Nationwide Service Provider Restructures Sales Force

When a long-term client decided it wanted more control over its corporate image and improved consistency within its multi-state sales force, LP Labor & Employment Group partner Laura Friedel worked closely with her client to direct the problem-solving conversation within its leadership and to implement the client’s solution. With a deep understanding of her client’s goals and challenges, she led it through extensive preparations to convert its sales force from independent-contractor status to full-time employees.

Over a six-month period, Friedel guided the client through the preparation necessary to undertake the conversion with reduced legal risk and a solid framework for future success.

Parameters

Primary Goals:
• Restructure sales force by converting independent contractors to employees in order to build a consistent national brand
• Improve institutional control and uniformity within organization
• Analyze risk for converting sales force
• Create incentives to retain sales personnel and enhance their sense of ownership
• Limit legal liability

Concerns and Issues:
• Retention of sales force following restructure
• Potential legal risks due to restructure
• Making sure that policies were in place to take full advantage of conversion
• Overall cost of project

What We Did

The project was a natural fit for Friedel, who works closely with her client and had frequently acted as a brainstorming partner and sounding board for its leadership team. At the initial stages, she helped them identify the benefits of the sales force conversion and analyze the legal risks involved. After the course was set, she guided the communication process to ensure a smooth transition for the independent contractors who would become employees, with the goal of retaining them for years to come.

Throughout the planning stage, Friedel continued to evaluate her client’s options and analyze the potential legal risks that come with structural business changes. Knowing there could be a risk that the conversion of the workers would suggest that they were previously misclassified, Friedel identified a government program for her client to take advantage of to reduce such risk. Today, Friedel continues to provide ongoing consultation regarding the converted workers as needed.