Utilities and Cooperatives

Utility Law

The firm’s Utility Law practice focuses on representing electric membership corporations.  Our firm has provided legal services for electric cooperatives since the creation of the Rural Electrification Administration in the 1930’s.  Our firm’s founder, Robert D. Tisinger, served for many years as General Counsel for both the national and state trade associations for electric cooperatives.  Richard G. Tisinger, Sr. continues to serve as General Counsel for the state trade association, Georgia EMC.  Steven T. Minor serves on the nine-member Board of Advisors of the Electric Cooperative Bar Association, a national association of attorneys representing electric cooperatives.

The firm advises electric membership corporations in connection with all aspects of daily operation, including the preparation and revision of corporate documents such as bylaws, service rules and regulations, policies and procedures, the negotiation and preparation of documents relating to commercial transactions, and the provisions of applicable legal and regulatory law such as the Georgia Electric Membership Corporation Enabling Act, the Georgia Territorial Electrical Service Act and the Georgia Public Service Commission regulations.

Recently the firm has represented electric membership corporations in the negotiation and drafting of documents relating to the procurement of wholesale power supply.

Representative Transactions:

  • Comprehensive review and revision of bylaws and policies of several electric membership corporations.
  • Represented electric membership corporations in member contest of director election results.
  • Counseled electric membership corporations in preparation and conduct of “hostile” member meetings.
  • Developed process and drafted bylaw amendments and procedures of member voting by mail-in ballot.
  • Represented electric membership corporations before the Public Service Commission in dockets involving deregulation of the electric utility industry and IOU docket for economic development incentive policy.
  • Represented electric membership corporations in negotiating long-term wholesale power supply contracts.
  • Developed extensive document retention policies and Red Flags identity theft prevention policies.
  • Acted as Moderator for the Public Hearings Held Pursuant to the Public Utility Regulatory Policies Act (“PURPA”) for Cobb EMC, Snapping Shoals EMC, Central Georgia EMC, Carroll EMC

Cooperative Law

We actively represent clients in all aspects of the formation and operation of taxable and tax-exempt cooperatives, including obtaining Internal Revenue Service Private Letter Rulings regarding the tax status of such organizations.

Richard G. Tisinger, Sr. and Steven T. Minor were featured in the January 2009 edition of the National Rural Electric Cooperative Association’s Legal Reporting Service.  The article gave insight on succession planning for electric cooperatives and its attorneys.  

Succession Planning for Lawyers: Insight from a Georgia Firm By Denise Davenport, Administrator, Electric Cooperative Bar Association

Lawyers, like most of us, spend their whole professional lives planning for retirement; saving, planning, and strategizing to make sure there is enough money to last. It is no surprise that, on average, the lifespan of an American is increasing, thanks to science, technology, and medicine. Statistics indicate that many of us will spend approximately 1/3 of our lifetime in retirement; far longer than most of our parents or grandparents. But lawyers who have devoted the majority of their career – if not their entire career – to a law firm should be thinking about more than personal investments in their retirement planning scheme. How many lawyers take into account “succession planning1 ”as part of their retirement plan? That is, considering how to transition clients to junior lawyers, establishing a timeframe leading up to retirement, and considering a compensation arrangement that is fair to the retirees, younger lawyers seeking upward mobility within the firm, and ensures the financial stability of the firm.

One expert estimates 35 percent of law firms have no such plan in place, leaving clients, lawyers, and the future of the firm uncertain. According to a recent survey of members of the Electric Cooperative Bar Association, 77 percent of its member-attorneys in law firms have five or fewer lawyers; a group that could be particularly vulnerable to a lack of planning.

Experts warn that waiting to implement a succession plan until a partner is ready to retire can result in chaos, as it can take three to five years to fully transition a retiring lawyer’s clients2

Richard (Dick) Tisinger, Sr. of Tisinger Vance, PC, a firm of 15 attorneys in Carrollton, Georgia, admits that he transitioned his clients to a young associate named Steve Minor, whom Dick recruited from the University of Georgia School of Law in 1992, over a period of about 15 years; considerably longer than the usual timeframe of three to five years. “Steve was with us probably five or six years before it occurred to anyone that he was suited to represent EMCs,” said Dick. So, there was no deliberate reason for taking 15 years, it just happened that way. “It wasn’t like we brought him in, sat him down, and told him he was going to represent the electric cooperatives.” Dick advises that partners observe young lawyers to see where their personalities and skills best fit into the practice. Sole practitioners and small partnerships beginning this process should not take more than three or four months to figure out if the new lawyer is going to work out.

“What’s your transition plan, Dick?” was a question from an electric cooperative client that both surprised and pleased Dick Tisinger. “Apparently, this particular general manager had attended an NRECA program on transition planning,” says Dick, who was a bit taken back by the question. “He had begun thinking about who was going to take over the cooperative when he retired and he wanted to know if I thought about who would handle the cooperative’s legal affairs when I retired.” The question also pleased Dick, he jokes, “Because I had an answer, ‘yes.’” General managers and boards of directors should feel comfortable asking this question.3 It is a legitimate question and one which ensures the general manager is exercising due diligence in managing the affairs of the cooperative.

Once thought to be only for larger firms, consultants and many bar associations, including the American Bar Association’s Law Practice Management Section4, have begun touting succession planning as part of their law practice management curriculum. Now, smaller and mid-size law firms are beginning to think about the eventuality of the firm as founding partners are on their way out the door.

Components of a Transition Plan

Transitioning Your Clients. Many experts agree that the most difficult part of succession planning is the emotional element5 of transitioning out of the practice – letting go is not easy for lawyers or clients with a long history. And, attorney/electric cooperative relationships tend to be just that. Dick inherited his cooperative clients from his father, Robert D. Tisinger, nearly 40 years ago.

With deep-rooted ties that span close to 80 years, how did a senior lawyer introduce and begin the transition process with a young lawyer? Dick advises senior lawyers to look for opportunities to put young lawyers in front of electric cooperative clients; not just the general managers and boards of directors, but the “gatekeepers” – those essential administrative staff who are your direct line to the top. Have the junior lawyer attend an annual meeting or occasionally “pinch hit” at a board of directors meeting. Have both lawyers sign documents, or assign certain projects to the junior lawyer and have him or her communicate with the cooperative. Give your clients the heads up that the younger lawyer will be filling in, letting them know you are available to answer any questions.

However, be aware of clients’ perceptions. “Job shadowing is effective if you’re looking to transition quickly, but the cooperative might wonder why they’re paying for two lawyers,” cautions Dick.

Recruiting new clients is an ideal opportunity to get a young lawyer involved from the start. Several goals can be accomplished by having both lawyers equally present and involved during those initial consults: 1) the client becomes comfortable more quickly with both lawyers; not just the senior lawyer, 2) the learning curve of the younger lawyer is greatly reduced, and 3) the senior lawyer can step out of the relationship with the client feeling more at ease that they will be properly represented.

Steve admits that when he was first introduced to Tisinger Vance’s electric cooperative clients, he felt a little out of place. “I guess some of the adages and terms these guys use come from farming days when they were growing up here in West Georgia,” Steve says of the way the cooperatives and Dick interact with each other. “I gotta get these down on paper before Dick leaves!” promises Steve. Dick laughs and admits, “There is a culture among EMCs that we don’t see with any other clients, and a lawyer needs to have certain qualities and characteristics to represent them,” Dick says regarding communication skills. “They [lawyers] need to be able to talk to GEDs, MBAs, and everyone in between.” Steve adds, “And, lawyers need to be able to distill it [legalese] down and present options to the cooperatives that allow them to make their own decisions.”

Steve agrees with Dick about the culture that exists within electric cooperatives. Perhaps it is due to the closeness of rural communities or the relationships between families and businesses that span generations. Whatever the reason, Steve quickly recognized this and felt it was important that he work closely with Dick. He believes very strongly that the relationship between the firm and those clients may have skipped a beat had it not been for the institutional knowledge – that history that spans generations – which Dick was able to share with Steve. Steve believes this helped him to better understand why things are done the way they are and to counsel electric cooperative clients in a more understanding way.

Retirement Timeline. It makes sense that the process of transitioning clients begin before senior lawyers reach retirement age. However, that does not necessarily mean that a retiring lawyer is no longer involved with the firm from the day of retirement. Rather, the firm and the retiree can decide how he can remain involved, if the desire is mutual. Perhaps the retiree will remain active in an of-counsel role or as a media contact, for example. An agreed upon retirement age also puts the younger lawyers on notice that there is opportunity for advancement within the firm.

Fiscal Responsibility. Some experts promote a compensation component to a succession plan that pays lawyers during their retirement, particularly for larger firms. Additionally, some larger law firms are committing to cover medical benefits for retired partners. Such a long-term commitment can have substantial financial consequences if a firm’s assets are not proportionately invested.

While smaller firms may not be in a position to offer such generous retirement packages to its retirees, a sole practitioner or small partnership still needs to decide how and if the firm will continue after the founding partner retires and then base their financial choices on those decisions. If your firm considers a compensation component of a succession plan, know that it can be complex and multifaceted, depending on the financial obligations of the firm, the firm’s corporate structure, and the firm’s retirement plan.

“The transition plan we have in place today looks very different from the one we started out with more than 20 years ago,” admits Dick. When it became apparent that the law firm would not survive under that initial transition plan, which looked more like a buyout agreement, the firm used a consultant to help develop the transition plan under which Dick will retire. Under a buyout agreement, the firm would lay out a large amount of cash to the retiree, which could jeopardize the liquidity of the firm. By contrast, under the current plan at Dick’s firm, a retiree sells his interest in the firm at book value at the agreed upon retirement age and agrees to steadily reduced compensation over a period of years.

There are as many ways to set up a succession plan as there are consultants that specialize in helping law firms establish them. Beginning a discussion, at the very least, with your partners and clients is the first step to developing a succession plan. If your firm has already developed a succession plan, it may be time to pull it off the shelf, dust it off, and give it a solid review in light of the current financial crisis.

Hopefully this editorial has prompted some thought – whether you are a co-op attorney considering retirement in five years or 20 years or an electric cooperative manager who wants to ensure continuity of qualified legal representation. If you have any questions or comments, please contact me at denise.davenport@nreca.coop