jointly by all parties to the dispute. If someone later decides to back out on the settlement, the other parties can proceed to court and have the mediation agreement enforced as a matter of law. That action in itself shows a judicial preference and favor for mediated dispute resolution over a court trial bureaucracy.

You Don't Need Big Box Firms for Big-Time Representation

The Washington Biotechnology & Biomedical Association (WBBA) is a trade group for life sciences in Washington. As a Life Sciences attorney, I often attend their trade events and meet people who are involved with pharmaceutical studies and various bio-technology projects. They are usually represented by one of the large firms here in Seattle.

The people I meet in the life sciences industry complain to me about the cost of their legal fees; they make a phone call to their attorney, and they're charged $400 an hour. I'm not really sure why or how these big firms have a monopoly on the life sciences, but it seems as if there is a perception out there that big law firms are better-equipped to handle cases. They are bigger, after all, and better-staffed. Their fees are hefty – but surely you get what you pay for.

This is an unfortunate misconception – one that costs a lot of money.

Many attorneys who now work as solo practitioners or for small firms trained at a major law firm. It is indeed possible to attain high-quality legal representation at a big firm. But is a big firm the only place you can find this level of competent representation?  If you choose to go a different route, will you be sacrificing quality? The answer is unequivocally “no” – and it's important to understand this, particularly if you don't have a corporation paying your legal fees.

The fact of the matter is that big firms are expensive – and they simply don't have to be. Their high costs are often a result of inefficiency and a certain approach to billing practices. In litigation, for example, the big firms tend to issue the absolute maximum number of interrogatories and requests for production and admission. The goal is to bring in as much information as possible, but retrieving and assimilating all that information takes time and costs money, which is then billed to clients. Perhaps this isn't a pressing issue when the client is Google or Microsoft, but what about individuals paying their own legal fees?

Whether it's a contract or a litigation dispute, the most cost-effective approach is to try to narrow down what's actually relevant and draft language that reflects what needs to be said in clear language, omitting the superfluous. For those of us in solo practices, part of the reasoning for this approach is practical: we are busy, and we don't have the time or the staff to do unnecessary work.  Many solo practitioners and small firms are staffed with attorneys who trained at large firms and provide excellent services at reasonable prices. 

For me, however, working as a solo practitioner also plays into my belief about the way I want to practice law. I don't believe in billing time just to bill time. It is my objective to do exactly what my clients want me to do – no more and obviously no less. I don't take action unless my client has approved it. When my clients receive my bill, they fully understand exactly what it is they're paying for.

Essentially, I believe in making things as clear as possible for my clients in the area of contracts and other transactions, using clear, understandable language. It is inappropriate, in my mind, to use 30 pages of complicated and archaic legal-speak to say what could be said simply and clearly in three pages. This is my approach in all matters.

Legal representation can be efficient, excellent and economical. It is possible to have all three. A smaller firm or a solo attorney can provide clients with the same level of service they would receive at a larger firm, and making this choice can bring the added bonus of a considerably smaller price tag.

If you are looking for an attorney, I recommend you contact your local bar association. Most Bar Associations, including the King County Bar Association and the Snohomish County Bar Association, have lawyer referral services. 

Fault-Finding to Success

Consumers are always seeking a quality product – no matter what industry the product is intended for. However, the complexities of most products today bring about an inherent problem: one industry does not necessarily control production up and down the chain. Thus, it is generally difficult to ensure quality control beyond one’s own company. This lack of control could be unnerving, if not for an unexpected, guiding principle: fault.

This principle of accountability holds true within the realm of Clinical Research Organizations (CROs). Liability drives companies to create better products, and fault is an ever-present motivator. In the case of CROs, these organizations find themselves in a delicate position of having to be cautious about whom they are dealing with in both upward and downward directions: medical sites, clinical research assistants, sponsors and subcontractors.

Every step of the way, your contracts must stipulate that the quality of work is guaranteed, and allocating fault and responsibility is a key element to that.  No matter who is involved in the process, though, there must be assurance that quality is assured, starting at the top and running straight to the bottom. 

My yard, like many yards, is inhabited by a number of squirrels who assume they belong on my property. My dog will bark, informing them that this is, in fact, not their yard. While an audible yap is not necessarily a powerful deterrent to the squirrels and their trespasses, the constant threat and physical presence of the dog keeps them on their toes. People in contracting relationships can think of the dog’s bark as “fault.” While the persistent threat looms, there is always the possibility of greater danger – such as a loose dog that can chase you.

The liability associated with a bad drug reaction – or even worse, introducing a dangerous or deadly drug to market – is huge. To prevent this from happening, CROs must have clearly defined guidelines and expectations for all the organizations and individuals involved. This runs deeper than being a blueprint for the “blame game.” This means establishing a method to ensure data integrity, which, in the realm of CROs, ultimately translates to public safety and health. CROs are not just trying to indemnify themselves, but they are making sure that every step along the way preserves the highest quality work.

The world of life science is a challenging and competitive ecosystem of tests and trials. Fortunately, there are some governing principles that help ensure the safety of those within it. For CROs, they can feel assured that the threat of fault will ensure that the best product possible can come from the system, and the greatest good can be done so that the consumer can have the maximum benefit.

Deeper Into the Licensing Abyss

In an earlier post I touched upon the importance of proper contracting language, but I barely poked the surface. Today I thought I’d delve a little deeper so you can better understand some of the ways licensing agreements can affect a business.In life sciences, one area where attorneys can be particularly useful is helping Clinical Research Organizations (CROs) with licensing agreements.

A CRO, for those unfamiliar, is sort of a middle man. It contracts up with a sponsor, a company producing a new drug or device or what have you, and then contracts down with subcontractors to use and test the new technology. Subcontractors include clinics and clinical research assistants, who go to medical sites where the new drug or device is being used and make sure data are properly maintained.

Licensing agreements are made between the sponsor and its subcontractors — sometimes passing through the CRO as well — granting them the right to use the new technology for testing purposes, but without conveying any ownership interest in it.

For example, right now I’m dealing with a company that came up with technology that uses genetics to measure the rate at which an individual metabolizes a drug. To test its device, the company will grant a license to a clinic to use it, but the license won’t transfer any patent rights, or any intellectual property rights.

Where I also get involved with a CRO is when a sponsor sometimes tries to include some type of licensing fee, which, in my opinion, is inappropriate in the context of a licensing agreement for testing drugs or equipment. Think about it: CROs aren’t making a profit from the use of a new technology, they’re simply testing it. If they're being paid to test a device, why should they also have to pay a licensing fee while seeing if it works?

Attorneys can also make a big difference by ensuring that the contract language of a licensing agreement is consistent between biotech companies, CROs, vendors, clinics and clinical research assistants. In other words, if there is a licensing agreement between a CRO and sponsor company, the subcontractors need to be similarly bound to the terms of that licensing agreement. Otherwise, there could be situations where subcontractors are using a particular device or software and think they have ownership interest in it, maybe even modifying it and putting their name on it.

For instance, a client of mine was running a licensed biostatistical software program to process data on the efficacy of a particular experimental drug. The client hired a subcontractor, but didn't tell him about its licensing agreement. He started tweaking the software and wanted to use it for other clients.  This was not a good situation:  the client did not have a work for hire provision in its subcontractor agreement, so technically the subcontractor had ownership, but that ownership was adverse to the licensing agreement with the sponsor. 

Fortunately, I was able to negotiate a resolution to the competing claims of ownership, and draft licensing language for my client to avoid this situation in the future.  If you deal with licensing agreements in your particular line of work, make sure to get legal advice.

The Importance of Insurance

When people hear the term “insurance,” they automatically assume that it is some form of coverage broadly defined in general terms. What many do not realize is that insurance is so much more than simple coverage for accidents and other unforeseen events, and being properly insured is an important aspect of doing business.

Insurance should perform a very crucial function: to protect a person or business entering into a transaction. One cannot always shift risk and responsibility to another party in the transaction.

The type and amount of insurance necessary is critical. Those who may have insurance may not be covered for what is actually needed, and those who have the proper type may not have enough to cover the potential damages one is exposed to in a business transaction. The specifics are dangerous traps, and many do not read between the lines where they should.

For instance, I have a Clinical Research client I formed in 2008. Clinical Research Organizations (CROs) assist in the testing of experimental drugs from conception through FDA approval.Once the company was up and running, they spoke with a broker who obtained an insurance policy.Six months later, they asked me to evaluate whether they were property covered for their particular line of work.

They were not.

The broker had simply procured them a medical malpractice policy, even though a CRO does not practice medicine. There was a specific exclusion in the policy precluding testing for administration of drug trials, which is exactly what a CRO does.

For six months they were operating with no insurance protection. I was able to put the client in touch with a qualified broker and obtain a full refund of the premium they had paid for the useless coverage. Legal advice regarding the adequacy of insurance is critical.

I have another client who contracted with a tile contractor who worked on condominiums for six full years before realizing that the insurance company had included a condominium exclusion that the contractor was unaware of. Unfortunately, the exclusion was discovered too late and my client and the tile subcontractor incurred substantial unanticipated costs due to the exclusion. Although the condominium exclusion was never blatantly stated, it was clearly within the policy and no coverage was provided.

The bottom line is, if you want protection during your transactions, you need to have the right insurance. And to get the right insurance, legal advice regarding the adequacy and sufficiency of insurance is critical.

Life Sciences, in Lieu of Chocolate

Science and technology fascinate me. Perhaps this isn’t the first sentiment you imagine hearing from an attorney, but it occurs to me daily. My enthusiasm for the life sciences industry and the intelligent people who make up its moving parts is one reason why I look forward to coming to work every day.

I was tempted to surprise the whole industry with a box of chocolates, but for today I’ll simply share a few pieces of what I value most.

I entered life sciences law with a strong desire to help companies start from scratch. As I mention on the website, my first client in this field was a Clinical Research Organization (CRO). The four individuals behind it have backgrounds in different areas of the field: pediatric oncology, managing FDA compliance issues and pharmacy. These clients fill the room with brain power, but as good as they are at what they do, they’re not attorneys. Companies in this industry have so many moving parts; they need someone on their side who understands contracts and licensing. For example, they need an operating agreement to explain how the business will run and how decisions will be made. This particular company has taken off in leaps and bounds in the four years since we started working together.

Always Changing

Due to fluctuations in venture capital and government funding, life sciences is a continuously changing environment. As soon as someone gets funding, everyone in the industry knows who they are and wants to start a new business with them or buy their existing operation. This is why new companies should involve an attorney from day one. Clients come to me knowing as much about indemnity, choice of entity and portion of liability as I know about biostatistics. This doesn’t prevent me from handling their agreements and licensing. We teach each other, and it’s in those learning experiences that I find my job so much fun!

Always Innovating

The intellectual abilities of my clients keep me on my toes. Every innovation brings a new set of issues to address on the legal side. I’m good at dealing with these issues. When you have smart people from varied backgrounds coming together and creating something new that’s financially viable, it’s an exciting thing to be a part of. These companies have a bright future not only in Seattle and San Francisco, but nationwide.

Always Building

The ultimate reward of working with life sciences companies from the very beginning is watching their rapid growth. Legally secure, my clients have a strong foundation to build on. The potential is huge because nothing can come up and bite them from behind. As their business grows, my business grows. Once the legal corners are squared, my role is to make sure the company is moving in the right direction.

The life sciences draw all kinds of curious people. Working with sponsors and vendors, or negotiating biotechnology agreements and software licenses allows me to hear about advancements directly from the source. In an industry that’s always changing, innovating and building, I get to learn something new about the world every day.

Small Business Pitfalls: Why Attorneys Make Cents – Part II

In my last post, I began making the case for retaining a qualified attorney to help you start and grow your business. You know by now the complexities of business law but may be still stuck on price and value. To you, I offer some of the insights I’ve gained that illustrate why it’s cheaper in the long run to have an attorney on your side.

Counting the Costs

The hazards of starting and running a successful small business are many. And frankly, they are all really expensive. Startup clients often call me midway through their attempt to start an LLC. They’ve done something wrong and they’re stuck. More often than not, charting the right course from the outset is a lot cheaper than untangling a mess. I also get questions down the line from established small business owners who’ve yet to understand when they are signing a document, they can be representing both themselves and the company — setting both up for liability.

Another source of panic calls I get is from people who’ve set up with the wrong structure, are in trouble and need help keeping their personal assets separate from company assets. I also counsel clients on choosing the proper insurance.

Furthermore, licensing requirements are another source of pain for new businesses caught unawares in legal dramas. For example, if a contractor goes into business as a landscaper and doesn’t have a contractor’s license, he can’t sue if he doesn’t get paid. I don’t think a lot of people know that. You may think you can just open a business and start working. But a contractor, for instance, has to have a bond to be licensed with the state of Washington for a minimum amount of $6,000.00 or $12,000.00, depending on the type of business.

Been There, Still There

One of the biggest benefits of developing a long-term relationship with an attorney is that he or she will know your company well whenever a problem arises. Waiting to call an attorney when you’re in trouble or being sued virtually ensures you’ll pay more because the lawyer will clock more hours getting up to speed. Moreover, I especially enjoy the continuity of advising on startup through to contract negotiations and as businesses grow, handling mergers and acquisitions.

If you’re going to spend the enormous amount of time required to start and build a business, and stake your future on it, you should make sure your legal foundation is solid. The myriad laws surrounding taxes, licensing, permits, new regulations, intellectual property, franchising, advertising, hiring non-citizens, contracts, operating online, environmental codes, workplace safety, acquiring and selling real estate and others are just plain confusing. The best way to ensure you start on the right foot is to sit down with a qualified attorney who explains everything in plain English and goes through the pros and cons of each issue so that you can make the best decisions possible.