Los Angeles (1223)

Stacey Roth is a self-described nurturer. The role comes easily at home, where the 42-year-old executive and her husband are raising 3-year-old twins and a 5-year-old son. 

But it also extends to her job at Hillsides, a Pasadena, Calif.-based nonprofit organization where Roth was recently promoted to chief program officer. In the newly created position, Roth will be in charge of all programs and treatment services at the 101-year-old organization that serves 7,500 children and families each year. 

As she prepared to leave her post as director of Hillsides’ Family Resource Centers, where she managed 120 employees and supervised the agency’s community-based outpatient and outreach programs and services, Roth hunkered down and spent eight hours writing thank-you notes to her entire staff. She also whipped up homemade brownies to accompany the notes.

Not many managers would have time for such thoughtfulness, but for Roth, it was business as usual.

“I have a philosophy that I am never too busy for things that are important to me, and I want my staff to know that they are important to me,” she says.

 

Taking advantage of opportunity 

In her new position, Roth, a licensed clinical social worker, will have triple the amount of employees to spoil. She will oversee 350 of the organization’s 450 employees while continuing to manage the Family Resource Centers.

In addition, she will oversee the agency’s three other core programs: a residential treatment program for children, an education center for children with learning and behavioral challenges, and a program for youth transitioning from foster care to adulthood.

Supervising a staff whose client base is so diverse is a challenge, but Joseph M. Costa, the CEO at Hillsides, says no one is better suited to the task than Roth.

Ironically, managing people was the furthest thing from Roth’s mind when she started at Hillsides in 1996. She was working as a therapist in one of the residential cottages for children and loved every minute of it.

“I figured I would be a clinician my entire life,” she says.

That changed seven years later when she was asked to coordinate Hillsides’ school-based mental health program at San Rafael Elementary school in Pasadena. Suddenly Roth was thrust into a role where she supervised therapists, and she found the new duties exhilarating.   

“It was so much fun to have people listen to my ideas, use them and then say they worked,” she says. “If I mentor 10 people, and they are each seeing 10 clients, I’ve extended my reach.”

She also found great joy having a part in helping other staffers learn and grow.  

“It’s wonderful watching nervous young therapists new to the field blossom into self-assured ones,” she says. “It is so satisfying.”

From this school coordinator position, Roth was promoted to clinical director at Hillsides and then less than a year later, to the director of the Family Resource Centers.

It was a job Roth held for eight years, and it grew to include three clinics and 15 school-based programs throughout Los Angeles County.

She made it a point to learn the names of all the employees underneath her and to know something personal about each one so when she talked to them, she could ask meaningful questions, showing she cared. She also gives cookies and brownies as presents to reward productivity and they are never store bought. 

“This way, I am putting a little bit of myself into acknowledging them,” she says. “I will rely on my good memory to continue to know as many employees as possible by name.” 

 

Part of the team

As warm as Roth’s personality can be, she is also a straight shooter who isn’t afraid to let staff know exactly what she thinks of their performance, positive or negative. She believes that employees do better with this transparent approach because “there is not that discomfort that occurs when people are trying to read between the lines.”   

She also makes it a point to never ask staff to do something she wouldn’t do herself. All clinicians in the Family Resource Centers are required to be on call for one 24-hour period each month in case a client has an emergency, and Roth always puts herself on the schedule.  

One of her top priorities in this new role will include ushering in a new type of care to Hillsides called Trauma Informed Care. This is an innovative approach that screens and treats individuals according to how much trauma they have experienced in their lives, an approach Roth feels is essential for Hillsides to adopt.

“Fifty-nine percent of the general population has experienced at least one adverse childhood experience and 70 percent of youth in residential placement have had some type of traumatic experience,” she says. “It’s clear our clients can benefit from this personalized focus.”

Under Roth’s leadership, Hillsides has formed a Trauma Informed Care committee. Her goal is to train all Hillsides employees in this new practice and to change the organization’s policies and procedures to make sure that trauma-informed care is at the heart of Hillsides’ approach.

“Clients will have an increased sense of emotional and physical safety and have quicker, more successful outcomes,” says Roth.

Trauma Informed Care will also strengthen staff, says Roth. 

One of its key components is self-care, a concept that comes naturally to her.

“I am always telling my staff, take care of yourself,” she says. “No client is as important as your own physical or mental health.” 

When Roth gets home at night, she follows her own words by declaring 5:30 to 9 p.m. a work-free time (unless she is on call). She focuses on her children, makes dinner, does homework with her oldest, reads and puts them to bed with the help of her husband.

After the kids go to sleep, she’s back at work, answering emails and phone messages for up to two hours.

Roth admits she’s blessed with more energy than most people as well as a never-ending passion for helping children and families in crisis, which makes every hour she devotes to Hillsides a labor of love.

“I believe and always have believed that we are the best when it comes to care for our clients,” she says. Roth is especially proud that “we don’t turn anyone away, even our most challenging client. We figure out how to make things work.”

Just the other day, she got a call from the director of Hillsides Education Center informing her that a family with a child in the school was in crisis, living in a motel with no money to pay for another night and nothing to eat. 

Was it possible, he asked, to give the family some emergency funds so they could have a place to sleep for another week and money for food while the father looked for a job? 

“And what did we do?” asks Roth. “We did it. We figured out a way to get them those funds. There is never a ‘no’ here. And how lucky am I that now I am the person who gets to say ‘yes!’”

How to reach: Hillsides, (323) 254-2274 or www.hillsides.org

Daniel K. Walker doesn’t just encourage his direct reports to question his decisions at Farmers & Merchants Bank — he demands it.

“I allow them to question me from every perspective, every decision that I make,” says Walker, the bank’s chairman and CEO. “I keep it very open so I can allow them to stop me if I’m jumping off the ship at the wrong time. I have great faith and trust in these individuals. I hired them because they came with great experience and knowledge in relationship to the achievement of the bank.”

And if it turns out that those hires aren’t able to put that constructive criticism up for discussion?

“It’s really quite simple,” Walker says. “I cannot have them on my team. I have to go find another individual. It has to be a specific trait that they have and are willing to bring to the game. If they don’t come in with that expression and concern for me, I can’t have them working for me on this specific level.”

Walker and his brother, W. Henry Walker, who serves as F&M’s president, took on their current roles in 2008. They both have a deep understanding and appreciation for the value of family, teamwork and collaboration in any successful organization. The ability is critical for people to understand their roles and to know both what they can do and what’s expected of them.

“As parents, you want to be consistent and structured in your actions,” Henry says. “Running an organization is much the same way. When your employees have trust and a sense of fairness, they move forward confidently. That also relates to how they develop relationships with your customer base.

“We’re all in business because of our customers. How that translates down is consistency and structure to the customer base as well.”

Dan and Henry are fourth-generation leaders at the bank, which was founded in 1907 by C.J. Walker. He was followed as president by his son, Gus, who was followed by his son, Kenneth, who today serves as president of the bank’s main office. That heritage plays a large role in the way the bank operates.

“I had the tremendous opportunity to work my first 20 years at the bank with my grandfather, who was president from 1937 to 1979,” Dan says. “That was a great opportunity for insight as well as for learning how to handle employees, how to communicate, how to lead and how to set your expectations in relation to your leadership team. You empower those individuals so that they can go and take their goals and the objectives of the company and the ultimate goals of the bank.”

The bank has about 650 employees in 23 branches and has experienced steady growth, despite the uncertain economy, with more than $5 billion in assets. Here’s a look at how the bank has achieved this feat and positioned itself for another 100 years of good fortune.

 

Work as a team

In order to position your employees to be assets and contributors to your success, you have to demonstrate that you value their presence in your organization.

“One of the areas where we’ve seen companies continue to struggle, specifically in banking, is the consistency of staffing,” Henry says. “They fail in this arena because they want their employees to have a relationship with the customer, but management does not put forth the effort to truly have a relationship with the staff.

“Because they fail in that arena, the employee, instead of feeling like a valued person in the organization ... they become a number. When they become a number, the job is a transactional job and they leave and move somewhere else.”

A commitment such as Dan’s to working with people who have the freedom to counter his decisions when they perceive a problem is a key component to building strong collaborative relationships on any team. You have to let people put to use the expertise that led you to hire them in the first place.

“Another very simple example is lending,” Dan says. “If you get passionate about lending to an individual, your passion and emotion takes over your ability to provide the proper analysis. Those individuals have to come to you and say, ‘Look, it’s true, whatever you’re seeing and thinking here. But let me tell you, if you applied those numbers in that particular situation, that customer is going to fail.’”

In this case, the lesson applies to banks, but it can be easily translated to any kind of business/client relationship.

“When you’re lending, you have two responsibilities,” Dan says. “You have the responsibility to protect the bank in relationship to the loan. But on the other side, you also have a responsibility to protect the customer from making a mistake in a relationship that impacts both the bank and the customer. We have to be on both sides of that coin.”

The whole team also needs to have a collective investment in the big picture. You can’t win with a group of people that dwells on what this action or that decision will mean for their own personal future in the company.

“We need officers who check their ego at the door and will get in and get done what needs to get done,” Henry says. “We see ego at a lot of other companies as very damaging. It’s just not something we want in our staff.”

You have to be deliberate about creating a climate where people will step up and contribute.

“It’s not that I have to go ask people what they think,” Dan says. “They are aware of my goals and objectives and they are aware of what I’m doing. They just jump up and say, ‘Stop,’ or ‘I need to discuss how we could do something just a touch different so that we achieve our goals.’ These are all things that additional individuals who you bring on your team allow you to do.”

 

Share the responsibility

The effort to build a team that can be a key player in helping you to achieve your goals begins with the questions you ask in the interview process.

“You throw out the leading questions and then see if there is anything else that the person would like to share about themselves,” Henry says. “See what they share and what opportunities that presents. What things are you most proud of? Where do they go with that question? How do they respond?

“Some of the general questions give you a sense of who they are. Many times on resumes people will put what activities they like. What are they passionate about?”

The key is to ask enough questions in the first interview to see if you should bring the person in for a second interview.

“In the second interview, it’s best to give them a project,” Henry says. “Give it to them to come back and see how they approach it. What is their depth of analysis? What was their commitment to getting the project done and how interested are they in working with you? A lot of times, they can respond perfectly to the questions you pose. But it’s the miscellaneous comments or how they dress or how they approach other parts of the interview that gives you a sense as to who they are as a person and how they approach life.”

You need to know as much as you can about the person you’re thinking of hiring and how he or she will fit into the slot, as well as the workplace culture.

“You are not just looking at competence,” Henry says. “Do they, will they, mix in with the organization and complement what we’ve worked so hard to achieve? Will they carry forward the value structure? How does our value structure show within their current lifestyle?”

It’s not always an easy thing to do because good hiring requires leaders who can begin to see the future and see not only how that individual will perform, but how that individual will influence the performance of others.

“They not only need to lead from our perspective and be responsible to us for how they lead, but then the individuals that are subordinate to them have to lead in the same fashion,” Dan says. “We have to cause all these individuals to accomplish the goals and be challenged by those goals. If the goals aren’t accomplished, it’s something where we all failed together. Not one individual. The responsibility of success is with everyone.”

The numbers indicate the Walkers have succeeded in creating an environment to which employees want to belong. Out of 650 employees, 25 have been with the bank for more than 30 years, 72 have been there for more than 20 years and 98 have been employed at F&M for more than 10 years.

“You don’t have consistency of staffing like that without fair, structured and consistent management,” Henry says. “Those are the values we’ve been taught in how we respond to situations. When you look at the success of a company, you have products and you have people. In banking, products are quite similar from bank to bank to bank. People truly make the difference.”

 

Takeaways

  • Don’t waste talent.
  • Demand open dialogue.
  • Look beyond the individual.

 

The Walker Files

Name: Daniel K. Walker
Title: Chairman and CEO
Company: Farmers & Merchants Bank

Born: Long Beach, Calif.

Education: Attended Fullerton College, Fullerton, Calif.

Who has been the biggest influence on your life? My father, Ken Walker, and my grandfather, Gus Walker. With my father, it was honesty and integrity. Strong, conservative and being friendly are the values of the bank. These are all things that were required; the ability to communicate quickly and accurately. You never present a problem without a solution.

Dan on taking credit: There is one thing I was taught that I remember very well from my grandfather. He says there is no limit to what can be accomplished if it doesn’t matter who gets the credit. If you lead in that fashion, when accomplishments are made, the entire team gets the credit. Everybody is growing together and everybody is achieving together. 

 

Name: W. Henry Walker
Title: President
Company: Farmers & Merchants Bank

Born: Long Beach, Calif.

Education: Bachelor of science degree in business administration, Pepperdine University.

Who has been the biggest influence on your life? For me, it would be my father, my brother and Jesus Christ. The men had great integrity. That’s what they taught us. They would make the right decision over the easy decision. We meet with borrowers that have been with us 40 or 50 years. They will remember the time when they were having difficulty and we backed them. That makes a difference. That’s where relationship, loyalty and friendship come in.

What one person would you most like to meet? My great-grandfather C.J. Walker. I’ve heard so much about him and who he was. I’d like to have the chance to meet him.

Henry on leadership: Leadership is a servant attitude. It’s not look at me and follow me. That’s part of our value structure.

 

Learn more about Farmers & Merchants Bank at: 

Facebook: https://www.facebook.com/fmbank
YouTube: https://www.youtube.com/fandmbank

 

How to reach: Farmers & Merchants Bank, (562) 437-0011 or www.fmb.com

Executive compensation is something stockholders really don’t care about when a company is profitable and stock values are going up and paying dividends. And right now, the Dow Jones Industrial Average is seesawing around a record high 16,000 mark. But there are times when people do wonder what’s going on. Last year, Bloomberg Businessweek compared executive compensation to the average workers’ pay.

The highest ratio was at the 
J.C. Penney Co., where the CEO’s annual compensation was $53 million. His workers’ pay, on average, was $29,700 — a ratio of 1,795-to-1. He was fired shortly thereafter because he had spent too much money on marketing and made too many changes. The company was improving and doing well; his compensation wasn’t what cost him his job.
 
“Of course, when things are going downhill, boards of directors start looking at trustworthiness, ethics, accountability and performance,” says Robert Bjorklund,
Ph.D., a professor in the Management Department of the School of Business at Woodbury University.
 
Smart Business spoke with Bjorklund, who is studying CEO compensation issues in top American corporations, about executive pay.
 
What message does sky-high executive compensation send to employees?
 
Do most workers care how much money Oracle Corp. CEO Larry Ellison makes? Not really.

What workers care about is internal 
equity; how their pay compares to other workers. If the person who’s sitting in the next office, doing the same thing, is making 20 percent more, that’s upsetting. But as far as the CEO, who is levels above rank-and-file workers, as long as he or she is making the company work, employees don’t really care. Employees have a stake, if not a say, in executive compensation, but they really have a stake in executive performance.
 
Should pegging compensation directly to performance be a given?
 
Many question whether CEOs should get a bonus when company performance is subpar. And that’s when you have to come to grips with the definition of performance. What makes a company successful? Must it involve something that has long-term impact? If you’re keeping a scorecard on where the company is going after the CEO departs, has the company been ramping up for the future? If so, that’s a good thing. But if the executive is getting paid for driving the stock price up, that can be disastrous. Assuming a CEO is paid in part by stock options, that means he or she is doing whatever he or she can to drive up that
price. That might put the company in more debt to increase an equity ratio of some sort. But if the stock rises and the CEO cashes out, that may not be good for the company, long term.

It would be better if we could find a way to normalize the value of a company — not in terms of what its cap rate is right now, but where its cap rate is going and the contributions the company is making.

What has been the effect of corporate governance mandates like Sarbanes-Oxley and Dodd-Frank?
 
Dodd-Frank hasn’t been all that effective. It certainly hasn’t changed executive compensation policies. There is an issue of scarcity, of course. There are only so many people qualified to run a Fortune 1,000 company, which drives up their value. For CEOs whose companies are doing well, the board’s personnel or executive committee is apt to think, ‘Our CEO is making only $30 million. Let’s give that person anything he or she wants to stay, because we like the job he or she is doing.’ That also applies when the CEO has no intention of leaving but wants a sweeter deal.

Is CEO compensation out of control? Certainly, if the issue is that there’s no overarching system to govern executive pay. But in the long run, the law of supply
and demand applies. If somebody’s doing a poor job, that person won’t last. It’s also likely that the next person will receive more money than his or her predecessor. Non-board members don’t feel they’re empowered to change the situation. They tend to look the other way — as long as the company is delivering a good product or service at a reasonable price, which is what everyone wants.
 
Robert Bjorklund, Ph.D., is a Professor with the Management Department in the School of Business at Woodbury University. Reach him at (818) 252-5262 or robert.bjorklund@woodbury.edu  
 
Insights Executive Education is brought to you by Woodbury University.
Thursday, 02 January 2014 05:37

Weighing in on health care reform: Los Angeles

Written by

The Patient Protection and Affordable Care Act, often called the Affordable Care Act represents some of the most far-reaching government overhaul of the U.S. healthcare system since 1965 when Medicare and Medicaid came into being. It will be phased in over time, but a number of changes have been delayed and won’t be in effect until 2015.

The act focuses on increasing the rate of health insurance coverage for American and reducing health care costs. Here’s what some area businesses have on their minds about health care reform as the time nears for the full impact of the ACA: 

Lisa Sachs
managing principal
Cumming Corp.

How is your company preparing for changes associated with health care reform?

Our vice president of human resources, Larry Berkel, has been working closely with our employee benefits consultant to make sure Cumming is prepared.

Cumming has always offered competitive health benefits to our team members and those eligible for health benefits are offered multiple options. Cumming has assessed its current benefit plans relative to what team members could obtain through the state or federal exchange and we clearly offer a better value than what is available through the exchange. 

Have you studied or instituted wellness programs to contain health care costs for your employees? 

We are in the process of evaluating various wellness programs and plan to institute a plan effective in Spring 2014, which is the start of our benefit year. The program we select will be administered by a third-party working closely with our human resources department to motivate and incentivize team members to lead healthy lifestyles including exercise, eating healthy and getting annual health assessments and physicals. We value our team members and want them around for a long time.  

What other things are you doing specifically to contain health care costs for your employees? 

We will be evaluating many options including moving to a self-insured environment, introducing a defined contribution plan (defined contribution health plans are consumer-oriented programs that allow employees to be more involved in the selection of benefits), or co-funding a health savings plan for team members. We will also be looking into becoming members of a private group affiliated with a private exchange. 

Do you foresee having employees pay a larger share of company-offered health care coverage?

 Not in the immediate future. It’s hard to predict beyond 2014, but our goal is to keep costs contained.

Jerry Azarkman
Co-founder and co-owner
Curacao 

How is your company preparing for changes associated with health care reform? 

Our human resources department has created written materials with the most frequently asked questions guiding our associates through the new information health care reform. These documents have been mailed directly to the associate’s home and attached to their payroll checks. In addition, a program of workshops are planned by HR at each of our locations to further answer questions and give as much information as possible to our associates. 

Have you studied or instituted wellness programs to contain health care costs for your employees? 

We are committed to the wellness of our associates. We have created a Zumba and Yoga program for associates at their lunch time. Associates that participate in this program receive a free healthy lunch every time they show up to practice.  This gives them the opportunity to exercise with a professional program that they would otherwise have to pay for in a gym, but at our company, we provide it free of charge. Each department has a safety representative, an associate that guides the rest in preventing accidents. 

What other things are you doing specifically to contain health care costs for your employees? 

At Curacao, associates receive paid sick days to use toward their recovery. All associates receive incentives for months with no injury in their departments. We also do safety training for earthquakes, safety evacuations and other programs that bring awareness of how to help each other and help people to feel more confident if something happens.

Do you foresee having employees pay a larger share of company-offered health care coverage?

While the company is profitable, we will continue providing a portion of the coverage.

Dave Michelson
President and CEO
National Interstate

How is your company preparing for changes associated with health care reform? 

National Interstate typically reviews all our benefit programs on an annual basis. The enactment of health care reform has not materially changed that process; it has simply added another layer of compliance-related items that we must be mindful of.  Our primary goal of providing benefit programs to meet the needs of our employees and their families remains unchanged. 

Have to studied or instituted wellness programs to contain health care costs for your employees? 

Over the last several years, National Interstate has implemented a variety of wellness programs primarily in response to our employees including initiatives such as an onsite flu shot clinic, monthly newsletter, health fairs including screenings and wellness vendors, as well as lunch and learn speakers. There is no question employees have greater access to information and resources promoting healthy lifestyles than ever before. For an employer, it can often be difficult to quantify the results of individual employees reaching their health goal. It may simply mean that employee was able to attend a son or daughter’s soccer game. Those kinds of results are important in addition to focusing on healthcare cost containment. 

What other things are you doing specifically to contain health care costs for your employees? 

We believe educating employees about the plan they participate in is a key factor in containing health care costs. Most medical plans have discounts and incentives already built into the plan design, yet many times employees don’t fully utilize these features. We work in conjunction with our health care provider to disseminate information to employees so they can make informed health care decisions. 

Do you foresee having employees pay a larger share of company-offered health care coverage?

It is impossible to predict what the future holds in terms of health care costs. What we do know is if our employees collectively work as a team, we have the best chance of minimizing health care costs for our organization. While we make health care choices as individuals, the impact of those choices from a rate perspective is felt amongst the group participating in the plan.

Anthony McBride
Principal, human resources
Edward Jones

How is your company preparing for changes associated with health care reform? 

We have been making changes to eligibility and benefit levels as required by the regulations since the passage of the Affordable Care Act. We have made required modifications to our group medical plan to ensure that it meets the guidelines for 2014. We will continue to closely monitoring the regulations so that we are prepared to meet future requirements of the law.

Have you studied or instituted wellness programs to contain health care costs for your employees? 

We have had a wellness program in place for several years, and anticipate it will help contain cost increases in the future by motivating our plan members to be aware of and gradually improve their health over time.

Due to health care reform what other things are you doing specifically to contain health care costs for your employees? 

By 2009, we had moved to a consumer-driven health plan model. Our plan includes some pharmacy and medical treatment programs that help direct members to lower cost, higher quality sources of care. Soon we’ll introduce online cost/quality transparency tools to help raise awareness of the disparate cost spread that can exist even within an approved provider network. 

Do you foresee having employees pay a larger share of company-offered health care coverage? 

While we do not plan to shift a greater proportion of the cost to associates in 2014, the overall costs for health care continue to rise. In this regard, we have added a surcharge to cover spouses who have their own employer-based coverage available. We cannot speculate on what may happen in the future because the health care landscape is undergoing so much fluctuation.

 

It’s easy to forget about costs when you’re embroiled in a lawsuit, but you could end up winning the trial and losing the fiscal war if you let the litigation tab spiral out of control.

“Business owners can be bamboozled by a litigation attorney when they’re in the heat of battle,” says Kim Karelis, a partner and expert witness with Ropers Majeski Kohn & Bentley PC. “Avoid disputes by negotiating a reasonable fee schedule in advance.”

Smart Business spoke with Karelis about the best ways to avoid and resolve a legal fee dispute.  

What is a legal fee dispute?

Attorneys usually charge a flat fee for routine tasks like reviewing a contract or setting up an LLC, so novice executives may experience sticker shock when they receive a bill from a litigation attorney if they don’t perform adequate due diligence. The lack of a formal fee schedule can sometimes lead to a dispute and additional litigation if the two parties can’t resolve the issue.

What should business owners know about hiring a litigation attorney?

Refuse block billing and question vague descriptions for services when negotiating a retainer agreement so you can compare and determine whether an attorney’s fees are reasonable and customary. Only the senior partner should bill for in-house strategy meetings involving several staff members and you shouldn’t pay bloated fees for photocopies, phone calls and secretary time.

Consider the cost for expert witnesses, court filling fees and depositions, and estimate your true ROI by comparing the total tab to what you may gain or lose by going to trial.

Finally, be wary of an attorney who seems unreasonable or wants to bill for every single second. Lawyers should be willing to negotiate, especially in this market.

What else can business owners do to prevent legal fee disputes?

Hiring a referral from a trusted colleague is probably your best bet, but you still need to get everything in writing and seek an outside opinion before signing an agreement if you’re unfamiliar with litigation costs.

Establish a budget and a goal for the action and consult several attorneys to see if they’re reasonable and attainable.

Lastly, nip potential problems in the bud by reviewing invoices and questioning any unreasonable charges you find in a timely basis.

What happens if a dispute arises?

Clients have the right to seek arbitration by a panel consisting of neutral attorneys and a layperson who will decide the appropriate amount of attorney’s fees through an informal, low-cost proceeding administered by the local bar association. The losing party has the right to pursue a court trial. However, they must act quickly and file the paperwork within 30 days of the loss.

What are the legal standards that apply to legal fee disputes?

A signed retainer agreement takes precedent when a fee dispute arises. If none exists, the court will attempt to determine a fair charge for the attorney’s services, in part by assessing whether the attorney’s fees are unreasonable or unconscionable.
While the courts tend to side with clients, especially when the attorney’s charges are vague, there’s little sense in taking chances when the problem is avoidable.

How are legal fee disputes usually resolved?

Most executives and attorneys don’t want to air their dirty laundry in public, so they try to resolve their disputes through informal, private discussions and by consulting an outside expert.

While few disputes end up going to trial, the chances increase when emotions run high and business owners don’t do their homework.

Kim Karelis is a partner and expert witness at Ropers Majeski Kohn & Bentley PC. Reach him at (213) 312-2012 or kkarelis@rmkb.com

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Written by Mark Scott

Interview by Lee Koury

It was a ski trip that would forever change Corey Shapoff’s life.

He was a political science major at UCLA on his way to law school, but this day, he just wanted to ski. As he climbed aboard a chairlift, he realized he was sitting next to Ray Parker Jr., the man who wrote and performed the theme song to the famous 1984 movie, “Ghostbusters.”

“So we went skiing and, he said, ‘Corey, you’re the kind of guy who would be a good agent,’” Shapoff says. “I said, ‘What’s an agent?’ He explained it to me and I said, ‘God, do I really want to go to law school or am I just doing that because that’s what poli-sci people do?’”

Shapoff decided to look deeper into the idea of becoming an agent and was intrigued enough to pursue it. He began writing letters to agencies in an effort to land a job.

“I wrote 15 letters and got into the biggest talent agency,” says Shapoff, who was hired in 1989 at the William Morris Agency. He worked with many of Hollywood’s premier writers, directors and actors, and appeared to be on his way to a glamorous life and career.

But something just didn’t feel right about it.

“I got into the talent agency, and I didn’t love it,” Shapoff says. “At the time, I didn’t like the vibe of it. It just really wasn’t me.”

It was about that time that he had an encounter with Jim Steiner, a legendary sports agent based out of St. Louis.

“The classiest, nicest guy you’ll ever meet,” Shapoff says. “I learned real quickly at a pretty young age the kind of businessman I want to be. It’s OK to be a nice guy, where with the agencies, it was a different mentality. I had a guy say to me that he’d do a deal with the devil if he could. Jim had integrity. He stuck by his principles. When he showed up at the airport in jeans and a T-shirt, I was like, ‘Wow, he’s my kind of guy.’”

The influence Steiner had on Shapoff’s life is visible every day at SME Entertainment Group LLC, the business he founded in 1991 and now leads as president. The company became part of Live Nation after its acquisition by Front Line Management Group and has orchestrated live events for high-profile clients such as Mercedes Benz, Microsoft, EY, Morgan Stanley and Hewlett Packard.

The ability to build strong relationships with such powerful companies as well as work with musical acts such as Christina Aguilera, Maroon 5, Katy Perry and Kelly Clarkson takes a lot of skill and even more trust.

“The customer service has to be extremely strong in this business,” Shapoff says. “It’s very competitive out there.”

 

Know your clients’ needs

One of the key differences when it comes to scheduling live events and concerts for a private audience is the fact that you have to think about what that audience would like to see.

“When you do concerts for the public and you have your advertising, people buy tickets because they are a fan of that act,” Shapoff says. “When you’re doing a business event and you hire a band, you have to have somebody that everybody likes and that can be a challenge. Even if I bring in Paul McCartney for free, there’s going to be a few people there who weren’t into The Beatles.”

That’s where the strength of the relationship between SME and its clients comes into play. You work with them to understand what type of event it is they want to have and what kind of entertainment would be the best fit for that event.

“I had a company that wanted to have the Black Keys perform at their event,” Shapoff says. “The average age of their group was 45 to 60. I’m like, ‘Guys, maybe you want to do somebody like Journey or somebody like that where they’ll know all the songs.’ They said, ‘No, no, no, we want to have the Black Keys.’ It wasn’t the perfect fit. The band did a good job, but somebody came up to me in the middle of the show and said, ‘Corey, you were right. We probably should have done a Journey or somebody like that.’”

The companies that take the time to customize their service to clients and develop a plan that meets their needs at a detailed level are going to be the companies that generate business from that client again and again. The reputation that is built through both trust and solid business practices can go a long way toward fostering such strong bonds.

It can also serve to broaden your reach.

“Through our partnership with Artist Nation, which was previously Front Line Management Group, we have access to 300 acts that they manage,” Shapoff says. “So we have some leverage in the business. If we need somebody who is not under our umbrella of 300 acts, we’re able to get pretty darn good pricing. It’s in everybody’s interest.”

 

Engage your team

One of the biggest personal challenges Shapoff has faced throughout his career is the ability to take occasional moments to stop and celebrate success.

“I’m a grinder, and I have naturally high expectations,” Shapoff says. “Fortunately, things have gone great for us other than a couple of years outside of 9/11 and a couple of years with the economy. But I’m the kind of guy who is always looking to what’s next.

“It’s just always been my mentality. It’s hard for me to turn it off and say, ‘That’s great.’ I’m always thinking about tomorrow. What if the stock market crashes? What if there is some unknown thing that happens? You can’t take things for granted in our business.”

Shapoff has learned to lean more on his team to ease the burden on his own shoulders and help SME stay on top of its game.

“I like to be involved, and I want to know everything that is going on,” Shapoff says. “But I have to delegate to my team. That was the biggest adjustment for me and it’s not an easy thing. I want to see everything. But you can’t be everywhere at one time. So there was a night where we had Maroon 5 performing. I was calling L.A. and asking, ‘How’s it going? What’s going on guys? Is everything good?’ But I was in Monaco for the World Entrepreneur Of The Year Conference. It’s that ability to delegate to others and trust them that is something good leaders have to do. When I started this business, it was just me and myself.”

Opportunities such as the World EOY Conference do take him away from his company, but they also provide invaluable lessons that help make him a better leader when he returns to the home office.

“If you dissect the Strategic Growth Forum that EY does or the World EOY program, it’s amazing,” Shapoff says. “When I look at everybody who is involved in how these programs come together, it’s inspiring for me. Inspiring for me and for my team to see what it takes.”

As he looks to the future for SME and the live event space overall, Shapoff sees plenty of room for growth.

“A lot of companies do events in Singapore, Hong Kong and China, places like that,” Shapoff says. “So having a presence there and a presence in South America and in Europe, that will be key. We already do have a presence with Live Nation, but I’m talking about my division and doing the corporate dates.”

There are days from time to time when Shapoff reflects on being a sports agent and misses those days. But as he reflects on the experiences and successes he has had after more than 20 years in the business, he is confident that he chose the right path.

“You’ll read about LeBron (James) signing a huge contract and everybody says, ‘I want to be a sports agent,’” Shapoff says. “They’re not reading about the agents who represent the seventh-round pick, the sixth-round pick and you barely have enough money to get by. There’s that aspect of the business that people don’t talk about.” 

 

Takeaways

  • Think like your clients.
  • Allow your team to do its job.
  • Keep the future in mind.

 

The Shapoff File

Name: Corey Shapoff
Title: Founder and president
Company: SME Entertainment Group LLC

Education: Political science degree, UCLA.

Shapoff on his greatest marketing challenge: No. 1 is how do you reach everybody? So many different people do events. How do you reach everybody is one of the challenges. How do you service everybody is another challenge. People might not talk like it’s a challenge, but it is. Where and how do you spend your time?

 

How to reach: SME Entertainment Group LLC, (310) 207-2233 or www.smelivenation.com

If your organization offers an annual wellness-screening program, you are in good company. According to a report by The Kaiser Family Foundation, nearly half of all U.S. companies with more than 200 employees provide wellness screenings. These programs provide workers the opportunity to have their height, weight, blood pressure, blood sugar and cholesterol conveniently tested on site.

Participants receive a printout of their results and, if the test values are abnormal, they are encouraged to see their primary care physician for a follow-up appointment.

Employers are provided with a confidential report of aggregate health data. This allows companies to tailor on-site educational programs and incentives to best match employees’ risk status. The new Affordable Care Act rules, set to take effect this year, provide companies more power to align insurance premiums with specific health goals.

For the employee, the tests provide a snapshot of their health status and at-risk participants may become more aware of and better motivated to make health behavior changes.

At issue, however, is the idea that traditional finger stick testing for total cholesterol and LDL (bad cholesterol) can create a “false negative” by providing the employee with reassurance that they have little or no near-term risk for a cardiovascular event.

According to the American Heart Association, 50 percent of all heart attacks and strokes occur in individuals with normal cholesterol. It’s estimated that for 30 percent of patients with cardiovascular disease, their first sign of disease is death. Clearly, something is missing if, after intense efforts by the medical community over the last 20 years to identify lipid abnormalities, we cannot provide employees with a more accurate assessment of their risk.

In 1976, Russell Ross, Ph.D., at the University of Washington, published a sentinel paper entitled “Atherosclerosis: An Inflammatory Disease.” Ross clearly outlined two components that lead to the clogging of arteries: an injury and a response.

It is inflammation, the response to the insult, that is the culprit in arterial disease. Oxidized cholesterol is but one of many independent factors that can damage the body’s 60,000 miles of blood vessels. Others include dental cavities, sleep apnea, insulin resistance (pre-diabetes or metabolic syndrome), cigarette smoking and stress.

Making work site screenings better

A growing body of research is showing that a multi-marker approach — adding several additional inflammation-specific blood tests to the traditional screening panel — can identify at-risk employees who would previously have gone undetected.

A recent study by Marc Penn, M.D., PhD. , and Andrea Klemes, D.O., published in Future Cardiology, evaluated 95,144 patients assessed by MDVIP physicians at their annual physicals. Based on a lipid-only wellness panel, approximately 30 percent of patients presented as being at risk. When the additional tests for inflammation were added, an additional 40 percent were identified.

These advanced inflammatory biomarkers are able to detect employees with “vulnerable plaque” that is likely to rupture into the artery lumen, thereby blocking blood flow, leading to heart attack or stroke. Studies conducted by Cleveland Heart Lab, provider of an advanced inflammation panel, have shown that approximately 10 percent of a screened population fit into this category.

Clearly, a multi-marker approach provides additive information. Employees deserve cardiovascular risk information that is better than the flip of a coin. Companies need the data to target resources to best promote individual and organizational well-being.

Dr. Mark J. Tager is CEO of ChangeWell Inc., a San Diego-based consulting and training company focused on maximizing the health/productivity connection. For more information, visit www.changewell.com

 

It’s still 2013 as I’m writing this, but by the time everyone else reads it, we’ll be closing in on 2014 and kicking off the New Year, working to make good on the resolutions and plans we promised our businesses.

What’s one area to take a closer look at? The company mission statement.

Typically defined as a formal summary of what your organization intends to do in both the short term and long run, mission statements also tend to be woefully outdated thanks to their very definition.

Formality and a lengthy summary can’t hold our attention span the way a down-to-earth and easily tweetable statement can. Now this isn’t to say you need to write everything in 140 characters or less. But if you don’t already have one in place for your business or you have a really stale statement that no longer gels with the direction your company has taken, it might be time to conduct some early spring-cleaning and overhaul your mission statement.

Aim for real and actionable, but also slightly lofty

As mentioned in Inc., mission statements should contain the following four elements: value, inspiration, plausibility and specificity. A simple, concise, grounded and fitting statement that addresses a call to action is the key here. It’s understandable that your statement shouldn’t be too much of a pie-in-the-sky plan for your business (steer clear of “we’ll single-handedly heal the world”-isms).

But a mission statement also needs to inspire just as much as it needs to encourage others to act out on it. Include at least one attainable element that shows how your company can go above and beyond where others may not.

It shouldn’t just be a description of your business

It’s easy to muddle together the synopsis of what your brand does with what it aspires to do. While you do need to mention what it is your business does, keep your overall business description separate from your mission statement — after all, the mission is based on the intentions of your company.

Think about your statement on an annual basis

Making changes to your statement at the start of the year is a great way to kick everything off to a solid start, but it’s also important to revisit your mission statement on an annual basis to make sure it’s still a fit for your company. Additionally, revisit the way you put it together from the grammar usage to how comprehensive it is.

Share your statement with your employees and customers!

At my company, we’re in the midst of revising our own mission statement and plan to make signs for each employee’s desk to showcase the new statement.

Whether you decide to redo your statement completely or even if you make just a few small changes, share them with your team members and customers — it’s a great and fresh reminder of all that your business stands for.

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing startup bundles that include corporation and LLC formation, registered agent, DBA, and trademark and copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney

Anyone who has been a fan of the “Fast & Furious” movies had to do a double take upon hearing the news that actor Paul Walker had been killed in a car crash. It just didn’t seem real that the 40-year-old actor, who rose to fame in high-octane street racing scenes in the fantasy world that is Hollywood, could have died that way. Sure, life imitates art sometimes, but this was just too much to comprehend.

Tragically, it was true, and the actor, who was known for his philanthropy and was hosting a fundraiser that same day to help the survivors of Typhoon Haiyan in the Philippines, was gone.

At the time this column was written, production on the seventh installment of the “Fast & Furious” movie franchise had been put on hold as the studio regrouped to figure out how to deal with what had happened.

Life is fleeting

It was another example of how fleeting life can be and how you just never know when your whole world can be thrown upside down. As human beings, most of us thrive on consistency and stability and the idea that we know what’s coming next week, next month and next year.

There are those adrenaline junkies, of course, who love the next challenge and relish the chance to take everything they know and throw it out the window in favor of a new, more exciting plan of action. It’s the kind of personality trait that is portrayed in movies about fast cars and heists made from the rooftops of cars traveling at more than 100 mph.

But whichever type you are, you are not immune to the possibility of your life changing in an instant. And it’s a lesson to all of us to cherish every moment and opportunity we get in life.

Maybe it’s focusing a little bit more on your business and the steps that your company needs to take to achieve its full potential. There are so many things out there to distract us in social media and in our daily lives in general.

It’s easy to get sidetracked or push a project through without giving it your full attention. But there’s a customer out there who is depending on you to come through. That project is just as important as the one for that customer you helped when you weren’t as busy.

What are the priorities?

But at the end of the day, while your business is a critical part of your life, so is your family. So are the families of your employees. Few would argue that family is more important than business.

As you look to do your best at work, make sure you’re leaving enough to be the best you can be at home too. Those moments with your loved ones are moments you don’t want to miss. It’s not always easy, but you’ve got to find a way to be great at both ends and help your employees do the same.

As you start 2014, make it a point to find that balance in the way you go about your life both at work and at home. You just never know when life is going to throw you an unexpected curve.

Mark Scott is senior associate editor of Smart Business Los Angeles, Smart Business Orange County and Smart Business Chicago. If you have an interesting story to share about a person or business making a difference in Los Angeles, Orange County or Chicago, please send an email to mscott@sbnonline.com

After more than a decade of private equity investing with business owners as partners, I’ve learned that the relationship can seem like a marriage. This is especially true in situations where things don’t go as planned.

For the business owner/private equity marriage to withstand challenging circumstances and generate value for both parties upon conclusion (a “liquidity event”), it is important that partners embrace the following attributes:

  • Mutual trust and transparency.
  • Shared vision.
  • Willingness of each partner to put the best interests of the partnership ahead of personal ego.
  • Determination and commitment to make it work.

Mutual trust and transparency

Trust is the cornerstone of all successful relationships. Without it, one can never know for sure where he or she stands. Trust should be built and tested during the courtship phase of the partnership prior to closing the deal and consummating the business owner/private equity marriage. 

Key questions requiring answers include: Does my prospective partner always do what they say they will do? Do they exaggerate? Do they tell only part of the story? Are discussions about the business always clouded by sales talk or spin? Are verbal commitments taken seriously?

If each of these questions can be resolved, the focus is then transparency.

Both partners should be comfortable sharing both positive and negative developments. The due diligence period provides ample opportunity for both sides of the partnership to test this attribute.

Shared vision

It is critical that the business owner and private equity investor share a consistent vision for the marriage. This shared vision should influence strategic planning, resource allocation and the incentives built into the deal structure. The realities of the business should be taken into account, with both partners challenging each other as to the achievability of projections given the business environment, the company’s competitive position and overall potential.

Each party should share the SWOT analyses they have conducted from their vantage points and their base case return expectations. For example, the private equity investor likely has a required time-based return hurdle. Similarly, the business owner will have a target exit value. Both need to be in sync.

Willingness to put personal ego aside

Most entrepreneurs believe they are capable and smart, and it can be difficult to acknowledge mistakes. The same applies to private equity professionals who often view their academic credentials and resumes on par with “real world” operational expertise.

Each needs to separate their personal egos from what is best for the company and the partnership. The business owner must be willing to add to the senior leadership team, and even in the most extreme case, allow a more qualified individual to lead the company, if that is what is best for the business.

Likewise, the private equity professional must be willing to acknowledge their limitations and bring in a more experienced member of the firm or qualified consultant, if challenges warrant additional insight.

Determination and commitment to make it work

Unplanned negative events can put a business on its heels. Much like a marriage, determination and commitment are required to drive the partnership through these tough times.

If they have a strong marriage, the partners’ vow of “in sickness and in health, ’til liquidity event do we part” can ultimately pay off.

Craig Dupper is managing partner at Solis Capital Partners, a private equity firm in Newport Beach, Calif., focused exclusively on lower middle-market companies. For more information, visit www.soliscapital.com.