Información Sobre Mi Práctica Legal (About My Law Practice, in Spanish)

Bienvenidos al Bufete de Abogada Anne Marie Segal. Les quiero informar de mi oficina y práctica legal.

Welcome to my law office and this short video in Spanish that explains my legal services.

Law Office of Anne Marie Segal ofrece asesoría legal a empresas y particulares. Se puede revisar http://www.amscounsel.com para más información. Ninguna de la información publicada en este sitio constituye asesoramiento legal ni constituye una relación abogado-cliente. Pueden existir hechos no discutidos aquí que son relevantes para su situación. Este es un foro público. Por favor no publique información confidencial o de información específica con respecto a sus asuntos legales en este sitio.

Law Office of Anne Marie Segal provides legal counsel to businesses and individuals. Please visit www.amscounsel.com for more information. None of the information posted on this site constitutes legal advice or forms an attorney-client relationship, and there may be facts not discussed here that are relevant to your situation. This is a public forum. Please do not post confidential or fact-specific information regarding your legal questions on this site.

Founding Your Nonprofit: Incorporation and Tax Exemption

Leave a reply

Taking a nonprofit from a dream to a viable entity involves weeding through the state incorporation and federal tax exemption process. Would-be founders of a nonprofit often find this a daunting marathon rather than a quick sprint. Indeed, there are many steps to be followed (with the proverbial “i” dotting and “t” crossing) and a bit of IRS grace to make this a reality. (Or, if you are hoping to form a 501(c)(4) on the wrong side of the political fence, maybe “grace” isn’t the operative word.)

I would like to give an overview of nonprofit incorporation and 501(c)(3) tax exemption, which is the most common way that charities are formed and become tax exempt entities. There are two main stages to the process:

1) State incorporation as a nonprofit entity. At a state level, founders of a nonprofit will create a nonprofit corporation after obtaining consent where required from government agencies. There should be helpful information the Department of State (or Secretary of State) website in your state. In New York, for example, you can visit the following website: http://www.dos.ny.gov/corps/nfpfaq.asp. A corporation is formed as a not-for-profit entity in a single step, which means among other things that it has a public purpose and is not formed for the benefit and financial interest of private individuals. Nonprofit status, however, does not equate to tax exempt status. That is the second step.

2) Tax exemption at the federal level. At a federal level, the Board of an incorporated nonprofit will file a Form 1023 to apply for tax exempt status with the IRS. This is a complex form and takes much diligence, thought and time to complete. Often a lawyer’s assistance is helpful so that the nonprofit knows it is answering questions correctly and completely. Important items on the Form 1023 include the Statement of Activities and financial data.

For more information, enclosed is a short video on the incorporation and tax exemption process:

My Biggest Risk, Finding My Core – One Year Later

4 Replies

My biggest risk was giving up security in exchange for self-direction. In the process, I broke through and found my core, which drives my life and practice today.

Here’s my story.

One year ago today, I walked out the doors for the last time of a safe, stable and seven-year long job. It wasn’t a bad job, all things considered. I learned a tremendous amount, made some good friends and enjoyed the challenge of being under fire from time to time. There were major and petty annoyances, like any other job, but it was fine. The ubiquitous “fine”.

A Fine Job, not a Great Life

Yet good enough was no longer enough. It simply wasn’t working for me, especially the push-yourself-to-your-limits-each-and-every-minute atmosphere typical of many law jobs, most notably in the finance world. Needs (not wants), from motherhood to health, were screaming to be addressed. I struggled to fit my life around my job, as high-level jobs nearly always demand, instead of integrating the two into a solid whole. I did yoga on the weekends and was stressed out all week. I felt stifled and exhausted, and I could no longer do my best work.

The answer was clear. I needed a way to reconnect with my values. This wasn’t a free-to-be-me, let’s-find-myself goal. Don’t get me wrong, as uncool as it sounds, I have always loved being a lawyer. But I was choking down my own success, not able to chew any of the individual bites. I wanted to taste my life again. I wanted to be the lawyer and person I knew I was meant to be. I only have one life, after all, and it was abundantly clear that I wasn’t living it the way I had always envisioned.

A New Path – Finding My Core

After many months of racking my brain for what environment could better match where I was going (or how to make my job a better fit), I realized that there was no known place to land. At least not with my then-current skills and the common lack of vision among recruiters and HR departments. I could have spent years retraining, but I didn’t have years. I needed to make it happen. Soon. Myself. I needed to craft my own suit rather than buying off the rack. Create my dream job from scratch.

(You have to love stock images. Can you think of an uglier suit than that?)

So I did. On May 1, 2012, I took my biggest risk. With six months of income saved, a supportive family and a walk into the unknown, I started my own law firm.

A year later, with many scrapes and lessons learned, I can report back that my path is not for the faint of heart. Although there is not one day that I wish I was parked back in that chair at my old office, I can imagine many people would. It has been quite an uphill walk, and no one drives by with a golf cart ready to help you up that hill. (Although a few will stop to offer some shade and a cool drink.) It’s character-building at its best. And worth every minute.

We Are Not Alone

I have learned, most importantly, that I am not alone. I have a great support group of clients, mentors, colleagues, other lawyers, small business owners and friends who have helped me visualize what my practice can be and achieve new heights. In return, I do the same for them. I would never have imagined how my world could and did open up after that first step.

After over a decade with corporate law as my core, my practice has expanded organically, largely driven by client needs and my desire to maintain a manageable schedule and grow in measured steps. I was asked by a friend to find a local trademark lawyer, and I ended up with a new client (after hours and hours of study to learn the area). Then a friend of a friend needed help with her non-profit. I am now working with a few key mentors and colleagues to assist her with the tax exemption process and other matters. Still other friends and colleagues, who are parents of minor children, have needed wills, advance directives and guardianship appointments over the past year. Furthermore, artists, knowing my background in the arts, have come to me with questions in that field. These practice areas are diverse and yet related, and my knowledge and experience in each one informs the other.

The Years to Come

I look forward to what the next year may hold in store, as these (now core) practice areas continue to cross-pollinate and mature. As I said recently to a group of businesswomen I know, each new day is like a little present waiting to be opened.

Fast forward to today, one short year from the day I walked out of that safe job and started this journey. My hope for more collaborative relationships and a self-directed, fulfilling future is being realized. I am blessed with awesome clients who have taken a risk in hiring me out of the gate, and I believe and trust that they have been fully satisfied with their choice. I look forward to serving them further and new clients and friends in many years to come.

*****

Anne Marie Segal’s biggest risk was trading security for self-direction. She has taken a further risk to document the decision and process rather than project a pre-approved, professionally-manicured cutout with no personality. (We tend to like our lawyers bland, after all, without any zest or salt.) She’s not that lawyer, and she never will be. Ms. Segal’s clients, who are generally looking for a client-centered relationship – not a didactic, inflexible lawyer with no new ideas – thank her for that.

Law Office of Anne Marie Segal celebrates its first anniversary as of tomorrow. The office was founded on May 1, 2012 and is located in Stamford, Connecticut.

Over the last year, Ms. Segal’s practice has expanded and now includes business and non-profit law, contract drafting, trademarks, art law and estate planning.

In September 2012, Ms. Segal launched this law blog (AMS Counsel Blawg) with the goal of “educating clients and the public on the basics and finer points of law and legal analysis.”

In November 2012, Ms. Segal added a second bar admission and now practices law in Connecticut and New York. In addition, she offers federal trademark registration services nationwide.

International Clients – Are They Really that Different?

Leave a reply

“A client from Hong Kong is not so different than one from Ohio.
It’s just another name on a document and an annoying time zone.”

That was how, when I was a summer intern during law school, a junior associate (let’s call him Bob) explained to me his approach to having a global client base. Fortunately, Bob’s opinions were rather rare at the international firm where I was employed. It was also obvious that Bob was engaged merely in the drudgery of the documents, without a sense of client service and with little (if any) client contact. I knew at the time, and I appreciate so much better now, that having clients across the globe brings unique challenges and opportunities.

You can’t pigeonhole your international clients with common cultural stereotypes. The interplay and nuances are a lot more complex. For lawyers, here are some thoughts to better your relationship with your foreign clients:

1) Cultural sensitivity goes a long way. Educate yourself about whether there are certain gestures in your client’s culture that are considered offensive, such as looking the client straight in the eye, getting too close, skipping small talk, using a client’s first (given) name, etc. Also be aware of what common practices pervade. Do meetings start on time? Is lunch a time to do business or socialize? What is the custom for business cards? Are there customs for men or women’s dress or social behaviors that are appropriate (and also within your own comfort zone)?

2) Obviously there are language differences (even if your client is a native speaker of English). References that seem obvious to you may be lost on your client. It is important when representing international clients to avoid colloquial expressions or use “shorthand” descriptions that may not make sense to someone who has grown up in a different milieu.

You also may find that although your client writes to you in “English,” the words on the page may not be strung together in a comprehensible way. You will need to find a way to tease out the important concepts and “mirror back” their questions so you can answer exactly what they are asking.

3) The legal system of your client’s home country may be structured in a manner unlike the U.S. As a baseline, the U.K., the U.S. and similar legal systems are based on common law, while many other countries have civil law systems. Islamic countries may be governed by or incorporate sharia law, and certain countries may have other religious laws or customs that affect or influence their secular law or jurisprudence. Different legal systems have different rules and obligations, including ethical obligations. The more you can understand your clients’ frames of reference, the more you can advise them about the rules and expectations of your own country.

4) In addition, very few nations have a federalist system in which lawyers are admitted state-by-state (or in a similar manner). Your international client may not understand, without proper explanation, why you are admitted in certain states but cannot represent them in other states. It behooves you to understand the scope of their business or issues and whether you can provide full representation or will need to get another counsel involved.

Of course, clients differ in their understandings of the U.S. legal system. Some may have an extensive appreciation of certain or many aspects of U.S. law while others got their ideas about how things work from popular lawyer TV shows. (To be honest, this may be true for your U.S. clients as well.)

5) Lawyers may have a different role in your client’s country (or his or her individual experience). For example, I recently had an international client ask me to negotiate a contract in a practice area with which I am not very familiar, among other requests for which I requested follow-up information. When I mentioned that I would need to review the contract to determine if I felt comfortable handling it, she said, “In my country, the lawyers do what C-level executives ask without so many questions.” Whether or not she is correct, I was grateful that she could express her expectations – even if they were inappropriate in my case – because it helped me manage those expectations and preserve (even grow) the relationship.

6) Avoid overlawyering, or if you need long and complex language, explain why it is important. In many countries, a two-page document may be used in situations where our common forms are 30 or more pages. Simplify where you can but do not oversimplify. As I mentioned in point 2 above, many countries have civil law systems in which the language that might be in a U.S. contract is already codified. If you need to include extensive contractual language to protect the client, make sure he or she understands its purpose and does not feel you are simply running up legal fees.

7) Put all fee agreements in writing. This is important for all clients, but especially international clients for the reasons explained above.

8) Don’t condescend. If you have any self-awareness about the relationship between the U.S. and other countries, you will realize that Americans do not always have a great reputation abroad. Similarly, lawyers are often seen as arrogant or worse, whatever the culture. Be the exception, and your clients will thank you for it.

9) Respect their time zones (literal and figurative). If your client is 12 hours ahead, consider taking an 8 am call rather than insisting it start at 9 or 10 am. That way, you are both inconvenienced, but not as much as if either of you insisted on working only during normal business hours. Similarly, if you know your client’s boss is only available in the morning, make sure to check your email in the evenings to respond to any last-minute questions (or at least acknowledge the question and let the client know an answer is forthcoming).

10) Treasure the relationship. Consider yourself fortunate to have the opportunity to work with international clients. There is nothing greater in the world than to gain insight into ourselves and our own points-of-view (and limitations), and one of the surest ways to do that is to learn to cross the divide between cultures.

As I am sure you are aware, international representation goes far beyond simply changing the name of an Ohio client to a Hong Kong one on a set of documents, whatever Bob tried to lead me to believe. I welcome suggestions from readers on further points to consider and wish you the best with your global client base.

The 100 Greatest Songs – Copyright Alert

Leave a reply

New topic alert!

As a new practice area of mine, copyrights will be a topic for future posts, along with my usual fare (business law, trademarks, estate planning and other legal topics). Copyrights are fun to write about, and it is fun to read how they work. Just about everyone has something in life that begs to be copyrighted, right?

But what does that even mean? What’s a copyright?

In the U.S., we can start with the definition from the U.S. Copyright Office:

Copyright is a form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works.

It is sometimes difficult to wrap your mind around exactly what is protected by copyright law, and it may be best to tease out the concepts slowly.

Let us start with the 100 best songs. But which 100? Of course, there is no single list of the best songs ever, and the contenders for spots on the list can range all the way from the Beach Boys’ California Girls to Bach’s Jesu, the Joy of Man’s Desiring, depending entirely on your choice in music. [Of course, we could add Led Zeppelin, Pink Floyd, U2, The Beatles, Nirvana, etc. to round out the list....]

What if you made your own list? Say your name is Eric, and you sat down and blogged or otherwise publicized your 100 favorite songs or what you think are the 100 best songs of all time or in the last decade, etc. Would it be protected by copyright?

Here’s one such list by one Eric Mack:

The 100 Greatest Songs of All Time

Could I copy it and say that it’s my own list? I could just remove Eric’s name and make it Anne Marie’s 100 Best Songs of All Time….

Actually, no. Eric has copyright protection for his list, as do the many others that have come up with similar lists, from VH1 to NPR, and from Karen to Ted to Emily Jane. Why? Because it is not simply a list of the most played songs according to quantifiable data. (That would not be copyrightable.) It’s a subjective list based on personal taste, so it’s original, and it has been published or otherwise fixed in a tangible medium of expression.

The fact that you like certain songs is not copyrightable, but the list itself is copyrightable as to the selection and arrangement of songs.

Does that give you food for thought on the copyright front or simply motivate you to create something copyrightable – your own best songs ever? If the latter, feel free to send a link to your own list. Either way, stay tuned for more posts.

Lawyer’s Fees Be Damned. Why Can’t I Just Use LegalZoom?

4 Replies

At some point, just about every lawyer is asked this question by a client or friend. Why do I need to pay lawyer’s fees to create my LLC, file my trademark, draft my will, etc.? I like to keep things simple. Why can’t I just use LegalZoom or another self-service documentation provider?

Well, the short answer is – you can. You can get a short, generic form agreement or filing from a service provider (with or without minimal “attorney review”), which may look and feel like a helpful, valid and comprehensive document until some dispute arises. You can also put your own roof on your house with the advice of a book or YouTube video, or from a kit, which may look and feel just fine until water starts to leak in….

Take a multi-member LLC agreement, for example. What are some of the things that can go wrong with a sparsely-drafted, generic agreement? I recently checked out the standard form of operating agreement from one of these services (not LegalZoom in this case, but a competitor with similar services). It allowed me to create a PDF copy (not Word, so I could not make additional changes) of a multi-member LLC agreement, with the help of prompts included as part of the program. Here are only some of the problems I observed in the program and language of the document, aside from what else could be added or improved:

1) Initial capital contributions are included but there is no language about what happens if (a) a member fails to contribute or (b) additional contributions are required or desired over time. These contributions may be needed to keep the company solvent, pay debts or ensure adequate capitalization (so limited liability is respected by the courts), or desired to expand the business, but under the agreement there is no mechanism to encourage or require them.

2) The agreement provides for profit allocations four times a year, with no discretion by the manager or a vote of the members. What if the proposed distribution would render the company insolvent? Should the members ignore or amend the LLC agreement at that point or call their lawyers to sort it out?

3) The agreement also provides that the members will receive enough funds to cover their income taxes when profits are allocated. Like the above, it sounds good, but what if there is not enough cash to do it (e.g., in the case of a large property distribution)? Should there be, for example, an exception in some cases? The program not only does not allow the option, it fails to clarify or even present the issues.

4) The agreement provides that “members … keep accurate books and records”. Have you ever heard of proper accounting by multiple individuals, none of whom has ultimate responsibility for it? Same for the tax filings. Have fun with that one.

5) The program automatically grants all members authority to sign checks from the LLC’s account. Does that sound like a good idea? Well, it depends, but in many cases it is better to have only one or two people handling the company purse.

6) Any member can withdraw at any time. The program did not offer an option that would require the member to provide any notice of withdrawal (so that, for example, the others could get funds together to buy him/her out).

7) The program also plugged in (without verification or options) that the members agree to hire an outside firm to assess the value of a withdrawing member’s shares. How would you, if you were trying to administer this agreement, find the right person to do that? How much would it cost? Is one opinion enough and what qualifications must the firm have? Again, if you are not working with a lawyer, you may not know if there are other valuation options and/or how to craft careful language to avoid disputes.

8) The agreement also provides that if the withdrawing member is not bought out by the others (collectively or individually) within 60 days, the LLC will be dissolved. A smart and devious LLC member could use this provision to force the hand of the other members, especially if the others are cash-poor, with threat of dissolution simply by threatening to withdraw.

9) There are no options – only standard language – regarding what happens a member dies or becomes incompetent. In that case, the interest goes to the heir who would have “all of the rights of an assignee of the member’s interest”. (It did not state “and all of the obligations”, which is a critical flaw.) This means that if a child, spouse, parent or other individual is an heir, the other members are stuck with him or her. Even if the new member has no idea how to run the business, is a pain in the neck, etc. Of course, the members could dissolve the LLC by majority vote and create a new one (with additional cost, heartburn, potential tax consequences, loss of goodwill in the name, potential breach of leases and other long-term contracts, etc.) Or they could kick out or buy out the new assignee/heir if the agreement included provisions to do so, which this one did not.

10) Under the standard language – which could not be changed in this program – all amendments to the agreement require unanimous written consent of the members. Depending on the number of members and their commonality or diversity of interests, this may or may not be recommended. Also, if unanimous consent is needed for every single change, one member can always stalemate or simply not participate in the amendment, holding the others hostage.

11) The so-called “required mediation” language is very poorly drafted and will likely be misunderstood or the source of bitter disagreements, if ever invoked. For example, the agreement says that “all members agree to enter into mediation before filing suit” yet also provides that “if any member doesn’t attend the mediation, the members are free to file suit”. Changing the language to read “the members (other than the member who did not attend the mediation) are free to file suit” would be just a start at improving the provision.

12) Did I fail to mention that, upon initially selecting an LLC agreement, you are not given a warning or alert from the program that you should check with your accountant or otherwise to determine whether an LLC is even appropriate and most efficient in the first place? If it is not, how much money and time have you saved?

If you are starting a multi-member LLC in any jurisdiction, I strongly urge you to consult with a business attorney and have a properly drafted LLC operating agreement to clearly spell out the rights and obligations of the parties. (I would offer a similar recommendation for other important legal documents.) Any money and time you spend on the “front end” getting it right will likely be money and time you save on the “back end” if the relationship between you and your fellow LLC members sours or if there are disagreements about what a poorly-worded contract actually means. (Oh, and at that point, can you imagine who will want to pay the legal fees to resolve your differences?) As is often said colloquially, marriage and business relationships are often much easier to get into than to live with or get out of. Don’t be the one caught holding the bag.

LegalZoom is a registered trademark of LegalZoom.com, Inc. This post should not be construed as commentary on whether legal service providers are engaged in the unauthorized practice of law, which is beyond the scope of the current discussion.

Art Law Websites – Get Informed About Business Law, Copyright, Trademark and More

18 Replies

Yesterday evening I had the pleasure of stepping in to give a presentation at the University of New Haven on Legal Considerations for Artists, a workshop sponsored by Make.Art.Work. One of the workshop participants asked for a list of helpful websites on the topics discussed, which I would like to share with my readers here as well.

I will post updates, if any, on my law office website. Enjoy!

A Short List of Helpful Art Law and Related Websites:
Copyright, Trademark, Business Law and Beyond

U.S. Copyright Office

http://www.copyright.gov

U.S. Patent and Trademark Office

http://www.uspto.gov/trademarks/index.jsp

U.S. Small Business Administration (info on starting a business, etc.)

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business

ArtBusiness.com – Common Artist Legal Problems and How to Avoid Them

http://www.artbusiness.com/legalprobs.html

Nolo – Law for All (type in search term “art”)

www.nolo.com

Lawline.com (a site designed for legal education with “hard core” discussion of topics such as copyright law, you can take courses for free if you create a login)

http://www.lawline.com/cle/course-details.php?i=999#.USzFCqXJD0c

Avvo.com (attorneys answer legal questions posted anonymously on site; take caution to seek legal advice tailored to your situation and avoid posting confidential information)

http://www.avvo.com

Fractured Atlas (assists with fiscal sponsorship for non-profits, etc.)

http://www.fracturedatlas.org

Artists Rights Society

http://www.arsny.com

Volunteer Lawyers for the Arts – NYC (workshops, etc., some financial aid available)

http://www.vlany.org/education/workshops.php

Connecticut Office of the Arts

http://www.cultureandtourism.org/cct/cwp/view.asp?a=3948&q=464520

(Unfortunately, the CT Volunteer Lawyers for the Arts appears to have disbanded. I am aware of above organization but am not familiar with it personally.)

The above sites are for your information and are not endorsed by Law Office of Anne Marie Segal as correct, updated statements of the law in every case or how it may apply to your situation. This list is geared to new and mid-level practicing artists and therefore does not include links to websites or blogs with updates or details about international art disputes or other high-profile art law information.

Ms. Segal provides legal counsel to businesses and individuals. Please visit www.amscounsel.com for more information. None of the information posted on this site constitutes legal advice or forms an attorney-client relationship, and there may be facts not discussed here that are relevant to your situation. This is a public forum. Please do not post confidential or fact-specific information regarding your legal questions on this site.

AMS Counsel Blawg

by Anne Marie Segal, Esq.

Información Sobre Mi Práctica Legal (About My Law Practice, in Spanish)

Founding Your Nonprofit: Incorporation and Tax Exemption

My Biggest Risk, Finding My Core – One Year Later

International Clients – Are They Really that Different?

The 100 Greatest Songs – Copyright Alert

Lawyer’s Fees Be Damned. Why Can’t I Just Use LegalZoom?

Art Law Websites – Get Informed About Business Law, Copyright, Trademark and More

Follow “AMS Counsel Blawg”

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Follow “AMS Counsel Blawg”