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Women in the Law

It is common knowledge that women outnumber men in law school enrollment, but they aren’t sticking with the profession. While women are well represented at associate levels (approximately 46%), there is a sharp decline in the senior ranks. Only nineteen percent of equity partners are women. For every one hundred women promoted to partner, one hundred forty-one men are promoted, a twenty-nine percent difference. There is a lot of debate about why women leave and how to get them to stay in the profession.

We do not speak for all women, but both of us wanted to work for an innovative, values-aligned, mission driven firm where we would be treated as an equal. This is easier said than done! A 2017 McKinsey report found that law firms have many of the right policies and programs to improve and advance gender equity, but the commitments do not necessarily translate to successful implementation and measurable outcomes.

Our firm however not only talks the talk, but also walks the walk. With our firm as the example, we believe that the profession can improve gender equity by doing the following:

  1. Bake it in. Gender parity is more than just a policy; it is a choice and culture that is baked into the DNA of our majority-female mission-driven firm. And vital to our cultural success is strong leadership. Jason has been the undeniable champion of gender equity from the day that both of us met him. He leads by example and has created an environment where we can have open and honest conversations about gender bias. There is also no question about whether we can go to him when we feel gender bias is at play, indeed we have navigated some difficult situations as a team.
  2. Facing our implicit biases honestly. Even if we think we believe we support gender equity, many of us have an unconscious bias that may favor more traditional Western ideas of men building careers and women staying at home to build families. This bias is not limited to lawyers in the profession; clients have this bias as well. Acknowledging that we all have biases, we should take an active approach to counter this deficit.
  3. Providing strong female mentorship. To have a strong, experienced female role model in our firm (Linda Phillips) has been invaluable to us. Since we can see it, we believe we can be it too. Linda has faced many of the same hurdles that we have faced, successfully navigated them, and now knows how to handle them with grace and feminine power.

We feel lucky to be working with and for a firm that places such a high value on gender equity and we are both committed to pay it forward.

A Leap forward for the Cooperative movement

As a cooperative attorney nothing is more exciting than stumbling on the odd article sharing a cooperative success story. Some days though, it’s more than the random, obscure news story, some days it’s an announcement that makes it feel like the movement is going mainstream. Today is one of those days. Today Evergreen Business Services (EBS) announced the launch of the Fund for Employee Ownership. The Fund was formed to “acquire businesses in Northeast Ohio to preserve the quality jobs they provide by converting them to employee ownership.”  EBS and the Fund are part of Evergreen Cooperatives, a network of companies focused on employee ownership as a catalyst for community wealth building. This group has already done amazing work and the Fund will utilize investor capital to scale the movement. As a firm, we are passionate about scaling the cooperative movement and this announcement is certainly a step in that direction. Congratulations to everyone who worked to make this a reality – we look forward to following the Fund’s progress!

Last Legal Cafe of 2018 – it’s free!

We will be hosting our last legal cafe of 2018 on Tuesday, November 13th at Wayfinder Coop! This free workshop will introduce attendees to the basic principles of cooperatives, explain what makes Colorado cooperatives special, and teach attendees how cooperatives can raise capital. You will leave with a better understanding of what the cooperative model means for its founders and members, what types of businesses can become cooperatives, and how you can raise the capital needed to scale and compete in the marketplace.

You can register on EventBrite and please be sure to fill out the online waiver before attending. Oh and there will be yummy baked goods! We can’t wait to see you!

PR: Francisca Pretorius Joins Firm Full Time

FOR IMMEDIATE RELEASE

September 20, 2018

CONTACT:

Jason R. Wiener

720.445.6860

jason@jrwiener.com

www.jrwiener.com

Linda D. Phillips

303.355.0401

linda@jrwiener.com

www.jrwiener.com

 

Francisca Pretorius Joins Firm Full Time

 

Jason Wiener|p.c., a public benefit corporation, is pleased to announce that Francisca Pretorius has joined the firm in a full-time capacity. She will hold the dual roles of Senior Associate and MBA in Residence.

 

Francisca practiced corporate law in Johannesburg, South Africa, for 4.5 years. She has extensive academic experience and is currently an adjunct lecturer at Strathmore University’s law school in Nairobi, Kenya, teaching Foundations of Roman Law and Legal Practice Management. Francisca also worked for Colorado State University’s Center for the New Energy Economy on renewable energy policy. She previously served on the board of a South African non-profit organization that identifies, connects, and mobilizes change-makers in Africa. Francisca is licensed to practice law in Colorado and South Africa and holds an LL.B (Bachelor of Laws) from the University of Pretoria, South Africa, an LL.M in International Trade Law with a thesis on carbon markets from the University of Stellenbosch, South Africa, and an MBA from the Global, Social, and Sustainable Enterprise program at Colorado State University.

 

“From the moment I met Francisca in the Global Social and Sustainable Enterprise MBA program, I knew she was a superstar. The combination of international big-law experience in South Africa, a background in renewable energy policy, combined with a social enterprise MBA makes Francisca uniquely suited to the work our firm does. Francisca brings a balance of rigor, attention to detail and tenacity, along with a tender touch with training and a big picture perspective. We are lucky to have Francisca join the team full-time and to offer her unique skill set and talent to our clients and partners. The whole team is excited by this big step forward,” says Jason Wiener, Principal. Linda Phillips, Senior Of Counsel, shares that “Francisca is a dynamic attorney who is passionate about the law and about helping those who want to create and build their social enterprise businesses. She will be a true bonus for our firm and we are delighted she is able to join us full time.”

 

In her practice Ms. Pretorius will work on business entity formation (with a focus on cooperatives), custom transactional support, regulatory compliance (especially compliance with the General Data Protection Regulation), and other areas of law that support mission-driven companies and social enterprise. Her full bio is here.

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New Law: How investment in culture and people fosters innovation, collaboration and client service

Originally published on September 5, 2018 on Medium.

How does a law firm, known largely as a stagnant institution, nurture a culture of trust, openness, entrepreneurship, resilience and collaboration? Read on to learn how we are liberating ourselves — from the clock and the obligations of client matters — to focus on the meaningful and necessary work of building a durable culture, adding value to clients, and propagating positive social and environmental impact. Much of what we are practicing, as described below, is experimental and still evolving. This is our best effort to practice what we preach.

I had never given much thought to what it takes to assemble a top-flight team of values-aligned, talented, dedicated and compatible people although I’ve been fortunate and privileged to have both served on and helped assemble such teams. Our current team, assembled over the course of 1.5 years, is the most awesome (in every respect) amalgamation of backgrounds, passion, talent, and dedication that I have ever thought possible. To be honest, that this team has come together at all feels as much happenstance as serendipity. I know now, however, that there are carefully nurtured and delicate dynamics at play.

Our whole team recently came together in Boulder, Colorado for a 2-day retreat. We put up out-of-office memos, we turned off the phone and we informed clients and strategic partners that we would be inaccessible. For folks who still largely inhabit a world where “time is money,” this kind of planned down-time is relatively rare. Throughout our time together, we discovered we are rare in many respects.

I. Open Book Collaboration

Over the last year, I have been slowly opening up the books of the firm to our team. I started with a 2017 year-in-review. I went over our high-level financial performance, key metrics and qualitative aspects of our practices and performance. This was an opportunity to tell the arcing story of the firm’s history, the ebb and flow of various campaigns and big projects, and to use the financials as a canvas for telling the richer story. I was struck by the level of engagement and the curiosity of the team. For some, it was the first time they were ever exposed to financial statements at all, let alone those that affect their own employer.

I followed up this year-in-review with a set of 2018 projections. The most exhilarating part was when I…drumroll please…unveiled our “Moonshot.” By this point, three members of our team had only been with the firm for less than two months. How cool! To start a brand new job and to have a front-row seat to an organization’s launch point for the moon. To be clear, we were not a start-up at this point. This presentation took place around the 4-year anniversary of the firm. For most of that time, the firm had been just me and one or two part-time contract attorneys. I gave this presentation to six people. From one to six team members in less than one year. That’s a lot of growth!

Like most moonshot goals, we set ambitious goals for the next 4–5 years. I confessed not having a clear picture of what strategy or tactics we would employ to reach the moon. I only knew that the moonshot had to be inspiring, credible and imaginative. To my surprise, it was…for all six of us. That was one of the first real signs I had that we had the right people.

II. Collaborative Goal-setting, visioning and strategic planning

I more or less set the 2018 goals and strategy by fiat. The team was too nascent and without historical context to engage in collective planning. Plus, we were planning for a merger with the law practice of Linda Phillips. Thus, there were too many “unknown unknowns” to go through a strategic planning process for the 2018 fiscal year in early 2018.

So, with early 2018 strategy and goals presentation as a backdrop, we hit the ground running at the 2018 firm retreat. I gave a summary review of the 2018 year-to-date. I refreshed everyone’s memory of our 2020 moonshot and I presented a model for what the launch path would look like to achieve it. This gave the context everyone needed to fully and meaningfully contribute to a strategic plan.

We spent the better part of two days engaged in the profundity of firm culture, client screening, business development, vision and values and strategic planning. Some of us confessed our predisposition for “passion and purpose fatigue.” Some revealed a rejuvenated motivation to tackle big, thorny social and environmental issues, including climate change, economic inequality and social justice. Ultimately, we bonded over our shared sense of purpose and our commitment to our core values.

I have been deeply impressed and touched by the occasions and experiences that remind me of the timeliness of our core values. I developed those as a solo practitioner and entrepreneur, back in 2014, long before I knew 4 of my 5 fellow team members. We explicitly revisit and discuss these core values every week on our team huddle.

We re-committed to the moonshot goal. The energy of the retreat hardened our commitment to our team and to our purpose. To get there, we knew the challenge would be strategic planning in an environment where we, not unlike most businesses, are not fully in control of the key inputs. We divided up the pillars of our core business — Internal Relationships, Business Development, Client Service, Internal Systems (tech), Internal Systems (processes), and Inclusivity and Diversity — and assigned each component to one team member. We follow the Todoist model of accountability — every task must have a direct responsible individual if it is to be done.

For each strategic plan component, we are following a standard 1-page format that involves:

· A vision statement.

· 3–4 high level elements of the component plan.

· 3–4 high level goals per element.

· 3–4 key performance indicators for each goal.

Each strategic plan component can include tactical detail in endnotes or subsequent pages.

Over the next 5–6 weeks, we will rotate presenting on drafts of each of our plans, providing feedback, iterating and ultimately consenting to the final assemblage of the plan.

We will be experimenting with a few new things:

· We will budget for conferences and events up front and allow team members to self-select which conferences they want to attend, with input from the team.

· We will budget for firm-wide and individual training. Each team member will have a time and monetary budget that they control. The aim is to increase competence and interdisciplinary knowledge and experience.

· We will budget for innovation and technology. Team members will have individual budgets they control for experimental projects and technology, to make the most of each team member’s creativity.

III. People Policies and Work Expectations

We hired our first employee in June of 2018. Despite having long practiced employment law, it is quite different to be an employer than to advise employers. I found myself in the seat that our clients usually occupy. I had to get comfortable with all that hiring employees entails; payroll, fixed costs, workers compensation, leading, supervision, and, most importantly, creating a culture and work atmosphere that enabled the highest contribution from people.

To do this, I resolved certain things:

· First, I would resist the inimical truth that setting compensation is an inherently imperfect science. I made the typical “negotiation” process collaborative, open and transparent. I showed prospective employees all the numbers and the revenue and cost model for the position. Their contribution and commitment is valuable to me and the firm and I want each team member to know that.

· Second, I didn’t want to baby-sit employees. I wanted to only hire people I trust unconditionally. I wanted to set each employee free to do their best work and to be happy. I tell team members that they can work any time, any where and in just about any way that suits them, as long as they get the job done to their highest ability given the circumstances and resources available. One team member chose to work while visiting a friend in Scotland. Another worked remotely from South Africa while visiting family.

· Third, I wanted to practice what we preach. The conventional 2080 work hours/year is…unworkable. It roughly translates into more awake time at a desk than with family. This is not how I choose to live my life, and so it would be hypocritical to impose this on co-workers or employees. Therefore, we set an expectation of a 1600 hours of work/year. Not just billable hours; that’s total time. This translates into approximately 31 work hours per week for 52-weeks, or 33 hours per week for 48-weeks. What employees chose to do with their time outside of the 1600 hours is up to them. We expect our team members to recharge themselves and to take time away. We put in place safeguards against burn-out.

· Fourth, we mean what we said in #3. We have an unlimited vacation policy. As long as employees meet expectations and add value to the firm according to prescribed metrics and quality goals, our team members are in control of their time.

· Fifth, we pay at or above market rates to our employees and contract attorneys. I regularly review market data for firms of our size, practicing in comparable areas of law, and practicing in similar geographic regions. We provide health insurance to all full-time employees, a 401k plan, paid professional development, a remote work stipend, and paid access to a rich technology platform for collaboration.

· Sixth, we create the conditions for innovation and entrepreneurial risk taking. By maintaining flexible and reasonable work expectations, we can afford to enter into creative and alternative fee arrangements with clients. We are experimenting with fixed fee, monthly subscription models, and other non-time-based billing practices. Our aim is to enhance value to clients while creating a fun work environment.

Corporate governance for stakeholders

My journey to the practice of law has not been linear. My sensitivity to injustice and inequality, on the other hand, has been a constant driver. I’ve always been in search of a solution, which led me to seek a deeper understanding of the systematic ways inequality has been ingrained into the fabric of society, which led me to law school. If you had told me when I was eighteen that eventually I would come to the realization that a piece of the solution was dependent on reforming corporate governance, I would have scoffed indignantly at the idea that corporations could be anything but evil money-making machines.

I’m not sure when the switch flipped, but sometime during law school I began to see how corporations could be leveraged as a solution if we recast the role they play in society. As my colleague, Lenore Palladino, writes in her recent blog post on corporate governance, “Why Workers on Corporate Boards Just Makes Sense,” corporations are run “according to a neoliberal model of shareholder primacy,” but that doesn’t mean they have to continue to be run that way or that it even makes sense. Corporations can and should be run differently. The corporate form and its many variations can be used to create economically viable businesses that benefit workers and communities, that are good stewards of the environment, and that demand capital in service of stakeholders.

Giving workers a voice in their companies, if not an ownership stake, has a role to play in breaking the extractive cycle corporate American has been in for much of modern history. Positioning workers so that they have a say makes sense from a practical point of view too. Without workers corporations don’t create value for anyone. Workers are the face of a business, they deal with customers and understand the day-in and day-out operations in a way the C Suite cannot. Placing workers on corporate boards also creates more accountability for companies that claim to consider all stakeholders in decision making. As Lenore points out in her article, giving employees board representation puts stakeholders on the board, creating a board that inherently governs for its stakeholders and not just shareholders. Often self-interest is viewed negatively, but when you consider creating a board where a variety of self-interests are represented, it can be leveraged to accomplish measured and equitable outcomes that benefit society as a whole.

Got Foreign Investors? What you need to know about Regulation S

Raising Money Abroad

Picture this – your start-up is ready to raise seed money; you think your business has international appeal and you want to open the round up to foreign investors. This might be the right strategy for your business, but have you thought about securities compliance? Will you also open the round to US investors? How will you attract the investors? Will the prospective investors purchase securities with transfer restrictions? These are all important questions to ask when you’re considering taking on foreign investors and you want your securities to be exempt from registration requirements.

Reg S

Regulation S of the Securities Act of 1933 (“Reg S”) provides an exemption from registration for “offers and sales of securities outside of the United States.” Companies issuing securities pursuant to Reg S must comply with certain restrictions on their offerings. Such restrictions are put in place to ensure that the exemption is not being used to improperly circumvent registration requirements and sell unregistered securities in the US. Reg S is comprised of five rules:

  • Rule 901: General statement of regulation
  • Rule 902: Definitions
  • Rule 903 and 904: Safe harbor rules
  • Rule 905: Resale limitations on equity securities issued pursuant to Reg S exemption

The focus of this post is the Category 3 safe harbor rule provided by Rule 903, which is available to US companies issuing securities to foreign purchasers. To qualify the following conditions must be satisfied:

  1. It must be an offshore transaction.”

Rule 902 defines “offshore transaction” as an “offer not made to a person in the United States…and at the time the buy order is originated, the buyer is outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer is outside the United States.”

  1. There cannot be any “directed selling efforts” in the United States.

Rule 902 defines “directed selling efforts” as “any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered in reliance on…Reg S.” This restriction is primarily focused preventing any advertising or offering of the securities in the US when the securities are being offered pursuant to Reg S. This ensure that the unregistered securities are only offered and sold to foreign purchasers and that a US purchaser will not learn of the issuance through any kind of public advertisement or publication in the US.

  1. The securities will be subject to a distribution compliance period and future sales will be restricted.

Finally, securities issued pursuant to the Category 3 safe harbor of Rule 903 are required to observe multiple transfer restrictions. Such securities are subject to a distribution compliance period, the length of which is dependent on whether the offering is for debt (forty days) or equity (one year) securities. During the compliance period, the securities cannot be re-sold to a US purchaser (with limited exception, discussed below). Further, any sale made prior to the end of the distribution compliance period is required to comply with the following requirements:

  1. The purchaser must certify that it is not a US person or that it is a US person purchasing the securities pursuant to an exemption from registration under the Act;
  2. The purchaser of the securities agrees that it will only re-sell the securities pursuant to Reg S or another qualifying exemption under the Act;
  3. The purchase agrees not to engage in a hedging transaction;
  4. The security instruments bear restrictive legend clearly stating the above-mentioned restrictions on transfer; and
  5. One or more of the charter documents of the issuer, i.e., its Operating Agreement or Articles of Organization, must explicitly state the transfer limitations to which its securities are subject.[1]

Raising money is a complex process but taking the time to do it properly is critical. Failure to comply with securities regulations can lead to complex and costly enforcement actions with consequences ranging from fines to criminal charges. The good news is that these consequences can be avoided by creating a fundraising strategy that addresses securities regulations and complies with the applicable requirements.

[1] 17 C.F.R. 230.903(b)(3)(iii)(B)(1-4)

Colorado is leading the way in cooperative law

There are lots of reasons to love Colorado – the sunshine, the mountains, Colfax Avenue and all its splendid weirdness, just to name a few. While those things are all great, the coolest thing about Colorado is that it’s leading the way in innovative uses of the cooperative structure, in no small part thanks to our incredibly flexible cooperative statutes. Any business can be a cooperative in Colorado. This means that when we talk with a new client about entity formation, in addition to discussing the merits of traditional business structures, we also get to educate them about cooperatives and help them decide if it might be the right structure for them. While that in itself is pretty cool, Colorado is one of the few states that has adopted the Uniform Limited Cooperative Association Act (“ULCAA”). The ULCAA gives cooperatives the flexibility that is most commonly associated with LLCs, including having investors that exclusively make capital contributions. Having an investor member class can make the cooperative structure feasible for companies that would normally have to forgo it because they need to raise outside capital on more flexible terms. As lawyers, this means we get to collaborate with our clients and come up with creative solutions for structuring the investor class, creating profitable exits when there is no public offering or sale on the horizon, and attracting investors – all while keeping the cooperative mission at the forefront. Basically, it equates to a lot of intellectual gymnastics and brainstorming sessions, which is when being a lawyer is the most fun and where we offer the most value to our clients. If I’ve piqued your interest, my colleagues, Linda and Jason, have written a wonderful blog that breaks down in more detail why Colorado is leading the way in cooperative law. A big thank you to Fifty by Fifty for publishing the blog and producing great content to advance employee ownership.

GDPR is Almost Here – Are you Prepared?

On May 25, 2018, the European Union’s new data protection legislation, the General Data Protection Regulation (GDPR), will take effect. This law heralds a new era of rigorous data privacy and security and makes data privacy a fundamental right for EU citizens. Of course, all EU companies and many multinational companies doing business in the EU have to be fully compliant with this legislation on Friday. What is important to note is that some U.S.-based businesses, even those without employees or offices within the EU, may also be required to comply with the GDPR.

Does my U.S.-based business need to comply with this law?

If your business processes and/or holds personal data of individuals residing in the EU (including employees) or you are marketing/selling products to consumers in the EU, then your business must comply with GDPR. In a broad sense, the GDPR requires businesses to understand what data they are collecting, be able to articulate why they are collecting it and which of the six categories of lawful processing its purpose falls into, what the business’s strategy is in the event of a data breach, what the timeline for retention of personal data is, and how such data is destroyed when the purpose for collecting and retaining the data no longer exists. There is a record keeping exception that companies with less than 250 employees may qualify for.

But what is ‘personal data’ and what do you mean by ‘processing’?

Personal data’ is any information related to a person that could be used to identify such a person. This includes the person’s name, identification number, location data or online identifier, email addresses, bank information, social media posts, or other factors specific to the physical, genetic, physiological, economic, mental, cultural, or social identity of that person. The EU is taking a very broad approach to defining ‘personal data’ so it is best to consider almost any information you collect about an EU citizen to be personal data.

Processing‘ means any operation performed on personal data, such as collection, recording, organization, structuring, storage, adaptation, alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment, combination, restriction, erasure or destruction.

Most, if not all of us, have a website and if a German resident stumbles upon our website, the GDPR will likely not apply just because that person found the website. However, if you are actively encouraging EU residents to visit your website, ship your products to the EU, market or translate your webpage in a language of an EU country, or if you engage with EU residents and process their personal data in any other way (for example track and collect information on webpage users from the EU to analyze online behavior), the GDPR may be applicable to your business.

The GDPR requires all businesses to protect the personal data of EU citizens, and specifically prescribes how this should be done.

How do I ensure compliance before May 25?

There is a “quick fix” that you can implement before Friday: add a cookie banner to your website that allows your business to ask permission before processing an EU resident’s data and also allows you to stop collecting data from any IP address from an EU country if they do not consent.

For the permission or consent to be valid in terms of GDPR, be sure not to use legal jargon or to bury the consent in fine print. Consent needs to be specific, in plain language, explain what you will be using the personal data for, and positive (i.e. the person must opt in to allow you to process the data).

Is there more to it?

Yes, the GDPR’s requirements are far-reaching and ensuring full compliance may take a bit more time.

One of the biggest and most important tasks is to map your data, i.e. figure out what personal data you store and collect in your databases (online, on computers, tablets and phones, and on paper), how that data is being used, and how long the data is being stored.

Once you have an idea of your data collection and retention practices, you need to determine what data relates to EU residents.

All EU residents need to consent (i.e. opt in) to your processing of their data, so the business will have to reach out to these residents to obtain consent or, alternatively, destroy the data.

Another key step is to update your data privacy policy and ensure that your business puts the necessary controls in place to adequately process personal data going forward. This policy should be in writing and become part of your existing and future service contracts with third parties.

What if my business doesn’t comply?

The penalties for non-compliance are quite steep: 4% of your company’s worldwide annual turnover of the preceding financial year or € 20 million, whichever is greater, for serious infringements of the GDPR; 2% or € 20 million, whichever is greater, for less serious infringements.

 

Contact us to schedule a consultation.

Tonya Price (tonya@jrwiener.com)

Francisca Pretorius (francisca@jrwiener.com