Happy Holidays, everyone.

Every year, Devouton, LLC works with Lee’s Summit Elementary (go Cougars!) on our annual holiday card project.  Students do the creative design work, and we use the winning entry on our card.  The project helps connect artsy kids with an art design assignment for a real client.  It’s a lot of fun for us.

After much work by the kids, and a very enjoyable time reviewing all the entries, here are a few that weren’t chosen for the card, but are winners in their own right.  The last, of course, is our favorite.

Cheers from Devouton, LLC, and remember to schedule that annual meeting.

If I ever get a holiday-themed tattoo, this would be it.

Playing on words is just one of my favorite things.

Everyone should have a rockin Xmas.

Sometimes it's that easy.

Don't we all.

Holiday-themed? Check. Lawyer-themed? Check.

Ed. note: This post was originally printed in the Lee’s Summit Journal, December 4, 2009.

Contracts are everywhere.  Whether your contract is big, like a home purchase agreement, or small, as with a cup of coffee, they all have the same components.   While you probably understand the terms of that cup of coffee, it helps to know how to read a contract.

Look at every contract as a “who,” “what,” “where,” and “when.”

1.  Who.  The “who” means the parties to the contract.  Clients who do business through an LLC, corporation or trust should always look twice at the “who.”  Make sure your company or trust is named, normally in the first paragraph and then again on the signature block.  In the case of a company, failure to use the company’s name could weaken the asset protection the entity is designed to provide.

2.  What.  The “what” is what everyone will get out of and/or give up in the contract.  In legalese, this is called “consideration,” and is incredibly important.  It will establish the baseline for your cost/benefit analysis (discussed later in this article), and will set out what you are obliged to do while the contract is effective.  The “what” is most likely the essence of your deal.

It is also helpful to look at a contract’s “what” as an ideation tool.  While cash is the commonly perceived choice of “what,” it may be helpful to remember that services, products and debt reduction are all forms of “what.”  Creative and constructive thinking about “what” can open doors and resolve conflict.

3.  When.  You understand that a contract becomes effective when signed, or when everyone does what they’re supposed to do.  Also know that time affects contracts in lots of other ways.  Sometimes a contract doesn’t kick in right away, or it may have a few deadlines along the way.  Some contracts require additional “what” at a later time.  When you read your contract, lock important dates into your calendar.  Also recognize the time value of the “what” in your contract.

4.  “Where” is where the “what” will happen.  This is important for things like shipping and insurance costs, sales tax and travel expenses, but can also be crucial in dispute resolution.  “Choice of jurisdiction” and “choice of venue” clauses can be important, and can be crafted at the beginning of a deal.  Absent this language, jurisdiction and venue will depend on what happened where, and when.

The “who,” “what,” “where” and “when” make up the concrete contract terms, but there are a few other themes and hot issues to remember:

Risk.  The benefit of the bargain normally drives you, but don’t forget to balance this with risk.  Identify and understand what yours will be in the agreement.  Then lay it over your personal risk tolerance.  Risk is part of every deal, from those new shoes to the biggest commercial real estate development.

Boilerplate.  “Boilerplate” is sometimes misperceived as contract language included in every agreement that doesn’t mean much.  The first part may often be true, but the second could not be more wrong.  Boilerplate may be identical from contract to contract, but it has as much legal standing as your “what” clause.  You or your lawyer should take a few minutes to assess how boilerplate affects your particular world.

Dispute Resolution.  Some contracts end up in dispute, and most of those go through a dispute resolution process.  Negotiation (usually informal) is the most common.  Arbitration is often a requirement in consumer or construction contracts.  Litigation is normally the choice of last resort.  Mediation is a hybrid of these, and is growing in popularity.  If you find yourself in a contract dispute, I encourage you to seek information on all these forms of dispute resolution.

Value.  Contracts boil down to value, which means different things to different people. This is true when you’re entering a contract, and also down the road, when you’re resolving differences.  Perceiving value early could save you time and money via litigation.  Holding true to other non-cash values could demand nothing less than a jury trial.

Contracts are everywhere, and affect different people in different ways.  Know yours, especially the big ones.  Take a moment to read the “who,” “what,” “when” and “where” of your next agreement before signing on the dotted line.

ESTATE PLANNING: Working with your lawyer

Scott was recently published in the Lee’s Summit Journal, a part of a new series on the law.  The article, published November 6, 2009, talks about how to work with a lawyer in the estate planning process.  It’s helpful no matter where you’re from.  The original article can be found at http://www.lsjournal.com/104/story/39302.html.

Scott Devouton, Guest Columnist

Your lawyer can help you break down complicated subjects. Estate planning is one of them. Most know that they need to think about a will, guardianship for the kids or beneficiary designations, but aren’t sure where to start. What do I suggest to clients, friends and family?

Estate planning is about as big-picture as it gets. Start there. Get out a pen and paper, your handheld or a whiteboard. Organize your world. Write it down. Take this roadmap to your lawyer or other trusted advisor, and use it as a reference point.

“What you need” depends mostly on “what you’re all about.” Here is one way to approach the process: Your world breaks down into three parts: things, people and time.

1. “Things” equal your balance sheet, your assets and liabilities.

What you have and owe will form one leg of your estate planning footstool. What you have (assets) could implicate things like the dreaded estate tax.

What you owe (liabilities, including standard of living) could implicate tools such as life insurance and debt management. This all may be some legwork for you, but it is crucial to making sure your estate plan fits. A secondary benefit of this process will be that you have your balance sheet fresh for other uses, such as applying for a loan or managing debt. I encourage you to look at it and update it from time to time.

2. “People” start with you. Estate planning involves very personal decisions about many facets of your life.

Everyone has a different cast of characters. “Who” will drive your “what” a lot of the time.

Start with yourself, what you believe in, and what you value. Then consider dependents, whether a spouse, minor child, parent, sibling with special needs, partner, employees, or even a pet. Finally, there is everyone else, including other family, the IRS, friends and philanthropic causes.

3. Ultimately, estate planning is about time.

The things and people in your life all move on their own timelines. A good estate plan takes time into consideration, and is often what makes different plans right for different people. Keep time in mind when you’re thinking of how people and things come together for you.

Keep some estate planning buzzwords in mind…“estate tax,” “asset protection” and “probate” are all terms that you might have heard and may be afraid of.

I encourage you to talk to your lawyer about them, and ask questions until you feel comfortable with how they apply to your personal situation. Remember, different issues apply differently to different people. What may be a problem to someone else may not matter in your situation.

A will, for example, might be good for your neighbor, but a trust may be a better fit for you. An irrevocable trust tied to life insurance may similarly be a good move to some, but entirely unnecessary to others. As you can imagine, the examples are many.

Finally, there is “succession planning.” This term applies if you own a business or real estate, and simply refers to what you want to happen to that asset (and any people associated with it) when you are no longer involved with it.

Address succession planning issues alongside your estate plan. Start early. There is usually a lot of flexibility if you start soon enough; options could be limited down the road. Also keep in mind that succession planning often involves how others (children, key employees, buyers, etc.) envision themselves being involved with the asset later on. I encourage clients to get a feel for all of this sooner than later.

Estate planning can seem huge. It covers a lot of territory and can involve a lot of financial, logistic and spiritual review. However, you can get your arms around it. Talk to your trusted advisors. Start by looking at your world; keep perspective as things come together. Your “who,” “what” and “when” will all drive what estate planning means to you. Have a coffee with your lawyer. Lay it out, ask questions, listen, and make sure your lawyer does the same.

In the end, your estate plan should reflect its most important component: you.



Bartering has been a steady part of the world’s economy throughout history, and continues today in full force.  Neighbors trade goods and services in towns around the globe.  Large organizations exist that do nothing but facilitate big-ticket barter transactions on the open market.

Don’t forget your lawyer under the bartering umbrella. Stories abound about old-time lawyers trading legal services for livestock, wagons and whiskey.  Modern lawyers may have different needs, but the concept still works.  You can trade almost anything for legal services.

• Solo practitioners have more flexibility to take smaller items, such as furniture, musical instruments or restaurant credits.  It is easy to propose a barter, and it shouldn’t take too long for you and your lawyer to determine whether a barter is appropriate.

• Small and medium firms will involve a bit more red tape, but are better able to use larger barter items.  Banquet hall use (holiday parties, etc.), office supplies and gym memberships are all things that a small firm could use.  You may have to be patient while waiting for your lawyer to pitch the idea to his or her partners, but you should be able to get an answer and barter terms together in 30 days or so.

• Large firms are less likely to barter for small items, especially if just a few items are involved.  However, large firms are much better situated to barter for big-ticket items, such as IT services and equipment, vehicle fleets or use of resorts for firm retreats and conferences.  With large firms the red tape will be longer, so start the conversation early.  Six months to a year out would not be unusual, but if set up right could greatly benefit both parties.

If you’re interested in bartering with your attorney, here are a few thoughts…

1. First look at what your lawyer charges for services.
2. Then look at what you have to trade and what that is worth.
3. Put a barter proposal together, including the net barter value.  Sometimes the barter will be an equal trade; sometimes one party will owe the other a balance.
4. Be as clear as possible about what each person will get and when they will get it.
5. Most of the time this will give your lawyer enough information.  If you’re dealing with a larger firm, offer to make a presentation to whatever committee would be in charge of approving the alternative billing arrangement.

To emphasize that bartering is a legitimate form of commerce, and for more information, check out the IRS’s “Bartering Tax Center.”  Keep your barter transactions in mind when you put your taxes together.

While you might not trade chickens for legal services in today’s economy, there are a million and one other things you can bring into your attorney-client barter relationship.  Use your imagination.  If cash flow is tight, or you have inventory that you need to move, consider bartering with your lawyer.

We’re plowing into the last three months of the year.  It’s time to step back and look at all things boring in your life.  Use your lawyer to maintain perspective – Once again, you may walk away with some free advice.

Estate Planning

You’ll fall into one of two groups here… Those who have something in place, and those who don’t.  If you’re all set, pull out the document packet your lawyer gave you and look it over.  Make sure your plan is appropriate for the age of your beneficiaries and the size of your estate.  Make sure your power of attorney designees are still around and able to take care of things if you can’t.  Make sure all your non-probate beneficiary designations are complete and up-to-date.

If you don’t have anything in place, you should.  Take an inventory of all the boring things in your universe… income, debt, assets, dependents, etc.  Look at things from 1,000 miles up.  Doodle, draw it out, just get it down.  Create the finite scope of issues you have to deal with.

You can pull your lawyer in after you’ve had a chance to go over everything.  Know what you generally want, because that will ultimately drive what you have in place.  Depending on your nature, you may also want to talk about philosophical or spiritual aspects of life… Feel your lawyer out on this last point, but make sure he or she understands what is important to you.

Business

This is also a good time of year to look at big-picture business issues.  Although it’s busy for most people, the timing is perfect for determining tax strategy and next year’s strategic vision and long-term goals.  Think particularly about how owners, employees and family fit into the picture (or don’t!).

After getting a grasp of your situation, have a coffee with your lawyer.  Your goal will be to take what you’ve accumulated and meld it with legal and tax tools that are constantly changing.  Your lawyer can even help you define your goals within a linear analytical framework.

A Little of Everything

If you are a lucky business owner, you’ll need to think of both your business and your family’s estate plan as one fabric.  Each will play off the other, and that is important to remember.  Your lawyer can help you set up and freshen up this one-two plan.

Warm and Fuzzy, Moving Forward

The good thing about looking at your big-picture now is that you have the luxury of speaking in general terms.  If you are so inclined, you can weigh lofty issues, determine life-long giving values and get a grasp on family fairness concepts.  Your lawyer has time to listen and evaluate before suggesting an action plan.  At that point, you’ll feel better about the plan that you ultimately put in place.

Enjoy Autumn, everyone.

I get a lot of calls from new clients that start something like this… “I want to buy a business.  How much will this cost me in legal fees?”  My answer is always: “It depends.”  You should know why, because it could end up saving you money.

Whether you’re starting a company, selling the family business or putting together your estate plan, it is usually impossible for your lawyer to know how much lawyering you’ll need just based on the fact that it’s happening.  Like life itself, every deal and every project involves a combination of an infinite number of situational variables.

Rushing to establish fees can do a couple of things.  It could lead to paying too much for something that is pretty run-of-the-mill.  When pressed for a fee quote, you may get the upper tier of what is possible, without the benefit of going through a full attorney-client analysis.  It could also lead to a half-baked plan that grows in cost as the project moves forward (“cost-creep”).  This latter scenario is common because the attorney will often not have all the facts to accurately spot any landmines on the path ahead.  It can be awkward for everyone when an additional and unanticipated case advance is requested.

This is not to say that you should write a blank check to your lawyer.  I always ask the client to come in for a project evaluation, or insist that we have an extended phone call to determine all factors in play before giving an estimate.  After this vetting, I’ll give them a budget based on the facts we discussed.  9.9 times out of 10 the project will come in under budget and we’re able to swiftly deal with curveballs along the way.

Some things that you should communicate to your lawyer before expecting an accurate price quote:

• What are the goals of your project? This will include what a business will do, who you want to receive your assets when you’ve passed and whether you want to make a zillion dollars or save the world.
• Who are the players? Often the number of people floating around a deal or a family will influence the complexity of the project.  This topic will also help your lawyer determine if there are any potential conflicts of interest.
• How will things be financed? A deal is markedly different if it has a group of private investors, rather than, say, one bank making an SBA loan.
• What is your time line? In some situations, it will cost more to get something done in a short time frame.  This is best known up front.

This “preliminary” meeting can be formal or informal, and it can be on or off the clock.  Do not be afraid to make suggestions or ask about either of these issues.  I would recommend following your lawyer’s preference for the formal/informal issue, but it is completely reasonable for you to request that the first meeting (or a portion of it) not be billed.

Finally, remember that these pre-project meetings will be covered under applicable attorney-client rules for confidentiality and privilege.  Your lawyer may stop you quickly upon realizing he or she has a conflict in the matter, but in most cases cannot discuss or divulge what you have discussed, even if there ends up being a conflict.

In the end, remember that your project is the most important thing!  The fee discussion should be a preliminary, administrative task that, while addressed, shouldn’t dominate the rest of your attorney-client relationship.

Design thinking can help bring it all together.

Design thinking attempts to determine what is desirable to your market, and in what manner it should be delivered as a viable and technologically feasible venture.  The end goal can be anything you value.  It roughly proceeds: Define, Research, Ideate, Prototype, Choose, Implement, Learn.

Design thinking requires some investment of time, energy, resources and opportunity cost.  Even the most efficient processes require some investment.  The point at which you engage legal counsel can have a significant influence on rate of return.  Legal issues can sometimes make the difference in whether a project moves forward or not.

It can be beneficial to have scheduled milestone meetings with your lawyer.  Of course, you should talk to your lawyer about what process works best.  Every firm and client has its own work style; however, if you need a starting point, here are some thoughts:

Concept stage

Have a coffee with your lawyer when your idea has legs.  At this stage, you will have an adequate concept of function.  This will allow your lawyer to spot any deal-breaking issues or issues for special attention as the process moves forward.  You’ll be able to lay the groundwork for important future efforts such as financing, operations, risk management and intellectual property.  Your lawyer may also start thinking about fee structure, staffing and workload management.

Prototype stage

All the above issues will likely be in better focus at the prototype stage.  The prototype meeting will help your lawyer reevaluate and bolster strategic and tactical thoughts from the earlier meeting.  If any legal filings are ripe, this meeting provides another avenue for your lawyer to collect required information and filing fees from your team.

Implementation stage

Connect with your lawyer again when things are ready to roll.  This meeting can be short or a longer series of meetings, depending on the nature of your project.  It gives your lawyer a final connection to what will hopefully be a successful project.  As operating or succession issues arise, your lawyer will be better able to evaluate the situation and get on top of any fire flares.

Value

Milestone meetings could help you improve your attorney-client value:

• The initial meeting can be shorter and less formal.  A lawyer may see it as an investment into future work and not bill you, or you might be able avoid time recording by picking up coffee, lunch, or whatever.
• The initial meeting will help you get on top of things earlier, possibly saving you formal and longer future meetings with your lawyer under more stressful circumstances.  The meeting could also prevent wasted investment on a project that is not legally or practically feasible as developed.
• Scheduled meetings will let your lawyer better manage your project.  Issues such as sequencing and personnel design can be processed on a macro level, and the project team can have a better perspective on issues.
• Proactive meetings can help with financing.  Your lawyer could be a good resource for contacts, and you will be better able to organize information for banks and investors.  Sometimes having the right thing at the right time can make a deal move.
• Early attention could help you and your lawyer spot opportunities in asset management, succession planning and personal planning.  The ability to synchronize work efforts can help to efficiently set up your long-term situation.

In the end, you are looking for project efficiency.  Well-timed legal services can help you focus on product development, rather than getting bogged down with legal logjams.

Just a quick reminder to have your annual attorney-client coffee.  Catch up with your lawyer, get your bearings, spot issues and opportunities.  You might even get some free legal advice.

Best wishes from Attorney Client, and best of fortune in 2009.

Litigation is never fun.  Why?  In addition to time, headaches and heartburn, litigation equals attorney fees.  Extraordinary or unanticipated litigation can have serious economic impact.

Contracts are a proactive way to help minimize risk of litigation.  They establish a safety net for business relationship issues, should they surface.  Operating agreements, vendor contracts and subcontractor agreements are all examples of attorney-client projects.  There are a few things you can do to maximize value.

• Read Your Contracts

If you will be signing something, read it.  This actually is not as simple as it sounds.  Legal documents are dense, are often confusing, and sometimes seem longer than necessary.  No matter.  Plow through them.  Absent very infrequent circumstances, if you sign it, you’re bound by it.

Tip:  If you receive a contract that someone wants you to sign, make a copy, and review the copy with red pen in hand.  Put the original in a safe place.

• Raise Specific Questions

Remember that a contract is a “meeting of the minds.”  Your lawyer may be familiar with you, but might not know anything about your latest deal.  Have a list of the specific issues you spotted during your red-pen review session.

This is an easy way to promote high-value legal service.  First, you can help conserve your lawyer’s time by cutting to the chase.  Second, you and your lawyer may spot an issue that is a deal-breaker or deal-maker.  Third, the process gives you a framework for thinking through business dealings.

• Think About Timing

Make sure you step back and think about your time situation.  When is the proposed closing date?  Does your accountant have any preference for timing?  Will your lawyer have a month or a day to review and revise?  How much due diligence will you have to perform?  Timing shapes whatever you have to accomplish.

Tip:  Enter contract dates into your calendar, and set alarms as reasonable.  Include periodic performance reviews, and make sure to give yourself and your lawyer enough time before a milestone hits.

• Work In Phases

Take a phased approach to help manage attorney fees.  Your lawyer will spend a segment of time in each major phase: review, discussion, negotiation, drafting/revision.  By segmenting your thought process, you will be better able to focus on the right issue at the right time.  It will also help you contain legal fees, or at least manage when the bulk of fees hits your books.  I am often retained to review and draft/revise a contract, while the client manages negotiation of the contract’s material terms.

• Tie Up Loose Ends

Once you have established the final terms of a contract, make sure all signatories sign the contract.  A contract is hard to enforce on its four corners if someone forgets to sign it.  Make sure all attachments are completed.  Your accountant will thank you.  Get your lawyer the executed agreement or a copy of the executed agreement. If any of the contract terms are in question down the road, you will be happy to have the signed agreement at the ready.

Billing statements are the face of your business relationship with your lawyer.  While they can sometimes be heavier than you anticipated, they can also help you smartly leverage your lawyer’s time.  Understanding what goes into attorney’s fees can facilitate more valuable service.

First of all, remember that it’s all about time.  Time spent working on your matter.  Time not spent working with other clients.  Time spent developing expertise in a particular field of law.  A lawyer’s fee is somehow tied to his or her time, whether they bill by the hour, charge a flat fee or take a percent of a matter.

As you might imagine, there are a lot of factors that go into a lawyer’s fee structure:

• Time and Labor

Time and labor are what everyone who has ever worked an hourly gig understands. Day’s work, day’s pay.  To some extent, this concept covers everything on this list, and builds the time value of your attorney-client relationships.

• Novelty or Difficulty of Matter

Compare this one to physicians and other specialty-driven industries.  The more complex a matter is, the more expertise will be required, and the more that expertise will likely cost.

• Skill Required

This one of course goes with the prior factor.

• Opportunity Costs

As much as you sometimes need your lawyer, other clients do, too.  This shows how even the practice of law can boil down to simple supply-and-demand economics.

• Market Rate

Econ 101, part deux.  Just like food, entertainment and real estate, you’ll pay more for legal services in Manhattan, NY than Manhattan, KS.  Geography will impact your lawyer’s fee structure.

• Value of Matter and Results

Your lawyer may wish to base his or her fee on the value of a particular matter. Personal injury attorney fees are usually structured in a “contingency fee” format.  The more your case is “worth,” the more your attorney would be paid.  Controversial?  Yes.  Within the scope of this blog?  Nope.  Just remember that all the other factors in this list will go into a contingency fee structure.

• Urgency of Your Matter

This is the “drop everything” rule:  You may be charged a premium for something put off to the last minute.

• Attorney-Client Relationship History

Sometimes an attorney will request a different fee structure for a new client than for a long-time client, but may revise it after the two of you develop a working history.

• Experience, Reputation and Ability

This is the sexiest factor of them all.  The classic high-powered fat cat on network prime time.  The rock star that makes it big.  If you ever see your lawyer’s fees increase, this will hopefully be at the core, with all the other factors playing in.  However, know that this X-factor branches from your own goals and values.

Knowing what goes into your lawyer’s professional fee gives some perspective to your attorney-client relationships, and will hopefully let you concentrate on the actual issues in your legal affairs.  Consider it an administrative skill.  It will help you deal with matters earlier, letting everyone think things through for an efficient engagement.