One of the basic assumptions about health care is that patients take medications to aid care. However, there may be times when medication does not aid care, but rather, jeopardizes patient safety. Therefore, medication safety is an issue that should be taken seriously by health care professionals and patients alike.
According to the Institute of Medicine — an independent, nonprofit organization — at least 1.5 million Americans are sickened, injured, or killed each year by medication errors. The cost related to preventable errors has been conservatively estimated at $3.5 billion a year and does not include lost wages, decreased productivity and additional health care costs.
“Many medication errors are largely preventable,” says Chronis Manolis, vice president, Pharmacy, for UPMC Health Plan. “By improving patient education and putting the right programs in place, these errors can be reduced.”
Smart Business spoke with Manolis about patient safety in terms of medication and what can be done to improve medication quality and reduce errors and costs.
What are some examples of medication errors?
There are three general categories of medication errors: those related to prescribing a medication, those related to the dispensing of a medication at a pharmacy and those related to the use of a medication. For each category, steps can be taken by providers and patients to limit the occurrence of errors.
In terms of prescribing, a physician needs to have complete medical information about the patient when determining appropriate medications to not only treat a particular condition but to ensure that it will not be harmful. This information includes all medications the patient is taking, all laboratory test results, other physicians involved in the patient’s treatment, any past hospitalizations and any drug allergies the patient may have. It is critical that patients have their complete personal medical history and treatment information and make sure that this information is passed on to their physician.
Dispensing errors occur when patients receive a medication that was not intended to be given by the prescriber. Several factors contribute to this error, such as hard-to-read prescriptions, medications that have similar names or appearances, patients who have the same name as another patient and any communication barriers that may exist.
Lastly, patients may use a medication incorrectly or in error. Often, they do not understand which medications are to be taken, when to take them, what condition the medication is for, the importance of each medication, which medications interact with each other, or how to properly use the medications.
Because patients are central to many medication errors, significant effort is needed to improve knowledge, skills and motivation to use medications correctly.
How can patients become more educated about medication safety?
The path to better medication safety begins with increased knowledge. Understanding the specific condition and how it is being treated is an important first step.
Patients can begin by keeping a list of all the medications they take, including prescription medicines and over-the-counter medicines, vitamins, and herbs, and share this information with their physician. They should always communicate to their doctor any allergies or adverse reactions they have ever had to medications or other substances.
It is very important that patients understand everything about their medications. This includes why they are taking them, what side effects they may cause, how long they need to be taken and whether the medicine can be taken in conjunction with other medicines or supplements, such as herbs.
What are some additional tips?
Patients should discuss with their doctor all aspects of the condition that the medication is being used to treat. Also, patients should be able to read what their physician writes if they are given a prescription. Having one’s physician send the prescription electronically (if available) to the pharmacy can avoid handwriting challenges and drug name similarities, which will, in turn, improve safety.
Patients should never be afraid to ask questions if there are any doubts or concerns. They need to fully understand their role in their care. Most important, patients must know exactly which medications need to be taken and when, and how often they need to take them. When a prescription is picked up at the pharmacy, they should ask if the medication being given is the medication the doctor prescribed and what exactly is the medication for.
What steps can be taken at the pharmacy?
Before leaving the pharmacy, always review medication and ask to speak to the pharmacist if there are questions or confusion. For example, if the prescription looks different, ask whether something has changed.
Patients should ask the pharmacist about any dietary restrictions, and whether there are restrictions with alcohol, or with other medications or over-the-counter supplements or herbs being taken. They should ask whether any drowsiness or dizziness can occur. Patients should request written information about the side effects and other warnings of the medicine. Written information has been shown to help individuals better recognize problem side effects. Lastly, using the same pharmacy whenever possible for all medications is another safety tip because the pharmacist will become familiar with the patient’s conditions and medication history.
Patients play a critical role in ensuring medication safety. Being actively involved in your own care enables the sharing of key information among all providers and thus promotes enhanced medication safety.
CHRONIS MANOLIS, RPh, is vice president, Pharmacy, for UPMC Health Plan. Reach him at (412) 454-7642 or email@example.com.
Insights Health Care is brought to you by UPMC Health Plan
Retirement plan participants and sponsors will gain more information about their plans’ fees and expenses when changes from the U.S. Department of Labor require comprehensive disclosure from service providers.
“The outcome of this change is going to be a much more level playing field of service providers and investment companies in terms of how and what they charge,” says Greg McDermott, Executive Vice President, FirstMerit Retirement Plan Services.
About 72 million workers participate in 401(k)-type plans, representing about $3 trillion in investments, according to the U.S. Department of Labor. All will be affected by these disclosure changes.
Currently, neither the plan participants nor the company providing the retirement plan are required by law to be informed of what fees the third-party plan administrator and investment manager charge and what that money covers. In fact, last year’s AARP survey revealed that 71 percent of 401(k) participants said they didn’t think they paid any fees.
McDermott explains that the disclosure mandate was supposed to take effect last summer but the deadline was extended twice to give providers more time to prepare by implementing new software, creating new reporting plans or adjusting their administrative processes. The mandate now takes effect July 1, 2012.
“For many other providers, it will be a dramatic change,” McDermott says. “But for FirstMerit, it’s not a significant change in terms of the way we currently charge for services and our level of disclosure. According to McDermott, FirstMerit already discloses the fees it charges for both its administrative and investment services and will now simply formalize the process to comply with specific aspects of the regulations. “We’re moving forward to meet the deadlines,” McDermott said. “In fact, our relationship managers are getting prepared to communicate the new regulations and what they mean to our clients and prospects.”
What does the change mean to service providers, sponsors and participants?
Service providers of retirement plans need to make sure their fees are reasonable, McDermott says. The Department of Labor has reported that the fees will need to meet industry benchmarks but has yet to define those benchmarks. FirstMerit, however, has already proactively compared its fees to available industry data that list average fees for different size retirement plans and found them to be both reasonable and competitive.
McDermott anticipates that review of provider fee information by plan sponsors will become a critical part of their compliance protocol. Although service providers are tasked with developing the required disclosures, plan sponsors face fiduciary liability for ensuring the disclosures are received, reviewing them and making certain their arrangements with providers are reasonable. McDermott recommends that plan sponsors begin a dialogue now with service providers to understand what assistance they will receive from their providers.
With the change, plan sponsors are responsible for seeing that plan participants will receive two categories of information—general information on plan restrictions and an explanation of any fees and expenses for plan administration such as investment advisory, legal, accounting or recordkeeping services. Additionally, the new regulation requires that participants receive information about each designated investment option in a comparative chart. According to McDermott, this may include items such as performance information over one-, five- and 10-year periods, a description of any shareholder-type fees, and the total annual operating expenses of the investment options.
“This will outline for participants the investment fees they pay in both percentages and dollars,” McDermott explains. “It will give them a picture of their retirement plan in hard dollars.”
Service providers, sponsors and participants also should be aware of the timing and impact of the impending regulation. Once the regulation takes effect July 1, 2012, expect changes in the marketplace because, as McDermott explains, more plan sponsors will be inclined to compare their fees to benchmarks, which will make the marketplace more competitive. As a result, some providers may need to align their fees more closely with benchmark levels.
“In the end,” says McDermott, “I think this trend toward transparency will benefit plan sponsors and certainly the participants in the long run because fees and fund expenses will be more competitive across the marketplace.”
What service providers must disclose
While the retirement plan fee disclosure mandate has many nuances, FirstMerit’s Greg McDermott offers
highlights of the information providers are required to share with plan sponsors:
- Description of the services provided (e.g. record keeper or securities broker).
- Description of designated investment alternatives available to participants.
- Consulting fees, actuarial fees, custodial fees and third-party administrative fees.
- All direct compensation earned by the provider as well as any indirect compensation that may be received. For example, a mutual fund company may pay the provider a small fee to provide its mutual funds.
- Description of any compensation that will be paid to the service provider, whether it is charged against the plan’s assets or paid directly.
- Any fees that will be paid upon the termination of the arrangement.
- Information necessary for the plan to comply with ERISA reporting and disclosure requirements.
Want to learn more about the changes or investment accounts in general? Contact Greg McDermott, Executive Vice President, FirstMerit Retirement Plan Services, at firstname.lastname@example.org.
The opinions and information contained in this message have been derived from sources believed to be accurate and reliable, but FirstMerit Bank, N.A. makes no representation as to their timeliness or completeness. This message does not constitute individual investment, legal or tax advice. All opinions are reflective of judgments made on the original date of publication and do not constitute a guarantee of present or future financial market conditions.
Greg McDermott, the President of FirstMerit Insurance Group, discusses retirement planning with Smart Business.
How has the economy affected future retirees?
The prospect of enjoying the Golden Years may seem more like fools gold to many Americans who have seen their retirement savings dwindle during the recent economic downturn. One of the immediate impacts of the downturn was the reduction or elimination of employer contributions to qualified retirement plans. In addition, a significant number of individuals lost their jobs and have had to tap into retirement savings in order to sustain them during this difficult economic period.
Perhaps the most significant barrier to the goal of retirement has been the loss in account values suffered by most retirement plan participants over the past few years due to market volatility and dramatic declines in stock values. The psychological fallout from the market meltdown has made many employees nearing retirement more risk averse and conservative in their investment selections, which may limit the future performance of their accounts.
All of these factors have combined to create a material reduction in retirement savings.
Many future retirees are worried about the future of Social Security. Where do you see Social Security heading?
The future viability of Social Security is certainly a looming issue and one that has challenged our government for decades, but with little action. I think we are nearing a time in which changes are going to need to be made in order to sustain the system for future generations. Since the Social Security system was put in place in 1935, the average life expectancies of retiring workers have increased dramatically, which means benefits are being paid for many more years than originally anticipated.
Another startling statistic is that in 1950, for every Social Security beneficiary, there were 16 active workers helping to fund the system. Today, there are three workers for every beneficiary, and that ratio will be two workers for every beneficiary by 2050.
The logical conclusion from this is that the age to qualify for Social Security will need to be increased materially in the future. It is also likely that there will be a form of “means testing” so that higher income earners may receive fewer Social Security benefits. Lastly, there is considerable discussion today surrounding converting our current “defined benefit” approach to Social Security to a defined contribution approach for younger employees in the work force in order to limit the continued growth in the benefit liability.
There is a general awareness by our government of the added burden on future retirees to create additional personal retirement savings. The advent of the Roth IRA is a good example of the government’s desire to create incentives for individuals to build their retirement savings on a tax-favored basis and create greater financial independence from government programs.
Anything else interesting or timely regarding retirement planning?
In late 2010, as part of the financial service reform legislation, Congress focused on creating greater transparency in fees and expenses charged within qualified retirement plans. Beginning in 2012, plan sponsors and participants will be told — in dollars and cents — exactly how much they pay each quarter for the management of their 401(k) plan. Most participants believe they pay nothing.
Investment fees, recordkeeping and administrative fees will be published in the one document most participants actually open and read — their participant statements. As participants begin to compare these fees and expenses, there will likely be questions raised concerning the value of services provided. This will be especially true when selecting investment fund alternatives. While many 401(k) providers have been very disciplined and transparent in their pricing for services, those providers that have been more aggressive in their fees and expense charges and have not been transparent in disclosure will be at a distinct competitive disadvantage. Many industry analysts are predicting that this new disclosure will likely produce a tipping point, resulting in reduced fees and expenses by many service providers, accompanied by greater accountability by plan providers.
As an example of the impact of fees and expenses, a 1 percent annual reduction in expenses at the participant account level over a working career could result in an increase in the account value at retirement of as much as 25 percent. While plan participants will now have a greater awareness of the expenses being charged to their account, plan providers will have an enhanced responsibility to assure the reasonableness of the fees and expenses being charged to the retirement plans they sponsor.
Reach Greg McDermott at email@example.com.
The opinions and information contained in this message have been derived from sources believed to be accurate and reliable, but FirstMerit Bank, N.A. makes no representation as to their timeliness or completeness. This message does not constitute individual investment, legal or tax advice. All opinions are reflective of judgments made on the original date of publication and do not constitute a guarantee of present or future financial market conditions.
Learn how SBA Financing can help your business grow & succeed
Thursday, May 31, 2012
10:00 a.m. to 11:00 a.m. EST (US & Canada)
Registration is required: Click Here to Register
If link does not work, type the following address into your URL:
Brief description of the topic:
In trying to grow their businesses, owners often find themselves seeking credit to finance those expansions.
Join Kreischer Miller, Fox Rothschild LLP and PNC Bank for this free webinar that will be hosted by PNC Bank and Smart Business to learn how U.S. Small Business Administration (SBA) loan programs may help.
The SBA offers a variety of loan programs that provide basic to complex financing solutions that business owners might not be able to attain conventionally. Hear from our well-versed panel — a CPA, an attorney and a senior SBA business development officer — who will go through case studies that show the unique ways SBA loans can be structured to help businesses successfully grow and expand.
In this session you will learn:
- How the SBA transformed since the Small Business Jobs Act was passed in 2010
- Benefits of SBA financing vs. conventional financing
- Overview of the SBA 7(a), 504 and Express Loan Programs
- Case studies showing creative ways SBA loans can be structured
Steven E. Staugaitis, a CPA and leader of Kreischer Miller’s Entrepreneurial Services specialty services group. Steve focuses on serving privately held companies with their accounting, tax and business advisory needs.
Thomas J. Kent, Jr., is a partner and Attorney for Fox Rothschild and co-chairs the firm’s Franchising, Licensing & Distribution Practice. He focuses on franchise law as well as mergers and acquisitions.
Lisa Kennedy, Vice President, Senior Business Development Officer at PNC Bank is one of the top SBA lenders in the nation. With over 22 years of SBA financing experience, she has helped fund over $150 million in SBA loans.
The Webinar and/or materials were prepared for general information purposes only and are not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell securities or currencies or to engage in any specific transactions, and do not purport to be comprehensive. Under no circumstances should any information contained in the seminar, and/or materials be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed in the seminar and/or materials are subject to change without notice due to market conditions and other factors.
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services and bank deposit products and investment and wealth management and fiduciary services are provided by PNC Bank, National Association, Member FDIC.
©2012 The PNC Financial Services Group, Inc. All rights reserved.
Last fall, the National Labor Relations Board (“NLRB”) issued a rule mandating that employers begin to post at the workplace a new form that notifies employees in general of what rights they have under the National Labor Relations Act. It was initially scheduled to take effect on November 14 of last year; but its effective date was postponed to April 30, 2012.
“Contrary to what some employers might assume, this poster is required regardless of whether their own employees belong to a union,” says Stephen P. Bond, partner at Brouse McDowell.
Smart Business spoke to Bond to find out more about what this means for employers and how they can comply with the new rule.
What kinds of employers should be concerned with the new requirement?
As a general rule, this applies to all businesses that have annual gross revenues of $500,000 or more. There are some specially defined categories that vary from this. For example, the regulation would apply to a nursing home with annual revenues of as little as $100,000, or a daycare center with annual revenues of $250,000. Even a smaller business can come under coverage if it buys or sells more than $50,000 worth of goods or services in interstate commerce. There is an exemption for governmental entities.
What does the poster say?
In addition to telling them how to reach the NLRB with complaints, it advises employees they have the rights to, among other things:
* Organize a union
* Bargain collectively
* Discuss wages, benefits and other terms and conditions of employment with other employees
* Take action with one or more co-workers to improve their working conditions by raising work-related complaints with their employer
* Go on strike, depending on the purpose or means of the strike
It also informs them that it is illegal for an employer to, among other things:
* Prohibit them from talking about a union during non-work time
* Question them about union activities
* Discipline them for being involved in union organizing activities
* Threaten to close down if a union is chosen by workers
* Prohibit them from wearing union buttons at work in most cases
* Spy on them for engaging in union organizing activities
How is it to be posted?
The poster is to be placed in a prominent location and, at the least, at any location where personnel rules are usually posted by the employer. If 20 percent of the work force speaks another language, a foreign language version of the poster needs to be posted. If the employer usually uses an intranet or Internet sites to communicate with employees about personnel issues, the poster needs to be available there as well, either as an exact copy or as link to the NLRB’s site. Employers can download the poster from www.nlrb.gov/poster, or they can call the government at (202) 273-0064 to have it mailed to them.
What challenges does this rule pose for employers?
The poster is significant on three levels. First, if an employer fails to comply voluntarily, any employee can file an unfair labor practice charge with the NLRB against the employer; and, theoretically, the NLRB could ultimately order the employer to comply with a court order. That process can be costly, time-consuming and counterproductive to staff morale. Beyond that, if an employer fails to post, and an employee later files an unfair labor practice charge on some other issue, the NLRB may excuse any delay by the employee because the person hasn’t been forewarned of his or her rights through a poster. The NLRB may also interpret the refusal to post as evidence that the employer has an anti-union motive relative to the unfair labor practice charge.
Second, while the warnings in the poster are merely reciting rights that have long existed in the law, some employers are concerned that this listing, without explanation or context, will create confusion among employees and lead to disputes that would not otherwise have arisen.
Third, the poster does highlight a couple of issues, which, regardless of the new requirement, employers should be aware of. Even if an employer does not have a union in place or a collective bargaining agreement, employees generally do have certain rights under federal law, essentially, the right to act in concert to assert their rights as employees. One example that is surprising to many employers is that employees have a right to talk about their rates of pay and work benefits — and a rule that prohibits that would be deemed illegal by the NLRB. In turn, they also have the right to talk among themselves concerning work issues, and to approach management for solutions, even though no union represents them. If employees are e-mailing or using social media to share their concerns about their work experience, the NLRB may say that this too is engaging in concerted action about work and prevent employers from interfering with it.
What is the status of the rule?
Once this rule was announced last fall, lawsuits were immediately filed in federal courts. The National Association of Manufacturers, for one, alleged in its complaint that the rule is itself illegal because the National Labor Relations Act, which created the NLRB, did not authorize it to issue a substantive requirement of this nature. This litigation is part of the reason that the NLRB has twice postponed the final effective date for the rule. In a decision issued in March, the Federal District Court for Washington, D.C., held that it was satisfied that the scope of authority that Congress intended to give to the NLRB, back in 1935, was broad enough to include this type of a posting requirement. An appeal was immediately filed and is now pending.
Stephen P. Bond is a partner at Brouse McDowell. Reach him at (440) 934-8080 or firstname.lastname@example.org.
Insights Legal Affairs is brought to you by Brouse McDowell
When it comes to merchant fraud, businesses that accept credit cards as payment often have an “it can’t happen to me” mindset. Unfortunately, it all too often does.
“Security risks are not going to go away,” says Michelle Thompson, vice president, fraud/risk officer for FirstMerit Bank.
Business owners and their employees may be doing things which could put the company at risk, like unintentionally being negligent with sensitive client credit card information. And until you have worked through the process of becoming PCI compliant, you may not have realized that you were at risk for data integrity issues.
Smart Business spoke with Thompson about merchant fraud and how businesses can protect themselves.
What should merchants be aware of in terms of fraud?
Many times, merchants will take a transaction over the phone, and the customer on the other end of the line is someone they’ve never done business with before. If the supposed transaction is fraudulent, oftentimes, the individual posing as a customer will ask that the product be shipped to an alternate or obscure location. Another tactic is to provide multiple credit cards for payment. I have seen this where the credit card numbers were almost identical, and all from the same credit card issuer. A credit card issuer is not going to provide an individual several cards in their name. A frequent tactic used is the individual will create a sense of urgency in order to rush the order. This is a very common fraud pattern, and it’s still working.
Merchants should also be wary of calls through the relay line, oftentimes called the TDD or TTY line, referring to telecommunications devices for the deaf or teletypewriter. This phone assistance line was originally created with an interpreter or someone in the middle to serve people who can’t speak or don’t speak the language. Unfortunately, to-day, 90 to 95 percent of these calls are fraudulent. Criminals use this tool to mask them-selves for anonymity. Beware of misspelled words or a structure that is grammatically incorrect.
There are a large number of merchants, many of which have accepted credit card transactions for many years, who believe that once they receive an authorization number, they are guaranteed payment. All that authorization code validates is ‘At this time, that credit or debit card has availability to cover the cost of the pending transaction.’ That doesn’t mean, however, that the authorized person is the one using the card.
Why do so many merchants fall for these ploys?
Businesses are anxious to sell their product, so they tend to bypass red flags, focusing on making a sale. Fraud is much more prevalent than many merchants think, or would like to admit. In some cases, it’s glaringly obvious, but in others, it’s very well hidden.
Many merchants also don’t understand that a credit card transaction is the same as accepting a check. Many merchants accept cards because the process feels safer and quicker. But if somebody writes you a check, especially if it’s for a large dollar amount, you could wait the standard 10 days to know if that check’s going to come back. It’s the same process with credit card transactions. They provide provisional credit, just like a check; however, there’s no guarantee it’s not coming back.
What preventive measures can merchants put in place to avoid becoming a victim of fraud
Knowing your customer is key. Many businesses are motivated by the prospect of a large sale; however, it’s important to utilize common sense and good judgment. A busi-ness also needs to be aware of whose hands are in the mix. Is there a person selling on the front line who faxes or emails orders to an accounts payable department? Does that person know this customer? Has someone completed proper due diligence on the credit card being used as payment? It takes everyone working together. The best way to help prevent employees from accepting fraudulent transactions is education. Educate everyone in the company who has any part in the sales process. It’s the best defense for protecting yourself.
What happens when a merchant or its service provider discovers a fraudulent transaction? Is there any way to recover the money that was lost?
If merchants suspect a fraudulent transaction, or are unsure about a customer or trans-action, they should contact their merchant services provider immediately. If the merchant reacts quickly enough, the shipment can often times be tracked down, and there may be the option to engage legal enforcement to attempt to track down the perpetrator.
It’s unfortunate that there are times when a merchant is unable to retrieve their product. This is prevalent with international transactions. Once the product leaves the United States, the likelihood of it being tracked down, even if the transaction is fraudulent and you can prove it, is fairly minimal due to the distance. That’s why it’s essential, when conducting international transactions, for a merchant to ask a lot of questions and look for those ‘red flags.’ When we do confirm that a transaction is truly fraudulent, we simply walk the client through backing out of the situation, and many times that reduces or negates any cost/loss being incurred by them.
What should merchants know about Payment Card Industry (PCI) compliance?
PCI is the unified security standard on behalf of American Express, Discover, MasterCard and Visa, although each of the Card Brands still has its own individual security standards and requirements. If a merchant does not become PCI compliant, and they should experience a breach, the fines and costs associated with it could put them out of business. There should be a partnership between a merchant and its merchant service provider. Safety and security should be a merchant’s No. 1 concern when processing credit card transactions.
Michelle Thompson is vice president, fraud/risk officer for FirstMerit Bank. Reach her at (330) 849-8937 or email@example.com. For more information on PCI compliance, visit the PCI Security Standards Council official site at www.prcisecuritystandards.org.
Insights Banking & Finance is brought to you by FirstMerit Bank.
If you operate a business, someday you will find yourself in a dispute, or even embroiled in litigation. Whether you receive a complaint from a disgruntled former employee or you find yourself looking for the best way to recover money that your business is owed, you need another player on your team.
“Many business people believe that the litigator, unlike the transactional adviser, is a lawyer to be avoided until the last possible minute, in order to save money,” says Anne Owings Ford, a member with McDonald Hopkins LLC. “My experience tells me that a different model is better.”
Smart Business spoke with Ford about how litigation attorneys can support business owners and improve the business’s bottom line.
Doesn’t a litigator deal with cases that are going to court, to arbitration or to mediation — in other words, disputes that already exist? Why should I talk with a litigator in the absence of a dispute?
Certainly, an experienced litigator should be familiar with and very comfortable in all of those arenas. But a broader view of the role of a litigator is most beneficial to the business owner, both in terms of peace of mind and cost savings.
For example, several years ago, I had a business client that was keeping me busy defending it in small controversies across the country arising out of its form sales contracts. I handled dozens of these matters, some just at the letter-writing stage, and others in full-blown litigation. My client contact called me one day and said, ‘We’d like you to look at this contract and see what we need to do to improve it, so that we can avoid these issues, rather than having to keep fighting them.’
I spent a few hours reviewing and reworking the contract, with an eye toward the provisions that had generated the most claims. I consulted with a transactional colleague to get her view of the contract. Then I returned the revised contract to my client, and they began using it right away. The claims dried up and I turned to other matters.
That was a powerful lesson: Consider whether you can save major attorney fees by spending a few dollars up front to identify problems before they end up in court.
Are there other reasons to talk to my litigation attorney outside the courtroom?
Your litigation attorney can help you deal with some of the least pleasant aspects of your business life. Consider the following:
* If your business receives a claim letter, your litigation attorney can help gather information, plan a response strategy, interview employees, run interference with your board and communicate with your insurer.
* If your business needs to advance a claim against a competitor, supplier or customer, your litigation attorney can help you frame the claim properly, to take into account not only the value of the claim but also the nature of the relationship and other competing factors. Your litigation attorney also can work with you on the proper approach, from a strongly worded letter on law firm letterhead to a complaint filed in federal court. Different disputes call for different approaches to resolve them.
* If your business is experiencing a high volume of a particular kind of claims, your litigation attorney can help you investigate whether there is a way to change your process to limit future claims.
* If you are experiencing pushback from within your organization regarding a dispute you feel needs to be addressed, your litigation attorney can help air the issues and offer constructive advice to get all players on the same page.
What should I expect from my litigator, in or out of a lawsuit?
You should have high, although realistic, expectations of your litigation attorney. You should expect not only prompt responses to your questions but also periodic updates, even if it’s only a quick email to let you know that the court has not yet issued a ruling. Your litigator knows that you have people looking to you for answers; it is the litigator’s job to provide them.
You should expect your litigator to be available to you when you need help. The kinds of issues that litigators address don’t always arise at convenient times. (Think an explosion at a plant or a confrontation in the office.) Litigators work hard to be readily available and you should expect to be able to reach them.
You should also expect your litigation attorney to explain to you — and to help you explain to your managers, your board and your insurer — your company’s options, as well as the litigation and dispute resolution process. The landscape can change quickly when you’re dealing with a litigation issue, and you should expect to be able to ask questions whenever you have them.
Finally, you should expect your litigation attorney to care, not just about a single crisis but about your business and its issues. Your litigator needs to know what’s going on in your world, because he or she can’t know whether one issue is related to another without knowing what they are.
Why can’t the attorney who provides my transactional advice do these things for me?
Your relationship with that attorney is an important part of your business, and no litigator is looking to interfere with it. That said, the litigator’s focus is different. Your business adviser is looking at the big picture, working to help you maximize your bottom-line profit and minimize costs of doing business. On the other hand, your litigation attorney can help you evaluate whether a specific issue is likely to blow up into multiple, high-dollar-value claims, or if the right approach may help snuff it out.
Litigators are geared toward identifying claims and lawsuits, so that if you talk with that attorney sooner rather than later, you may be able to advance a proper claim in a cost-effective manner, or address a bogus claim with a minimum of fuss. Ultimately, good litigators want to help you address claims — yours or anybody else’s — efficiently. If you call them, they can do exactly that.
Anne Owings Ford is a member with McDonald Hopkins LLC. Reach her at firstname.lastname@example.org or (216) 430-2001.
Insights Legal Affairs is brought to you by McDonald Hopkins LLC.
Led by Managing Partner Tom W. Watson, CPA, FHFMA, BKD Dallas was established in June 2009 when Dallas-based KBA Group LLP joined BKD. The office consists of 95 team members, including eight partners, who offer focused experience in audit, tax, risk management and transaction advisory services for public and private companies in a variety of industries.
BKD Dallas is located in the nation’s ninth largest city and is surrounded by many sites and recreational opportunities, including Six Flags over Texas, SpeedZone — a racing track that includes four kinds of racing, mini golf and other activities — the Dallas Zoo, Dinosaur Valley Park where visitors can hand feed roaming animals and Nasher Sculpture Center that features modern art, in addition to a host of shopping and dining options.
Smart Business spoke with Watson about BKD Dallas and how the organization innovates and impacts its community.
Give us an example of a business challenge your organization faced, as well as how you overcame it.
The Dallas office has a deep history of working with private equity funds and their related portfolio companies. When the economic crisis in 2008 started, many of the funds we worked with stopped doing deals, causing a potential slowdown in our business. We recognized the need to diversify our Dallas practice office to cover more industries. A benefit of being with BKD is lots of experts around the firm in lots of industries. Government/non-profit and health care were two of the areas we knew BKD was deep in but that had not been developed in Dallas. We were able to identify two top BKD partners in each of these niches who had a desire to come to Dallas and build these practice areas. We’ve had great success in these areas, adding multiple governmental and health care clients over the last two years. As a result, we’ve been able grow our business despite the economy and create rewarding career options for our employees.
In what ways are you an innovating leader, and how does your organization employ innovation to be on the leading edge?
There are a number of CPA firms that are technically competent to provide audit, tax or advisory services to companies. We believe that the innovative firm is the one that provides highly technical solutions with unmatched client services. We wrote a book about our client service, which we share with every employee and many of our prospective clients. It’s a big step to put a very high set of client service standards in writing and then tell our clients to judge us on those. By following through, we believe we really differentiate ourselves from other firms, resulting in long-term satisfied clients. Even though our book was written a few years ago, it continues to be time-tested and useful in virtually every business setting.
What is the greatest lesson you’ve learned, and how have you applied it?
It’s funny how the lessons you learn early in life seem to have applicability throughout your professional career. Telling the truth is one of these, and it’s as valid in a business environment as when you are in grade school.
When working with clients, integrity and honesty are paramount. It includes being honest and upfront about meeting deadlines and not setting expectations that cannot be met. It also means addressing issues quickly, whether its good or bad news. Clients expect us to be upfront with them, and as part of our client service standards we practice that every day.
How does your organization make a significant impact on the community and regional economy?
Being part of the community is important for both BKD’s partners and employees. We are active members of the North Dallas Chamber of Commerce, and we regularly support their initiatives to improve the business environment in the north Texas area. We have a number of our partners and staff involved in charitable organizations and community events. We encourage our staff to participate in coordinated charitable activities, such as supporting the North Texas Food Bank.
Through our charitable arm, the BKD Foundation, we’ve initial corporate sponsor of the First Tee of Dallas. This is a great organization that impacts the lives of young people by providing educational programs that build character, instill life enhancing values and promotes healthy choices through the game of golf. We also support numerous other charity activities, including Go Red for Women. The foundation’s main goal is to support causes in the communities in which we work, and we’ve tried to do that.
How have you added “value” to the products and services you provide to customers and clients?
One of our client service standards is true expertise. One way we promote this is having our staff become true experts in a particular industry early in their career. The fact that we have partners, managers and in-charges on nearly every project who have significant industry focus — whether it be energy, banking, health care, manufacturing, government or real estate — brings value to the product.
We also operate under the idea of principled innovation — we bring innovative solutions to clients with a principled base. We do not let innovation lead us into new, untested, unproved or unprincipled solutions; we try to retain true professionalism in the solutions we offer.
What is your philosophy on going “above and beyond” for customer service?
Client service is at the heart of everything we do. We have a service contract with our clients that says we will offer the five core tenets of our philosophy: integrity first, true expertise, professional demeanor, responsive reliability and principled innovation. While it seems on the surface to be a pretty simple concept, in practice it isn’t executed by very many people as well as it should be. We live those concepts every day, and it shows in our client service.
Tom W. Watson, CPA, FHFMA, is the managing partner of BKD Dallas. Reach him at (972) 702-8262 or email@example.com.
Businesses looking for office space should consider expanding their real estate search to Akron and Canton.
“There was a perception, although totally unfair, that the market was dying,” says Terry Coyne, SIOR, CCIM, an executive vice president with Grubb & Ellis. “However, the numbers clearly show that the vacancy rate has actually gone the other way. Both the Akron and Canton markets are actually on the upswing, and coming back strong.”
Coyne says the Akron and Canton office markets are experiencing a remarkable rebound and businesses that are ready to buy or lease office space would be best served to do it now, as rates continue to decline.
Smart Business spoke with Coyne about what makes Akron and Canton’s markets unique, and how it affects real estate performance.
What should businesses know about Akron and Canton office real estate markets?
Currently, there is a resurgence in the office market for both Akron and Canton. The Akron market offers good office vacancy, because there is no new construction and the service sector is coming back. Also, Akron is benefiting from the rebound in financial services, which explains the nice office market there.
Canton’s office space is tighter than Akron’s because there is no new construction in Canton and Chesapeake Energy and VXI Global Services recently purchased a lot of the previously available space. Between those two companies, you have a remarkable rebound in downtown Canton.
How do Canton’s office buildings compare to those throughout Northeast Ohio?
The average office building in Canton is relatively small, at 29,338 square feet. By comparison, office buildings in the Cleveland area average over 55,000 square feet. So the smaller building size is the first notable trait of Canton’s office market. The average age of a building is 43 years, which is on par with other parts of Northeast Ohio. Price per square foot is lower in Canton than in Cleveland as well. Canton office space has recently sold for an average of $49.11 per square foot, about 14 percent less than Cleveland’s $56.95 per square foot. The vacancy rate in Canton is significantly lower than other parts of NE Ohio; Canton’s vacancy in office property is 12.1 percent, whereas other parts of Northeast Ohio have vacancy rates in excess of 22 percent.
Why is Canton outperforming other parts of Northeast Ohio?
Part of the answer is that Canton did not experience the speculative construction boom caused by increasing real estate prices in the 2000s. Although Canton did see a fair amount of construction in the 2000s and 1990s, the busiest decade for construction was the 1980s.
However, construction alone does not tell the whole story. Because the average building size is much smaller in Canton, a higher percentage of buildings are single tenant and owner-occupied. Building owners taking up their own space effectively limits the supply of space and helps to keep the vacancy rate low.
What should businesses know about the Akron office market?
In the office market, Akron is outperforming much of Northeast Ohio with a vacancy rate of just 13.4 percent. Canton does have a lower vacancy rate, but Canton’s office market is smaller and not comparable to Akron. The average office building in Akron is 58,317 square feet and 42 years old.
Akron’s low price when compared to Cleveland helps to explain the lower vacancy rate. Asking rental rates average around $16 per square foot, and the asking sale price is around $55 per square foot. Akron’s geography is another factor: its concentration of highways make it well-situated for access to Cleveland, Canton, the East Coast and the South. The presence of large occupiers of space is the final piece in the puzzle. Goodyear and First Energy are just two of the many office users in Akron, yet these two companies combine to occupy 9.2 percent of all Akron’s office space. With large users taking almost one-tenth of space off the market, it is more likely that the vacancy rate will stay low.
What market changes can businesses expect in the future?
Canton’s office market is not the largest in Northeast Ohio, but it is certainly one of the best performing. As the local and national economy improve, it seems reasonable to expect that Canton will continue to experience low vacancy rates, and could even see some speculative construction in the years to come.
Like the rest of Northeast Ohio, Akron stands to benefit from the continued growth of manufacturing. As manufacturing companies grow and become more profitable, the infrastructure available in Akron and throughout Northeast Ohio will offer an attractive location for businesses. ‘Onshoring,’ rather than offshoring, is all the rage.
Akron’s significant number of distribution and warehouse facilities can also expect to see an increase in value as the economy recovers and companies require more space to house and ship inventories. The only potential roadblock is presented by energy prices. If the price of gasoline continues to climb, highway distribution will become less attractive as companies turn to more energy efficient methods of shipment, like rail. Natural gas prices have fallen significantly due to the exploration of shale across the country; if these prices continue to fall, it will halt exploration, as it becomes unprofitable to extract gas at such low prices. Though there are potential pitfalls, Akron looks well-positioned to take advantage of the economic recovery.
Terry Coyne, SIOR, CCIM, is an executive vice president with Grubb & Ellis. Reach him at firstname.lastname@example.org or (216) 453-3001.
Insights Real Estate is brought to you by Grubb & Ellis
Most business owners are not in the real estate or contracting business. So, when they’re relocating, building or renovating, they probably have limited resources or knowledge when it comes to managing this time-consuming process. They have a choice: go it alone or align with a professional that has the technical expertise to manage the delivery of the project within clearly defined scope, schedule and budgetary requirements.
“Whether it’s a ground-up new building construction project or the renovation and remodeling of space, project managers are subject matter experts that can drive value in their ability to identify opportunities and mitigate potential project risk events,” says Eric Verh, director of Project Management at CBRE, Cleveland. “They can properly manage and coordinate teams of multidiscipline design, construction and vendor professionals and provide strategic consulting through all phases of the project’s lifecycle.”
Smart Business learned more from Verh about the value of project management, whether you’re facing a new building construction project, renewing a lease and renovating, or looking for new space and considering landlord turnkey or tenant-controlled improvement projects.
When should a user or owner of real estate hire a project manager to assist in the design and construction process for a proposed project?
The simple answer is the sooner you bring a project management professional in to manage a project the better. During the pre-construction phase, typically where only 20 percent of the project cost is incurred, 80 percent of the value creation can be realized in value engineering, design efficiencies and speed to construction that a project manager can lead if brought on board at the conception of an idea for new space or renovation or contraction. Full-service companies such as CBRE offer strategic consulting through business and conceptual planning stages of a project before the design actually takes place. CBRE Project Management offers clients up-front assistance during their space and building search. By providing comprehensive financial and qualitative analysis of alternative sites or buildings, our clients understand overall budget and scheduling implications associated with each site and, therefore, are better positioned to negotiate more advantageous lease or purchase terms with prospective landlords and sellers.
Further, through proper planning and strategy development early on there are many unforeseen scheduling and budgetary missteps that can be avoided. Understanding roles and responsibilities of those involved in a project and clearly defining the approval process for critical issues are often overlooked. If understood early on, extra time can be planned into the schedule and an expedited process for time-sensitive matters can be developed by a project manager to reduce time and expense.
What types of building owners or tenants are best served to retain the services of a project management professional?
Small, medium and large companies that have single building project needs to corporate and institutional owners and users of real estate on a regional, national or global basis can benefit from the services of a project manager. For example, companies looking to lease or own real estate can focus on their core business while allowing the project manager to oversee their best interests in managing a specific construction project that aligns with the company’s expectations in terms of quality, cost and timing of delivery.
On the other hand, corporations that may be rolling out national rebranding initiatives that either fully outsource or supplement their existing staff with a project management representative can benefit from local market experience and relationships. It runs the full gamut, from small companies to large corporations, whatever their real estate project management needs may be.
Even on small lease renewal projects involving simple renovations of just new carpet and paint, users of real estate may not understand the full implications of what that may mean. For example, the type of carpet selected can lead to the need to tear down, reinstall and re-cable workstations and the moving of employees and their contents, all of which can significantly add to project costs and employee disruption. Project managers can help companies identify these implications up front and to make decisions for alternative material selections or scheduling adjustments to mitigate such costs and disruption. So even on small projects, it’s beneficial.
Does the value offered by a project manager offset the associated costs for these services?
It is a win-win situation in the sense that a full-service project manager can represent a client’s best interest, while concurrently offering value engineering suggestions and efficient project planning, scheduling and design consultation from project inception through furniture, fixture and equipment selection and move services. For instance, at CBRE, our project management platform often saves our clients on average $2-$3 for every dollar spent on project management fees. It’s our ability to offer up strategic project solutions and best practice methods, as well as our preferred national vendor pricing for building materials and systems that are passed through to our clients in the form of cost savings from day one.
How can a business reduce operating costs through project management?
It comes down to details and aggressive and proactive planning in design early on that the project manager can help manage that process to reduce operating expenses within a tenant space. Selecting appropriate types of construction materials and design, as well as types of finishes, lighting, building controls and water usage can all lead to a more efficient building, which costs less to maintain and operate. Sustainability is big these days. For instance, LEED-certified projects can include environmentally friendly solutions that provide cost savings over time. Project management can not only help clients get into a new building or space, but also going forward have the savings of operational efficiencies.
Eric Verh is director of Project Management at CBRE, Cleveland. Reach him at (216) 363-6455 or email@example.com.
Insights Real Estate is brought to you by CBRE