| COMPLEX ISSUES AND SIMPLE SOLUTIONS
By Joseph Fullop III Ph.D.
Complex rules and regulations that have overlapping jurisdictions have made navigation in business and government a nightmare. Economic issues are especially complex for regulators because they are trying to target a fast moving and ever evolving industry base in which they have absolutely no expertise. Solid interpretations of the myriad of rules and regulations are now undeniably impossible. But that's OK, that's just the way it is!
Our forefathers could rely upon the opinions and council of their attorneys. Today our legislatures pump out 7000 pages of new laws each session. How many of these laws do you know? If you feel bad about your lack of knowledge ask your attorney how many of these laws he can recite, let alone interpret. Scary is not the word for it. But that's OK, that's just the way it is!
When you call a government agency for assistance in complying with the rules and regulations they have little or no printed documentation of value, and treat you as if they don't have time to mess with you. But that's OK, thats just the way it is!
Attorneys write opinions for their insurance companies' defense instead of for the clients' guidance. A legal or tax opinion today is synonymous with the creation of liability. Any time someone gives their opinion and others depend on it they need to be ready to defend their opinion in court. Every opinion you receive today is riddled with caveats that render it worthless. People, however continue to require opinions with many different legal documents as a matter of historical form. These opinions cost a great deal of money because the opinion giver must be insured in order to give that opinion. He must charge for his time and the insurance. The problem is that the insurance only covers the opinion giver. It doesn't cover you. If anything goes wrong and the opinion rendered is found to be incorrect, or merely controversial, you have to pay the attorney again to defend you in the pending litigation, that he got you into. What's wrong with this picture? But that's OK, that's just the way it is!
The CPA that you rely so heavily upon is no different. The professional CPA hangs out their shingle and thereby represents themselves as experts in the art of interpretation of tax regulations. Say it isn't so! When you confront one of these experts however all of a sudden the answer you need becomes a SWAG (thats a "Scientific Wild Ass Guess"). They portray themselves as experts, where is the expertise? But that's OK, that's just the way it is!
It is becoming increasingly more evident that all the so-called experts are frauds. Worse than this however is the fact that we are willing, without question, to accept these conditions in return for our hard earned dollars. What are we as business people to do about these situations?
The first thing you need to do is resist the demands of others for worthless opinions. Their attorney is going to check out anything that you are representing anyway. All transactions should be executed based on "caveat emptor" which means "investor beware". There is no need for you to incur additional expense based upon historical tradition.
The next thing you can do is hold the professionals you use to higher standards. If they can't stand the heat, fire them, and get someone who will actually do their homework and not rely upon their firms reputation.
Demand from government the answers to your inquires in writing. Force your legislators to pass legislation that requires the same level of professionalism from government employees that they demand from citizens.
The most practical solution demands that you alter the way you work with accountants and attorneys. You have the right to expect professional work from your specialists. If you build a house you expect the contractor to meet certain standards with his work, so why should you expect any less from your attorney or accountant. In order to command this quality of work you must alter the way you communicate your needs. If you need a contract built by your attorney you first write down the exact specifications you wish the contract to meet. Let the attorney fill in the legal mumbo jumbo. List the things you want to make sure he covers. List the things you don't want to happen, and the penalties you want in place in the event of default. This list should be presented to the attorney in writing. After the last draft of the contract is done you ask the attorney to give you a letter that states that the contract that was prepared by him meets all of the specifications outlined in your original request. If for any reason you have any problems as a direct result of his incompetence the attorney will be obliged to remedy the problem at their own expense. This rule also applies to tax preparation, and dealing with government officials. You must learn to carefully word your questions and be very specific as to your needs. It can save you and your company a fortune.
Your intent is what you must be able to prove in a court of law in the event you become head to head with state or federal regulators. The documentation I have described to you will go a long way to prove your original intent. Always remember to add to your list that the instrument being prepared must meet any and all state or federal rules, regulations, and or statutes. The attorney should now be held responsible for any breach of state or federal regulations. That is what he gets paid for! The basic tool of business and the free enterprise system is the contract. Learn how to use it not only to consummate a business arrangement but to control business risk as well. Get back to the basics.
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