Massachusetts Family Business - Spring 2017

Massachusetts

SPRING 2017

FAMILYBUSINESS SMALL BUSINESS CONFIDENCE SHINES FOR 2017

Official magazine of the

Inside:

How Protected Is Your Family Business From Creditors?

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Massachusetts Family Business Official magazine of the

CONTENTS

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CONFIDENCE UP FOR SMALL BUSINESSES With a business superstar in the White House and the economy riding high, executives are in a good mood across the state. Experts discuss what to do – and what to watch out for – to stay on top of the wave.

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director’s corner

Now is the time to manage success, and seize opportunities.

8

business profile

6

Essex’s seafood legends unite the old and the new.

10 asset protection

How protected is your family business from creditors?

12 learn to litigate

A step-by-step guide to dealing with a lawsuit.

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8

12 3

From the Board

City of Champions!

By Jeffrey S. Davis and Brian Nagle Boston is the city of champions! Tom and Bill brought the franchise’s fifth Super Bowl win home from Houston! The Red Sox are well-positioned for another World Series run of their own and success stories of family business like yours and others have peppered the regional economic landscape.

Like the Patriots’ mantra “Do Your Job,” New England is a region built on success through working harder and perfecting the details. A new year, and a new administration, is upon us. With it comes new changes, challenges, opportunities and uncertainties.

After one of the most surprising Presidential elections in recent history, 2017 promises plenty of change and lots of unpredictability, and also offers potential for opportunity for those that anticipate and manage change smartly.

To effectively navigate this uncertain environment and properly identify and harness new opportunities, it is more important than ever for businesses to be proactive in their preparation and ability to adapt accordingly. To understand how other businesses have embraced and navigated difficulties and attained their success provides the underpinnings and catalysts of change within an evolving family enterprise. The ability to proactively address these difficulties is necessary to ensure success.

The environment for family businesses is more fluid than ever and the days when families could stick with business models forged by their founders are a thing of the past.

Businesses that are slow to evolve or inadequately prepare for such changes inevitably fail to identify and exploit new opportunities and suffer the consequences on their balance sheets, cash flow and future sustainability.

While they remain an integral contributor to economic growth, family-owned businesses also benefit from the state’s accelerating economy. Massachusetts is uniquely positioned because its intellectually-informed economy and smart families can take advantage by seizing the moment. Under the new administration, access to capital is going to change. Family companies must work with their internal team and external advisors to make any necessary changes and adjustments for their organizations to win.

At the Family Business Association, our mission has always been to help family businesses achieve success. We provide forums for businesses to collaboratively exchange knowledge and experiences and assistance in the formulation and implementation of best practices. We look forward to continually finding new ways to offer assistance, provide resources, and facilitate communication.

We are also excited to be debuting the

Quarterly Family Business Radio Show this spring on the Radio Entrepreneurs Network where families will share their stories of family businesses and gain exposure while exploring and discussing the many topics and issues that confront them. If you are interested in being involved or appearing as a guest, reach out and contact producer Ian Motha at Ian@Radioentrepreneurs.com. ■ JEFFREY S. DAVIS IS CEO OF MAGE LLC AND A COFOUNDER OF THE FBA. BRIAN NAGLE IS MANAGING DIRECTOR AND PORTFOLIO MANAGER OF FIRST REPUBLIC INVESTMENT MANAGEMENT INC. AND A COFOUNDER OF THE FBA.

Massachusetts

FAMILYBUSINESS

Official magazine of the Family Business Association. Inc.

Editorial | Advertising | Design A Family-Owned Business Since 1872

101 Huntington Ave., Suite 500 Boston, MA 02199 fbaedu.com

DIRECTORS Jeffrey S. Davis, Mage, LLC Al DeNapoli, Tarlow, Breed, Hart & Rodgers, P.C. Brian Nagle, First Republic Private Wealth Management

4

PRESIDENT Edward D. Tarlow, Tarlow, Breed, Hart & Rodgers, P.C.

VICE PRESIDENT Catherine Watson, Tarlow, Breed, Hart & Rodgers, P.C.

TREASURER Jeffery P. Foley, Gray, Gray & Gray, LLP

280 Summer Street, Boston, MA 02210 Phone 617-428-5100 Fax 617-428-5119 www.thewarrengroup.com ©2017 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.

Business Environment Generally Bright in 2017 Labor Issues, Health Care Costs Remain Challenging for Masschusetts’ Small Businesses

By Joe Kourieh

F

ollowing the most unorthodox election in American history, for business owners throughout the nation and especially in Massachusetts, the stars seem to have aligned coming into 2017. With a new president branded as overtly business friendly and a local economy mid-boom, those on the front lines supporting small and familyowned businesses agree that morale is high among executives.

“They feel like they have their guy in the White House now,” said Gerry

Nadeau, senior vice president of commercial banking at Rockland Trust, one of the top small business lenders in the commonwealth. “Trump is a businessman who they can relate to – he had successes, and also financial troubles, when they did.”

President Donald Trump is the harbinger of changes both cultural, raising business to a level of reverence not seen since Reagan, and practical, promising sweeping tax and regulation reforms.

Specifically, Trump aims to reduce the

business tax rate from 35 to 15 percent, and has already signed an executive order reducing federal funding for regulations to $0 for the year, and prohibiting agencies from creating a new regulation unless two are sacrificed.

If this uncharacteristically swift storm of action in D.C. were not enough to embolden qualified Bay State entrepreneurs to expand their operations or jump into the game, the economic wave of growth that washed over the state Continued on page 6 5

Continued from page 5

throughout 2016 certainly was, resulting in a significantly larger loan volume in lenders’ pipelines at the outset of 2017 as compared to the previous year, said Nadeau.

Telling a similar tale is Eastern Bank’s Joe Bator, director of the business banking division, who oversees the execution of enough small business loans to consistently hold the top spot among Small Business Administration (SBA) lenders in New England.

“Generally, they’re quite bullish on how we’re doing economically,” he said of the small business owners he’s worked with in recent months. “They’ve had a good year. Profits are strong.”

From Eastern’s perspective as a lender providing the funds to feed the appetite of the small and family-owned business community, Bator called 2016 “a record year,” with loan volume up 15 percent in early 2017 compared to the beginning of 2016.

Larger institutions have begun to move confidently to enhance their small business support as well, such as TD Bank, who will install additional staffers all along the East Coast to deal with companies under $1 million in revenue, according to a mid-February announcement from the country’s 12th largest bank.

This story is in turn corroborated by the Associated Industries of Massachusetts, which released an early-March survey saying employers in Massachusetts are more confident about the business environment than any time in the last 13 years.

The New England Economic Partnership’s annual report projects the state’s 2017 average annual payroll employment will see growth in 2017 similar to 2016 (1.5 percent). Additionally, a recent Gallup poll shows that in January, consumer spending across the country was at its highest point for that month since 2008, before the financial crisis drained American bank accounts.

Labor & Health Care Woes If it sounds like all this adds up to a state of business nirvana, it may yet be too good to be true. Though the obvious response might be for a flood of new businesses to start up and for existing businesses’ operations to get bumped up a notch, this is not necessarily the case when considering the most basic resource on which a company depends: labor.

Across the board, most experts agree that labor constraints pose the greatest threat to economic expansion, as the Baby Boomer generation’s current “Silver Tsunami” pushes a sizable chunk (roughly a quarter) of the population into retirement age. This outpouring of bodies from the workforce causes a drop in overall labor and, more crucially, skilled labor specific to each industry.

Similarly, if the CEO of a family-owned business is at or near their golden years (and many of them are), rather than seize the moment for expansion, the incentive to retire into a good economy with dollars in the bank – high-value American dollars at that – often wins out.

This results in a surprisingly high number of selloffs and successions during times of economic vigor. With a concrete 6

estate plan in place or the knowhow to get the most value from a buyer, these transitions can be smooth and reinvigorating to the company. Without them, disaster can ensue.

And there are still more factors lurking beneath the sunny surface of the business landscape which could trip up unsuspecting executives. One of the most prominent is health care costs, which have already risen in recent years, causing some employers to adopt more complicated, unpopular methods to keep workers part-time and without benefits. Although Trump has promised to replace the Affordable Care Act with an equally universal and less expensive model, there is thus far no specific plan on the books.

The bottom line is not that family-owned businesses should feel cynical about or avoid seizing the opportunities of the robust economy; rather, they should use the boom time for deliberate and meaningful preparation against these and other ever-present business pitfalls.

Resources for Success The best defense may be in the form of a handful of free or very low-cost resources available to small business professionals in the commonwealth. Whether through one-on-one mentoring or group workshops, utilizing expertise offered through these development programs can make the difference for small businesses.

Take for example the Small Business Development Center (SBDC). Armed with millions in government funding, the SBDC system trains and advises up to 7,000 businesspeople per year.

“It’s about sustainability,” said SBDC Massachusetts Director Georgianna Parkin, describing how her staffers work continually with clients to hone their business model to keep at the cutting edge. “They have to find their niche, and stay current.”

Another such resource is SCORE, a free training program with six locations across Massachusetts, supported by 350 volunteers with the goal of creating long-term relationships with small business clients to see them through the peaks and valleys of ownership.

“Most entrepreneurs are going it alone,” said Paul Waldeck, SCORE district director for Massachusetts and Rhode Island.

“They have nobody to talk to or bounce ideas off of. We provide that sounding board.”

“We’ve all made the same mistakes,” he said of the volunteer advisors, most of whom are either retired or active entrepreneurs, “and we know to come back from them.”

Parkin said that training and mentoring programs are more important now than ever, since despite current good conditions, “business is continually changing.”

“Businesspeople don’t always focus on long term, or don’t have time to see marketing trends,” she said. “No business is going to survive unless their product is relevant, and their company is competitive.”

■ JOE KOURIEH IS ASSOCIATE EDITOR AT THE WARREN GROUP, PUBLISHER OF MASSACHUSETTS FAMILY BUSINESS MAGAZINE. HE MAY BE REACHED AT JKOURIEH@ THEWARRENGROUP.COM.

In Their Own Words “For over 40 years, we have focused on providing housing opportunities to communities throughout the region – developing, constructing and managing a portfolio of 11,000+ units. We are energized by new growth opportunities for 2017 and a business expansion with the launch of a new real estate office in Boston’s North End later this year. Overall, we are very optimistic.”

Karen Fish | CEO, Peabody Properties Inc.

We asked some family business leaders from around the commonwealth how they feel about the coming year’s prospects.

Here’s what they had to say.

“We are very optimistic about this current business landscape. We experienced strong sales in 2016, and the first two months of 2017 has been very positive. This for us has been driven by a stronger market demand for our ability to customize both the hydrotherapy pools and plunge pools, as well as a greater demand in the athletic market for hot and cold plunge pools.”

Suzanne Vaughan | President, SwimEx

“We feel optimistic about the economy and the business climate in 2017. In addition to a strengthening economy and the prospect of tax cuts which should further encourage business growth, we have seen an uptick in interest in cybersecurity issues. With all the talk about hacking, the issue of security is front and center in the minds of businesses and we see it as an area of growth for us.”

Konrad Martin | CEO, Tech Advisors

“Headline news and world events will impact businesses both ways – they always have. We remain optimistic and steady in our mission and focus and will adapt as needed to the changing business climate.”

Hilary Troia | Co-owner, Office Gallery International

“We are optimistic about 2017. We expect business to be strong and steady, similar to how 2016 was.

We celebrated the beginning of 2017 with the opening of our 27th location, in America’s hometown of Plymouth. The biggest headwind to success is the labor market; it can be difficult to find good people.”

Leo Vercollone | President and CEO, VERC Enterprises

“Mod-Tech Homes has experienced a significant increase in both sales and inquiries. Many of our clients from previous years are now ready to begin their projects.

We are delighted with the pent-up demand and look forward to our strongest year ever. We are optimistic about the business climate and are encouraged by the early signs of 2017.”

Francine Townsend | CEO/Owner, Mod-Tech Homes LLC

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Business Profile

Woodman’s of Essex Unites Nostalgia with New Traditions

The Woodman clan on the top deck of the restaurant in Essex.

By Malea Ritz

S

teeped in tradition, originality and award-winning taste, Woodman’s of Essex holds one major claim to fame above the rest – inventor of the fried clam.

Woodman’s began as a roadside stand in 1914, selling small grocery items, homemade potato chips and clams. On July 3, 1916, original owners Lawrence “Chubby” and Bessie Woodman took what was considered a facetious suggestion from a local fisherman to fry up a few clams into an experiment. Wondering if the finished product was palatable enough to become profitable, the pair brought fried clams to the town parade to test their luck – and it turned out they were a big hit.

Over 100 years and five generations later, Woodman’s continues to fry clams where it all began.

“Having a product that came to fruition over 100 years ago that my grandfather did, it kind of makes you proud,” said Stephen Woodman, third generation, Woodman’s CEO. 8

“One of the things that the family strives for is to keep the old new again.

We’re constantly trying to reinvent ourselves without changing,” said Maureen Woodman, third generation, director of catering sales at Woodman’s of Essex.

The restaurant prides itself on being family-friendly, both for the elderly and infants. For many, it has been a long-standing family tradition to come together.

“The experience has not changed. You know when you go there that the feeling and the taste and the smell is going to be exactly what you had as a child,” Maureen said. “It’s unchanged in an ever-changing world – people are looking for that right now. The Millennials love that, their grandparents tell them about this clam shack and it’s exactly as they told them. It gives them a comfy feeling; you feel safe.”

The Woodmans have also been using a social media push to interact with the restaurant’s new generation of followers,

and enjoy seeing their visitors’ experience through a different medium.

The restaurant’s original gluten-free menu has also kept the crowds coming with the rise of Celiac’s disease in recent years and the emergence of the glutenfree diet. Woodman’s menu items are made with corn flour, making them more easily digestible than their wheat counterpart.

“I think the food is current because you just don’t cook this food at home still,” she said.

Both the restaurant’s location and cuisine have been earning Woodman’s quite a bit of attention. The restaurant has appeared in numerous movies, including “Grown Ups,” “The Proposal,” “Manchester by the Sea,” “The Crucible,” “Love Letters” and the TV show “The Devil You Know.”

Woodman’s has also appeared on the Travel Channel’s “Food Paradise” and on various Food Network programs, and has

received a slew of recognitions too lengthy to tally. Among those, Woodman’s ranked number four in the country for its clam roll and lobster roll.

“Most of the time, we’re lucky, but all of the time, we’re proud of what we have,” said Maureen.

There are currently three working generations at Woodman’s; the youngest is 14, and the oldest is 79. They’ve all grown up around the family business that has become something of a legacy.

“I think when you’re younger, you want to do stuff, but as you age you realize the people who come before you have more wisdom,” Maureen said.

“I can see my grandkids … like to come down and just be here and they love to work. They love to do things and they want to be with their dad or papa, and that’s probably what it was like when I was young, too,” Stephen said. “I worked every morning with my dad, besides going to school.

That’s the way it was. And that was fabulous, that was great to be able to have a such a great relationship with your dad. And be able to work with him every day, so I had a great time.”

With a family-run business that has weathered the storm both economically and meteorologically for many years, the key can be pulling together.

“The trust level is amazing, you share everything together. We really made a decision that we’re a family first and a business second,” Maureen said. “We share each other’s successes and tragedies, we’re there for each other and we have each other’s back.”

The Woodman family is also passionate about giving back to the community, in more recent years setting up a scholarship fund to commemorate the generosity of the late Dexter and Gini Woodman.

Since the program’s inception in 1987, $701,500 in scholarships have been distributed to 126 local students.

“A lot of people know about us, a lot of people love fried clams – our fried clams.

I think about it and smile and it feels nice,” said Stephen. “What do I think about our restaurant or our fried clams?

They’re the best – hands down. That’s all there is.”

■

The fifth generation and company catering truck.

Woodman’s staff serves up lobsters out front.

Kristi Woodman, fifth generation, holds up some of Woodman’s menu items.

Lawrence “Chubby” Woodman in front of the roadside stand.

Bessie Woodman outside of the restaurant.

MALEA RITZ IS ASSOCIATE EDITOR WITH THE WARREN GROUP, PUBLISHER OF MASSACHUSETTS FAMILY BUSINESS MAGAZINE. SHE MAY BE REACHED AT MRITZ@THEWARRENGROUP.COM.

From left to right, Dexter Viator, fifth generation; Steve Woodman, third generation; Wendy Viator, fourth generation; Kristi Swett, fifth generation; and Eian Woodman, fourth generation.

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10

How Protected is Your Family Business from Creditors?

By Alexander A. Bove Jr.

M

any family business owners become complacent about creditor exposure because they believe their corporate or limited liability company structure will protect the business. The fact is that if it is a corporation and you or anyone else owns shares in their AL E X AN D ER A . own name, jointly B OV E J R. with another, or even in a revocable trust, the answer is, it’s not protected. If it is held in a limited liability company (LLC), formed in Massachusetts or one of several other states with similar LLC law, the answer is, it’s not protected.

Unfortunately, most business owners are far less familiar with the principals of asset protection than they are with how to build and maintain a successful business.

It is common knowledge, for example, that running a business in corporate form can protect the shareholders from liabilities of the business itself, but few stop to realize that the liability of a shareholder, especially a majority shareholder, can be satisfied by the assets held by the corporation. That is, a judgement creditor can reach the shares owned by a debtor and could exercise ownership of the shares.

If the shares represent a controlling interest in the business, the creditor can literally “take over” the business and run it (profitably or into the ground), sell it, or liquidate it. And don’t think that holding these shares in an estate planning trust helps. Such trusts are typically revocable by the “owner” and offer no protection whatsoever.

Many think an LLC will avoid this exposure, since the LLC laws protect the business from the debts of a member, and a judgement creditor may not become a member or vote the debtor’s interest, or look at the LLC books. Therefore, the LLC does offer somewhat of an obstacle, at least slowing the creditor down, but by no means does it offer true protection.

The immediate protection it offers is a wall between the creditor and the assets held within the LLC. Unlike using control of corporate stock to reach the assets held in a corporation, a judgement creditor of a member of an LLC has no right to reach the assets inside the LLC. But the “wall” does not make the judgement on the debt go away. Despite the wall, a determined creditor could conceivably acquire the debtor/member’s interest in the LLC, depending on the circumstances and the governing state law. The first remedy of a creditor of a member of

protecting assets from creditors without giving up benefits or control. And it must be noted that any such plan will require a considerable move from the status quo and the introduction of new documents into the family plan. It will also typically require re-titling of major assets. Once this small hurdle is overcome, the business owner would see that there are ways to retain control over a company without exposing ownership of the company to creditors; and there are ways of protecting children’s and grandchildren’s company interests and other assets from their credi-

In some states, including Massachusetts, if it looks like the LLC is stalling or contriving to circumvent the court’s order, the court can order a foreclosure of the debtor/member’s share, causing the interest to be lost entirely. an LLC is to obtain a “charging order” against the LLC interest. This is a court order directing that any payments that are to be made to the debtor/member must be paid instead to the creditor until judgement is satisfied.

In some states, including Massachusetts, if it looks like the LLC is stalling or contriving to circumvent the court’s order, the court can order a foreclosure (forced public sale) of the debtor/member’s share, causing the interest to be lost entirely (unless, of course, the LLC pays the creditor).

Thus, even under the “better” of the two possible outcomes the debtor/member’s share of the profits is cut off until the debt is paid. This is not asset protection. Under the “worse” of the two outcomes, the creditor could purchase the debtor/member’s interest at the foreclosure sale and just sit with the interest until distributions are made or until the LLC is sold.

Asset protection begins with a careful review of the family’s interests, circumstances and objectives, with a view towards

tors; and there are ways of passing the baton without passing the exposure.

To accomplish such objectives requires not only a careful and expert structuring of the underlying entities, having in mind the family’s immediate, intermediate and long-term objectives, but also recognition of the need for, and ways to develop, flexibility. Even the best current plan can be subsequently handicapped or rendered vulnerable to creditors by unforeseen changes in the family, such as divorce or disability, a change in the law or a change in the nature of a major asset. Flexibility must be built into the plan, as well as provisions for a periodic monitoring of the plan to consider ongoing family developments, objectives and changes of any sort that might affect the plan.

■ ALEXANDER A. BOVE JR. IS A PARTNER IN THE BOSTON OFFICE OF BOVE & LANGA, AN ESTATE PLANNING AND ASSET PROTECTION FIRM. HE IS ADJUNCT PROFESSOR OF LAW, EMERITUS, OF THE BOSTON UNIVERSITY LAW SCHOOL GRADUATE TAX PROGRAM. HE MAY BE REACHED AT BOVE@BOVELANGA.COM. 11

You Just Got Sued for the First Time.

Now What?

12

By David B. Chaffin

B

eing sued is unnerving, particularly the first time it happens. And with good reason: Litigation can be expensive, inefficient and uncontrollable. But a big part of the stress is really just fear of the unknown. The purpose of this article is to make the unknown known.

File it away as a stress DAVID B. CHAFFIN reliever to be used if and when the process server appears.

While the rules vary from court system to court system, the litigation process is generally the same in all courts. It involves five main stages.

First Stage – Pleading The plaintiff sues by filing a complaint that sets forth his claims. It will recite the facts and set out counts, claims for relief under legal theories (e.g., negligence). A demand for a jury trial usually is included.

The defendant must respond to the com-

plaint, usually with an answer that tracks the complaint, admitting, denying or denying knowledge as to each allegation of the complaint and asserting affirmative defenses. The answer can include counterclaims against the plaintiff and related claims against other parties. Rather than answering, where a complaint is defective on its face, the defendant can move to dismiss. Motions to dismiss are infrequently granted.

Second Stage – Discovery After the pleading or motion to dismiss stage, the parties conduct discovery, the process by which the parties investigate one another’s case and gather evidence.

Discovery is supposed to be confined to the issues in dispute and not abused, but it probably is the part of litigation in which abuses of one sort or another most frequently occur. It all too frequently is an expensive, disruptive process, and it can take many months and sometimes years to complete.

There are multiple discovery mechanisms. Other parties’ documents, including electronically stored information, can be obtained and/or inspected. Interrogatories – written questions that an opposing party must answer under oath – can be served. Depositions – examinations of witnesses under oath outside the court – can be conducted. Requests for admission – writings that compel an opponent to admit or deny specified facts – also can be served.

Third Stage – Dispositive Motion Practice In most cases, one or more parties will move for summary judgment after discovery is completed. Such a motion essentially argues that, even viewing the evidence in the light most favorable to the non-moving party, the moving party is entitled to judgment in its favor. The moving party argues to the court that Continued on page 14

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even if the court believes all of the valid evidence offered by the non-moving party, the moving party wins. Motions for summary judgment are granted more frequently than motions to dismiss.

Fourth Stage – Trial Claims that survive summary judgment go to trial. Claims can be tried to a jury or the court (with the court essentially acting as a jury). A complete discussion of trials is beyond the scope of this article, but a few things are worth mentioning.

First, the notion that juries often get things wrong is wrong. Juries are smart, and they try to do the right thing. If you’re in the right and telling the truth, you shouldn’t have anything to fear from the jury. A litigant who thinks he can pull a fast one on a jury is fooling only himself.

Second, a trial can and should be an enjoyable and rewarding experience. But the conditions must be right. Your case must have merit. It doesn’t have to be a slam dunk, but it can’t be a for sure loser.

Further, you – and your trial counsel – must be prepared. Preparation is absolutely critical.

Third, if a trial is going or has gone badly and this comes as a surprise, someone has not done his or her job. It’s your lawyer’s job to continuously evaluate your case, to warn you that a fall may be coming, and to press for settlement. So, if you get to trial, brimming with confidence, only to have the ceiling collapse, it’s your lawyer who is to blame.

Fifth Stage – Appeal After a judge has dismissed a case on motion or after trial, a case may proceed to appeal. The appellate courts concern themselves mostly with issues of law, not fact. Thus, if a trial court misinterprets the law, reversal may occur, but an appellate court almost never will reverse a judge’s or a jury’s findings of fact.

First Things First If you get sued, you should do five things immediately: First, read the papers that have been served on you. If they include a motion for a preliminary injunction or any other document that seeks some sort of im14

mediate action by the court, the lawsuit should be made your first priority. Failing to give immediate attention to the case can result in, for example, a freeze on bank accounts by default.

Second, refrain from calling your opponent. A common reaction is to pick up the phone to see if there’s a way to make the case go away. This never works. Your opponent has gone to the trouble and expense of suing. He means business, and a mere phone call won’t work. More importantly, what you say to your opponent can and will be used against you.

if it is not provided, steer clear. Find out about trial experience. Hiring a lawyer who can’t try a case is like hiring a carpenter whose only tool is a hammer. Ask yourself whether the lawyer is someone you would be okay spending time – maybe a lot – with.

Get clarity on rates and negotiate them, and ask about alternative billing arrangements. Hourly rates vary. A lot. Do a careful cost/benefit. Also, bear in mind that almost all lawyers will discount their standard rates. Lawyers compete to land cases, so you have leverage. Depending

Juries are smart, and they try to do the right thing. If you’re in the right and telling the truth, you shouldn’t have anything to fear from the jury.

Third, tell your insurance broker about the lawsuit and instruct it to notify all insurers that might provide coverage for the lawsuit. Depending on the nature of the claim and the nature of your coverage, it may be that you have coverage not only for any eventual judgment against you or your business, but for the cost of defense.

Fourth, immediately advise everyone who may be in possession of any evidence that has any relevance to the claim against you, including email, not to destroy or delete any of it. Do this in writing. The destruction of evidence can result in sanctions.

Fifth, be careful what you write down, and tell everyone else to do the same.

Anything you write down may end up being produced in discovery.

Counsel Selection The importance of the choice of litigation counsel cannot be overstated: Cases can last years, and it is critical to find someone you would be okay working with for years.

Shop for your lawyer. Do not hire the first one whose name you happen to get from a relative or acquaintance, or the one you used for the closing on your house.

Ask for recommendations. Do research.

Interview candidates, and ask them about experience with cases like yours. This is information you are entitled to have, and

on the case, some sort of alternative billing arrangement, such as a reduced hourly rate or partial contingency agreement may be worth exploring. In short, do not accept the “sticker price.”

Also, get a commitment on staffing.

You and your lawyer should agree on who will work on your case. The shortest path to inflated bills is overstaffing. Prohibit your lead lawyer from involving others without your permission.

Tips/General Observations The litigation process can be abused, and it can be very wasteful. But on the most important issue – Does the good guy win in the end? – the news is good: He usually does. Further, the process can be satisfying, if not downright enjoyable.

Everyone likes to be vindicated, right?

But there are exceptions. Whether a lawsuit becomes a nightmare depends principally on the personality of the person behind it. Some folks fight for the sake of fighting or to prove a point or for ego gratification, and can convert a rational process into something that is anything but. With people like these, special tactics and considerations are required. ■ DAVID CHAFFIN IS THE MANAGING PARTNER OF THE BOSTON OFFICE OF WHITE AND WILLIAMS LLP. HE MAY BE REACHED AT CHAFFIND@WHITEANDWILLIAMS.COM.

Not all family members are alike.

At Tarlow Breed Hart & Rodgers we celebrate the differences that make family businesses special.

With guidance from our family business specialists, your company could bear fruit for generations to come. Isn’t it time you had a conversation with our Family Business Practice Group? Call Ed Tarlow or Al DeNapoli at (617) 218-2000.

101 Huntington Ave., Boston 617.218.2000 | tbhr-law.com

Portrait by renowned illustrator Joseph Adolphe.

RENOWNED INSIGHT | BUSINESS SUCCESSION

“The biggest challenge for your business today? Tomorrow.”

Donald P. DiCarlo Jr. M.A., J.D., LL.M. (Tax) National Director of Business Advisory Services, Senior Wealth Strategist Don helps business owners develop and implement successful business succession strategies. He forges relationships with clients while they are still actively engaged in managing the business, and offers key advice at each critical stage. He is part of a seasoned team of wealth advisory professionals who work seamlessly to provide the full spectrum of services required by clients. To learn more about our collaborative and creative approach to managing wealth, contact Mark Andersen at 617.457.2056 or mandersen@wilmingtontrust.com.

Transitioning ownership of your business will undoubtedly be one of the most significant events of your life. And one you may not be prepared to even think about right now. However, with careful planning at each stage, you’ll be ready for what’s ahead – and confident that you’ll preserve everything you’ve worked so hard to build.

Growing your business.

Your banker and insurance specialist will help determine which deposit, lending, cash management, and insurance solutions will best fuel the growth of your business.

You’ll also want to ensure your will and other estate planning documents are in order, and that you’re taking advantage of tax-minimization strategies.

Transitioning business capital to personal capital. As your business evolves, you may consider selling or transitioning to your son or daughter, or someone outside the family. We can help you explore exit strategies, secure the right buyer, and value your business.

We’ll also help you determine how and where to invest your wealth, and how to manage your liquidity and cash flow needs.

Managing and transferring personal wealth. This is when all your hard work pays off. You’ll begin to implement trust and planning strategies to transfer wealth to the next generation.

You may also have the freedom to donate resources to those organizations you find meaningful.

ONLY

30%

O F FA M I LY B U S I N E S S E S SURVIVE INTO THE S E C O N D G E N E R AT I O N Source: familybusinessinstitute.com

At Wilmington Trust, we can help create a plan for each stage of your business and your life. Founded by a family business leader more than a century ago, we have the experience to help guide you through times of growth and succession. Our approach focuses on both your business and personal financial needs, allowing us to make each transition in your journey a seamless one.

For more insight on how to successfully prepare for what’s next, view our capital transitions video series at wilmingtontrust.com/capitaltransitions.

F I D U C I A R Y S E R V I C E S | W E A LT H P L A N N I N G | I N V E S T M E N T M A N A G E M E N T | P R I VAT E B A N K I N G

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of your professional advisor should be sought.

Private Banking is the marketing name for a product and service offering.

Investments: • Are NOT FDIC-Insured • Have NO Bank Guarantee • May Lose Value Wilmington Trust is a registered service mark. Wilmington Trust Corporation is a wholly owned subsidiary of M&T Bank Corporation (M&T).

Investment management and fiduciary services are provided by Wilmington Trust Company, operating in Delaware only, and Wilmington Trust, N.A., a national bank. Loans, retail and business deposits, and other personal and business banking services and products are offered by M&T Bank, member FDIC. ©2016 Wilmington Trust Corporation and its affiliates. All rights reserved.