When thinking about potential board members, consider the following:

• Are there experts in your industry that would enable you to leverage their expertise or relationships as board members?
• As most companies are dependent on financing, is there a local banker that could sit on your board to provide a lender’s perspective?
• How about local business people that could bring experience and a rolodex of connections to the company?
• Include at least one founder on the board to keep the dream alive, but don’t stack the board with all the founders.  You want a diverse set of directors — not too much concentration with one group.
• Include a venture capitalist on the board.  They are great for strategy, financing, relationships, fiscal responsibility and process.  However too many VC’s can be a problem for the same reasons!
• Include a marketing expert — this will counterbalance all the linear thinkers on the board.
• Independence, Independence, Independence!  I can’t say this enough.  Having board members that are independent of the business and the executives will help facilitate a 360 degree view as well as hold executives accountable.

In addition, there are some obvious choices that may not be your best bet:

• Company Counsel.  While it may seem quite convenient to have company counsel sit on your board, this may be detrimental in the long run when that attorney has a conflict of interest and must withdraw from both roles.  In addition, the line between business advice and legal advice gets blurred when company counsel sits on the board.  This presents issues when trying to protect conversations under the attorney-client privilege.
• Your Spouse.  Mixing marriage and business can be a very difficult balance to strike.  If you have achieved it, congratulations!  Unfortunately, many of these relationships turn sour in one way or another.  You should think long and hard about mixing these important relationships.  If you decide to proceed, be sure to work with an attorney to correctly structure the business relationship.
• High Profile Board Members.  Typically, these people are over-committed and cannot give the time and energy needed as an active board member.  Try finding other roles for these people, like a strategic advisor, spokesperson or coach.

The more strategic you can be when composing your board, the more beneficial your board will be to the growth and success of the company.  Be sure to check back for more posts on corporate governance matters.

(Hat Tip:  Darin Lynch — Thanks!)

This view was expressed by the Vice President, Associate General Counsel and Chief Compliance Officer at Best Buy Enterprise Services Inc. in the May 2010 issue of Inside Counsel.  “Their ability to triage, to understand an issue as it’s coming in, can save me immense amounts of outside counsel fees and in-house resources.”  But why is this approach reserved only for in-house counsel — it is not.

Perhaps the distinction is not whether an attorney works in-house or outside, but whether the company has found the right attorney.  Companies must seek out counsel that understand what it is like to live with decisions in a business environment — not those who just make insulated and unpractical recommendations.  The difference between a really good attorney that can triage issues and solve problems and “outside counsel” is not the location of the attorney, but their skill, experience and approach.

The General Counsel Hotline provides a business-centric, proactive tool to allow clients the luxury of in-house counsel at a fraction of the cost.  See how this program can turn three of your outside counsel into one.

What do you think?

(Hat Tip: Michael Mason Norman, ED.D. — Thanks!)

Bottom line:  make sure you take appropriate precautions to erase the hard drive when you get rid of your digital copier.

• As needed telephone consultations regarding legal and strategic business issues;
• Monthly strategic legal planning sessions in your office;
• A trusted, objective advisor available when you need it; and
• Freedom from the billable hour.

How many times have you experienced the following:

• Been reluctant to call your attorney to ask what you believe is a simple question because you are worried that you will get a $1,000 bill.
• Decided that instead of proactively consulting your attorney, you would just “wait and see” and call your attorney if or when you have problems.
• Wished you had predictability in your budget for legal expenses.
• Needed a strategic, business-minded lawyer that could help you evaluate your business in an objective manner without trying to bill hours.
• Been frustrated because your attorney doesn’t really understand your business and only speaks legalese!

The General Counsel Hotline is the solution.  Clients are embracing this new model and it just might be a perfect tool to augment your legal practices.  Contact Ethos Business Law today to find out how the General Counsel Hotline can decrease your legal risk and increase your bottom line.

Another of my favorite examples of relationship building shows that results can happen quite fast.  A client had an issue with some products being imported into the United States from China.  The issue centered around whether the seller of the products paid a certain license fee.  The licensor had a reputation for being very aggressive in these cases, usually requiring immediate destruction of the allegedly infringing goods.  Fearing a multi-million dollar loss and knowing that the products were in fact licensed, my client immediately traveled to the port.  While in the coffee shop, my client struck up a conversation with the person sitting next to him.  After chatting for a while, they both left and coincidentally walked to the same building.  My client happen to ask if this person knew the customs official he was looking for and my client’s new friend said absolutely.  Unknowingly, my client had just befriended one of the most senior customs officials at the port.  That short relationship building exercise in the coffee shop allowed my client to quickly work with the right people to clarify the error and get the products released.

Building relationships can happen in various environments and through different formats — in person, networking, online and in other ways.  Ethos Business Law client, LoopDesk, has developed a useful and innovative online business-to-business networking tool that allows companies to build relationships in a way that many other social media sites do not.  If you are interested, you can click here to learn more about LoopDesk and take advantage of an advertising special they are offering.

Whether you build relationships through personal networking, online networking, social media or through other ways, building relationships is a lifelong process that will build and evolve you brand.  Start building and maintaining relationships today and they will be very valuable in your future business dealings.

• Dell’s $3.9 billion acquisition of Perot Systems in September
• Walt Disney’s $4 billion tie-up with Marvel in August
• Exxon Mobil’s $41 billion all-stock buy of XTO Energy in December
• AIG offloading its Asian life insurance business to the U.K.’s Prudential for $35.5 billion

While these deals certainly make headlines, I don’t think they do much for main street American business and more importantly, I don’t think you can declare that merger and acquisition activity is back based on these deals alone. The article argues that these deals signal change  and explains that companies are looking to invest the cash they accumulated through the significant cost-cutting measures in 2009.

However, what the article fails to address is the significant strain many companies still feel, those that did not have the luxury of accumulating significant cash reserves through cost-cutting.  On the contrary, for many businesses, cost-cutting was not a strategy employed to accumulate cash — it was a drastic measure taken to ensure survival.  As such, these businesses are not in a position to simply spend the cash reserves to restart the engine, they need their market to rebound.

Perhaps some of the rebound can come from the larger players who have these cash reserves through a “trickle down” process.  But most of this growth will drive from continued consumer confidence and growth.  So, yes, these large deals are important to signal a sea change, but the real recovery is going to require a much larger economic and environmental change over time.

Perhaps the best nugget of the article came in the last paragraph:  “In his latest letter to Berkshire shareholders, Buffett said, ‘Directors should hire a second advisor to make the case against the proposed acquisition, with its fee contingent on the deal not going through.’ Absent that drastic measure, his advice remains ‘Don’t ask the barber whether you need a haircut.’”

The basic business model is simple — outside general counsel services typically work with small to midsize businesses that have few or no in-house lawyers and act as an in-house lawyer without the cost or commitment of full-time employment. They can parachute into a company, even as a C-level executive, and stay for as long or as briefly as needed.  Outside general counsel are perfectly suited to triage and solve your day-to-day legal needs at a fraction of the cost of traditional legal solutions.  Here are just some of the benefits that outside general counsel provide when compared with traditional law firms:

• They are key business advisors, not just legal technicians
• They have significant in-house executive legal experience, and often times advanced business education
• They share a business-centric and practical approach, grounded in the company’s business objectives
• They can work in your office, along side your team
• They provide proactive legal risk management, helping avoid problems before they arise
• They communicate better with business constituents
• They provide another executive on your team, without the commitment of hiring a new employee
• They free you from worrying about the 6-minute bills
• They offer low overhead costs, meaning more affordable rates

An outside general counsel can handle your day-to-day legal needs in a manner that is more relevant to you than a traditional law firm and at a more compelling cost. In addition, they can work with law firms, and manage them, to get the most out of high-priced specialists when needed. Large companies rely on in-house counsel for these reasons. With an outside general counsel, you can too.

Some of the interesting attributes of Cash Balance Plans include:

• Are a type of defined benefit plan governed by the Employee Retirement Income Security Act (ERISA).

• May be well-suited for high income-earning professionals and owners of small, closely-held businesses.

• Feature deferral of more pre-tax income than 401K or profit sharing plans.

• Can often be layered on top of a 401K or profit sharing plan.

I recently saw a research article here that provided a great summary of Cash Balance Plans.  This was put together by Bernstein Global Wealth Management and was sent to me by Paul Borowski, one of their advisors (Paul.Borowski@bernstein.com).  Take a look and see if this might be right for you.