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Hearsay

Summer 2015, Volume XVIII, No. 1

Note from the Editors

Dear New Lawyers Section Members,

The New Lawyers Section is looking for thoughtful attorneys with an interest in writing to submit articles for its quarterly publication, Hearsay. Articles can focus on any issue relevant to Minnesota’s new lawyers. Hearsay is distributed to over 3,000 new lawyers in Minnesota. Writing for Hearsay is a great way to practice your writing skills, showcase your expertise and get published.

  • Do any recent legislative changes or appellate decisions affect your practice area?
  • What do you wish you would have known in your first several years of practice?
  • What are some of the major pitfalls into which new lawyers fall and how can they be avoided?
  • What tips would you like to share with new lawyers about working effectively with office staff, paralegals, partners, and court personnel?

If any of these areas are of interest to you or you have other ideas you would like to share with your bar colleagues, please contact Hearsay editors Joe Bourne (jbourne@gustafsongluek.com) and Jeff Mulder (jmulder@bassford.com). The deadline to submit articles for the next issue is September 30, 2015.

We look forward to your queries and submissions.

Select Issues in Business Entity Operation and Conversion

By: Brandon M. Schwartz

 

INTRODUCTION

One of the hardest decisions a business owner has to make is when and how to sell the business they worked hard to create and in which he or she invested so much.  Often the decision to exit the entity or sell the ownership interests is due to disputes with the other owners.  This article discusses how to exit the business and how to handle those disputes.

This section also discusses mergers, acquisitions and conversions, how an entity conducts business across state borders, the appropriate filings to maintain the status of the business and considerations to be given with regards to business succession and estate planning.  These are often overlooked aspects of properly running a business that owners and advisors alike need to consider.  And while the forms for completing some of these tasks are simplistic and available right on the Secretary of State’s website, other important considerations are discussed herein.

A.    HOW HARD IS IT FOR INDIVIDUAL MEMBERS TO EXIT THE ENTITY?  WHAT’S THE PROCEDURE INVOLVED?

How to exit and the procedure involved are often delineated in the limited liability company’s Operating Agreement, or the Bylaws or Shareholders Agreement for a corporation.  If applicable, the owner should refer to those Agreements.  This section will deal with exiting the entity if the owners have not laid out an exit plan in the applicable agreements. Read more...



The Process of Incorporation vs. LLC Formation

By: Brandon M. Schwartz


INTRODUCTION

One of the first legal issues entrepreneurs face is what type of entity they should form.  This article focuses on and compares limited liability companies (“LLC”) and corporations, two of the most common types of entities.  The first consideration is choosing the state in which to form the new entity.  Next, we will examine the incorporation and organizational documents that govern corporations and LLCs and how these documents are filed with the appropriate governmental agency.  Due to the broad applicability to a large number of states, including Minnesota, the recently adopted Minnesota Revised Uniform Limited Liability Company Act (“LLC Act”) and the Minnesota Business Corporation Act (“Business Act”) will be referenced herein.

A.    SELECTING THE STATE IN WHICH TO INCORPORATE.

There may be several factors in considering what state is best to form a new entity.  This section will focus on the differences to consider between states.

The formation and governance of corporations and LLCs is controlled by statute in all 50 states.  Those statutes have been interpreted by the courts in each of the states; which in some cases may be an important factor in determining what state to form the entity.  Delaware has long been regarded as a pro-business state because of its favorable corporate statutes and respected Court of Chancery (a court of equity without juries) interpreting and deciding issues involving Delaware entities.  Due to the well-reasoned decisions by the Court of Chancery on the key issues facing entrepreneurs, Delaware is often the de facto state of formation as disputes will be handled in a predictable fashion.  The familiarity by business lawyers with Delaware law can be the deciding factor as to the state of organization when the owners of the entity are from different states. Read more...



Tips and Tricks to Taking an Expert’s Deposition

By: Brandon M. Schwartz

Taking an expert’s deposition can be a daunting task.  Experts are typically highly educated, well credentialed, and a wealth of knowledge in their particular field.  A well reasoned expert opinion can also be the difference at trial before the trier of fact or in negotiating a favorable early settlement.  As such, the importance in thoroughly conducting an expert’s deposition cannot be understated.  These tips and tricks will help you prepare to take your first expert deposition.

Review the CV

Long before the deposition, you should have received the expert’s curriculum vitae (“CV”).  The CV will have the expert’s education, experience, past articles or publications and other background information.  Do not wait until the night before or during the deposition to review the CV for the first time.  Determine whether the expert has educational experience, professional experience, both, or none in the area they are rendering their opinion.  Finding out the basis of the expert’s testimony during the deposition is critical.  Some experts may have no practical experience regarding the subject they are testifying about and their knowledge on the subject is purely academic; question them on their lack of practical experience.  Other experts may have significant experience in the field, but have no publications on the issue; question them on why they have never published literature on the subject.  Knowing the expert’s background prior to the deposition is critical in helping to prepare questions during the deposition.    

Know the Lingo

As litigators, we are well versed in legalese.  Language that is commonplace to us sounds foreign to those outside the legal world.  Similarly, experts are well versed in the language of their trade or field and you need to be too.  Read more...



Four Tips for Creating an Effective Estate Plan for Blended Families

By Courtney Sebo

Even though estate planning is essential in protecting families, controlling assets, and providing peace of mind, it is an unfortunate truth that it can come with conflict and distress.  This is particularly the case with estate planning among blended families.  A blended family is defined as a family that includes a child or children from a previous relationship.  In some blended families, both adults have children from a previous relationship.  I also include in this definition families where only one adult has children from a previous relationship.

Blended families have unique dynamics.  They have their own methods of communicating with one another and dealing with conflict.   The methods of dealing with conflict may have been constructed over decades or they may not have been constructed at all.

Many blended families have one communication technique in common: silence.  Many blended families experience such pain and suffering in talking about family issues that they eventually learn not to talk about them at all.  This article aims to help attorneys address estate planning with blended families in a productive and sensitive way

As we know, not creating an estate plan is a huge risk.  What families fail to realize is that unless they deal with estate planning while all members are alive, they run the risk that once they are gone, grief will overtake the remaining members, causing battles that last for years and hard feelings that last lifetimes.  It is far better to plan an estate while all members are alive and can express their desires and intentions, even though the conversations may be tough. Read more...



What to Expect at the Intersection of Law and Social Work

Jada Fehn
Clinical Instructor and Managing Attorney
Hamline University School of Law

Hamline University School of Law recently launched a medical-legal partnership (MLP) with United Family Medicine (UFM), a community clinic on West Seventh Street.  UFM is a nonprofit provider of primary health care that strives to meet the needs of the medically uninsured, underinsured, and underserved residents of Saint Paul.  One of the main components of the partnership is a law school clinic that will provide legal assistance and educate student attorneys as part of a holistic approach to medical care. 

UFM is remarkable for the intensive social work services they provide through a team of five patient advocates.  The advocates help clients address issues like substance abuse, family violence, homelessness, medical care costs, lack of education, and employment.  Many of the problems the patients of the clinic face result in legal issues, which creates a huge opportunity for collaboration between the legal staff and the advocate team.  This article aims to explain the value that social workers can bring to legal practice and prepare attorneys for the experience of social work collaboration.

Background

My present position as managing attorney of the MLP is not the first legal position I have held in which social workers were integral to helping clients.  As a law clerk in Mental Health Court, I saw how the social workers who were assigned to each case provided some of the most necessary components for the case resolution.  It would be pointless to order a patient to get treatment without having arranged an appropriate placement with the services the client needed to start recovery.  Their efforts made the court process run much more smoothly, but it was just one part of the large system in which we worked.  The social workers in mental health court were employed by the county and therefore aligned with the petitioner for civil commitment.  Consequently, as a member of the court team, I was shielded from some of the day-to-day work.  Read more...



Drone Law May Still Be the Wild West

By Tara Kalar
MnDOT Office of Chief Counsel
MnDOT Office of Aeronautics

Tara Kalar is Associate Legal Counsel at the Minnesota Department of Transportation, Office of Chief Counsel. She advises the Office of Aeronautics and the Office of Civil Rights.

The future is now- we are living in an exciting era of new technology. Commercial drone technology is expected to contribute $13.7 billion to the economy over the next 13 years and create 70,000 new jobs, according to the Association for Unmanned Vehicle Systems International.

Unmanned Aircraft Systems (UAS) or Unmanned Aerial Vehicles (UAV), commonly called drones, are being increasingly used for a myriad of commercial purposes. The Federal Aviation Administration (FAA), which regulates civil aviation in the United States, has not adopted one definition of commercial use, but consistently interprets use for the benefit of a company or individual as commercial. The FAA limits the commercial application of drone technology. Drones can also be flown for recreational or governmental use. 

Recent history saw Xcel Energy approved for drone use to conduct inspections of energy infrastructure. Notoriously, Amazon made a public attempt (and was ultimately denied by the FAA) to obtain authorization to use test drone technology for package delivery. Farmers now use drone technology to analyze soil and crop conditions before issues could be detected by human eye. Surveyors are beginning to use drones to map boundary lines; motion video companies are using drones to capture otherwise hard to reach angles; relators are using drones to capture attractive marketing material; drones are hovering over disaster sites in search and rescue missions, the list of applications goes on and on.

Historically, the FAA outright banned the commercial application of drone technology. Recently, however, the FAA has spurred a boom of commercial activity by loosening regulations restricting drone use and issuing Section 333 exemptions.  Section 333 exemptions grant permission to commercial (and public agency) drone users to operate rotor and fixed-wing aircraft. The operator must also obtain a Certificate of Waiver or Authorization (COA) from the FAA to ensure that the airspace is properly observed while operating a mission. Read more...

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