Fractional General Counsel Explained

June 22, 2020 by James Olsen Leave a Comment

Fractional General Counsel involves contracting targeted contingent staffing for your business’s legal needs. Fractional general counsel professionals provide more than just an outsourced service. Retaining Fractional General Counsel is more like hiring a part-time attorney to specialize in your business rather than outsourcing to a law firm for spot work at expensive hourly rates.

Fractional General Counsel provides part-time legal services for a company based upon a retainer agreement. In return, the company receives the benefits of an attorney committed to your business without the fully loaded costs of an employee. Likewise, the company also avoids the headache of paying for time and materials for every phone call or email to outside law firm counsel and is able to focus on building a relationship with an attorney who learns and understands your business.

With the fractional general counsel model, your company has an attorney “on call” and available as legal needs or questions arise. The attorney assimilates into your business structure and in turn knows the importance of learning the business, how to work with your people and vendors, and how to put legal advice in the context of your overall company objectives to facilitate risk navigation.

Furthermore, a proactive fractional general counsel in your corner enables you and your business to gain back time, achieve greater clarity, create better outcomes, and navigate risk.

Who is Fractional General Counsel for?

Some companies may require an attorney for several hours each day. Others might require two or three days each week or as little as a few hours per week. The beauty of this model is that the needs of the company dictate the time the fractional general counsel spends working for that company and the stabilized cost structures help the company balance its budget accordingly. So, if your costs for outside legal services are hard to predict or too high, and you are hesitant to email or call your outside attorney for day-to-day legal concerns because of the cost, you may want to explore hiring a fractional general counsel.

Benefits of Fractional General Counsel:

Attorney becomes intimately familiar with the company and its needs.
Predictability around ongoing legal costs, allowing for more accurate budgeting.
Reduced anxiety about emailing or calling your point-of-contact attorney to discuss routine matters.
Proactive approach with more focus on risk navigation and prevention, keeping potential legal issues in check.
Discounts on related services beyond the scope of the retainer.
The services of an experienced business attorney without the cost of a full-time executive-level employee (or their accompanying benefits package).

How does this Fractional General Counsel thing work?

Consult
- Prior to representation, your needs are articulated and defined through discussion and bundled accordingly. This allows James to then map out a navigable plan around your legal risk factors.
Map
- Now that we’ve agreed that there is synergy and a retainer is signed, you now have a Fractional General Counsel mapping and prioritizing your legal services on a regular basis, along with specific deliverables and timelines to track to. In essence, your time is freed up to concentrate on enabling your business to perform optimally.
Navigate
- You now have the Fractional General Counsel meeting your needs and the support you need to navigate your legal risks. Furthermore, you have a single point-of-contact to proactively maneuver those risks alongside you.

Why JTO Legal?

JTO Legal partners with clients to navigate risk in the face of constantly changing conditions impacting their business and personal legacy. We proactively execute legal strategies to assist our clients in leaving behind a valued legacy. JTO Legal navigates your risk at the velocity of change.

Navigating Client Risk.

Putting your business and people first in tailoring legal services with integrity for the best possible management of risk at the velocity of change.

Partnering Across Change.

Navigating risk requires trustworthy partnerships across constant change as people, technology, and organizations create value in their success.

Legal Services Scaling Methodology.

We have a methodology for scaling legal services to changing environments at the speed of business.

Legacy Building.

We strive to enable our clients to leave a valued and powerful legacy in their market, their people, and their personal lives.

At JTO Legal, fractional general counsel packages can offer the following:

Availability for routine questions and advice via phone or email
Draft, review, advise, and negotiate on agreements and contracts
Advise on legal matters involving employees
Assist with acquisitions and mergers
Assist with succession planning
Provide board and governance support, including help with board meetings, minutes, and resolutions
Advise on compliance with regulations that apply to the client’s business
Manage outside attorneys when the client needs highly-specialized expertise or faces litigation
Advise on outside resources for services such as cybersecurity, insurance, accounting, branding, and more.

How much do Fractional General Counsel services cost?

These tiers are categories that are negotiated in the consult phase as bundled services. The following are examples of the bundled service categories that can be provided depending on each company’s needs. (Please note: Nonprofit Package Specials are available upon request)

Gold: Starting at $1000/month

Up to 2 hours of video/phone calls and emails per month
Business Formation
Contract review, drafting, and editing
Agreement negotiation assistance
Basic IP applications and trade secret agreements
Website Agreements
Employment Agreement review & recommendations
Vendor Agreement review & recommendations
General Counsel
20% discount on any time and materials hourly work outside the scope of the agreement

Platinum: Starting at $2500/month

Gold + up to 3 additional hours of video/phone calls and emails per month
Corporate Structuring
Commercial Transactions
Distribution Agreements
Securing IP
Agreement negotiation(s) assistance
Independent Contractor and Vendor Agreement review, drafting, and editing
General Counsel
30% discount on any time and materials hourly work outside the scope of the agreement

Rhodium: Starting at $5000/month

Platinum Services + 4 additional hours of on video/phone calls and emails per month
Succession Plan Strategy
Business valuation
Agreement reviews, version controls, and renegotiation(s) assistance
Corporate Governance Assistance
Compliance Reviews & Guidance
HR workplace policies and procedures review, editing, and drafting (including Employee Handbook)
Continued Monitoring of IP
General Counsel
40% discount on any time and materials hourly work outside the scope of the agreement

Legal Solutions Live Here. Contact Us Today!

How to build a Lean business plan

April 9, 2020 by James Olsen Leave a Comment

How to build a business plan – the Lean Canvas Model

Starting a business can be an all-consuming adventure that has the potential to be both very rewarding and very challenging at the same time. When trying to figure out what kind of Minnesota business you want to start and why you want to pour your life and soul into that business, there are some tools that can help. Ash Maurya’s Lean Canvas is one such tool that you can utilize to help you think through their business plan.

The Lean Canvas is broken into nine questions and is essentially a one-page business plan which according to the book Lean Analytics: Use Data to Build a Better Startup Faster, was inspired by Alex Osterwalder’s Business Model Canvas.

This one page canvas can assist you in assessing your risks, rewards, and trade-offs. While the Lean Canvas has nine simple, but provocative questions for you to ask yourself, JTO Legal has added a tenth in order to help you further think through your business plan.

The Ten Questions:

Here are the ten questions that you should be asking yourself prior to making real investments in starting up a new business:

The Business Problem: What are some real needs and problems that are crying out for solutions for people today, and how does your business expect to address those problems for them? If there are already solutions, that are good, you need to determine if they are indeed viable alternatives to what you want to provide. If there is no clear business problem for you to solve, you are already in trouble.
Customer Segments: Who are your targeted customers and market segments? Your message must reach out to these groups in a clear and concise manner.
Unique Value Proposition: Is your elevator pitch clear, distinctive, and memorable? Remember, if it is not compact, or if it cannot explain why you are different or better than the competition, AND make people remember it, then you may need some help crafting that message.
Solution: Are you able to adequately provide solutions to your target customer and market problems? What capabilities do you provide that someone would want to pay you for?
Channels: What is your pathway to customers and how will you get paid? A business without customers, is not a business, it is research.
Revenue Streams: What are your sources of revenue? Knowing how much revenue you think you can get is important, but knowing how often and at what intervals or frequency those revenue streams provide real cash is critical. A business needs money to make money, so a clear plan to manage cash flow is critical to success.
Cost Structure: What are your fixed and variable costs? Initial start-up costs are only a part of a good plan, knowing how cash is used each month will make for a successful business plan.
Metrics: How will you measure success and how will you track that measurement? This is one of the most critical elements to consider. Enthusiasm often biases perception, and real metrics keep you honest. Knowing them in advance will make you discipline enthusiasm with reality, and make for a more profitable business.
Unfair Advantage: What gives you the edge? There is one thing that will separate your business from the pack, and you need to make that clear to everyone. Your business needs to have a clear view of its competitive advantage.
Timeframe: What does your timeframe for success look like? Many great ideas die because they take too long to get to market. You need to know what you must accomplish at various intervals (over 30 day increments, quarterly increments, etc.) Defining targets you need to hit by each interval is what a plan is for.

Creating a visual one-page business plan that answers these questions and posting it by your computer to remind yourself daily of where you are headed as a business will help you evaluate your success and constantly strive towards it. Without a plan, it is easy to lose focus and flounder. Danger lies not only in the enthusiasm of a great idea without a business plan, but also a business plan without true measures of execution effectiveness. That is why measuring your plan is critical.

As the saying goes: Proper Prior Planning Prevents Poor Performance! So get drawing on that whiteboard, break out Visio, or print out a word document that reminds you of your ultimate vision – then track reality against expectations with real metrics. If you do, you will be more successful and less stressed in the long run!

Legal advice can be crucial during the start-up phase. JTO Legal is available as a resource for guiding your business. So, if you would like to learn more about starting a new business, please feel free to contact the firm at our Contact page.

Are You An Independent Contractor Or Employee?

March 6, 2020 by James Olsen Leave a Comment

If you run a business in Minnesota, one the issues you need to consider is the proper classification of workers – independent contractor or employee?[1] These classifications describe two different working relationships, each with its own sets of duties and responsibilities. It is important to make the correct classification. Employers who mis-classify workers can end up with a substantial tax bill and even a lawsuit on their hands.

So how can you tell the difference? The answer—like so many legal questions—is that it depends. It depends on what analysis you are looking at. The IRS has one set of analysis. The State of Minnesota has another. As a business owner in Minnesota, it is important to consider both federal and state rules.

Federal (IRS) Test

First, let us look at the IRS test. Courts have considered many factors when determining whether a worker is an employee or an independent contractor. Generally speaking, these factors can be grouped into three categories: behavioral control, financial control, and the relationship between the worker and the employer.

Behavioral Control. Factors that indicate whether an employer has the right to control how a worker performs the work for which she was hired include: a) instructions given by the employer to the worker, and b) training the employers give to the worker.

The key consideration is whether the business has given up the right to control the details of a worker’s performance. For an employee the answer is no. For an independent contractor, the answer should be yes.

Financial Control. Factors that indicate whether an employer has the right to control the business aspects of the worker’s job include: a) the extent to which the worker has un-reimbursed expenses, b) the extent of the workers investment, c) the extent to which the worker makes service available to the relevant market, d) how the employer pays the worker, and e) the extent to which the worker can realize profit or loss.

Independent contractors are more likely to have un-reimbursed expenses, to have significant investment in the facilities she uses to perform her work for employer, to advertise her services in the relevant market, be paid a flat fee, and have an opportunity to make a profit or loss on her work.

Type of Relationship between Employer and Worker. Factors that indicate the type of relationship between the employer and worker include: a) written contracts describing the relationship the parties intended to create, b) whether the business provides the worker with employee type benefits, c) the permanency of the relationship, and d) the extent to which services performed by the worker are a key aspect of the regular business of the company.

What really matters is the nature of the underlying relationship, not what the parties choose to call it. A true independent contractor will finance her own benefits of the overall profits of her enterprise. If the employer offers work to the worker with the expectation that the relationship will continue indefinitely, rather than for a specific period of time or for a specific project, this may be evidence that the employer and worker intended to create an employee relationship. Finally, if the worker performs work that is a key aspect of the regular business conducted by the employer, this may be evidence of an employee relationship.

State of Minnesota Test

Now let us look at the State of Minnesota test.[2] Minnesota case law has developed a five (5) factor test that allows an employer and worker to make some judgments concerning the appropriate classification of independent contractors or employees. The five factors are as follows:

the right to control the means and manner of performance
the mode of payment
the furnishing of tools and materials
control over the premises where the work was done
the right of discharge.

The degree of control an employer may exert over a worker has become the primary factor to consider in Minnesota. If the employer has the right to control worker’s job duties, it is evidence that worker is an employee rather an independent contractor. Minnesota’s Department of Labor and Industry provides questions that are helpful in analyzing the control factor in a particular situation. The questions are not meant to compel a particular conclusion and should only be used as a guide.

Furthermore, in 1986 the Minnesota Legislature authorized the Department of Labor and Industry to further define the term “independent contractor”. The result was Minnesota Rules Chapter 5224, which contains guidelines for asserting independent contractor status for 31 specific occupations. Comparing the worker at issue with these listed occupations is a way to start educating yourself.

To clarify, the purpose of this blog post is solely to flag a potential issue for business owners. It is NOT offering legal advice of any sort. Should you have any concerns regarding this issue, feel free to contact JTO Legal through the website.

[1] The terms “employer” and “worker” are used in the following information and are not to be given a literal meaning nor do they correspond to the “employer” and “employee” as defined in the Minnesota Workers’ Compensation Act. They are used as a manner of convenience to distinguish between one who pays to have a service performed and the one who is paid to perform the service.

[2] Minnesota makes a distinction between independent contractors in the construction business, in the trucking and messenger/courier service, and other occupations. Here we address only the “other occupations” test.

Fair Use For Media Platforms

November 16, 2017 by James Olsen

Lately, I have had a few clients ask me about fair use in their media platforms (film/TV/webisodes). The only real way to get a sure-fire answer on fair use is by getting sued and having the court determine it. That is never a cheap process either because the issues rarely get resolved by summary judgment by the courts.

The courts would typically look at four factors: (1) the purpose and character of your use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion taken; and (4) the effect of the use upon the potential market.

The purpose and character of your use helps determine whether you created something new or just copied something verbatim. Did you add anything new and did it add value to the work? In a Vimeo pilot, could one say that the piece was a new version of the song as sung by the cast, and if so, was it transformative? Depending on the program type, there may be an educational argument, but again, that is no guarantee. In such programming, having the cast comment in an educational manner about the piece you strengthen a fair use case by making it educational.
The nature of the copyrighted work often gets to whether it is factual or fictional works being used and published v. unpublished works. One has more leeway when providing a public good with facts v. modifying fictional works. The scope of fair use is also much broader with published works as opposed to unpublished.
The substantiality of the portion taken gets to the amount used. The use of whole songs or portions of songs may matter here and it may not. In some instances, the court may look at how much of the “heart” of the piece you use.
The effect on the potential market for any material one is using is the final factor. Does the material create an increased awareness of the song and artist? This may or may not matter depending on the court, case, and artist. You do not want to be competing with the artists who make a living off of their songs.

Overall, fair use for media platforms is a question of risk that each project and teams need to assess their risk appetite on. The only sure-fire way to avoid the controversy of eventually having to defend fair use would be to use material already in the public domain. There are search engines that can help you do so. In general, one should be good to use anything created prior to 1929. Another way to protect oneself would be to sign up for a licensing platform/licensing house that would sell individual licenses per material used. This may or may not be cost prohibitive and the risk might be worth avoiding the cost – that is something only you can decide.

If you or anyone you know is contemplating assessing the risk of fair use it is recommended that you seek legal counsel. JTO Legal is happy to help assess business risks – that is why the law firm exists. If interested in discussing further, please feel free to contact JTO Legal and reach out to James T. Olsen at [email protected].

***Some Fair Use Case Studies for further reading***