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Author: Matthew Harrison

SLOW BURN HIGH RETURN

 

IMPORTANCE OF MAINTAINING A LONG-TERM PERSPECTIVE

As a business attorney, one of the errors I often see a fledgling business commit is to focus their entire business model on achieving instant success.   In other words, the business becomes too focused on the one large client, opportunity, product, or other action that will lead to quick success and profitability.   Very similar to a gambler, the business is constantly looking for the “big payday.”   Also, very similar to a gambler, that big payday for the business rarely comes.    Instead, the business languishes and eventually fails.

From my practical experience, I rarely have seen a business be able to survive in the long-term with the instant success perspective.   Instead, most businesses arrive at success and survivability through a series of small actions taken over time.   This is a more organic approach where small actions slowly build up a critical mass that acts as a catalyst for sustained success.   It is what is often called the “slow burn, high return” approach.

“Overnight success” never occurs overnight.   Instead, it is long-term planning, preparation, and work that leads to success.  New businesses often miss the opportunities that come from this long-term approach.   In fact, the business often loses out on long term relationships with clients, customers, or others because its leaders are looking for quick success.   As such, they are losing out on long-term profitability.

My suggestion to individuals starting a new business is to look for potential business relationships that will foster a long-term approach.   For example, it may be a potential client, customer, or business partner that does not immediately need your product or services.   Instead of parting ways never to communicate with each other again, agree to stay in touch.   These communications over time, will often lead to a change of circumstances where you will be able to assist this potential client, customer, or business partner at some future date.   Oftentimes, it may be a referral by this individual or entity that does not need what you can offer, but a relationship has developed sufficiently over time where an entity is comfortable in its recommendation of your business.

Just as a business should foster these long-term relationships, business owners need to keep in mind that they will often be approached by individuals or businesses looking for that big payday.    Avoid relationships with these individuals or businesses because, like a traveling salesperson of old, it could be here today, but gone tomorrow.    You do not want to be the individual holding the bag when the dust settles.

Long-term success is more of a marathon than a sprint.   A successful business must focus its primary attention on the long-term approach.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Revising Your Estate Plan With The Times

 

The Only Constant in Life is Change

As I often mention during the meeting where a client signs their estate plan documents,  an estate plan is “not designed to be set in stone forever.”   The majority of estate plans and their respective documents are designed to evolve as the individual’s life changes.   Without this ability to amend or revise, an estate plan often becomes outdated and practically useless.

On several occasions, I have met with adult children attempting to resolve their parents’ estate.   The children are grown often with children and sometimes grandchildren of their own.  The children were constantly told by their parents that “we have a Will in place” or “you don’t need to worry because the Trust will take care of everything.”   Once the parents have passed, the children discover a Will or Trust that is so completely out of date, it is practically useless.   In some circumstances, I have reviewed Wills and Trusts that were created in the early 1970s and never revised once.   On occasion, I have reviewed estate plan documents from as far back as the 1950s.   These documents address children who are now adults with children/grandchildren of their own as if they are minors, individuals with assignments of responsibility who have long ago passed away, and outdated directives referencing laws and statutes that have been revised several times after the documents creation.

At a minimum, an outdated estate plan causes logistical problems for the children/beneficiaries as they attempt to unravel what should occur.   Unfortunately, it also leads forcing the estate into the probate court system.   In the worst situations, the outdated documents cause confusion between individuals.  When confusion happens disputes inevitably occur.   This leads to the accrual of thousands of dollars in legal fees, costs, and expenses.   What should have been a simple process now becomes complicated, time consuming, subject to delay, and expensive.

In order to avoid any issue and the resulting confusion and disputes that can develop, regular review and updating of an estate plan is essential.   In order to assist in the process, I have the following suggestions.

Review your estate plan when a major life event occurs.   Major life events have the ability to quickly make an estate plan obsolete.   These major life events can include the following:

  1. Addition of new beneficiaries. This may include the birth of a child, grandchild, or when an adoption occurs.   In order to avoid any confusion or dispute from occurring I recommend that you specifically designate who is to be a beneficiary and who is not.
  2. Death of individuals. Often mentioned in estate plans are individuals who are either beneficiaries or fiduciaries with responsibilities to carry out.   If one of these individuals has passed away, an estate plan should be modified to replace him or her with a living individual.
  3. Divorce. Oftentimes, estate plans will list a married couple as holding joint responsibility.   This often is seen while addressing guardians of underage children.   If a divorce of the couple occurs, revisions would be needed to specify which of the individuals should have this responsibility or another individual/couple should be named.
  4. Children becoming adults. Often an estate plan should evolve to take into consideration children who are now adults and should be given greater responsibility.    

When these events occur, it should trigger a red flag for a review and revisions of an estate plan.

Even if a major life event has not occurred, I always recommend that a review of an estate plan occur at least once a year.   That way, the individual will be able to locate and revise minor changes in circumstances that still have the ability to significantly impact the estate plan.   For example, in a review of the documents one might discover that the address or telephone number of individuals has changed.    This contact information is very important to have up to date in the Powers of Attorney if an emergency situation has occurred where the first course of action will be to attempt to contact the individual by telephone.

In order to facilitate this once-a-year review, I recommend picking a date that is easier to remember as “review the estate plan” day.   For example, some clients pick a non-major holiday or date (such as, St. Patrick’s Day, April Fool’s Day, or Flag Day) to help them to remember to review their estate plan documents.

Whether a major or minor change to an estate plan, the amendment process is typically far simpler than establishing the estate plan.  My firm is certainly willing to assist you.   For my clients, they often contact my firm by e-mail or telephone, we work though the revisions that need to occur, and they only come to the office once to sign the documents.   Most revisions are then placed with the current estate plan or replace the out-of-date document.

As mentioned above, the “only constant in life is change.”   Make certain that your estate plan evolves as your life does.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Unnecessary Sacrifices

 

In the current fast-paced world of business where communication is nearly instantaneous with the push of a button and where decisions need to be made quickly, I have often observed businesses languishing on the sidelines.   The businesses are not languishing because they have a poor product, non-competitive pricing structure, bad employees, or any of the other typical reasons why businesses cannot compete and succeed.   Instead, it is because they are not making the right decisions fast enough in today’s market environment.

When I have spoken to businesses and their respective owners, especially those who are languishing on a decision to be made, I often use the quote “you are sacrificing ‘very good’ and ‘great’ on the altar of ‘perfection.’”

What is the intent of this quote?   It is to place in the forefront what I have often observed.   There are many businesses and individuals with great ideas that could lead to success.    However, the idea makers are unwilling to commit to and move forward with their idea because it is not “perfect.”  As such, they then spend an inordinate amount of time and resources (financial, mental, labor etc. . . ) attempting to “perfect” the idea.  Consequently, their idea often never reaches the level of perfection they envision.   In their attempt to find  perfection from their perspective, the great idea is lost or delayed to the point where it is no longer useful.   A great idea that would have led to success, profitability, and increased business which could have continued to revise as circumstances dictated has now become worthless.   This scenario is a form of indecisiveness or “analysis paralysis” that I have discussed in previous articles.

One example of this situation I observed as a college student.   I had a classmate that I often interacted with because we had similar class schedules due to our respective majors.   He was very smart, achieved high grades, and was full of ideas.   One “idea” for a business concept that he discussed on a regular basis was creating a company where businesses use this new thing called the “Internet” to have a platform to perform software and other functions that a business would not have the ability or resources to organize themselves.   Essentially, almost 25 years ago, he was describing businesses utilizing a cloud network to provide software services.

It was a brilliant idea.   He talked about it regularly.   Unfortunately, it went nowhere past talk.    Why did it stall?   One reason why is that he was unable to get past the talk stage.   For example, when he would discuss this concept, he would often talk about developing a “mission statement” that he wanted his company to follow.   He believed this mission statement would be the catalyst to lead the company, and the employees, to success.   He spent a considerable amount of time developing this statement.   From semester to semester when I would review his statement there would be little change–a different word choice here, minor punctuation change somewhere else.   Unfortunately, at the end the day, his idea never moved beyond his search for the perfect mission statement.

Businesses and their respective leaders need to avoid the perpetual search for perfection which leads to nothing of value.   Do not delay and sacrifice potentially successful ideas in the elusive pursuit of perfection.  Sometimes having only an idea that is “good enough” is exactly that–good enough to be successful.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

The Internet is Forever

Practical Guidelines For Employers

Involving Employees and Prospective Employees

Over the course of the last year, especially during the most recent election cycle, the airwaves have been inundated with news of individuals caught in one scandal after another involving their use of the Internet and various social media platforms.   In certain circumstances these “scandals” have led to the individuals being terminated by their respective employer.   In more extreme cases, it has led to criminal investigations.

A question I often hear from my clients is how far can they go in utilizing the Internet and social media platforms to investigate either the current or prospective employees of their business.   These clients want to utilize these investigations to address a problem before it becomes a social media firestorm that would negatively impact their business.  Business owners also want to prevent a problem in the first place by avoiding hiring a potentially troublesome employee.  

General Guidelines

In my presentations to business people on the subject, I always open the discussion with the statement “the Internet is forever.”   Any statement, posting, or email, even if deleted shortly after its occurrence, remains in existence.   There are search and cache programs designed for the very purpose of retrieving deleted items, and individuals who have seen controversial posts often will take a screenshot of the post as proof of its existence.   A business owner must assume that any posting, statement, or other use of the Internet will always exist and can be potentially accessed by others.   As such, they must act and react accordingly.

The next subject I discuss is even though the Internet and social media platforms are very public situations, an employer still needs to make certain it complies with federal and state rules and regulations concerning discrimination.   One example is Title VII of the Civil Rights Act and protected classifications outlined therein (e.g. race, gender, age, sexual orientation, religion, etc…).  Another example is disability discrimination as outlined by the Americans With Disabilities Act.   Both of these federal statutes, and similar state statutes that address these areas, would prohibit an employer perusing information that he or she would not be entitled to if requesting the information from the employee.  

Prospective Employees

Although employers should avoid use of the Internet and social media to discover protected information as outlined above, an employer is not prohibited from conducting research about prospective employees in other areas.

Researching through social media if an employee appears to be reliable, honest, speaks negatively about others, his/her emotional maturity level, criminal behavior, and similar issues are acceptable areas to research.   For example, prospective employees who post statements online such as “I lied to my supervisor about a project deadline, but he is too dumb to notice.  Ha Ha,” “I hate working with these clients,” or “I want to punch my co-worker in the face” are all legitimate social media red flags that the employer can use in the determination of whether to hire someone or not.  

When a prospective employee social media search is conducted, it should be under guidelines established by the company, which will directly outline the parameters.  It should either be conducted by one individual (such as the HR Director) or by a small group of individuals who are directly responsible for the hiring of the position in the company.   It should not be a time of an employee free-for-all to see who can find the most information the quickest.   In addition, an employer must avoid obtaining this information utilizing deception.   For example, creating a fictitious character and then having the prospective employee “friend” the character in order to gain access to information is problematic and should be avoided.

Current Employees

Often employers are caught in the crossfire when an Internet “scandal” occurs involving an employee.   The best defense in this situation is a good offense.

First, employee handbooks and employment agreements should include sections and provisions concerning an employee’s conduct.   Emphasizing that as an employee they are representing the company and that certain negative actions and behaviors will have a detrimental effect.   As such, negative actions and behaviors both inside and outside the workplace may directly impact their employment and be a cause for termination.   Putting an employee on notice from the start is both an effective deterrent and affords protection for the employer if something does occur.

Second, if a negative event has occurred, the company should have written procedures in place for a quick investigation and determination of what is to happen next.   In addition, these procedures should designate certain company personnel to quickly investigate and address the issues as quickly as possible.   The Internet works at the speed of light with a ripple effect that can turn into a tsunami if a company does not address a situation quickly and effectively.

In addition to the circumstances discussed above, sometimes employers learn of the actions of employees through social media that may not involve a “scandal.”  Nevertheless, these actions impact the company and can create personnel issues.   This below example, that I have heard of more than once, outlines this situation:

An employee contacts his/her employer (usually outside of business hours) notifying that a family member is facing a medical or other crisis.   As such, he/she must take several days off to travel across the country to take care of the crisis.   The employer accommodates the request and makes arrangements for others to complete the work previously assigned to the absent employee.   Shortly thereafter, the employer discovers (usually by information from other employees) through social media sites that that employee is not taking care of a family crisis.   Instead, he/she lied about the crisis and is in Mexico with their significant other on vacation.

Under this example, the employer is within its rights to trigger their investigation process and to determine whether termination is necessary.   The primary consideration is to follow the policies and procedures that are in place.

Conclusion 

In the fast-paced social media climate that is now in existence, a business needs to be aware of its impact on employees.   A business with established principles and guidelines in place for these occurrences (and to prevent troublesome employees  from being hired in the first place) will both allow for these matters to be properly investigated and also avoid running afoul of statutory mandates.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

A Small-Town Mechanic’s Wisdom

 

I was raised in a small city with a population of less than 15,000.   For most of my childhood, it was literally a “one stoplight town” that had eventually graduated to three by the time I left for college.   Growing up in a small town certainly has advantages and disadvantages.   One advantage is that a small town is often populated by unique individuals that you would never meet in the busyness of a large city.   These individuals, through tough times and personal experiences, have developed a common-sense perspective often missing today.

One group of individuals I remember who possessed this common-sense perspective were the owners and mechanics at a local gas station.   It was a Cononco station in an older building consisting of two sets of gas pumps (one full service and one self-serve) and two mechanic’s bays to maintain and repair automobiles.   It was my grandfather and father’s service station of choice because they trusted the mechanics and owners.  I remember as a child sitting in the chairs in the waiting area, which was also the office, cash register, old soda vending machine, and shelves to display oil cans and promotional materials.   While waiting for the oil change or other repair work on our vehicles to be completed, I noticed that it was often a stopping place for old-timers in the town who would purchase gas, a soda from the vending machine, and stay and talk for a while.

The desk in the office/waiting room included the service paperwork and cash register as well as pictures, stickers, and plaques.   Most of these consisted of humorous sayings about fishing, hunting, and cars.   One that I remember to this day was a plaque that simply stated:

Pay me a little right now

Or pay me a lot more later

This not-so-subtle statement was to highlight the importance of preventative maintenance from a car mechanic’s perspective.   They knew that keeping the car up to date on minor service and repairs (e.g., oil changes, tire rotations, filter replacements, etc. . . ) prevented the major car repairs from occurring.    In essence, paying the few dollars on occasion prevented the larger, unexpected, and unmanageable bill from ever occurring.   Through years of experience and multiple examples, the mechanics understood this fundamental truth.

I have often observed business owners not recognizing this fundamental truth.   Businesses and their respective leaders often either ignore and consistently choose not to perform this “preventive maintenance” on their business.   They justify their decision because it is a low priority or to save a little bit on the bottom line.   Rarely, if ever, does this approach benefit the business in the long-run.   Instead this approach eventually leads to events that jeopardize the long-term health and survivability of the company.

I often see this behavior when business leaders choose not to perform basic legal preventative maintenance.   Preventative legal maintenance for businesses includes areas such as, updating pre-existing contracts, modernizing employee policies and manuals, keeping abreast of new laws and regulations, the initial negotiation/development of new agreements, and the review and drafting of new contracts between parties.   In these circumstances, these business leaders/owners place legal maintenance at a low priority.  They assume that the status quo will continue to work, what they have now is sufficient, they can independently draft or negotiate the agreements on their own, and/or the legal work would be expensive.   Unfortunately, it is usually only a matter of time until this lack of proactive maintenance leads to a major legal dispute, complaint, or litigation that has the potential to lead to the ruin of the company.  Once a dispute has reached this stage, the legal costs of correcting the issue or defending the corporation in the dispute is now exponentially more expensive than the preventative legal maintenance costs would have been.

In that way both an attorney and mechanic’s approach is the same.   We do not want to see a business breakdown occur that could cost substantial fees, costs, and expenses to correct.   As an attorney representing clients, I will always prefer and recommend that regular legal maintenance occur.  The costs are substantially less than the alternative and it better protects the client when an unforeseen event occurs.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.