Power conversion technology firm Princeton Power Systems Inc., in Princeton, and AppliCad, a contract manufacturer of electronic products in Farmingdale, have won funding of nearly $4.3 million from the Board of Public Utilities to expand their facilities that make renewable-energy or energy-efficient products.

A hospital in Neptune, a township in Mercer County and a home in Maywood are among the numerous entities taking advantage of the state’s incentives to spur energy-efficiency investments.

Michael Winka, director in the office of clean energy at the state’s Board of Public Utilities, said the incentives and the savings in energy bills are helping commercial enterprises, municipalities and homeowners defray their investments against the backdrop of an economic downturn.

Distribution plan to compensate those who purchased securities in select companies in 1990s.

CORRECTION APPENDED
In ironic twist, Hudson City Savings Bank didn’t receive funding though TARP.

N.J. needs businesses to lead energy-efficiency charge. The recent climate talks in Copenhagen and the current debate in Congress over legislation to reduce greenhouse gas emissions have placed a renewed focus on energy policy, particularly as it relates to its impact on the business community. Closer to home, we are implementing an energy master plan that serves, in the document’s own words, “as a roadmap to guide us toward a responsible energy future with adequate, reliable energy supplies that are both environmentally responsible and competitively priced.” The plan lays out a strategy for achieving some fairly aggressive goals for the year 2020, including 20 percent reductions in projected energy consumption and peak electric demand, and having 30 percent of our electricity produced by renewable resources such as solar, wind and biomass.

 

Looking at New Jersey’s energy profile, we see residential electric customers outnumbering business customers by more than a 6-to-1 ratio. But due to the heavy energy demands of many large commercial and industrial facilities, businesses consume nearly two-thirds of all the electricity used in the state. Given this fact, it becomes clear that the business community will have to take the lead in energy efficiency, peak demand reduction and renewable energy if we are to achieve the energy master plan’s goals.

 

There are some who might view my statement about “taking the lead” as another burden government is placing on the back of New Jersey’s business community. The fact of the matter, though, is that investments in energy efficiency and peak load reduction make good business sense for the energy user, and can be an engine of economic growth for our state. Our research has determined that every dollar invested in energy-efficiency measures by commercial and industrial customers yields $11 in energy savings over the life of that measure — a far better long-term investment return than most other options available today and significantly greater than the 4-to-1 return earned on energy-efficiency measures by residential customers. Additionally, energy-efficiency measures are a form of infrastructure investment that can help in an economic downturn by creating jobs, generating long-term savings and providing businesses with a competitive advantage once the economy turns around.

 

The question often arises as to whether it is better to use a carrot or stick approach in encouraging the type of behavior that will allow us to achieve our goals. I am a firm believer in carrots over sticks — which, in the case of energy efficiency, can be characterized as favoring financial incentives to reward those businesses whose behavior and investments help reduce their energy consumption and carbon footprint, versus the approach of using punitive rates and surcharges to discourage excessive consumption.

 

I fully recognize that if business is going to take a leadership role in achieving our energy goals, government has to provide it with the “carrots” necessary to encourage investments in clean energy. Toward that end, the New Jersey Clean Energy Program is shifting significantly more resources to commercial and industrial customers over the next several years and incorporating additional programs that address the needs of business customers from the smallest mom-and-pop store to the largest industrial facility. In 2009, we budgeted more than $100 million for energy-efficiency programs aimed at business customers — an amount projected to grow to $150 million by 2013. We also have substantially increased financial support for individual businesses, raising the ceiling this year to $500,000 annually per service (or $1 million if the business has both gas and electric service). New Jersey businesses will also benefit from an additional $300 million in utility-sponsored energy-efficiency programs, $260 million in federal stimulus funds for clean energy, $60 million in incentives for combined heat and power and $47 million for economic development programs funded through the Regional Greenhouse Gas Initiative’s carbon auction.

 

Many business leade

Asset sales no solution in budget balancing act

Rolling snake eyes, again, in Atlantic City

Seasoned lawyer builds firm with education and adaptation in mind For Princeton lawyer and CPA David Sorin, education and business always have gone together. He went to New York University, graduated at 19 and worked for three years at then-Big Eight CPA firm Peat Marwick (which later became KPMG LLP), then went on to Fordham University School of Law. His J.D. in hand, Sorin rose to become the office managing partner at Buchanan Ingersoll P.C. and then Hale & Dorr LLP (now WilmerHale LLP), before leaving law to become a university professor while establishing a business consulting firm.

 

But like a moth drawn to a flame, Sorin, 50, returned to the legal arena in November as a co-founder and co-managing partner of SorinRoyerCooper LLC, a law firm that focuses on emerging businesses, life science enterprises and other companies. Sorin’s latest venture reflects the lessons he picked up working for big firms.

 

Given the weak economy, some people might question his timing. After all, as more companies merge or simply go out of business, law firms are competing for a shrinking number of clients.

 

In 2008, giant law firms like Heller Ehrman LLP and Thelen LLP voted to dissolve. Then, in March, WolfBlock LLP, a Philadelphia law firm with offices in Roseland and Cherry Hill, bit the dust.

 

But Sorin said the economy isn’t the only issue to topple some law firms. Instead, he sees a fatal flaw in the traditional way law firms bill their clients.

 

“I left law because I believed that the law firm business model — with its high overhead and adherence to billable hours — was not working for the kind of high-tech, life sciences and other kinds of client companies I like to work with,” Sorin said. “I returned to the practice of law when I found business partners that were open to a more flexible way of doing business. In today’s economy, it’s even more important to work with clients to save money. For example, we’re open to alternative fee arrangements, including billing by the project instead of by the hour, and blended rate structures.”

 

When Sorin left Hale & Dorr, he billed out at about $800 an hour. But nearly three years later, SorinRoyerCooper’s highest rate is $395 per hour, he said.

 

“We’re also staying competitive by freezing our rates,” Sorin said. “We won’t raise them in 2010.”

 

Sorin’s plan places the firm squarely in the minority: On average, law firms plan to raise their billing rates by 3.2 percent in 2010, according to a survey released Dec. 1 by Altman Weil Inc., a Newtown Square, Pa.-based company that provides management consulting services to law firms. Only 8.5 percent plan no increase, while “less than 1 percent of all law firms surveyed plan to decrease rates in 2010,” according to the survey.

 

“Many firms incur big costs — that have to be covered by higher fees — by outfitting their offices with marble or other costly designs that may look impressive, but have no bearing on the quality of service that’s rendered to clients,” Sorin said. “We keep costs down with utilitarian offices that are located in the suburbs, which tend to offer lower rates compared to urban areas.”

 

Law firms that want to stay in business have to be willing to keep learning and adapting to changing circumstances, Sorin said.

 

“Lawyers have to be willing to be entrepreneurs,” he said. “They need to remember that change is always necessary, and there’s always room in the marketplace for an alternative way to structure a law firm that delivers quality and value.”

 

E-mail to mdaks@njbiz.com

Congress is expected to reinstate levy, and could make it retroactiveAt the end of 2009, the federal estate tax disappeared. But the levy’s sunset may not make things simpler or less expensive for business owners and other taxpayers who hope to pass their assets on to beneficiaries free of a tax that reached as high as 45 percent.

 

At the state level, New Jersey decoupled from the federal estate tax some years ago, so the situation is not likely to have a major impact on Garden State tax returns.

But in a twist, the federal levy without the estate tax may be higher than it would have been before the tax expired.

 

“Some of my clients passed away in 2009, but we were able to minimize their estate tax because of careful planning,” said Deirdre Wheatley-Liss, an estate lawyer and shareholder in the Parsippany law firm of Fein, Such, Kahn & Shepard P.C. “But now, it’s difficult to develop a plan because no one is certain about what’s going to happen to the estate tax.”

 

Thanks to a 2001 provision, the estate tax — which could be as high as 45 percent of the assets bequeathed to heirs — disappeared Dec. 31. Congress could reinstate it, perhaps retroactively, which makes Wheatley-Liss’s job even tougher. As things stand now, the estate tax is scheduled to be resurrected in 2011, with some exemptions and other changes from the 2009 version.

 

“You don’t want to completely revise a person’s will in light of the absence of the estate tax,” Wheatley-Liss said, “because it could still be resurrected by Congress.”

 

But taxpayers who ignore the issue altogether could be taking a big risk.

 

“One big concern is that many people have a will that allocates assets based on the federal taxable value of their estate,” said Michael LaMotta, partner in charge of tax services at the Livingston CPA firm Wiss & Co. LLP. Since the federal estate tax “is at least temporarily nonexistent, their assets could end up being distributed in a way they did not intend.”

 

It’s anyone’s guess whether Congress will reinstate the estate tax, since many observers never thought the Barack Obama administration would let it lapse in the first place. They were proved wrong when political wrangling kept Congress from acting before the deadline.

 

Even if the estate tax stays buried, taxpayers may not get a break, Wheatley-Liss said. One of her clients, the owner of a Morris County-based information technology company, died in mid-2009 with a $5 million estate, which was transferred to his widow in accordance with his will.

 

Under then-existing law, an unlimited marital exemption meant the transfer triggered no tax liability. And under the old rules, the widow got a step-up in basis, or ownership valuation, from the firm’s $500,000 historical, or book value, to the $5 million fair-market value at the date of her husband’s death.

 

So if she sells the company as planned, for $5 million, the widow won’t incur any federal capital gains tax, which maxes out at 32 percent, and is generally due on the difference between a person’s basis — or their acquisition cost — and the increase in value they realize upon selling or otherwise transferring it.

 

But with the end of the estate tax, the unlimited marital transfer expired, too. So if a person in similar circumstances dies in 2010, the surviving spouse would likely have to recognize $200,000 of capital gains if the business is sold for $5 million.

 

“It’s always a good idea to keep current with your estate tax planning,” Wheatley-Liss said. “At a time like this it’s even more important.”

 

E-mail to mdaks@njbiz.com

Firms may be pinched when they take on roles outside their fields of expertiseA court case with a lot of twists highlights the challenges that businesses can face when they try to expand by offering a broader range of services to their clients.
The husband-and-wife team of Sara and Warren Wilson are the founders of Snack Factory LLC, a Skillman-based pretzel-chip company. They are blaming a Philadelphia attorney and his law firm for their loss of a lucrative licensing deal from Pepperidge Farm Inc., a subsidiary of Camden-based Campbell Soup Co., according to the case making its way through Trenton’s federal district court.

 

“It’s not unusual for a professional services firm to want to do all it can for clients,” said Michael H. Karu, a co-managing member of the Livingston CPA firm Levine Jacobs & Co. LLC, who was not involved in the ongoing case. “Without passing judgment, I would just note that smaller firms are often very protective of their clients, but they still have to know their capabilities — and know when it’s time to tell a client that outside help is needed.”

 

A Big Four CPA firm would likely have specialists in just about every kind of area, he said, but a smaller firm may have to look for outside help to handle an unusual or very large assignment.

 

The Wilsons said they initially retained Bernard Eizen and his firm, Eizen Fineburg & McCarthy, to help with personal and estate tax planning.

 

But Eizen “leveraged his position of trust to become the family’s ‘one stop shop’ for all personal and corporate needs,” according to the complaint.

 

The lawyer and his team “knew, or should have known, that they lacked the high degree of skill, experience and proficiency in intellectual property licensing matters necessary to competently represent Snack Factory in these transactions,” according to court documents.

 

Eizen Fineburg doesn’t agree.

 

“We represented the Wilsons successfully for decades, including in connection with the prior successful sales of two of their businesses to Nabisco and J&J Snack Foods,” according to a statement issued by the law firm. “The allegations concocted in the complaint are baseless and grossly inaccurate, incomplete and misleading. ... We stand by all of the advice we and intellectual property counsel have given to the Wilsons.”

 

Concern over litigation like this likely is driving an increasing number of smaller professional services firms to either farm out complex matters to outside experts — while making full disclosure to clients — or to decline an engagement to begin with, Karu said.

 

“A large financial services client of ours asked us to do some valuation work that I knew was beyond our comfort level,” he said. “So I told the client I wanted to contact another firm that could handle it, and everyone was satisfied.”

 

Karu said he didn’t worry about losing the client “because we had good relations with the client and with the friendly competitor firm. It’s not a good idea to learn something new on your client’s dime. If you have to bring in someone else, at least you have some control over the situation.”

 

“When you overextend your capabilities, you can risk ruining the relationship with your client,” said Joseph J. Kowalski, president of Capitol Management Consulting Inc., in the Titusville section of Hopewell. “It’s better to be upfront with a client and help them find someone who can handle their needs.”

 

But not everyone agrees with that.

 

It’s OK to “step outside your comfort zone as long as you can find the people with the knowledge to get the job done,” said Bob Zelnick, president of Ashford Consulting Group and chief executive of The Alternative Board North Central New Jersey. “If it’s done right, there’s a lot to be said for saying ‘of course we can,’ and then getting the talent to do the job right.”

 

E-mail to mdaks@njbiz.com

Exclusive alliance hopes Web emphasis encourages industry interaction

Solar, renewable-energy projects may find homes upon landfills, other contaminated sites in N.J.

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