Eduardo Vidal | Sunny South Florida
In my columns I will explore how the legal profession is being fundamentally transformed by technological and business changes, but at the same time it is important to explore some of the practical aids to our profession that have been around for a while, and that continue to facilitate our practice.
I will discuss such aids as legal process outsourcing and corporate due diligence services in the coming months, but first we should start with services that have been around, but we may not have fully appreciated their utility.
Chief among these aids are corporate service providers that make our filings with government agencies, collect information from government records, and otherwise facilitate our dealings with governments, so that we can focus on providing high value-added advice to our clients.
In America and other Anglo-Saxon jurisdictions, we often take for granted the “judicial security” of our business entities, contracts and properties, but when engaged in international practice, and all practices eventually involve an international component, we see that respect for the rule of law is not universal, so then we need international corporate service providers to make sure that we and our clients receive the judicial security that we would otherwise take for granted.
These corporate services include reserving corporate and other business names and ensuring their availability, forming business entities and qualifying them with the appropriate government agencies, filing statements of amendments, mergers and other conversions with respect to corporations and other legal persons, as well as annual, quarterly and monthly reports, as necessary, obtaining good standing certificates, plus also dissolution and withdrawal statements.
Some people object that corporations, partnerships and other legal entities should not be considered persons by the law, especially in corporate, tax and constitutional matters, but this legal convention facilitates commerce. They say that they will believe a corporation is a person when Texas executes one, but Arthur Andersen was executed in Texas by federal prosecutors following the Enron accounting scandal, so there is one.
These services also include protecting intellectual property, by filing trademarks, service marks and other such assets, helping to obtain business licenses and other occupational licensing, depending on the business conducted by the applicable corporation, and obtaining tax certificates from federal, state and local governments.
Protecting corporate property includes searching for and filing security statements under the Uniform Commercial Code and other lien arrangements, as well as real estate searches and reports from title insurance companies. These searches and reports should include not only state and local liens, such as in state courts and other agencies, but also federal liens, such as ship mortgages, bankruptcy courts, the patent and trademark office, federal courts and other federal agencies.
I am so old that I have filed liens for equipment leases and secured loans with the Interstate Commerce Commission, established in 1887 and finally dissolved in 1996, and I remember that the signature pages of the leases and security agreements had to be acknowledged by a public notary. I have also filed liens with state motor vehicle title offices for financing leveraged leases of trucks and buses. A new type of lien that old-timers like me have to deal with are potential environmental liens, especially connected with superfund and brownfield sites, and similar environmentally-sensitive locations.
Corporate service providers typically do not provide real estate title insurance, which is a separate and specialized industry, but they can provide ownership and encumbrance reports, chain of title records, open mortgage searches, owner verifications, deed retrieval and document recordings.
These services can also provide registered agents, agents for service of process and other such agency roles, as well as managing annual and other periodic reports, and identifying independent directors of corporations and members of limited liability companies.
As the legal profession becomes more demanding for practitioners, due to rising pressure from technological and business developments, we must learn to delegate what can be performed more effectively by corporate service providers, and focus on the truly high value-added work of providing strategic and actionable advice to our business clients – – the consigliere role of Tom Hagen, played by Robert Duval, in The Godfather movies.