Academy of Chiropractic Personal Injury & Primary Spine Care Program
Quickie Consult 297
"Are You One Idiot Away From Financial Ruin?"
I just finished consulting a "non-healthcare service business" about the exposure he has and the potential for ruination of his business. His only choice at the moment is to close his business and re-organize under another name.
We are a "healthcare service business" and have the same level of exposure to the idiots who attempt to make money from you through lying, cheating and stealing. Unfortunately, too many of them are the same people you wring your hands over on how much to give raises and bonuses to, your staff.
This businessperson trusted a lawyer that he bartered business with and trusted that the lawyer had reviewed the documents he showed him 4 years ago. When he showed them to me, regardless of not being a lawyer, I feared for his business and his family. He was having problems with his staff stealing inside information and steering clients to a "secret company" they created doing the same thing. He had "non-competes" and "restrictive covenants" in agreements and felt that his company and family were protected. In fact, not only were those documents useless, they were the very instruments that brought him down and forced him to settle with these "crooks" should they have had only half a brain.
His documents were illegal and unenforceable based upon the $500 per hour lawyer I sent him to for a corporate and document check-up. I asked him to confer with the previous lawyer and his answer in his defense was that he only took a cursory look at the documents. The old lawyer really doesn't care because, in New York, you can't sue or hold a lawyer responsible for anything beyond 3 years. This is now 4 years later. The lawyers are smart in limiting their liability and leaving the long-term risk to the people that have entrusted their lives to them. I was in the exact same position in 1995. I got screwed...really, really bad.
Today, the business person I work with was told that it will take 30-40 hours at $500 per hour to limit the exposure of the documents created and to close down the company, while opening a new one with clean documentation. This does not mean that he has prevented anything, only mitigated his exposure and left him praying that the idiots who worked for him previously remain idiots and don't realize that they can leverage their former boss and end up owning him for a lifetime.
You are in the same position if you do not have the correct office policies, employment agreements, corporate structure, employment statuses and a clear and legally defensible paper trail for terminated employees. I offer the office policy on the Web site, but the rest must be done through a health care lawyer. Do not make the same mistake that my business client did and ignore your corporate and employment infrastructure to protect your practice and your family.