Top 3 Reasons to Hire Attorney to Represent You in a Contested Hearing Conducted by the Office of Administrative Hearings

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In this article, I will discuss three most important reasons for retaining a lawyer to represent you in a Contested Hearing conducted by the Office of Administrative Hearings (OAH).

1. Contested Hearing conducted by the OAH is an Administrative Version of a Trial

Contested Hearing is an administrative trial. In most ways, it is highly similar to a regular civil trial, only with somewhat relaxed procedural and evidentiary rules. There is an administrative law judge and an attorney representing the other side. The rules of procedure and evidence, while more informal and less strict than in a usual trial, must be followed. Moreover, where the OAH does not provide for or omits certain procedures, the administrative judge will refer back directly to the civil court rules for the guidance.

Thus, you need to know the OAH rules. It is very easy to damage your case by making unnecessary procedural mistakes. Even where the mistakes are reversible, the image of your case may suffer.

2. Government Agencies are Represented by Attorneys

Government agencies realize the complexity and importance of the Contested Hearings. Hence, they are always represented by attorneys, often highly experienced and specialized in the relevant areas of law. Government lawyers are also well-versed in the procedural rules of the OAH.

Therefore, it is simply very difficult, if not impossible, for a business owner, who is not trained in law and inexperienced in the OAH procedures, to match the government’s combination of experience, knowledge, and skillful advocacy – even when the judge is lenient when it comes to procedural mistakes committed by the pro se litigators (i.e. business owners who choose to represent themselves).

3. Legal Fees are Often Lower than the Cost of Failure

An adverse ruling by the judge in a Contested Hearing may often put you out of business (for example, in a business license denial case). Even if your business is able to absorb the costs of the final outcome, the expenses associated with the provisions of the ruling may often be significantly higher than in a situation where an attorney’s timely intervention may have mitigated or averted altogether the worse terms of the judge’s decision.

Of course, hiring an attorney does not mean that you will automatically win your case. It does mean, however, that you will have a professional ardent advocate skilled in the art of law and procedure working solely to reach the most favorable outcome in your case. Even in a losing situation, your attorney may be able to find the least-damaging solution to your problem. Often, a lawyer may be able to settle the case even without the need to go to the hearing, avoiding the expenses associated with it.

Conclusion

While a Contest Hearing is not as full-blown civil trial, you should make sure that you are adequately represented during the hearing proceedings. There are procedures to follow, rules to know, and a formidable opponent to defend against. The stakes are usually sufficiently high to justify reasonable expenses on the legal representation.

Sherayzen Law Office can help you every step of the way in the pre-hearing process and it will provide vigorous and creative defense of your interests during the hearing. Call NOW at (952) 500-8159 to schedule the consultation!

Organizing Business in Minnesota: Top Five Reasons to Incorporate

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Generally, all business entities in Minnesota can be organized into two large groups: incorporated business entities and unincorporated business entities. The first group mainly consists of corporations, limited liability companies (“LLC”), limited liability limited partnerships (“LLLP”), limited liability partnerships (“LLP”) and business trusts. If the incorporated entity operates in certain professions, the business title of such entity often includes an extra “P” for “professional” (for example: PLLC). Incorporated entities are organized by registering with the State of Minnesota; in addition, there is usually a maintenance requirement which consists of annual filings with the State. Furthermore, additional documentation, such as buy-sell agreements, bylaws, operating agreement, and partnership agreement, may be required to organize the relations between business owners and managers. Since incorporated entities are treated as separate entities, there are also numerous legal and tax implications associated with a particular choice of incorporation.

The unincorporated business entities mainly include sole proprietorships and general partnerships. Unlike the incorporated entities, unincorporated businesses usually do not require any type of registration with the state and often (in the case of sole proprietorships, always) avoid any complications associated with being treated as separate legal entities.

Given the accounting and legal complications and expenses of money and/or time associated with additional paperwork, what are the main reasons for business owners to incorporate, i.e. why go through all these troubles? Answering this question is precisely the objective of this essay. In this article, I will detail the top five powerful incentives which account for why most successful businesses seek incorporation.

1. Limited Liability Protection for Owners

Probably the most common incentive for business incorporation is protection of the owner’s assets. As a consequence of incorporation of a business, business owners are not personally liable for business debts and only have risk up to the amount of their investment and additional contributions they may have contractually obligated themselves to contribute to the entity. Thus, under the limited liability protection doctrine, liabilities of the business are separated from the owner’s personal assets.

Remember, however, that the limited protection is not absolute. A business owner may still be liable under the common law concept known as “piercing the corporate veil” (a common-law doctrine which removes the limited liability protection in certain circumstances). Furthermore, there are additional statutory provisions which may encroach on the limited liability protection (such as personal liability for the employees’ portion of FICA and withholding payroll taxes).

Finally, it must be remembered that an incorporated business will not provide limited liability protection from professional liability. For example, lawyers and doctors cannot protect themselves against professional liability by incorporating their business. The incorporation, however, can usually shield professionals from debts and obligations of the business itself.

2. Flexible Ownership Structure

The second reason for business incorporation is flexibility in structuring business ownership, especially transferability of ownership. In order to understand this superiority of the incorporated entity over unincorporated one, one must remembered that, unlike a sole proprietorship, an incorporated entity is considered to be separate from its owners. Therefore, the ownership interest in an incorporated entity is generally considered as personal property and can be transferred independent of the business. The same analysis applies to general partnerships, but such partnerships usually do not have the features, such as different classes of stocks or stock compensation options, enjoyed by the incorporated entities.

The transfer of the ownership interest in an incorporated entity may be restricted by the owners themselves by using bylaws, shareholder control agreements, buy-sell agreements, operating agreements, member control agreements, partnership agreements, et cetera.

3. Business Tax Planning

Incorporation of a business may be one of the best ways to reduce or defer taxes. The primary reason for this is the fact that the State of Minnesota and the federal government tax each business entity differently. Moreover, there are great differences with respect to the types of taxes and tax rates imposed on an entity and its owners. Structuring compensation differently (for example, issuing equity to employees in exchange for services rendered) may produce a completely different end-of-year tax bill. Some business entities may even choose their own tax year different from the usual calendar year used by a solo proprietorship. With careful tax planning, a business owner may greatly reduce his tax burden, thereby increasing his profits and competitiveness of his business.

In addition to the pure business tax planning, incorporation of a business can be a great tool for estate planning.

4. Superior Options for Attracting Investors

It is much easier for an incorporated entity to attract investors and secure business financing. This is usually the case because an incorporated entity can be capitalized either with debt or an ownership interest in the entity (equity), and the business owners can simply sell equity to raise capital and attract investors. Thus, investors become co-owners of the business without having to going through the process of constant re-titling of the assets (as would usually happen in a sole proprietorship). Obviously, the limited liability protection and the flexible ownership structure are two other very important factor in attracting investors.

5. Continuity of Life of a Business Entity

In a general partnership or a sole proprietorship, a death of an owner or a partner’s withdrawal from business will lead to the dissolution and the winding up of the business. Unlike unincorporated entities, however, the incorporated businesses can continue their existence indefinitely, unless the organizational documents specifically limit the term of the entity. This continuity of life creates goodwill value for the business and its owners, and it is very important to the stability of the business.

Conclusion

Incorporation of a business can be very important to business success. Except for professional liability, the owner’s personal assets are separated from the debts and obligations of the business. Incorporation can help a business to attract investors through its flexible ownership structure and assured continuity. Finally, incorporation of a business can create tremendous opportunities for business tax planning, reducing the tax burden and promoting the competitiveness of the business.

Obviously, these five factors are not the only reasons for business incorporation. They are, however, the most common and the most powerful ones. You should remember though, that, once the decision to incorporate your business is made, the next step is to decide which particular entity best fits your situation. The choice of entity should be made a business and tax attorney, who will choose the right entity for you through analysis of the combination of business and tax factors. Sherayzen Law Office can help you make this choice, draft and file the necessary documents, and create the right legal structure for your business entity so that you can concentrate on working toward your business success.

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Fee Agreement Arrangements with Business Lawyers in Minneapolis: 5 Most Important Issues

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In this article, I will discuss five most important issues that you need to know before you sign a fee agreement with business lawyers in Minneapolis.

1. How is the lawyer’s fee paid? There are three main models of payment that lawyers use: hourly fee, contingency fee, and flat fee. The hourly fee is the most common form of business lawyer compensation and it is fairly simple – the business attorney is paid only based on the time he spends on the case. If you’re paying your business lawyer by the hour, the agreement should set out the hourly rates of the business attorney and anyone else in this attorney’s office who might work on the case. The contingency fee, where the business attorney takes a percentage of the amount the client wins at the end of the case, is rarely used by business attorneys in Minneapolis. In the unlikely case that this latter type of fee arrangement is used, the most important issue to understand is whether the business lawyer deducts the costs and expenses from the amount won before or after you pay the lawyer’s percentage. Obviously, you will pay more in attorney fees if your business lawyer deducts the litigation costs based on the latter scenario (i.e. after you pay the lawyer’s fee). Finally, in a flat fee arrangement, you pay an agreed-upon amount of money for a project. For example, you pay $5,000 to your business attorney to organize your corporation with all of the corresponding corporate documents. While a flat fee arrangement is possible in a small project, it is generally disliked by business lawyers in Minneapolis because it often lacks the necessary flexibility to account for the client’s individual legal situation. Usually, some sort of an additional payment arrangement is built into such fee agreements to make sure that the balance between the client’s legal needs and the business attorney’s fees is maintained.

Remember, usually, you will have to pay out-of-pocket expenses (e.g. long-distance calls, mailing costs, photocopying fees, lodging, etc.) and litigation costs (such as court filing fees) in addition to your business lawyer’s fees.

2. Does the agreement include the amount of the retainer? Most business lawyers in Minneapolis require their client to pay a retainer. Retainer can mean two different fee arrangements. First, retainer may be the amount of money a client pays to guarantee the lawyer’s commitment to the case. Under this arrangement, the retainer is not a form of an advance payment for future work, but a non-refundable deposit to secure the lawyer’s availability. Second, a retainer is simply the amount of money a business attorney asks his client to pay in advance. In this scenario, the lawyer usually deposits the retainer in a client trust account and withdraws money from it for the work completed according to the fee agreement. The fee agreement should specify the amount of the retainer and when the lawyer can withdraw money form the client trust account (usually, on a monthly basis).

3. How often will you be billed? Most business attorneys in Minneapolis bill their clients on a monthly basis. Sometimes, however, when the project is not large, the fee agreement will specify that you will be billed upon completion of the case. In a flat-fee scenario, it is likely that the client will be obligated to pay either a half or even the whole amount immediately as a retainer. It is wise for a client to insist in paying some part of the fee upon completion of the case to retain a degree of control over the case completion.

4. What is the scope of the business attorney’s representation? Most business lawyers in Minneapolis will insist on defining their obligations in the fee agreement. The most important issue here is to state what the business attorney is hired for without defining it either too narrowly or too broadly. Usually, a fee agreement should specify that a new contract should be signed if you decide to hire this business lawyer to handle other legal matters.

If you are hiring a large or a mid-size law firm, beware that the partners in a law firm often delegate some or all of their obligations to their associates or even their staff. While the partners retain full responsibility for the case, there is a danger that important parts of it may be delegated to far less experienced associates. Besides the potential quality issues, there is also a concern that you would be paying a large hourly fee for a first-year associate’s work. It is important to insist that the fee agreement specifies what, if any, type of work is being delegated to the associates, the corresponding billing rate of each associate involved, and who carries the responsibility for the whole case.

5. Who controls what decisions? Whether this information should be included in the fee agreement really depends on a case and on an attorney. Generally, business attorneys in Minneapolis let their clients make the important decisions that affect the outcome of the case (such as: acceptance or rejection of a settlement offer, commencement of a lawsuit, financial and personal contractual issues, et cetera). All of the decisions with respect to the legal issues (such as: where to file a lawsuit, what motions should be filed, what should be in the contract, negotiation tactics, etc.) are usually taken by the business lawyers. If there are any changes to this arrangement (for example, you want your lawyer to make certain decisions with the respect to the outcome of the case), you should insist that these modifications be reflected in the fee agreement.

Generally, before you sign the fee agreement, business lawyers in Minneapolis will discuss with you many more topics than what is covered in this article. The five issues explained here, however, are crucial to your understanding of how the business relationship with your business attorney will work. Before you sign the fee agreement with your business lawyer, you should ask at least these five questions and make sure that the answers are complete and to your satisfaction.

Fee Agreement Arrangements with Contract Lawyers in Minneapolis: 5 Most Important Issues

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In this article, I will discuss five most important issues that you need to know before you sign a fee agreement with contract lawyers in Minneapolis.

1. How is the lawyer’s fee paid? There are three main models of payment that lawyers use: hourly fee, contingency fee, and flat fee. The hourly fee is the most common form of contract lawyer compensation and it is fairly simple – the contract attorney is paid only based on the time he spends on the case. If you’re paying your contract lawyer by the hour, the agreement should set out the hourly rates of the contract attorney and anyone else in this attorney’s office who might work on the case. The contingency fee, where the contract attorney takes a percentage of the amount the client wins at the end of the case, is almost never used by contract attorneys in Minneapolis. In the unlikely case that this latter type of fee arrangement is used, the most important issue to understand is whether the contract lawyer deducts the costs and expenses from the amount won before or after you pay the lawyer’s percentage. Obviously, you will pay more in attorney fees if your contract lawyer deducts the litigation costs based on the latter scenario (i.e. after you pay the lawyer’s fee). Finally, in a flat fee arrangement, you pay an agreed-upon amount of money for a project. For example, you pay $3,500 to your contract attorney to create a standard independent contractor agreement. While a flat fee arrangement is possible in a small project, it is generally disliked by contract lawyers in Minneapolis because it often lacks the necessary flexibility to account for the client’s individual legal situation. Usually, some sort of an additional payment arrangement is built into such fee agreements to make sure that the balance between the client’s legal needs and the contract attorney’s fees is maintained.

Remember, usually, you will have to pay out-of-pocket expenses (e.g. long-distance calls, mailing costs, photocopying fees, lodging, etc.) and litigation costs (such as court filing fees) in addition to your contract lawyer’s fees.

2. Does the agreement include the amount of the retainer? Most contract lawyers in Minneapolis require their client to pay a retainer. Retainer can mean two different fee arrangements. First, retainer may be the amount of money a client pays to guarantee the lawyer’s commitment to the case. Under this arrangement, the retainer is not a form of an advance payment for future work, but a non-refundable deposit to secure the lawyer’s availability. Second, a retainer is simply the amount of money a contract attorney asks his client to pay in advance. In this scenario, the lawyer usually deposits the retainer in a client trust account and withdraws money from it for the work completed according to the fee agreement. The fee agreement should specify the amount of the retainer and when the lawyer can withdraw money form the client trust account (usually, on a monthly basis).

3. How often will you be billed? Most contract attorneys in Minneapolis bill their clients on a monthly basis. Sometimes, however, when the project is small, the fee agreement will specify that you will be billed upon completion of the case. In a flat-fee scenario, it is likely that the client will be obligated to pay either a half or even the whole amount immediately as a retainer. It is wise for a client to insist in paying some part of the fee upon completion of the case to retain a degree of control over the case completion.

4. What is the scope of the contract attorney’s representation? Most contract lawyers in Minneapolis will insist on defining their obligations in the contract. The most important issue here is to state what the contract attorney is hired for without defining it either too narrowly or too broadly. Usually, a fee agreement should specify that a new contract should be signed if you decide to hire this contract lawyer to handle other legal matters.

If you are hiring a large or a mid-size law firm, beware that the partners in a law firm often delegate some or all of their obligations to their associates or even their staff. While the partners retain full responsibility for the case, there is a danger that important parts of it may be delegated to far less experienced associates. Besides the potential quality issues, there is also a concern that you would be paying a large hourly fee for a first-year associate’s work. It is important to insist that the fee agreement specifies what, if any, type of work is being delegated to the associates, the corresponding billing rate of each associate involved, and who carries the responsibility for the whole case.

5. Who controls what decisions? Whether this information should be included in the fee agreement really depends on the case and on an attorney. Generally, contract attorneys in Minneapolis let the client to make the important decisions that affect the outcome of the case (such as: acceptance or rejection of a settlement offer, commencement of a lawsuit, financial and personal contractual issues, et cetera). All of the decisions with respect to the legal issues (such as: where to file a lawsuit, what motions should be filed, what should be in the contract, negotiation tactics, etc.) are usually taken by the contract lawyers. If there are any changes to this arrangement (for example, you want your lawyer to make certain decisions with the respect to the outcome of the case), you should insist that these modifications be reflected in the contract.

Generally, before you sign the fee agreement, contract lawyers in Minneapolis will discuss with you many more topics than what is covered in this article. The five issues explained here, however, are crucial to your understanding of how the business relationship with your contract attorney will work. Before you sign the fee agreement with your lawyer, you should ask at least these five questions and make sure that the answers are complete and to your satisfaction.