Businesses and Contracts and a Follow up to "Looking Outside the Sandbox"

Rush on Business's Writing the Better Contract from Anita Campbell- Part II lead me to How To Earn Undying Loyalty From Business Clients (Part II) - Guest Blogger - Anita Campbell. I agree with Rush emphasizing the points about what makes a good contract:

First and foremost, the better contract protects the client.

The better contract is written in plain English. (A novel concept indeed!)

The better contract is written for a 12th grade education or lower.

The better contract incorporates standardization.

I came to law school in time for the Plain English movement. Oddly, I find clients who think if it is covered with legalese the contract must be defective. There is another point where the Bar is ahead of the clients and we need to educate our clients.

How To Earn Undying Loyalty From Business Clients (Part II) - Guest Blogger - Anita Campbell also has some points related to my Looking Outside the Sandbox:

Now, all of this standardization may sound counter to earning a living. But I suggest just the opposite -- if you make it as easy and painless as possible for clients to deal with you, they will be eternally loyal. They will so enjoy interacting with you, that they will find a recurring need for your services. And they will value your services more, because they know you value THEIR time -- and their budget.

Contrast that with the lawyer who insists that every contract or document must be written from scratch; who makes legal mountains out of molehills – and makes everything so complex that the small business owner cannot even delegate to staff, but has to get personally involved each time.

What happens to that lawyer? Clients get frustrated. They avoid coming to the lawyer even when they know they should. Why? They know the process will not be efficient. They fear their business goals will be delayed. They start making lawyer jokes. That’s when they start going bare, without legal counsel. Or worse, they start pulling out old agreements or downloading contracts from places like www.DocStoc.com and playing attorney without the benefit of proper advice.

I view lawyers who do not standardize their documents as being ignorant of computers. I began standardizing legal documents in 1994. This allows me to charge flat fees in many cases, if not most, and I do not know how I could operate nowadays without having computerized my practice.

Clients have a similar problem by not allowing their lawyers the opportunity to standardize the clients' documents. If clients give me a supply of work that can be standardized, I give the client a different fee rate than for one-off jobs. The only time I am using an hourly rate for document preparation is when I am faced with a job unique in content and a client from which I cannot expect repeat work. With any sort of volume, it is more practical for the lawyer to standardize the documents and which makes the work economical for both lawyer and client.

NDA's

Start Up Lawyer Blog's What is important in a confidentiality agreement or non-disclosure agreement (NDA)? should be read by a business owner, employer or lawyer looking at a confidentiality agreement. Here are two examples.

Need for an agreement. Entering into an NDA increases the risk that the recipient may face charges of trade secret misappropriation if it develops similar information in the future or inadvertently discloses or uses the information. This is the primary reason that VCs will not enter into NDAs.

Mutual versus one-way. Some agreements only cover disclosure of confidential information by one party. Other agreements are mutual and cover disclosures by both parties. Generally speaking, mutual agreements are less likely to have provisions that are one-sided.

Be sure to read all of this post.

For those Indiana business wanting a NDA, feel to give me a call. I will also review NDA's for employees.

Interstate Trucking: New Regulations on Driver Qualifications

I know I am a day late on this but see the following post for why the posts here are a bit untimely. You can access the proposed regulations - with the deadline for making comments - at the following:

Qualification of Drivers; Exemption Renewals; Vision

Silence is not always golden

I am back from about 40 hours of misery. The doctor told me that it was some kind of allergic reaction. I told him I never used to have allergies. He say, these things happen when you get older. That got me thinking of atrophy and entropy - two subject that always get me depressed. I think the doctor has no idea why the room was spinning when it ought not have been but that has stopped. Everything has pretty much stopped except an aversion to food other than cottage cheese. No, we are not having fun in Anderson, but I hope that you are.

Online Resources: Open Source for Lawyers

Probably you have some idea of open source software, but whether you do or do not take a look at Open Source for Lawyers - Home. The site describes itself this way:

"If you are a lawyer or legal worker who is interested in implementing open source software in your practice, you have come to the right place."

Can we continue to compete as lawyers with the increased costs of software? I do not think so. I suggest taking a good look at this site, keep looking at it, and ask questions if you do not see the need or the cause of the fuss.

Looking Outside the Sandbox

Let me be frank that this post has little to do with law but a lot about lawyers, clients, how lawyers practice law and how I think clients perceive lawyers. After twenty years of practicing law in Indiana, having been computerized for the past 15 years, being connected to the Internet for the past 12 years and running this blog for the past year, I have some opinions and ideas.

First, I think that clients have certain misconceptions about lawyers. Most lawyers do not resemble the characters seen on television or in the movies. We follow our ethical rules and work for the best interests of our clients.

Second, I think that clients have misconceptions about how lawyers practice law. As a former partner once pointed out to me, we exist on the clients' post tax dollars. What does this mean? That too many clients buy on the sole criterion of price.

I say computers and then the Internet have disrupted the practice of law in ways many clients do not know and lots of attorneys do not like to admit. What I am writing about here applies not to us in Indiana but further afield in places like Scotland. The following comes from Dressed for Success published by Scotland's The Firm magazine:

“Our first purpose in creating Oracle was to achieve greater operational efficiency – by reducing overheads, for a start. This has been our greatest success. It was plain that previously we were all paying a lot for quite an extensive bureaucracy to answer phones, keep our diaries, issue invoices and collect fees for us. These are all straightforward functions and need not be expensive. We also believed that solicitors wanted to deal directly with Counsel. Rightly or wrongly, the existing arrangements were seen as cumbersome and inefficient for all involved.

“The stable system is really based on a world that has passed into history. Counsel cannot afford to be remote. Mobile phones, PDAs and e-mail have transformed our ability to communicate. Most solicitors now instruct us electronically. It is rare for us to deliver work in paper format. Electronic document control transforms turnaround times and makes diaries work for us, not the other way round. We believe our evolving business model to be both sustainable and efficient.”

We will not see more change until lawyers feel comfortable that they will not lose clients and income and clients must understand what they are getting from their lawyers.

With disruption does come opportunity and that is how I view JD Supra as a good reaction to the Internet.

Many years ago, I interviewed with a lawyer who had bought the local Indiana Bell building. Two lawyers and a secretary in a rather large building tastefully decorated for the purpose of impressing clients. He made a point of emphasizing the connection between putting on a good front that impressed clients and income. Over the years, I have come to agree with him even if I am annoyed at the idea that clients are so easily bamboozled. Being online has lead me to some strange encounters with potential clients - I am not sure if they think that being online means I am a charitable organization or not.

Take a look at Virtual Law Practice Blog. This blog complements the Kimbro Legal Services website. Which turns the idea of a large front on its head.

Business clients have the same problems. Bigger is not always better. Once upon a time there was a virtue to throwing bodies at a legal problem. Computers and the Internet changed all that. With a high-speed connection, I can get access to the news and case law just as quickly as a Big Firm without all the expense of those other bodies or the overhead of a large building for housign all those lawbooks. Take a look at Bigger Isn’t Always Better When It Comes to Outside Counsel from the ABA Section of Litigation. That article covers how business clients overlook smaller firms but also the marketing problems of lawyers.

Like James, Curley left a large firm to form his own office. He says that he and other solo and small firm practitioners have benefited from the increased use of technology. For example, many benefits that were traditionally available only at the larger firms “can be replicated through an artful use of technology in the hands of a competent solo. You don’t need the 100,000-volume law library that the big firms heavily invested in years ago. You don’t need the trappings of a class office space in a landmark building like people used to insist on years ago.” Also, with the availability of remote access, he says, clients have realized there is no need to pay for the overhead of a big firm.

What other ways are lawyers changing how they practice? Bay State Legal Services, LLC offers evening appointments. Note that they have a trademark on After-Hours Law. Which might be a little bit much but it does emphasize the seriousness of the firm. I know that many lawyers in this area offered the same kind of service for many years because of the client's have to work for a living. (One of my favorite comments about the Net is "what is old is new".)

Lawyers cannot meet clients' needs without knowing what clients think of the services they are getting from lawyers. Most clients have no idea what kind of service they are supposed to get from their lawyers. Clients have two metrics (if not only one): the lawyer's reputation for success and are the fees less than the competitors? Both are seriously flawed for judging legal services but especially looking for the lowest rate of fees. A potential client puzzled me when she asked me my hourly rate and then did not ask me to estimate the hours needed to complete the case. (I puzzled her by explaining my practice was largely flat fee). I suggest reading The State of the Legal Profession, Part 1 - Client Driven Innovation for a background on how businesses have been changing their relationships with law firms. This paragraph has given me a lot to think about:

In return, the outside firms are encouraged to advise Cisco on how to be a "better" client, in terms of communication, prioritization, and other matters aimed at increasing efficiencies related to the SLA. "Flexibility on both sides is required," Chandler said.

How do we advise our clients to be better clients? Lawyers, there is one great idea in there.

I think we need to educate our clients about what we do and how we do it. However, the clients need to help in this endeavor. I intended this blog as a way for me to expose the law and myself to the wider world. I am not sure but what I have failed in that endeavor and there are probably several good reasons for this failure. I will accept my shortcomings - a blog with a diffuse subject, posts too long, legalistic writing - if the potential clients will accept that they are looking for quick answers about something that does not provide quick answers. You, the non-lawyers, taking the time to read this must also start thinking outside of the sandbox.

Let me give an example of something related to my business practice, I have tried for years to promote a preventive law practice for my business clients without success. I do not understand why business owners are willing to pay a large fee to litigate case that might have been prevented with less in fees. If anyone cares to explain, I am quite eager to listen.

Which takes me back to The Firm's article:

At the time of the launch of Oracle Chambers Campbell and Carruthers were seen as mavericks, which in the often conservative legal profession is not always conducive to winning business. So, any regrets?

“Oracle Chambers was the best commercial idea we have ever had,” they say. “In just a year, we have seen our fee income grow significantly, and our administrative costs are now very, very low - it is the perfect economic equation. We think this is the future for Advocates, who above all must be fiercely independent, yet accessible. We are adaptable and responsive, easy to consult, and approachable. ”

I think both sides of the attorney/client relationship would benefit from changes in how we practice and with clients knowing more about what they are getting (or should get) from the profession.

New Business Blog and Some Comments on Business Partners

I think some will find RICHDAD interesting reading for business owners and investors even thought it is not a law blog. But as my long time readers know, I like to make mention of business blog that give practical advice and I think RICHDAD's Finding the Right Business Partner has some practical advice:

"Finding a great partner like Ken is similar to finding a great husband or wife -- you have to kiss a lot of frogs before you find the prince or princess of your dreams. I don't know of a magic formula other than to keep kissing."

Selecting a partner cautiously will save on legal fees. And like the post above, I am not using partner in its technical term but in the olloquail sense as having a business with another person or even two more. I do not know how to help potential business owners than with this advice.

Online Resources: The IT Law Wiki

Need to know more about the law and information technology? The IT Law Wiki describes itself this way:

This wiki is an encyclopedia of the legal issues, cases, statutes, events, people, organizations and publications that make up the global field of information technology law (often referred to as “computer law”).

What business, what lawyer could not use such an introduction/guide to computer law?

Indiana Limited Liability Companies and Fiduciary Duties

Reading Chancery Gives Victory to "Freedom of Contract" and Refuses to "Find" Fiduciary Duties in LLC Agreement When Not Clearly Stated from Delaware Corporate and Commericial Litigation Blog gave me a reason to tout Indiana as a place for forming a limited liability company. The Delaware Chancery Court decided that Delaware law imposes no fidicuiary duty other than what is specifiied in the LLC's operating agreement.

Importantly, the court found no provision in the LLC Agreement at issue that: "create[d] a code of conduct for all members; on the contrary, most of those sections expressly claim to limit or waive liability."

Here is the money quote:

"There is no basis in the language of the LLC Agreement for Segal's contention that all members were bound by a code of conduct, but, even if there were, this Court could not enforce such a code because there is no limit whatsoever to its applicability".

The "implied covenant of good faith and fair dealing" claim was carefully examined and dispatched with one of the more lucid and cogent treatments I can recall of this amorphous cause of action.

Finally, the breach of fiduciary duty claim was confronted by first reciting the provisions of the Delaware LLC Act at Section 18-1101(c) that allow for complete elimination of all fiduciary duties as part of an LLC Agreement. The court read the parties' LLC Agreement in this case to eliminate fiduciary duties because it flatly stated that:

"...members have no duties other than those expressly articulated in the Agreement. Because the Agreement does not expressly articulate fiduciary obligations, they are eliminated."

Indiana's Court of Appeals decided in Purcell v. Southern Hills Investments, LLC (pdf format) that an implied fiduciary duty existed for Indiana LLC's. The Court of Appeals relied upon Credentials Plus LLC v. Calderone, 230 F. Supp.2d 890 (N.D. Ind. 2002) (see Purcell at page 9 -10).

The Delaware blog finds no problem with this situation while I have serious qualms. My qualms fall into two categories. First, having been involved in cases where the mistreatment of an LLC's minority members amounted to a breach of fiduciary duty and with an implied fiduciary duty there was no protection for the minority. Secondly, I see too many people relying on do-it-yourself sites to create their operating agreements and those can lead them into the first category.

All of which means one thing for the non-lawyer: get a lawyer to draft or review your LLC agreement.

Trademarks and Larry Bird

News from The Indiana Daily Lawyer about a new trademark case out of Indiana. Larry Bird sues over use of name and I am hard put to think of another name in this state and especially in French Lick which lead to this kind of lawsuit.

"Bird filed the suit, Larry Bird v. Legend of French Lick LLC, No. 4:08-CV-0070-DFH-WGH, in the U.S. District Court, Southern District of Indiana, New Albany Division Monday against Georgianna Lincoln and Christopher Cooke, who purchased Bird's childhood home in French Lick from the Larry Joe Bird Revocable Living Trust.

The two marketed the property as a bed and breakfast, promoting the house as, 'Legend of French Lick, the Former Home of Larry Bird Resort.' The two also attempted to purchase memorabilia from Bird and wanted to use his name to identify the house; those requests were denied.

The lawsuit seeks to stop Lincoln and Cooke's unauthorized use of Bird's name in violation of federal trademark laws and state publicity laws. Bird has registered his name as a trademark with the U.S. Patent and Trademark Office, according to the suit. The suit also seeks damages for the improper use of his name and for the impoundment and turnover of certain properties the defendants used improperly."

I wish I had a bit more time to dig into this one. I am a bit surprised that the seller did not impose some limitations on the buyers that might have prevented this suit. Does it seem like such a stretch of the imagination to think the buyer of Larry Bird's childhood home would not try to use the home to make money based on that association? Or that the seller would react in this way? I think not.

Indiana Law on Breach of Fiduciary Duty

First, what is a fiduciary duty? Where one is in a position of trust to others then that person has a fiduciary duty to those others.

Second, when can one sue for a breach of fiduciary duty? When the person having the trust commits an act clearly in his own interest and against the interest of the corporation, a breach of fiduciary duty occurs.

More specifically, the law sets out three elements the plaintiff must prove for a successful breach of fiduciary duty case: (1) the defendant had a fiduciary duty to the plaintiff, (2) the defendant breached the duty, and (3) the breach of duty caused injury to the plaintiff.

See Hartung v. Architects Hartung/Odle/Burke, Inc., 157 Ind. App. 546, 552, 301 N.E.2d 240, 242 (1973). For a more accessible case involving the fiduciary duty of a shareholder and relying on Hartung, see Linden v. Coco (html format).

Premier Bankruptcy News

The Indianapolis Business Journal shows some problems with the Premier Chapter 11 Bankruptcy case. With Trustee to intervene in Premier bankruptcy, the story highlights some problems of many Chapter 11 case. Albeit, this case seems an extreme example:

"The U.S. Trustee's office plans to file a motion to intervene in a Chapter 11 bankruptcy case brought by Premier Properties USA Inc. because the development firm is insolvent."

***


Two court hearings last week made it increasingly clear that Premier is in no position to work its way out of bankruptcy: None of its employees have been paid for at least eight weeks, and the firm's operating account balance has fallen to $14.33.

U.S. Bankruptcy Court Judge Basil H. Lorch III said he will consider Trustee Mark Drummond's request to convert or dismiss the Chapter 11 filing at a hearing May 30. Drummond had not filed the request as of this morning.

Creditors familiar only with Chapter 7 bankruptcies would do well to consult with their lawyers when they receive notice of a Chapter 11 bankruptcy.

A New Idea to Aid in Caring for Aged Parents

I keep saying that everyone needs to think about advanced directives: a power of attorney, healthcare power of attorney, and a Living Will. I am now intrigued by an idea I found via You and Yours Blog's Family Contracts to Make Siblings Get Along for the Care of Aging Parents in the Dallas Morning News Caring for pops: Put it in writing:

"To manage that familial strife, Mr. Hofheinz has come up with what he calls a 'memorandum of understanding' between siblings. The contract spells out each adult child's responsibilities and holds that person accountable for them."

It is a good idea and one worth contemplating.

Speaking of Defamation - A Georgia Case and Indiana Law

I wrote a bit about Indiana defamation law in Business Defamation/Trade Secrets. Reading the following from Quick Takes -- April 15, 2008 from Workforce.com made me think I should repeat myself:

"You Can’t Say That: Slander allegations made by an ex-employee of Amerisave Mortgage Corp. will be heard in court after all, following a decision by the Supreme Court of Georgia that overturns a lower court’s ruling to dismiss the lawsuit. The case stems from allegations made by Stephen Scouten that Amerisave and its business associates allegedly “defamed him by disseminating false information” to employees that he was terminated for theft, according to court transcripts and published reports."

This certainly sounds like the defenses of May v. Frauhiger (WP format) and Dietz v. Finlay Fine Jewelry Corp. (html format) would not apply. Without knowing more , I would say the best defense would be on the issues of damages and malice. Remember the elements for defamation are a defamatory communication; made with malice; publication of the communication; and damages.

Online Resources: Estate Planning and Elder Law

Credit Wake Forest Law School's Elder Law Clinic with a compact collection of links to books, articles, and newsletters relating to estate planning and elder law.

No, it is not legal advice but legal information. Like this blog, it is a place to start your legal research and not its end.

Happy Mother's Day

I wish all of you a Happy Mother's Day.

Business Defamation/Trade Secrets

Someone asked me an interesting question about a customer contact/relationship database. With customer relations management (CRM) being touted as so important for businesses of all sorts, could there be action against a company for content of its CRM database?

While CRM might contain or be a trade secret of a company, any content from its clients ought not be trade secrets of any sort. (More on why only "ought not" in a moment).

Could the company be liable for defamation? Only if the information contained in the CRM database satisfies the following elements: a defamatory communication; made with malice; publication of the communication; and damages. See Schrader v. Eli Lilly & Co., 639 N.E.2d 258, 261 (Ind. 1994). A more recent cases having interest here are May v. Frauhiger (WP format) from 1999 and Dietz v. Finlay Fine Jewelry Corp. (html format) from 2001.

In general, if the company keeps information in its CRM database private there is no liability for the company even if the information is false.

I see a couple of interesting trade secret scenarios. First, if an employee leaks the content of a
CRM database does not seem likely to be a defamation case against the company but might give the company's clients a cause of action against the employee. My second scenario involves a client giving trade secrets to the company under a non-disclosure agreement and this information goes into the CRM database (or any other database) and that gets leaked to the world - there I see a free-for-all of litigation.

LLC Uniform laws

Not too often do I write about theory rather than practice, but reading A model for LLC laws (Thanks to Delaware Corporate and Commercial Litigation Blog for its Ribstein on LLCs that lead me to Professor Ribstein's article).

I do not know that our General Assembly has given any thought to revising our LLC statute. If there is any movement in Indiana towards changing the LLC statute, I say reading Professor's Ribstein's article should come first.

Funeral Home News: What is the FTC doing in Pittsburgh?

WTAE from Pittsburgh reports that the FTC followed up the television's investigation into the area's funeral homes compliance with the FTC Funeral Home Rule. Now the strangeness apparently starts:

But the FTC refuses to tell consumers exactly what the funeral homes did that was wrong.

***

But the FTC refused to make public the nature of the violations at Cooke Funeral Home. Details of the violations are whited out from the documents that Team 4 requested.

All this sounds very ominous until one gets down towards the end of the story:

The FTC took no action against Lanigan, but it did require the other four to enter the Funeral Rule Offenders Program, a three-year educational program operated not by the government but by the funeral home industry itself.

And that's the trade-off for offenders. They agree to enter the FROP program, and the public will never find out what they did wrong.

I have yet to deal with the FROP program - and hope never to do so. See, I agree with one of the other Pittsburgh funeral directors:

East Pittsburgh Funeral Director Pat Lanigan was also visited by undercover FTC agents, who later sent him a compliance letter claiming his business committed "very serious violations of the (funeral) rule." But the details of those violations were erased from the copy of the letter the FTC sent to Team 4.

"In my case, somebody could make up any story in any figment from their imagination about what I did wrong, and we didn't do anything wrong," said Lanigan. "Actually, it was just a misinterpretation by the FTC of our price list."

I think combining a higholy publicized story with a the anonymity of FROP creates a nasty situation implied by Mr. Lanigan.

Luckily, Indiana funeral directors have not had a sweep like this one in Pittsburgh. That does not mean we can assume none loom in the future. Do a good audit of your procedures and make sure that your people get trained thoroughly in the Funeral Home Rule.

Indiana Business News: State Funds for ESOPs

The Indianapolis Star reports on a new sate program which should encourage employee stock ownership programs here.

Indiana State Treasurer Richard Mourdock on Tuesday announced a $50 million program to help workers set up employee stock ownership programs.

***

Under the state plan, workers can get loans from participating banks to set up ESOPs. The state doesn't guarantee the loans, but encourages banks to participate by buying certificates of deposit at reduced interest rates. In turn, the banks provide loans at reduced rates to Indiana businesses that are setting up ESOP programs.

The initial rates that financial institutions will be charging Indiana businesses through the program will be 4.25 percent.

Employment Law: Federal FMLA Jury Instructions

The Indiana Daily Lawyer reports that the 7th Circuit Pattern Jury Instructions Committee is accepting public comments on jury instructions for Family Medical Leave Act cases. The IDL had the following contact information:

Comments should be e-mailed to U.S. District Court, Northern District of Indiana Chief Judge Robert L. Miller Jr. at Robert_Miller@innd.uscourts.gov with a subject line of "Pattern FMLA Instruction Comment" or mailed to the judge at U.S. District Court for the Northern District of Indiana, 204 S. Main St., South Bend, IN 46601. Comments will be accepted through June 30.

A copy of the FMLA draft for notice and comment is available on the Northern District's Web site.

Online Resource: Startup Company Lawyer

Startup Company Lawyer is a lawyer's blog out of California. Here is a description of the writer and the blog:

Yoichiro (”Yokum”) Taku is a corporate and securities partner in the Palo Alto, California office of Wilson Sonsini Goodrich & Rosati. My WSGR web bio is here.

WSGR represents:
• more than 20% of the companies receiving venture financing each year;
• more U.S. companies in their initial public offerings than any other law firm worldwide; and
• more technology companies in mergers and acquisitions than any other U.S. law firm.

I represent technology and growth companies at all stages of development, through private financings, strategic transactions, public offerings, and mergers and acquisitions. I also represent investors in venture capital financings. I also advise numerous entrepreneurs from initial company formation to liquidity event. At any time, I typically represent several startup companies seeking venture financing, private companies that have received financing, and publicly traded companies.

My reading of the blog impressed me with the writing about financing - which is not a subject I tend to write about here. It is my opinion that financing a new business is the biggest obstacle between a good business idea and a business.

From the News - A Trade Secrets Mess in Virginia

Google Alerts brought the headline Wife of Danville councilman to appeal trade-secret decision to my attention and it raises some very interesting points for such a short article.

The story raises points about trade secrets, fraudulent conveyances, collections, and litigation in general.

1. Collections. Woman loses a trade secrets case and plaintiff gets a nice sized judgment. Thing is unlike personal injury cases where insurance will pay the judgment, with a trade secrets case we have to look for assets to pay the judgment. Plaintiff in this Virginia case is doing just that.
   
2. Fraudulent conveyances. This where a defendant has an asset and transfers it away from a creditor. Fraudulent conveyance came to mind when reading this (and I bet it sounded loud and clear to plaintiff's attorneys):

   On March 17, Romar’s attorneys, Glenn Pulley and W. Huntington Byrnes, filed a motion asking for an accelerated hearing because Tomer and her husband, Danville City Councilman Adam Tomer, transferred ownership of their home to John C. Tomer on March 4.
   

   Their motion said, “The deed … purports to be both a deed of bargain and sale and a deed of gift. It is unknown at this time whether or not Adam J. Tomer and Robin G. Tomer actually received consideration for the transfer, but it is clear that the Grantors reported the sale price of $91,000.00 to the Clerk.”

3. Litigation Generally. A plaintiff may have a great case - liability clear to everyone - but if the defendant lacks assets there may be no way to pay the judgment. Then a great case becomes a pretty poor case. Civil cases bring to mind a line from a song: "Money, that's what I want." Do not expect a lawyer to take on a civil suit as a contingency fee case where collecting the judgment is unlikely.
4. Trade Secrets. Consider all the above, read the report from Virginia, and then read my other articles on trade secrets, and you should realize why I emphasize prevention as the best employment for a business' lawyer in a trade secrets case. Use the judgment from the Virgina case to decide if the cost of prevention is less than the risk of trade secrets exposed:

   An earlier court date was not granted, the motions were heard on April 7, and a Judgment Order was filed, ordering Robin Tomer to pay Romar $171,000.

Keep saying this: trade secrets can unmake my business.

From Pilotonline.com's FAI's founder lays blame for problems on executives:

Two years ago, George Christian said he had amassed enough wealth to leave his company in other executives' hands and spend his time traveling the world and playing poker.

***

Christian said he cannot afford to hire an attorney to respond to the Virginia attorney general's charges against him and his company. Representing himself, he filed a third-party complaint in Chesapeake Circuit Court against six former FAI managers and one of the companies that he claims they formed using FAI's assets and business model.

"The third-party defendants breached their duties of loyalty and good faith by, among other things, self-dealing and misappropriating trade secrets for the unlawful use in a competing business," Christian's filing reads.

If you have an Indiana business and want to protect your trade secrets, you can give me a call.

Starting a Business - Is the Idea a Good Business

4 Entrepeneur hits hard with Is Your Great Idea A Real Business?:

The first question you should ask: Do you have a compelling value proposition? This point is forever worth repeating: Great ideas are only great business ideas if you can convince people to pay for your product or service at a price above what it costs you to deliver it. Just because you think the world needs new canine cologne doesn’t mean anyone else agrees–or if they do, that they would be willing to pay enough to cover your electric bill.

You don’t need a 90-page business plan to convey a value proposition. In fact, you should be able to communicate it in a few sentences. If you can’t figure out why your product is great, your customers probably can’t, either.

I notice it has been a while since I posted a business oriented article but for those wanting to start a business need to take a look at this.

Employment Law for Businesses: FirstStep Recordkeeping, Reporting and Notices elaws

The federal Department of Labor put a big effort into publiczing its FirstStep Recordkeeping, Reporting and Notices elaws.

First, a press release (U.S. Department of Labor releases new “elaws” tool to help employers comply with recordkeeping, reporting and notice requirements) with the following:

The new FirstStep Recordkeeping, Reporting and Notices elaws Advisor has been integrated into a FirstStep suite of advisors that also includes the revised and expanded FirstStep Poster Advisor and FirstStep Employment Law Overview Advisor.

"These Internet tools will make it easier for small business employers to learn about and comply with the federal laws that apply to them," said Secretary of Labor Elaine L. Chao.

The elaws advisors are free, Web-based tools designed to help employers and workers understand the department's major employment laws. By asking a series of questions, the advisors simulate a conversation with a Department of Labor expert and guide users to customized information explaining the requirements of each law.

Then, the FirstStep Employment Law Advisor which has three parts:

This Advisor provides three basic starting points depending on your interests and needs:

• FirstStep - Employment Law Overview Advisor provides a short primer on each law's basic provisions as well as any related recordkeeping, reporting and notice requirements.
• FirstStep - Recordkeeping, Reporting, and Notices Advisor provides detailed explanations of each law's recordkeeping, reporting and notice requirements.
• FirstStep - Poster Advisor provides access to short descriptions of DOL poster requirements and links to printable posters.

The federal DOL also has the Compliance Assistance - News Room.

Indiana jurisdiction over out-of-state defendants

How do Indiana courts have jurisdiction over people and businesses not residing Indiana courts? After all, Indiana's civil jurisdiction ends at its borders.

Indiana's Trial Rule sets out how to get jurisdiction. Indiana Trial Rule 4.4 (Service upon persons in actions for acts done in this state or having an effect in this state) sets out the categories of actions by defendants which give Indiana court's jurisdiction over those defendants.
What neither the courts nor out-of-state businesses wants is to be brought into an Indiana court for an inadvertent incursion to Indiana. The law gives weight to the amount of contact an out-of-state defendant has with Indiana. Where defendant's the only contacts are by telephone
and without personal appearance in Indiana and it is the Indiana plaintiff initiating contact, Indiana law makes it very difficult to have jurisdiction over the out-of-state defendant. See Dura-Line Corp. v. Sloan, 487 N.E2d 469 (Ind. Ct App. 1986) and Baseball Card World, Inc. v. Pannette, 583 N.E.2d 753 (Ind. Ct App. 1991), trans. denied..

Indiana businesses need to be careful about dealing with out-of-state persons. Consulting with a lawyer about the problems of operating outside of Indiana is far cheaper than trying to collect a debt in another state.

Indiana Business Opportunity Transactions Act

For those buying or leasing goods from another to start a business, take a look at Indiana's Business Opportunity Transactions Act. The statute came to my attention when I found online a complaint filed by Indiana's Attorney General. The complaint is to be found here.

I have taken the liberty of quoting the most pertinent parts of the definition for "Business opportunity":

(1) involves the sale or lease or offer to sell or lease any goods or services to an investor that are to be used by the investor in beginning or operating a business;
(2) involves an initial payment by the investor of more than five hundred dollars ($500) and an initial cash payment of less than fifty thousand dollars ($50,000); and
(3) involves a solicitation of investors in which the seller represents that:

(A) the investor may or will earn an amount in excess of the initial payment as a result of the investment;
(B) a market exists for any goods to be made or services to be rendered by the investor;
(C) the seller may buy from the investor any goods to be made or services to be rendered by the investor;
(D) the seller or a person referred by the seller to the investor may or will sell, lease, or distribute the goods made or services rendered by the investor; or
(E) the seller may or will pay to the investor the difference between the initial payment and the investor's earnings from the investment.

Businesses can face felony charges, a civil suit, an action by the Attorney General or all of the above.

Online Resources for Law

Not endorsing - just informing.

Global Legal Iinformation Network:

The Global Legal Information Network (GLIN) is a public database of official texts of laws, regulations, judicial decisions, and other complementary legal sources contributed by governmental agencies and international organizations. These GLIN members contribute the full texts of their published documents to the database in their original languages. Each document is accompanied by a summary in English and, in many cases in additional languages, plus subject terms selected from the multilingual index to GLIN. All summaries are available to the public, and public access to full texts is also available for most jurisdictions.

The Public Library of Law:

Searching the Web is easy. Why should searching the law be any different? That's why Fastcase has created the Public Library of Law -- to make it easy to find the law online. PLoL is the largest free law library in the world, because we assemble law available for free scattered across many different sites -- all in one place. PLoL is the best starting place to find law on the Web.

Starting a Business? Why You Need a Lawyer!

I have written before about why having a lawyer from the beginning is a good thing for a business. Now Michigan Business Law Blog has done a very good job of putting all the reasons into a list of eight. Everything in Why You Should Contact a Lawyer Before Organizing Your New Business applies to Indiana businesses.

If you do not have an attorney and are wanting to start a business in Indiana, please feel free to contact me.

Forms, JD Supra, and What Do You Think?

Consider this post as an open invitation for comments. I encourage anyone to let the world (well, the very small slice of the world reading this blog) know what they think about posting forms to Net and JD Supra.

JD Supra is a recent and probably important Internet legal resource. That The New York Times published Lawyers Open Their File Cabinets for a Web Resource might show the site has drawn some important attention except that The Times filed the article under "Novelties".

The Times described the site like this:

It works like this: Lawyers who contribute to JD Supra dip into their hard drives for articles, court papers, legal briefs and other tidbits of their craft. They upload the documents, as well as a profile of themselves that is linked to each document. Site visitors who have a legal problem and are thinking about finding a lawyer can use an easily searchable database to look up, say, “trademark infringement,” find related documents and, if they like the author’s experience and approach, perhaps click on his or her profile.

Okay, that is the idea. Not probably as attractive to the DIY crowd as it will be to lawyers, but let me go on to Vancouver Law Librarian Blog's NY Times Covers Consumer Benefits of JD Supra.

Vancouver Law Librarian Blog puts forward a much more interesting question than did The New York Times (which is probably because The Times was not writing as a lawyer for lawyers to read):

Looking purely from a consumer's view, I see the benefits of sharing work product as:

• The ability to read these documents & become better informed;
• Increased reliability of documents where Lawyers take public ownership of them;
• Researching legal issues within a collection of vetted documents;
• Ability to identify a lawyer with rare experience (& not worth the lawyer's effort to market);
• Ability to identify expertise by geographic region or practice area;
  

When decisions & execution are *this* important, I can't see DIY legal work being an issue. The question then becomes, are Consumers better off with these documents available?

The bullet points make sense and I cannot disagree with them. I can see how we might better explain the law by exposing the public to our work product. That is, show the how the abstraction of a statute (or whatever source of law) becomes reality in the shape of a pleading.

I have made my opinions about doing your own legal work more explicit on my Indiana Divorce & Family Law Blog (which you can see here) than I have on this blog. Before running across JD Supra, I was always troubled by the fact that forms need to be put into the correct legal context. No one uses a hammer where a scalpel is the proper tool but I see that possibility whenever