Perspectives February 2022

Scherer Smith & Kenny LLP serves mid-sized and fast-growing entrepreneurial companies. From complex litigation to business, real estate, intellectual property and employment law, our team brings strategic thinking, pragmatism and intense dedication to our clients’ success.

Partner Notes

Are we there yet?

Welcome to 2022, another opportunity to start fresh, set new courses and goals, and find out what surprises and events await us. For me, and I hope for you, too, my feeling at this early stage of the year is “so far, so good.” But then, I’m an optimist by nature, but perhaps more importantly, by intention. My consistent view is that hard work, focused goals, some resilience and living with integrity generally leads over time to positive outcomes. Sometimes dark shadows obscure these values, but overall, it’s important to keep your chin up, as my folks often said.

That said, with the year not yet even 15% complete I’ve found myself weighing the meaning of headlines and events to discern more precisely what tone this year will take – whether my positive view of the future is a sound road map or will turn me down a blind alley. Use any of those metaphors like “reading the tea leaves,” “putting a finger to the wind,” or “kicking the tires,” but I’m more gun-shy to predict, as I have in the past, that things should be better this year than in the recent past.

I am apprehensive, of course, due to the ups and downs caused by two years of bleak Covid news and the resulting political, social, and economic uncertainties caused by the virus. What a wild ride! As each wave of illness passed and life and fun seemed to be just within our grasp, some new variant would appear. To paraphrase Michael Corleone in Godfather III, just when I thought I was out, it pulled us all back in. I am tired of feeling like Charlie Brown trying to kick the football that is yanked away at the last moment.

But this year does feel different to me than the last couple. Hundreds of millions of vaccines have been administered, the variants appear to be less virulent, Covid restrictions are being relaxed or ended, and live entertainment, dining out, and seeing and hugging family and friends has returned. Vaccines are shown to largely eliminate the deadliness of Covid.

Even some of the worrisome events we are seeing – stubbornly higher inflation, broken supply chains, and product and labor shortages, for example, are caused largely by an economy roaring back, with GDP expanding at roughly 7.0% by the end of last year. This time shortages are not due to panic buying of toilet paper and Purell. Our nation is opening back up rather than shutting down. Work prospects and wages are better than the last couple of years for most people.

I am also blessed to work with great clients and the true professionals at our firm. We have brought everyone back to the office on a hybrid work schedule, meaning that all our employees work from home for some portion of the week. But we also have all hands at the office on Thursdays to permit collaboration in person by the entire office. On these days we also celebrate birthdays and work anniversaries, and intermittently hold in person office meetings. Really, it’s just great to see everyone in person again.

Personally, I am doubling down on the likelihood of broader freedoms. I am planning more travel and having my wedding (with people, even) later this Spring, and looking forward to the “Big” birthdays to be celebrated this Fall by both me and my fiancé. Already this year there is a lightness that was missing last year – and unquestionably during 2020.

So, I think there is substance behind a belief that this year will be better than the last two, and that it may even mark the beginning of the end of this disruptive, deadly time. But I am also wary. It may take a while before I can stop checking my rearview mirror to see if something’s gaining on me, but this, too, shall pass.

Happy New Year to everyone. We look forward to working with you this year.

- Written by William M. Scherer

New CID Laws Summary - 2022

Governor Newsom signed a number of bills into law during the last calendar year that affect common interest developments (“CIDs”), such as homeowners associations and stock cooperative corporations. The topics range from election by acclamation to rental restrictions to urban lot splits.

Below is a summary of the three new laws in which we believe our CID and homeowner clients will have the most interest. Of course, if you have any questions about the details of these or the other new laws impacting CIDs, please feel free to contact either of us to discuss.

ALERT: Revised Statement of Information Forms for Corporations and Limited Liability Companies

Effective January 1, 2022, the California Secretary of State updated its Statement of Information forms for corporations and limited liability companies in response to Assembly Bill 3075.

The revised Statement of Information forms require the filing party to certify whether any officer or any director (or member or manager for a limited liability company) has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law for the violation of any wage order or provision of the Labor Code.

Start Right: Preparing to Sell Your Business from the Beginning

Preparing to sell your business when you first start may seem counterintuitive but doing so will greatly reduce the cost and stress later and will likely help you realize a higher valuation if you do decide to sell.

Starting a business is exciting. It’s also expensive. You’ve worked hard to save money to launch the business, maybe have raised some money from friends and family or other investors, and you are trying to be cautious in how and where you spend your money. It can be tempting to cut costs and assume you can “clean it up later”. The problem is that “later” never comes. You are busy doing what you do best, managing and building your business. Administrative issues, tracking down individuals to sign documents they should have signed at the outset, getting your accounting on the right track are all far down on the “to do” list.

2022 Employment Law Updates