“BEST PRACTICES IN LLC FORMATIONS” (Post #3) – “Best” Practices vs. “Sound” Practices
As I mentioned in my first post in this blog on the subject of best practices in forming LLCs (published on January 16, 2012), it seems to me that authors of LLC formbooks and practice manuals worth their salt ought not merely to propose to their readers the practices these authors favor for use in forming LLCs or even to recommend these practices for this use. Rather, they should provide their readers with what they believe to reflect LLC formation best practices; and they should explain to their readers why they believe them to be best practices.
The reason, obviously, is that this is what, if they reflect on the matter, readers clearly want. Obviously, if you ask these readers whether, in forming LLCs for their clients, they want do so as well as they reasonably can–i.e., at a high level of competence–their answer (even if they have not previously focused expressly on the question) will be a resounding yes. But this means that what they want from such a book is not merely recommended or even clearly sound practices. Rather; they want best practices.
But validly classifying specific LLC formation practices specifically as best practices is no easy task. This is because, in almost all cases, the best LLC lawyers and law firms—i.e., the ones most likely to be using the best LLC formation practices—cloak these practices (and all of their other legal practices) in secrecy. In my experience, they almost never disclose them in any detail in law journal articles, in practice manuals, in CLE outlines or in any other source.
So what can be done by a person such as myself–a person intent on writing the best possible LLC formbooks and practice manuals—to overcome this cloak of law firm secrecy?
Above all:
- We can scour the legal literature in the hope that the best law firms or the most skillful LLC formation lawyers have disclosed their secrets in these sources (even though we know in advance they probably haven’t done so);
- We can test our own considered ideas about best practices by seeking evaluation of them by other LLC lawyers we believe are forming LLCs for their clients with a high degree of competence; and
- We can test our ideas in blogs like this one and elsewhere on the Internet and in other public media–e.g., bar seminars–in the hope of receiving useful feedback from the community of LLC formation lawyers.
Indeed, if we want to write good books about LLC formation practice, we must do all these things.
The reason, obviously, is that this is what readers want. Clearly, if you ask these readers whether, in forming LLCs for their clients, they want do so as well as they reasonably can–i.e., at a high level of competence–their answer (even if they have not previously focused expressly on the yes) will be a resounding yes. But this means that what they want from such a book is not merely recommended or even clearly sound practices. Rather; they want best practices.
But validly classifying specific LLC formation practices specifically as best practices is no easy task. This is because, in almost all cases, the best LLC lawyers and law firms—i.e., the ones most likely to be using the best LLC formation practices—cloak these practices (and all of their other legal practices) in secrecy. In my experience, they almost never disclose them in any detail in law journal articles, in practice manuals, in CLE outlines or in any other source.
So what can be done by a person such as myself–a person intent on writing the best possible LLC formbooks and practice manuals—to overcome this cloak of law firm secrecy?
Above all:
- We can scour the legal literature in the hope that the best law firms or the most skillful LLC formation lawyers have disclosed their secrets in these sources (even though we know in advance they probably haven’t done so);
- We can test our ideas about best practices by seeking their review by other LLC lawyers we believe are forming LLCs for their clients with a high degree of competence; and
- We can publish these ideas in books and in blogs like this one in the hope of receiving useful feedback from the community of LLC formation lawyers.
Indeed, if we want to write good books, we must do these things.
The reason, obviously, is that this is what readers want. Clearly, if you ask these readers whether, in forming LLCs for their clients, they want do so as well as they reasonably can–i.e., at a high level of competence–their answer (even if they have not previously focused expressly on the yes) will be a resounding yes. But this means that what they want from such a book is not merely recommended or even clearly sound practices. Rather; they want best practices.
But validly classifying specific LLC formation practices specifically as best practices is no easy task. This is because, in almost all cases, the best LLC lawyers and law firms—i.e., the ones most likely to be using the best LLC formation practices—cloak these practices (and all of their other legal practices) in secrecy. In my experience, they almost never disclose them in any detail in law journal articles, in practice manuals, in CLE outlines or in any other source.
So what can be done by a person such as myself–a person intent on writing the best possible LLC formbooks and practice manuals—to overcome this cloak of law firm secrecy?
Above all:
- We can scour the legal literature in the hope that the best law firms or the most skillful LLC formation lawyers have disclosed their secrets in these sources (even though we know in advance they probably haven’t done so);
- We can test our ideas about best practices by seeking their review by other LLC lawyers we believe are forming LLCs for their clients with a high degree of competence; and
- We can publish these ideas in books and in blogs like this one in the hope of receiving useful feedback from the community of LLC formation lawyers.
Indeed, if we want to write good books, we must do these things.


