In a complicated professional services partnership, I spent a lot of time on the phone and writing e-mails to my client and opposing counsel. Also prepared an affidavit and application for temporary injunction, and did some legal research. An important issue in setting up a professional services company is to make sure it complies with the relevant statutes about business formation. Whether it’s a P.C. or a P.L.L.C., the company’s shareholders or members may only be people who are licensed to practice the chosen profession — and the company may only practice that profession, or provide ancillary services. A classic example is a medical practice set up as a P.C., which may also employ med techs and nurses to provide their non-medical but ancillary services. All the shareholders of the medical practice P.C. must be doctors. Having a non-medical shareholder would make the whole business structure illegal. There’s a well-known problem with insurers trying to “clawback” payments for services, based on a practice being dominated by a non-licensed professional. Typically, professional services companies avoid that problem by setting up an MSO (“managed services organization”) structure, where the licensed professionals have a P.C. or PLLC that pays the MSO a flat monthly fee for back office work like billing, facilities maintenance, equipment leasing, etc.
Another complicated business relationship involves concealment of revenue by one of the business partners. The firm prepared and filed a complaint and application for injunction. Many phone calls, e-mails, and an in-person meeting with client. When revenue is hidden from the partner who is responsible for paying sales taxes and preparing the business financial statements, many problems will ensue — and someone will get sued.
In New Haven Superior Court, a status conference led to a careful hallway conversation with opposing counsel, whose client admits owing some money and claims willing to pay. Although many people like the “convenience” of remote hearings, being there in person leads to more efficient resolution of matters. Putting on the suit and tie and driving and parking and walking through security to get to the actual courtroom also demonstrates (maybe even instills) deeper concern for the clients’ matters, compared to throwing on a tie and blazer and logging into a video chat at my desk. There is a certain added thoughtfulness to in-person appearances and a built-in time for reflection while traveling to and from.
In Meriden Superior Court, the losing plaintiff tried to re-open a small claims matter against my client; they were denied. When there’s a strong and well-supported small case, small claims court is efficient for the plaintiff. Otherwise it’s usually defendant-friendly.
The Miami arbitration continues to be stalled by the defendant’s pending criminal charges and concomitant constraints. I think his attorney is overplaying those constraints, and it would be feasible for him to appear and defend the matter. But so far the arbiter is buying the b.s.
Also in New Haven Superior Court, the firm is negotiating payment of a $500,000+ commercial loan on which the client is in default. Frequently, companies default on loans because of circumstances they didn’t foresee. A savvy commercial counsel for a lender will not permit a force majeure clause in a loan agreement or promissory note.
The firm has stepped in to defend a lemon law complaint in Milford Superior Court. Kind of a he-said she-said situation; does anyone actually have a copy of the advertisement from two years ago? Need to serve discovery on that question, to an opposing party who has no attorney but thankfully does have an e-mail.
For a longstanding client, I reviewed a fairly simple business contract. “Small” jobs still are worthwhile for clients and the firm — and even “simple” contracts may have gotchas given the client’s particular line of business.
Another attorney called on the firm to help out with a complicated open-source licensing question. They thought it was complicated. After listening to their client’s story, I thought the licensing issue actually was straightforward. There is a big difference between software that makes API calls to an open-source module, or software that actually incorporates the open-source code.
Subpoenas were served for testimony at an upcoming evidentiary hearing in New Haven Federal District Court. One witness was out of state, and has a tricky schedule; so the clever move under Rule 45 was to subpoena them for a remote video deposition (flexible scheduling) rather than in-person attendance at the hearing.
The firm continues preparations for an arbitration hearing in a CUTPA / breach of warranty matter in Milford Superior Court. Looking forward to putting on the case through witness testimony and physical exhibits.
Getting closer and closer to closing a Bridgeport deal for a convenience store / gas station. But not quite there …
