How and Why I Provide Client-Centered Legal Services

The other day, a new client said to me that before she called me she had spoken to a few other attorneys who provide similar services, but she decided to work with me for the simple reason that I called her back. The other law firms she called would only let her speak to a legal assistant and before she could even talk to the attorney she thought she might hire, she had to fill out a 20-page form and then wait for an appointment, all without knowing whether this was a person she wanted to work with or how much she could expect to pay.

“I hired you because you called me back.”

A typical estate plan can cost anywhere from $800 to $4,000 or more depending on the client’s needs and the attorney they are working with. This is a huge investment! But my experience with other firms is similar to my clients: They want to give you the service they want to give you, not the service you want to pay for. My client’s experience with other firms was not unusual. Most firms want to get all the information about you first and then decide if they want to work with you, and they don’t typically give you an opportunity to do the same.

All lawyers care about their clients. We’re all in this business to provide our clients peace of mind, to solve clients’ legal problems, and to leave them feeling satisfied. But not all lawyers know how to do this in practice. They focus on efficiencies that make sense to them, not necessarily to you. They know they need clients, but they don’t deliver client-centered legal services.

What are client-centered legal services? Authors Aaron Street, Sam Glover, Stephanie Everett, and Marshall Lichty in a recent book define client-centered legal services as the creation of a “client experience that shows that you care about [the client], that you understand who they are and what they need, and that you [the lawyer] are the right person to take care of them.” This involves making adjustments in four key areas:

Pricing,

Accessibility,

Communication, and

Feedback.

Here’s what this means for my practice and my clients.

First, my clients always know what something is going to cost. I frequently offer flat-fee options for estate planning and basic business documents, meaning that you will pay X and receive Y. That way, you know upfront what something is going to cost. When I offer my hourly rate, I provide an estimate so that there are no surprises going forward, and I keep fees as part of the conversation going forward to make sure the client is comfortable with what they’re spending. Even before you hire me, you’ll know what you can expect to spend on this major investment.

Second, I meet clients where they’re at. No driving downtown and dealing with confusing parking and traffic situations or meeting your lawyer at a stuffy office. I’m happy to meet clients at their business or home instead. And to make sure everyone feels safe during the pandemic, I’m primarily meeting clients by video conference or phone, which is not only safer but also saves everyone a lot of travel time and headache.

Third, I communicate with clients directly. When you call, you’ll never get a legal assistant or some other gatekeeper. I offer a 15-minute free consultation so that you can get to know me first before you hire me. I gather as much information as I can from our phone call and I only ask you to provide additional documents if it is absolutely necessary to achieve your goals. My job is to make this process as painless as possible so that you can stop worrying about your legal issue.

Finally, I will ask for your feedback. I want to know if the services I’m providing to you meet with your expectations (and hopefully exceed them!). And if they don’t meet your expectations, I want to know how I can do better. Client-centered services are about constantly improving my processes to better meet your needs and the needs of folks like you. If I can do better, I want you to tell me how.

So you want to form a Public Benefit Corporation...

The selection and formation of an entity for your business is a huge topic, but historically at least we could organize that discussion into two sections: for-profit and non-profit business entities. You might be somewhat familiar with the distinction — a for-profit company aims to make the most money for its owners or shareholders whereas a non-profit company aims to do the most good for the most people without ever turning a profit. For a long time, people wondered whether there might be something in between — a for-profit model that incorporates doing good into its bottom line. Enter the public benefit corporation.

Minnesota’s public benefit corporation law went into effect in 2015. Since then, a Minnesota company can elect to be treated as a public benefit corporation in its articles of incorporation and bylaws. The law establishes two basic types of public benefit corporations, a “general benefit corporation” (GBC) that does not have to specifically name a beneficial purpose and a “specific benefit corporation”(SBC) that declares a special beneficial purpose in its articles and bylaws. How do you know if a company is a GBC or SBC? It’s in the name. Public benefit corporations are required to include either “general benefit corporation” or “specific benefit corporation” or the abbreviations GBC or SBC in their names.

So, what difference does GBC or SBC status make to the corporation? As with any corporation, shareholders can sue the corporation for failing to deliver on its promises, and in the case of a GBC or SBC, shareholders can also sue the corporation for failing to pursue or create a general or specific public benefit. Persons other than shareholders, like members of the general public or constituencies intended to be helped by the corporation, cannot sue the corporation for failing to provide promised benefits, however. And unlike non-profit corporations, GBCs and SBCs still must pay taxes.

Why become a public benefit corporation? For businesses that want to create benefits besides profits through their business activities, becoming a public benefit corporation may shield the company’s management from shareholder claims that the company is focused more on its social mission than maximizing profits. The inclusion of a public benefit mandate in the corporation’s founding documents can also help guide its management toward putting people and not just profits first. And it could be a good public relations move to help draw business to the company from customers who share the company’s values.

If you’re interested in forming a Minnesota public benefit corporation or have more questions, contact me.

Prepare Your Business and Estate Plan for COVID-19

The global coronavirus pandemic has turned our world upside down. It is the only thing anyone is talking, writing, or thinking about, and with good reason. We are all vulnerable and we are being told that most of us will contract the virus, it is only a question of when. Postponing illness through social distancing and self-quarantine are essential to ensure that those who do get sick can receive care when they need it. But being under quarantine, for many of us, has become a time to think about the things that matter most to us and also a time reflect on life’s fragility.

So, if you have been putting off thinking about your personal estate plan, now is a good time to think about it. And if you own a business, think about what would happen if you become sick. Who will manage your business or personal affairs if you need to be hospitalized? What will happen to your assets if you pass away, and who will be in charge of administering your estate or running your business? These are important questions that feel particularly salient in this tumultuous time.

Even though we’re under quarantine, that does not mean you have to postpone making changes to your business or estate planning documents. Much of the work can be done by phone or video conference. And many essential documents, like trusts or contracts, do not require special witnessing or notarization. For documents that require notarization, Minnesota law authorizes the use of remote notaries who can electronically notarize your documents using a video conferencing service on your computer, tablet, or smartphone. As of right now, will signings still require two witnesses to be in the physical presence of the testator, but the witnesses can still maintain a safe 6-foot distance from the testator and each other. And the Minnesota State Bar Association is working on proposed legislation to lift this requirement as well.

In uncertain times like these, it can help tremendously to take proactive steps to feel in control. There is little we can control in this moment, but one thing you can do to get some peace of mind is to make sure there is a plan in place if you become sick. Make sure you have a health care directive so that someone you trust can make healthcare decisions for you in case you’re unable to do so. Make sure you have a power of attorney so that someone can access your accounts in case you need to be hospitalized or quarantined for a long period of time. Make a plan for who would manage your assets or take care of your children or pets if you were to pass away. Taking these proactive steps will help you feel ready to face whatever comes next.

Chemical Spills on the Farm and CERCLA

While many farmers are moving away from reliance on chemical fertilizers and pesticides, most farmers still depend on synthetic chemicals to boost soil fertility and combat weeds. For example, most corn and soybean farmers in the Midwest apply anhydrous ammonia to soils in the spring and fall to add the nitrogen to their soils that plants need to grow. Farmers depend on anhydrous ammonia because it contains more nitrogen than alternative sources, it is easy to obtain from their suppliers, it can be applied many weeks before planting, and it’s generally the least expensive source of nitrogen.

But anhydrous ammonia has a number of drawbacks, including the fact that it must be stored as a pressurized liquid and it requires special equipment to transport and apply the chemical, which when released as a gas can be harmful to people. In fact, the federal government lists anhydrous ammonia as an “extremely hazardous substance.” If there is a spill or “release” of an extremely hazardous substance, the person in charge is required to immediately report the spill or face stiff penalties, including fines of over $57,000.

Because most farmers and farm cooperatives deal with these chemicals at some point, it’s important to know what you must do if a spill occurs and to communicate that information to everyone you work with. The Comprehensive Environmental Response, Compensation and Liability Act (or CERCLA) requires a person in charge of a farm or other facility to immediately report a spill of any hazardous substance. The most important thing to remember is that, if a spill occurs, you must call the National Response Center immediately. How soon is “immediately?” Within 15 minutes, according to EPA policy. If you fail to call the National Response Center within 15 minutes of discovering the spill, the EPA will most likely bring civil penalty claims against you for as much as $57,317 per incident. The maximum penalty amount is adjusted annually for inflation. Note that calling 911 or other first responders is not sufficient to satisfy the legal requirement. Rather, your first call must be to the National Response Center (NRC). The NRC will coordinate any local response.

Are there exceptions to calling the NRC within 15 minutes? Not really. The only exception is if you are physically unable to make the call, such as where all phone lines are down or where no one is physically able to reach a phone. Since most of us have cell phones in our pockets at all times, there usually will not be an excuse to not make the call.

In addition, if you store anhydrous ammonia on your farm or at your business in quantities in excess of 500 pounds, you may also be subject to additional requirements under the Emergency Planning & Community Right to Know Act (EPCRA) and Section 112(r) of the Clear Air Act (CAA). These laws require you to report inventory of extremely hazardous substances to state and local authorities, to implement a chemical accident program, and submit a Risk Management Plan to EPA, among other things.

If you have questions about whether your farm or business is complying with federal regulations or is adequately prepared in the event of an accident, please contact me and I’d be happy to help.

Farmer Co-ops and Illegal Price Fixing

Farmers are commonly known as “price takers” not “price givers.” This is because most farm operations are small in comparison to agribusiness suppliers. This was certainly true when the first farmer coops were created in the 19th century, and even more true today in the wake of mega mergers in the agriculture industry. As the industry continues to consolidate, prices for farm inputs tend to go up as competition among suppliers decreases. When farmers join together to form a cooperative, they can aggregate their buying power, putting them on a more equal footing with larger corporations.

Recognizing the value of farmer coops, the US legislature passed the Capper-Volstead Act in 1922 to protect farmer coops from charges of unfair competition. Normally, under antitrust laws, separate individuals cannot work together to fix prices in their industry, since doing so would be anti-competitive. The Capper-Volstead Act makes an exception to this general rule for cooperatives comprised of agricultural producers. It’s one of the many unique exceptions in US law that applies specifically and exclusively to farmers. The law is important because, without its protections, farmer cooperatives that set prices for their goods would be illegal.

But not every farmer cooperative meets the qualifications for Capper-Volstead exemption from antitrust laws. The coop must meet very specific requirements. The requirements come in two flavors: (1) Structural, and (2) Functional. The first structural requirement is that all coop members must be agricultural producers. If even one member is not a producer, the whole coop loses its exemption from antitrust laws. This can be a difficult question today as more farms grow their operations to include things like processing, packing, or marketing agricultural products. Therefore, it is important to include provisions in the coop’s bylaws stating that membership is limited to producers and for the coop to regularly review its membership to make sure that all members are still primarily agricultural producers.

The second structural requirement is that the coop must be operated for the “mutual benefit” of its members. This generally means that the coop is democratically controlled by its members and that profits are returned to farmer members. The third structural requirement is that the coop must provide for only one vote per member or, instead, the coop cannot permit more than an 8% return on member equity. Usually, the simplest thing is to provide for one member-one vote. The fourth and final structural requirement is known as the 50% rule: the coop cannot deal in the products of nonmembers in an amount greater than the products of its members. These requirements are intended to further essential cooperative principles, such as democratic control, open membership, and cooperation.

The functional requirements are the things that a coop can and cannot do. The only activities a coop may lawfully engage in are processing, preparing for market, handling, or marketing of agricultural products of its members. Anything beyond these activities is illegal. For example, a farmer coop may not acquire competitors for anti-competitive purposes; it may not coerce customers, suppliers, or nonmembers into doing business with them; it may not conspire to eliminate a competitor; and it may not conspire with other businesses or groups to fix prices. In essence, farmers may cooperate to gain equal footing among corporations; but it may not conspire to crush its competition. As an example, a large cooperative of mushroom growers was discovered to have been buying up competitors’ mushroom farms, selling them at a loss, and saddling the properties with a perpetual deed restriction stating that no mushrooms could be grown on those farms any longer as a way of controlling the mushroom supply and driving up prices for its members. The cooperative was sued alleging antitrust violations. Though the coop raised Capper-Volstead antitrust immunity, the federal district court was not persuaded.

If you have questions about cooperative antitrust immunity or what should be in your coop’s bylaws, contact me or another of my super smart colleagues at FMJ!

The Importance of Regulatory Compliance for Ag Suppliers

If you’re in the business of selling farm inputs to farmers, you may not know that simply having the wrong label on a product could result in a fine of almost $20,000 per sale. What may seem like an inconsequential difference between one label and another could result in crippling fines when it comes to the sale of products regulated by the U.S. Environmental Protection Agency. Earlier this year, the EPA raised its maximum fine amount to $19,446 for violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Just ten years ago, the maximum fine per violation was just $6,500. Products regulated and subject to penalties under FIFRA include pesticides, herbicides, fungicides, and similar products.

Under FIFRA, all pesticides must have a label approved by EPA, and the label must be displayed on the product. The label provides instructions on safe handling to ensure the safety of the applicator as well as the safety of the environment. Two products can have very similar sounding names, but still have very different labels, which can make following FIFRA a regulatory challenge. If a product has been mislabeled, each sale of that product is considered a separate and independent violation. So, if a coop makes 1,000 sales of a mislabeled product, they could incur fines of almost $19 million.

The best medicine is always prevention, which is why it’s important to have someone on staff whose job it is to ensure compliance with all applicable state and federal regulations. For businesses that have an internal audit program in place, EPA rewards self-reporting of violations by offering reduced fines so long as the audit program complies with certain criteria. It is important to remember that all self-discovered violations must be reported to EPA within 21 days. EPA has an eDisclosure system for online reporting.

For businesses already facing a potential fine, it’s important to understand the process and your rights. EPA will first send a Notice of Intent to File Administrative Complaint. This Notice will inform the violator of the basis for the alleged violation and a proposed fine. The violator has the opportunity to negotiate with EPA to reduce the fine by, for example, implementing a Supplemental Environmental Project (SEP) to mitigate the harm caused. After a Complaint is filed against the company, the company has the opportunity to appeal the fine to an Administrative Law Judge (ALJ) who works for the agency. From there, the business can appeal the ALJ’s decision to the Environmental Appeals Board (EAB), which is the last stop before the violator can appeal directly to federal district court. As you can see, the appeals process can be lengthy and expensive, which is why prevention is so important.

For more information on EPA compliance or if you have questions, contact me or my colleagues at FMJ for help.

Employment rules to know when employing commercial drivers

Farmer co-ops and farm businesses that employ commercial drivers for trucking or hauling products need to be aware of certain employment laws that apply specifically to commercial drivers.  Failure to follow these rules could lead to fines, suspension of business, and impoundment of commercial vehicles.

1. US Department of Transportation Drug & Alcohol Policy.

Most employers have some type of drug and alcohol policy for their employees that restricts the use of intoxicating substances while on the job.  What you might not know is that, for commercial drivers, the federal Department of Transportation requires employers to have a specific drug and alcohol testing program in place and to inform their employees about the drug and alcohol testing policy.  Failure to do so can result in fines, suspension of business, or vehicle impoundment.

The rules are complicated, but in essence employers must perform drug and alcohol tests on all commercial drivers of vehicles with a gross vehicle weight rating of 26,001 or more pounds.  Testing must be undertaken prior to employment, at random, when there is reasonable suspicion of substance use, after an accident, when an employee is returning to duty after being removed, and follow up testing as necessary.  Employers may contract with an authorized service agent to provide the testing services.

In addition, employers must have a written policy and must provide the policy to their employees.  It's a good idea to include this policy in the employee handbook or manual.

More information is available at the DOT's website and in the DOT's Employer Handbook.

2. Special overtime rules for commercial drivers.

Most employers know that you're supposed to pay employees time and a half for hours worked in excess of 40 hours per week.  But, this rule does not always apply to commercial drivers.  If you don't know the rules, you might be paying too much or too little in overtime to your employees.

The rule is called the "motor carrier exemption."  Ordinarily, under the Fair Labor Standards Act, an employee is entitled to one and one-half times their "regular rate" for all hours worked over 40 that week.  But under the Motor Carrier Act, some employees are exempt from this requirement.  An employee is exempt if:

1. They are employed by a motor carrier (transportation industry) or motor private carrier (the employee transports the employer's goods);

2. They are employed as a driver or have other duties that affect the safety of operation of motor vehicles (includes, among others, someone loading goods on and off a vehicle or servicing a vehicle);

3. The employer's vehicles have a gross vehicle weight rating of at least 10,001 pounds; and

4. The employee drives or reasonably could drive across state borders.

If an employee meets all four criteria, the employer is not required to pay time and a half.  The employee is still subject to state and federal minimum wage requirements, however.

These rules are complicated, and a violation of these rules can come with expensive fines or obligations to pay back wages, which is why consulting an attorney with experience in this area is important.  Contact me or the other great attorneys at Fafinski Mark & Johnson, P.A. if you have questions or concerns.