Archive for the ‘Legal Assistance’ Category

New Report Finds that Legal Outsourcing Improves Services & Reduces Costs

October 31st, 2014 By Virtual Paralegal Services

A recent report based on research of U.S.-based law firms revealed that nearly 9 out of 10 large law firms and approximately 60% of mid-sized firms outsource one or more office functions. In addition, roughly 33% indicated that they planned on engaging in additional outsourcing opportunities within the next two years.

90% of firms reported that their services improved with legal outsourcing

Outsourcing a particular aspect of legal services, whether it be document review, paralegal services, legal research, or due diligence, means that one particular aspect of a practice is being handled by a company that specializes in the service that a firm needs assistance with. While it may be the first time a firm has had a case requiring a copyright search, an outsourcing company who provides that service will have staff with years of experience handling that task. This translates to faster, more efficient service and cost savings for law firms.

Law firms are often busy places where staff members’ attention is pulled in many different directions. When a particular aspect of, i.e., litigation is outsourced, law firm staff have one less item to concentrate on. With less to worry about, staff can concentrate on performing their core tasks at a higher service level. Therefore, not only is the work that is being outsourced done more efficiently, but law firm staff can perform their core duties more effectively.

89% enjoyed access to industry best practices

To remain competitive and best serve their clients, outsourcing firms must pay attention to best practices in their industries. They must pay attention to trends, new technology, changes in the law, and remain on the cutting edge of industry.

Law firms who outsource have access to industry best practices through their association with outsourcing firms. Law firm staff can concentrate on their core job duties and count on a reputable outsourcing firm to keep them informed of important changes and industry best practices.

85% cited cost savings as a result of outsourcing

Outsourcing companies engage individuals with skilled expertise who are able to work on tasks in an efficient manner while producing quality results. In addition, law firms save on the costs associated with having to hire a full time staff person to handle tasks that can be done on a project basis through legal outsourcing.

The increasingly competitive legal market means that clients are becoming more cost-conscious and may shop around for the most competitive rates before settling on a law firm. This creates pressure on firms to increase productivity while decreasing costs. Outsourcing tasks that require specialized skills is one way to increase productivity while saving money on training in house and reducing overhead costs.

Interested in Outsourcing?

Virtual Paralegal Services provides support for businesses and law firms in many different capacities. From commercial real estate transactions to litigation support and secured lending, our experienced paralegals will work closely with your business and deliver quality paralegal services. Contact us today to learn more about our services.

Bookmark and Share

Ratifying Unauthorized Corporate Acts with a Certificate of Validation

July 24th, 2014 By Virtual Paralegal Services

Effective on April 1, 2014, Title 8 Section 204 of the Delaware General Corporation Law provided a means of ratifying a defective corporate act. A “Defective corporate act” is defined as “an over issue, an election or appointment of directors that is void or voidable due to a failure of authorization, or any act or transaction purportedly taken by or on behalf of the corporation that is, and at the time such act or transaction was purportedly taken would have been, within the power of a corporation under subchapter II of this chapter, but is void or voidable due to a failure of authorization.”

Guidelines for filing a Certificate of Validation are provided in Section 204(b)

Filing Fees
The minimum filing fee is $2,500. In addition, if the Certificate of Validation retroactively increases authorized stock, annual reports for past years are recalculated and if any increased franchise taxes result, they are due at the time of filing. Alternatively, if authorized stock is retroactively decreased, no refund for any decrease in Franchise Tax will be granted.

Practical Issues
This new process has exposed some practical issues for which filers should be aware:

  1. Amendments cannot be combined and corrected in one document. A separate Certificate of Validation is required per amendment.
  2. Amended Annual Reports: If amended annual reports are required, DE statutes allow one year to file an annual report. Therefore, a corporate officer must deal directly with the Franchise Tax Dept to determine the process of filing the reports and to determine the applicable fees. Once fees are determined, the company either pays them directly to Franchise or they can wire them to the service company to handle payment.
  3. Since each filing must be handled individually, service companies cannot include them in batch filings.
  4. Filings cannot be pre-cleared or expedited.
  5. Filings can only be submitted as 24 hour and yet processing time has taken over 24 hours.

Click here for a sample Certificate of Validation.

It is important for corporations to review and maintain – on a regular basis – their minute books and corporate resolutions to ensure their corporate actions are in compliance with their certificate of incorporation and bylaws. If not, there may now be an easier means of ratifying those unauthorized actions, but it is not cheap.

For more help on this topic or to learn more about VPS’s minutebook services, please contact VPS today.

Bookmark and Share

Securities and Rule 144A

July 10th, 2014 By Virtual Paralegal Services

144A is a SEC rule that allows (within specified circumstances) qualified institutional investors to trade unregistered securities on the NASDAQ Portal Market for investment purposes – but not for resale to the general public. The purpose of 144A is to enable a more efficient and liquid resale market for unregistered securities. This makes it easier for:

  • Private companies to raise money in US capital markets
  • Institutional investors to trade restricted non-registered securities

While section 5 of the Securities Act of 1933 requires all offers and security sales to be registered, it allows for exemptions. The US Securities and Exchange Commission states that Rule 144A provides the exemption, permitting the resale of restricted securities (securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer) if specified conditions are met, including:

  • Holding period: the issuer must have held the securities for one year – if the issuing company was subject to the reporting requirements of the 1934 Act, the required holding period is reduced to six months.
  • Current Public Information: The issuing company must provide the public with sufficient information regarding the nature of the business. They must also provide a complete list of all officers and directors and an up-to-date financial statement.
  • Trading Volume Formula: the amount of equity securities which can be sold in a given 3-month period are bound by the 1% measurement guideline.
  • Ordinary brokerage transactions:

 – Affiliates must conduct sales as routine trading transactions
 – Brokers and sellers may not solicit orders to purchase securities
 – Brokers are limited to standard commission

  • Filing Proposed Sale Notice with the SEC: A notice must be filed using Form 144

 – For sales of 5,000+ shares to totaling $50,000+ w/in a three-month period
 – Securities must be sold within three months of filing the notice
 – If sales are not completed, an amendment notice must be filed

  • The legend has been removed:

 – Only transfer agents can remove legends
 – Transfer agent must obtain the issuer’s consent
 – If a dispute over the removal of a legend arises, said dispute is covered by state law, rather than federal

Rule 144A also allows for general solicitation and reduced publicity restrictions, freeing the issuer from compliance with rule 135c under the securities act. The new rule permits offering participants to communicate with prospective investors in Rule 144A offerings with no limit as to the method of communication or the number or type of investors (QIBs or non-QIBs) contacted using the following methods:

  • Mass emails
  • Advertisements
  • Cold calls
  • Articles, Interviews, and other communications

All of the above can be distributed via printed materials, television and radio broadcasts, or online. They, however, remain subject to anti-fraud provisions under federal security laws. In addition, there must be reasonable evidence that all sales are made to qualified institutional buyers.

Virtual Paralegal Services provides senior securities paralegal support to law firms and businesses across the United States. Contact us to learn how we can assist you.

Bookmark and Share

1099 Independent Contractors – Are you Compliant?

July 3rd, 2014 By Virtual Paralegal Services

In a study conducted by Intuit, 40 percent of the American workforce will be freelancers, contractors, and temp workers by 2020. Even now, many companies are replacing some of their full-time employees with part-time professionals, freelancers, and independent contractors. Some are keeping a present employee, but changing the status from employee to independent contractor. The changing workforce requires employers to be ever more vigilant about the questions and compliance requirements surrounding independent contractors.

Is that former employee – now contractor – or the new contractor truly a 1099 independent contractor or does he/she require a W-2? The difference is significant. You withhold and manage taxes for employees; while independent contractors pay their own based on the 1099s they receive (Form 1099 is the independent contractor’s equivalent of a W-2). The IRS expects you to know the difference between a W-2 employee and a 1099 independent contractor. In addition, you must make the correct annual filings with the IRS for both W2 employees and 1099 contractors. If you get it wrong, the penalties are high.

So how do you know the difference?
Ask the right questions.

1. Do you set the hours or does the worker set his or her own hours?
2. Naturally, you know what work you want accomplished, but who sets the guidelines for how, when, and where the work will be accomplished – you or the worker?
3. Does the worker furnish his or her own tools and equipment and hire his own assistants if needed?
4. Does the person have a workplace, home office, equipment storage, etc. that belongs specifically to him and is at a separate location from your business?
5. Does the individual work only for you – or is he/she free to obtain work for other companies simultaneously?
6. Do you set an hourly wage/salary or does the worker set his/her own rates/commissions per job?
7. Do you receive an invoice from the worker for his services?
8. Did you sign a contract for the work he/she is accomplishing on your behalf?

Using independent contractors to perform a multitude of tasks is beneficial for most businesses, involving far less liability and obligations than W-2 employees, and potentially eliminating the provision of employee benefits, insurance, tax withholding, etc. It is crucial; however, to not only classify an individual correctly, but to understand 1099 compliance.

Before hiring an independent contractor and signing a contract:

• Assess the independent contractor’s business and require pertinent documentation.
• Ask the independent contractor to complete a questionnaire specific to 1099 workers. Include a checklist that helps to determine if the worker is accurately classified as an independent contractor versus an employee.
• Sign a written contract with and maintain a separate file for each independent contractor. This file may include, but isn’t limited to the following documentation:
1. Copies of tax returns showing the contractor filed a Schedule C for the past couple years if he or she is a sole proprietorship
2. Copies of 1099 forms by other companies for whom the consultant has provided services
3. Professional licenses and proof of insurances
4. The signed independent contractor employment agreement and any other drafts of it
5. W-9 form signed by the consultant
6. List of equipment and materials the 1099 professional will use to perform services and costs
7. All invoices submitted for billing purposes

Written contracts are imperative and protect both your business and the independent contractor. Make sure your agreements include an Independent Contractor clause that clearly identifies the roles of the parties. Also, make sure you are managing your 1099 contractors and tracking 1099 payments correctly in order to comply with annual filing requirements.

Hiring independent contractors can be a tremendous benefit to your business.Contact Virtual Paralegal Services. We will help you create your questionnaires, draft your contracts, and help manage and maintain 1099 compliance.

Bookmark and Share

VPS Sponsors New York State Bar Association CLE – Starting A Practice in New York

May 20th, 2014 By Virtual Paralegal Services

VPS supports many solo and small law firms across the United States. This full day event worth 7.5 MCLE credits was held for attorneys practicing in New York with varying levels of experience from newly admitted to senior attorneys moving out on their own. The program covered very practical issues facing small law firms including: finances, ethical considerations, marketing strategies, malpractice insurance, and staffing considerations. For more information regarding malpractice insurance, visit dannagracey.com.
IMG_0795

Bookmark and Share