Official Publication of the Minnesota State Bar Association

Vol. 62, No. 7 | August 2005
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Tips & Traps

Managing Receivables.  There are three kinds of clients who don’t pay your bills:  those who can’t pay, those who don’t pay, and those who won’t pay.

Those who can’t pay were poor clients to take on in the first place. Although the spirit was willing, the bank account was weak.  If you can’t provide your services to such a client on a pro bono basis, the sooner the attorney-client relationship is severed, the better for you both. 

Those who don’t pay have the money to pay the bill, but among their creditors, “the squeaky wheel gets the grease.”  Be light but firm, and always follow up.  If you can’t or won’t look after your own affairs, clients may question how zealous you are about their affairs.

Those who won’t pay have something they want to talk about and they are waiting for your call.  If you don’t follow up promptly with “won’t pay” clients, you’ll never get paid.  Furthermore, if you delay, it will be even more difficult.

The best person to follow up an unpaid legal fee bill is you. You are the one that the client hired, and you are the one that will have to cut loose the “can’t pay,” guilt the “don’t pay” into paying, and respond to the unhappy “won’t pay.”

Michael J. Ford
Quinlivan & Hughes
St. Cloud

Unemployment Compensation
Unemployment compensation proceedings often are treated cavalierly or with indifference by both employers and employees.  The stakes, however, can be sufficient to justify more thorough attention. An employee who prevails may realize in excess of $10,000, depending upon level of pay and duration of unemployment, while an employer who loses may incur higher unemployment insurance costs.

But strategic considerations may be more significant. Under Minn. Stat. §268.105, subd. 5(c), testimony offered in an unemployment compensation proceeding, as well as the result of the case, is not admissible in any other civil proceedings.  Further, under Minn. Stat. §268.105, subd. 5a, the outcome of an employment case is not collateral estoppel and may not be used “in any separate or subsequent action [or] in any other forum.”  Despite this statutory prohibition, both the proceeding and the outcome can be important in parallel or subsequent wrongful termination disputes. Both sides may use subpoenas in unemployment proceedings, which may give them an opportunity to engage in what effectively amounts to prelitigation discovery for a subsequent wrongful termination case. 

Marshall H. Tanick
Mansfield, Tanick & Cohen, PA

Pro Bono Calls
Time being precious, it is especially disheartening to watch the clock tick away as you patiently answer yet another telephone inquiry from a troubled consumer, with no expectation of remuneration.

Take heart! The Minnesota Attorney General’s Office has prepared a wonderful series of consumer publications, covering everything from used cars to landlord-tenant issues to home buying or selling, senior’s legal rights, pyramid schemes, credit use and many others. The guides contain common sense advice, brief dissertations on Minnesota law (with statutory cites), and third-party contact information.  You can obtain these guides free of charge at (click on “Publications”) or by calling the Attorney General’s Consumer Protection line at (651) 296-3353 or (800) 657-3787.  I keep a current selection of these guides in my desk. By simply opening a guide during a phone call, I become an instant expert and give the client the info they need.

Steve Besser
Dolan & Besser

Small Business Incorporation
A client calls and says he has a friend who needs an attorney to set up a small corporation. He wants a cheap corporation; he doesn’t have much money.  What do you recommend?

Here’s the problem:  1). If he has no money to set up a corporation, he certainly has no money to bring a product or idea to fruition; 2) The question suggests that he has no business plan; maybe it’s not time for a corporation just yet, but how could he know with no business plan? 3) When the idea fails, as it usually does, you become the reason for its failure. Respectfully decline to help or encourage this effort.

Russell H. Jensen
Attorney at Law
St. Paul 


Homesteads & Estates.  The debtor-creditor definition of “homestead” controls for purposes of intestate succession, not the Minnesota property tax definition.  The Minnesota Probate Code does not define homestead so other authority is needed. Two sources are Minnesota’s property tax law and Minnesota’s debtor-creditor law.  Minnesota’s property tax definition of homestead is broader than the debtor-creditor definition.  The property tax definition allows homestead classification even though the property is only occupied by a relative of the owner. Minn. Stat. §273.124, subd. 1(a), (c). Minnesota’s debtor-creditor statute, however, has a narrower definition. It states that property can only be classified as a homestead if the property is “owned and occupied by a debtor as the debtor’s dwelling place.” Minn. Stat. §510.01.  This latter definition was found controlling for purposes of intestate succession.  So was the ruling In re the Estate of Norma Jean Bonde, Decedent, A04-784 (Minn. App. 2005).

William Forsberg
Parsinen Kaplan Rosberg & Gotlieb