I have Ian's permission to post it here:
QUOTE
Hi Jill,
Thanks for your questions. Hopefully the following will provide some insight into what’s going on. This is not a SEMPO press release, but I personally stand behind, and am responsible for, all the statements in here so it’s official in that sense. It’s not privileged, and you may pass the information on if you see fit, as long as it’s not changed in any meaningful way.
I am a SEMPO member and volunteer for the organization. I did the preliminary review of the bylaws to see if they were compliant with the 501© 6 status. I did this review as a favor to SEMPO to help with Year 2 objectives.
I have completed a preliminary review of the corporate documents (including bylaws) and recommended getting a specific type of full service law firm. One issue is that SEMPO was originally applied for as a 501© (3) organization but the reviewer changed it to a 501 © (6) during the approval process. The reviewer did not make the necessary changes to any of the paperwork such as bylaws, but sent them through nonetheless. This caused some initial confusion as to the actual status and identity of the corporation, and therefore required the necessity of a preliminary review.
A preliminary review is exactly that - preliminary. It is not conclusive. It identifies issues and potential issues and helps provide guidance and identifying the next steps. This was necessary and appropriate in order to choose and properly instruct legal counsel, who will take it from here.
I've recommended a full service law firm with extensive experience in the proper area of non-profit law for this reason. These types of firms are not common but my understanding is that they have located and contacted at least one high profile firm fitting these criteria in their legal jurisdiction and are in discussions with them.
A law firm that takes on a client that wishes a legal review must put their firms’ reputation (and insurance policy) on the line. Before a law firm takes on a client for anything other than simple issues, they typically have a board meeting themselves, which can take a while to set up internally. This is normal and expected. I have a fair amount of public company experience and the lawyers in almost every case had to have a board meeting, check all their records for possible conflicts of interest, and so forth. Additionally, many like to have retainer fees and other finance related issues resolved up front. This can all take time, particularly during the most popular month (August) to take vacations in North America.
I have recommended that SEMPO follow these steps. Each step builds upon the last in a logical and fully supported manner, and therefore should be done in this order:
1. Locate a law firm capable of dealing with not only current, but future issues with SEMPO. This law firm should be full service, with specific expertise in technology, marketing, corporate and non-profit areas.
2. Revise the By-Laws to fully reflect the goals and obligations of SEMPO. Have them approved by the lawyers.
3. Create policies and policy manuals to provide an authorized structure for future communications and actions. Have the most important and basic ones approved by the lawyers
4. Change official communication structures (to reflect the revised by-laws and legal advice, where warranted.
5. Hold any necessary elections or other official organizational actions (such as meetings, etc), according to set policy.
Taking legal steps to review the organization after a year of fast growth is standard for an organization like SEMPO. The practice of law does not lend itself to quick decisions and acting in a hasty manner at this point would simply do more harm than good.
Ian McAnerin, BASc, LLB
Thanks for your questions. Hopefully the following will provide some insight into what’s going on. This is not a SEMPO press release, but I personally stand behind, and am responsible for, all the statements in here so it’s official in that sense. It’s not privileged, and you may pass the information on if you see fit, as long as it’s not changed in any meaningful way.
I am a SEMPO member and volunteer for the organization. I did the preliminary review of the bylaws to see if they were compliant with the 501© 6 status. I did this review as a favor to SEMPO to help with Year 2 objectives.
I have completed a preliminary review of the corporate documents (including bylaws) and recommended getting a specific type of full service law firm. One issue is that SEMPO was originally applied for as a 501© (3) organization but the reviewer changed it to a 501 © (6) during the approval process. The reviewer did not make the necessary changes to any of the paperwork such as bylaws, but sent them through nonetheless. This caused some initial confusion as to the actual status and identity of the corporation, and therefore required the necessity of a preliminary review.
A preliminary review is exactly that - preliminary. It is not conclusive. It identifies issues and potential issues and helps provide guidance and identifying the next steps. This was necessary and appropriate in order to choose and properly instruct legal counsel, who will take it from here.
I've recommended a full service law firm with extensive experience in the proper area of non-profit law for this reason. These types of firms are not common but my understanding is that they have located and contacted at least one high profile firm fitting these criteria in their legal jurisdiction and are in discussions with them.
A law firm that takes on a client that wishes a legal review must put their firms’ reputation (and insurance policy) on the line. Before a law firm takes on a client for anything other than simple issues, they typically have a board meeting themselves, which can take a while to set up internally. This is normal and expected. I have a fair amount of public company experience and the lawyers in almost every case had to have a board meeting, check all their records for possible conflicts of interest, and so forth. Additionally, many like to have retainer fees and other finance related issues resolved up front. This can all take time, particularly during the most popular month (August) to take vacations in North America.
I have recommended that SEMPO follow these steps. Each step builds upon the last in a logical and fully supported manner, and therefore should be done in this order:
1. Locate a law firm capable of dealing with not only current, but future issues with SEMPO. This law firm should be full service, with specific expertise in technology, marketing, corporate and non-profit areas.
2. Revise the By-Laws to fully reflect the goals and obligations of SEMPO. Have them approved by the lawyers.
3. Create policies and policy manuals to provide an authorized structure for future communications and actions. Have the most important and basic ones approved by the lawyers
4. Change official communication structures (to reflect the revised by-laws and legal advice, where warranted.
5. Hold any necessary elections or other official organizational actions (such as meetings, etc), according to set policy.
Taking legal steps to review the organization after a year of fast growth is standard for an organization like SEMPO. The practice of law does not lend itself to quick decisions and acting in a hasty manner at this point would simply do more harm than good.
Ian McAnerin, BASc, LLB
