Solicitors From Hell?

I received the following email from an individual named Rick Kordowski today. He is the former proprietor of the lawyer-baiting website solicitorsfromhell.co.uk, the premise of which was to extort money from solicitors in return for not publishing tirades of questionable provenance. As far as I was aware, he had been put out of business and the “phoenix” business that has arisen has, according to its home page at www.solicitorsfromhell.net been created to fulfill his “legacy”. However, as you’ll see from this email that Mr Kordowski does still appear to be very much involved.

(By the way, I believe that English is Mr Kordowski’s first language, despite indications to the contrary.)

Hey there at satan’s business,

This is the current editor of the online portal called SolicitorsFromHell.net .

This site principally caters for the disenfranchised legal consumer; in other words, those members of the public who are convinced the official route has not served or will not serve their needs or the justice of their grievance. There are times when the establishment’s complaints handler gets it wrong – for whatever reason: occasionally there are cover-ups with the retort “insufficient evidence” being used to protect the wrongdoer.
We are contacting you with a formal and “needs to be sent heads up” regarding a soon to be published article.

In the last few days we have been in contact with a former client of your law firm. He claims, and in our opinion, it clearly shows that you lack the respect and dedication you claim to show all your clients.

The communication he sent is attached to this message. You can see exactly what we will publish; we did, however, covered all private data, i.e. contact details and transaction details.

As we do not operate as a usual daily newspaper your point of view regarding these accusations is not mandatory.

The article will be showed on our website starting with tomorrow morning.

Rick Kordowski
SolicitorsFromHell.net , former SolicitorsFromHell.co.uk

Well, obviously I couldn’t let an opportunity like this pass unexploited. I dispatched the following email in reply:

Dear Mr Kordowski

Thank you for your email. Unfortunately, the attachment containing the promised information was full of gobbledy-gook. I suspect that this is because you assume that as a solicitor, I must be a Microsoft user. I am not.

I see that you allege we claim to show “respect and dedication” to all of our clients. I must record that I don’t ever recall writing such meaningless rubbish, that being the sort of dribble that conventional commercial law firms use in their boardroom brochures. We are not a conventional commercial law firm and never will be.

I should also mention that you refer to “a former client” of my firm. We have no former clients. All of our clients, whether we are currently engaged on their behalf or not, remain precious and valued. I know that the professional conduct rules diluted the rules on conflicts of interest a few years ago to refer to “current clients” but I don’t hold with that. As far as I’m concerned, every business that becomes a client of *particular remains a client for life.

I find it hard to believe that in a practice as small as ours, we could have had, in the three years since our founding, a client so disgruntled as to wish to record his or her dissatisfaction on your site, though I suppose it’s always possible. I write this with some confidence, however, given that most of our work is done in the commercial creative and tech sectors and, I mean no offence by this, I can’t imagine any of them would wish to be associated with your site. This kind of activity would hardly endear them to their investors and customers.

In addition, we like to think we offer market-leading levels of transparency. All of our clients have access to all documentation relating to their files at all times, even after they have been closed. This includes invoices, time sheets, correspondence, documents and everything else. This also includes a complaints policy, which they find in the Records section of the file at opening, and a document that spells out our mission, values and behaviours, to which we ask them to hold us to account.

You can see, therefore, that discouraging you from publishing the dissatisfaction of an irritated client would be totally against the grain for us. Indeed, it would entirely undermine our values. I am sure that you will have taken the trouble to conduct reasonable enquiries to satisfy yourself that the information you intend to publish is accurate and that the facts contained therein are true and not misleading. That being the case, please do proceed. We have, as a firm, yet to receive anything close to a complaint from our clients since we opened our virtual doors but I have, during my long and varied career, always tried to receive every grumble, whether justified or (in my opinion) not, as an opportunity to impress upon those concerned my commitment to client service. I’m sorry that the client concerned didn’t feel that the views s/he has shared with you couldn’t be disclosed to me directly – or maybe they were hinted at but I was too obtuse or focussed upon what I was doing to notice.

So, though it pains me as an atheist to write this, please do “publish and be damned” as the saying goes. I guess that given the name of your website, you will have no shortage of company. I look forward to reading the article tomorrow.

Kind regards and thanks for your interest in our firm,

Matthew Rippon

PS. I see that you remain very much involved with the ‘Solicitors From Hell’ movement but on the homepage of the website, much store is placed upon the new domain as being a part of your “legacy”. You are referred to in the past tense. I wonder whether that has something to do with the various court proceedings to which you were subjected?

Matthew James Rippon
Director
Particular C&L Limited

Sadly, my email appears to have bounced so I have resent it this time to the info@solicitorsfromhell.net address I found on the “Contact Us” page of the website. I can’t wait to see what appears tomorrow. I guess that if nothing else, at least that means somebody considers as serious enough contendors to warrant this kind of attack. If only he knew just how tightly Mrs Mc grips the purse-strings…

*** UPDATE ***
09:45, Tuesday 13 February 2014

Just checked the “latest entries” page on the solicitorsfromhell.net website and was disappointed to find that we are not yet listed. What is the world coming to when you can’t rely on a character like Rick Kordowski to follow through on his declared intention to publish this kind of material? Well, he did say he wasn’t a newspaper. Maybe he’s not an early riser either.

ECJ in Hyperlink Shock Ruling

You’ll all be pleased to know that the European Court of Justice (we’re not allowed to call it the ECJ any more – it’s the Court of Justice and it is an arm of the European Union) has declared that hyperlinks are legal after all and not a potential infringement of the copyright in the material that is the target of the link.

OK, perhaps that’s not a massive surprise, but years and years ago (when some of our clients were still in short trousers, metaphorically speaking), most thought that the practice of “framing” – that’s where the link produces the targeted page apparently within the site providing the link – had been outlawed. The ECJ – oops, the Court of Justice (which happens to be in Europe) – has said that as long as the targeted content wasn’t restricted in some way (in which case, the link would be an unlawful circumvention), it doesn’t matter how the content is presented.

So you can link to publicly available material on another site, present the desired text within your own site (stripped of extraneous branding, advertising, etc) and it seems that you won’t be infringing the copyright owner’s right to control how that content is communicated to the public (because they have already communicated it to the public).  Another hammer blow to the newspaper industry, it would seem – or at least that part of it that relies upon advertising revenue from publicly available content.

Of course, if you find a way to link to content that is restricted in some way (I guess this would usually mean password-protected), then it would be an infringement because the content would NOT have been communicated to the public already.

And if you stick beans in your ears, you’ll probably damage your hearing…

For those with a head for European-ese, the short-ish judgment is available here:
http://curia.europa.eu/juris/document/document.jsf?text=&docid=147847&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=106551

… and you can link to it to your heart’s content.

The Price of One Man’s Freedom

IMG_0332

Whatever happened to ‘innocent until proven guilty’?

This morning, one man in the north of England will wake up to find himself free.  Two years ago, he was accused by two women of various sexual offences against them.  He was charged and, although it was their word against his, the wheels of justice ground remorselessly forward towards a trial that started on Monday of this week.

Once charged, his name was published.  He faced verbal and physical abuse.  He was hounded out of his home and from his home town.  The women, on the other hand, as victims, properly benefited from anonymity.  It is hard enough to persuade victims of this type of crime to come forward.  If their names were to be made public, that in itself would be too high a hurdle for many of them.

In our legal system, the Prosecution puts its case first.  It is possible, though rare, in the English courts for a Judge to decide at the end of the Prosecution’s case that there is no case for the Defendant to answer.  In that situation, rather than asking the jury to consider its verdict, the Judge will not trouble the Defence but instead the Defendant will be acquitted immediately.  Usually, this happens when the Prosecution’s case is technically flawed in some way.  When it’s a she-said/he-said case like this one, a Judge will let the jury weigh up who’s telling the truth – that’, after all, is what they are there for.  They are the arbiters of truth.

Almost always.

Yesterday, the Judge accepted the argument made by Counsel for the Defence that there was no case to answer.  Why?  Because under cross-examination, the two women were revealed to be conniving liars.  Indeed, so bad was their evidence that they ended up fighting with each other via the witness box.

So the accused was freed.  He was reported as being “distraught” – a strange adjective to use for a man who has, for the last two years, been falsely labelled as a sexual predator facing a long prison term and a lifetime on the sexual offenders register.  But of course, you can’t throw this much excrement at somebody and expect him to walk away without some kind of lingering stench.  He may never be able to return to his home town.  Were you to google his name, you would doubtless come across reports of the charges made against him and perhaps you may never see reports of his acquittal.

For the rest of his life, this sorry case will hang over this man, affecting his reputation, his confidence and his psychological health.

The Defendant’s barrister (for our American friends, his trial attorney), when asked whether the alleged victims would face perjury charges, replied simply “that almost never happens”.  And yet their anonymity is judicially preserved.  To report their names would be a contempt of court and could see the reporter and his or her publishers imprisoned.

Who knows why they did this?  Perhaps it was out of spite, revenge for some perceived wrong they had suffered.  Perhaps he was the village weirdo, an outsider who was asking for trouble.  Perhaps they were just bored and looking for something to spice up their dull and fruitless lives.  Perhaps, just perhaps, there was some tiny kernel of truth to it all, some way in which the lives of the three did intertwine, but which did not result in the commission of a criminal offence.

I am not saying that it is wrong to preserve the anonymity of complainants in cases like this, both before and after the case.  I am not even saying that in this case, withholding the identity of the Defendant would have prevented the unnecessary level of distress and lingering damage that has been caused to him.  What I am saying is that it is time that something was done.  Some combination of measures perhaps involving anonymity for the Defendant may help.  But maybe there should also be a readiness to re-examine, in the context of the acquittal, the basis for the evidence given by the complainants upon which the case was based.

The acquittal of a Defendant does not necessarily mean that he has been found to be innocent.  To be convicted, a jury must conclude that it is beyond reasonable doubt that the Defendant is guilty.  These days, English Judges tell their juries that they must be sufficiently certain so that they are sure.  So, the fact that a Defendant is acquitted does not mean that those tabling the accusations are necessarily lying.  But there comes a point.  There must be consequences for those willing to destroy the lives of innocent people by misusing the criminal justice system for their own ends.

The victims of this type of crime are the powerless and the meek.  It is incumbent upon all of us to give them as much support as we can to bring their abusers, the perpetrators of these horrible crimes, to justice.  But very, very occasionally, the true victim is not the person you might have expected it to have been at the outset.

I am not an expert in this.  I am a lawyer but I have no knowledge of or experience in criminal law.  But I can see when the system has become unfairly balanced against individuals supposedly innocent until proven guilty.

This post was first published on Medium.

Knuckle Down, Fit In.

About 13 years ago, I had my first appraisal at what was then my new firm: Prettys in Ipswich.  Colourful shirts, floppy hair and a passion for doing things differently, I think it’s fair to say that I was already rubbing my supervising partner up the wrong way.

“You need to knuckle down”, he said.  “You have to fit in.”  I still have the notes I made at the appraisal, which was something of a character assassination.  Those notes contain just four words:

KNUCKLE DOWN

FIT IN

And for a long time I had them pinned to the wall above my desk, as a badge of pride.

I have never “fitted in” to any law firm that I have worked at.  Which is probably why within a year of meeting the right person to partner up with, I had set up my own practice.  We work hard, we love what we do.  But we will never knuckle down.  We will never fit in.

As a result, we will never again get that magical unexpected call from the huge client of which every lawyer dreams.  (It did happen to me once, when I was at Watson Burton, and I ended up handling all the grey trading litigation for Canon UK.)  But that’s OK.  Because what I’ve realised is that even as a lawyer, it’s OK not to fit in, not to knuckle down.  There are enough people out there who like the way we do things that differentiating ourselves on this basis is a good thing.  A great thing.

Two things happened today that made me decide it was time to write this post.  One, we had some wonderful recommendations (one from a client, one about our iTunes podcast, and finally one being a podcast listener coming to our defence when somebody suggested that my post about it wasn’t suitable for a Facebook group about start-ups in London).  All this in the space of an hour and a half.

And two, I read this post by Seth Godin.  Of course, Seth is all about differentiation.  And you’d know that already if you had read Purple Cow.  But what I love about this very short post is that it summarises in just a few words not only why it’s important to be different, but why the reason for that difference is important.  You’ll see when you read it.  And don’t say you haven’t got time.  It’s less than half the length of this one…

Do You Find Lawyers Frustrating? You’re Not Alone.

I just read an interesting assessment of forthcoming changes in European trade mark law.  Rather enthusiastically, it was called “Trademarks: a Hot New Issue“.  I imagine only an IP lawyer could describe changes to trade mark legislation as “hot”, but it was worth a read.

The piece, published on the website of the Law Society Gazette last week, focussed on the proposal to cut the fees for Community Trade Mark applications.  OHIM, the body responsible for administering the system, has been making a sizeable profit despite having  cut its fees substantially a few years ago.  The European Commission, it seems, is not happy about this.

It is generally agreed that Community Trade Mark application fees are too high.  One of the reasons for this is that the basic price for an application gives you the right to cite goods and services in three classes.  If you want to know more about how the classification system works, see my explanation here.  I’m guessing from Mr Goldsmith’s piece above referenced that there are a number of European countries in which this is the standard practice – not being a trade mark attorney this is not something that I have ever needed to know.  However, in the UK it has only ever (so far as I’m aware) been necessary to pay for your application in one class.

The result of this is that although it costs a base price of €900 to file an application for a Community Trade Mark (otherwise referred to as a “CTM”), in the UK it costs just £170.  (By the way, there’s no VAT on either.)  On the other hand, for your €900, you get not just an extra two classes of goods or services in your specification, but you get trade mark protection across the whole of the European Union, which I believe now extends to 30 countries, following the accession of Croatia, and about 300 million people.

This creates a number of problems.  First, the CTM application is unnecessarily complicated and expensive for SMEs who wish to file applications in just one or two classes (which is most of my clients).  Secondly, it makes the comparison between a UK and a CTM application difficult to explain to a client who is open to the latter but a little short of funds (again, most of my clients).  Third, those clients that do opt for a CTM but who are only really interested in one or two classes feel the need to cite all the three that they have been forced to pay for, filling the surplus classes with an unwanted clutter of goods and services that really they have little intention of using.

Excessive specification clutter (yes, that’s the phrase they use) then causes a problem for businesses who bother to check the trade mark registers before selecting a new brand.  If you’ve never heard of a trade mark or its proprietor and the mark itself is yet to be used in public, how do you know that really the owner intends to apply it only to clothing in class 25 and not for industrial oils and greases in class 4 or non-metallic building materials in class 19?

As you can see, this debate, whilst superficially dull, is actually quite relevant to brand owners and would-be brand owners around the world.  Especially those, like you, who are on a restricted budget.

So why is this an example of the frustration that lawyers create?

If you scroll to the bottom of Mr Goldsmith’s well-written article, you will see that he asks for comments from his colleagues.  However, of the four comments posted, only one partially contributes to the debate.  The other three and a half comment upon or castigate the author for his apparent use of the American spelling “trademark” as opposed to the English version “trade mark”. (In truth, I suspect that the spelling was changed in the sub-editing process.)

One of those comments includes the line:

“If we can’t get these things right, what hope is there for the clients?”

Really?

All around us, the profession is crumbling.  We face hitherto unknown financial pressures and competitive threats.  Lawyers have never been less valued by their clients or more disrespected by the public at large.  But of course what prospective clients are really interested in is whether we can spell the word “trade marks”.

If you’ve ever thought the lawyer you regretted consulting sat in an ivory tower unable actually to give you any useful advice, here’s your proof.  Were I not an aetheist, I think I would be seeking divine intervention by now…

A Stolen Bike and Why You Might Need a Lawyer Some Day

Daniel and Keith Lovejoy, picture courtesy and copyright of The Northern Echo

Courtesy of and (c) The Northern Echo

Seventeen year-old Daniel Lovejoy worked through his summer holidays and at the end, he spent £110.00 on an offroad bike.  Sadly for Daniel (but perhaps happily for those living near where he used to ride it) his bike was stolen when thieves broke into his father’s garage.  The next day, the bike was discovered nearby, having been dumped by the thieves.  Hurrah!

If only it was that simple.

The Police wouldn’t allow Daniel and his father Keith to retrieve the bike.  Instead, they recovered the bike and sent it for forensic examination.  Five weeks later, the justice system having apparently exhausted itself in this particular instance, Daniel was informed by letter that he could retrieve the bike if he paid £150.  And that if he failed to do so, the charge would rise by £10 a day for every additional day that it was stored beyond the two weeks he was given to retrieve it.

It’s funny how long it takes ordinary people to realise that so-called civil servants such as the police, health workers and educationalists etc aren’t actually there to look after us.  They aren’t, of course.  They are there to serve the objectives of the Government.  In my case it happened when, on reporting a break-in, I was told by a police officer that they wouldn’t be sending anybody round to have a look at the scene of the crime because there really wasn’t any chance of catching the culprits.  I was disillusioned.  Unsurprisingly in this case, Keith Lovejoy was furious.  He has written to his local councillor and to his MP but fears by now the bike may have been disposed of.

I’m not sure I ought to tell him this for fear that he might explode, but Daniel’s troubles may not be over.  Daniel may be charged an additional £50 for the disposal of the bike that was stolen from him.  And if that weren’t bad enough, since it’s unlikely that the police would recover at the auction of the bike anything like the storage charges that have been levied, the balance could be recovered from Daniel as a debt.

The case hit the local press this week and in a statement responding to Keith’s complaints, a spokesman for the local police force said that the collective hands of Durham Constabulary were tied.  It is a national scheme and the fees are set by the Government under the Removal and Disposal of Vehicles Regulations.

Actually, it’s The Removal, Storage and Disposal of Vehicles (Prescribed Sums and Charges etc.) Regulations 1989.  These regulations apply the fees applicable where the police or a local authority recover a vehicle under The Removal and Disposal of Vehicles Regulations 1986, which is itself brought about by section 99 onwards of The Road Traffic Act 1984.

But, you guessed it, it’s not that simple.

You see under regulation 4 of The Removal and Disposal of Vehicles Regs 1984, vehicles can be removed by the Police:

“where a vehicle… has been permitted to remain at rest on a road or on any land in the open air in such a position or in such condition or in such circumstances as to appear to a constable to have been abandoned without lawful authority.”

Which is interesting, because the concept of “abandonment” is a legal thing and it relates to the rightful owner of something effectively surrendering his title to that thing.  But wait… Daniel hadn’t abandoned his bike.  It had been stolen from him.  Therefore, he hadn’t abandoned it.  Which means the charges imposed by the Contract Vehicle Recovery Scheme don’t apply.

Now consider this.  The failure of which ever grey sector quango or contractor holding Dan’s bike to return it to him when demanded amounts to wrongful interference with goods – what we used to call “conversion”.  This is a “tort” – a civil wrong that could be the subject of action in the County Court.  Dan would be entitled to damages for the failure of the Police or whoever else may have control of his bike to return it to him upon demand.  He would doubtless also obtain a court order requiring the bike’s immediate release and, if the bike has been “disposed of”, he would get damages to the value of the bike.

This is the sort of thing that legal aid lawyers deal with all the time.  And it’s why you should think twice about supporting the Government’s proposals to scrap criminal legal aid and introduce price competitive tendering just because you think you would never be in a position where you’d need a lawyer to protect you and yours.

Join the campaign against PCT and the abolition of legal aid.  And give Dan his bike back.

 

Read more about this story in the pages of the very excellent Northern Echo

“Tell Me Straight Doc, Have I Caught Open Source?”

I have had no less than 3 different enquiries about the relationship between the GPL and proprietary software in the past fortnight, so I thought it about time I had another look at this. It’s an area that I used to be a bit of an expert years ago but haven’t looked at it in probably 7 years.  And that was before v3 of the GPL was even published.

The GNU FAQs are the obvious place to start but they are a bit dry and they focus mostly on the use and distribution of open source software rather than how you night use it within a proprietary software business model. Which is probably what you’d expect.  But it is the last word on the subject and it’s bang up to date, so if this is an issue, you should have a look here first.  And also have a look at the GPL (or the LGPL as appropriate), because after all, they were originally written by programmers, not lawyers, so you should find them less legalesy and more understandable than most American legal documents.

There’s a better explanation that is more on point at a resource called Sitepoint but bear in mind that (1) it’s written by an American lawyer and is based on US law (which is directly relevant on the issue of “derivative works”) and (2) it was written in 2001, which was long before v3 of the GPL was published.

Here’s my reading of it.  If you are linking to GPL modules but they don’t form an integral part of your programme, that’s fine.  You’re free to use the output of those modules to your hearts content.  So if you are building an app that sits on top of a GPL’ed platform like Moodle, then your app can connect to that platform and draw data from it via a plug-in, but as long as the plug-in is a discrete programme in its own right, even if you distribute it alongside your programme, you are free to use a proprietary licence for your software – only the plug-in would have to be subject to the GPL.  However, if you are using libraries that form part of a GPL package and those libraries then form an integral part of your software, your software will have to be released under the GPL – if you choose to release it.  However, many open source libraries are licensed under the Lesser GPL to get around precisely this difficulty, so check what the position is.

The other point to consider is are you actually releasing the software?  If you are merely charging people to use services on a SaaS model but you don’t actually distribute the software, you are not actually releasing the software at all so relax, all will be well.

Apologies for the presumption of some basic knowledge of this stuff – I would have written a more detailed introduction for the beginner but (1) I’m in the midst of a to-do list as long as your arm and (2) somehow I doubt there are many beginners out there that feel the need!

The Copyright Registration Fallacy

And whilst we’re on the subject of myths, here’s another one. I’ve just been told by a new games studio client that they’ve registered their copyright with the UK Copyright Registration Service. Anybody that’s been along to one of my IP presentations will have seen the rookie mistake already.

YOU CAN’T REGISTER COPYRIGHT.  

Not at all.  Not anywhere in Europe.  “Registering” copyright proves nothing in the UK other than that the particular expression supposedly registered was actually in existence at a particular time.  And even then, only if the court accepts that the copyright registration service you use is infallible in its administrative procedures.  It may have an official sounding name, but the UK Copyright Registration Service is NOT part of the UK Intellectual Property Office.

If you want to protect your copyright by starting enforcement action against somebody you believe to be infringing your work, your registration will do no more than show that you purportedly created a version of the work concerned by a particular date.  But it doesn’t show that you own the copyright in that work.  It doesn’t show that there even IS copyright in that work.

The only time I can conceive of a copyright registration service being of real use is if you have created your work independently and ‘registered’ before the publication of somebody else’s work, and that other person is now threatening you with infringement action.  Then, the copyright service may help show that you had created your work independently and independent creation is a complete defence.  But of course, that still requires the court to accept that the registration is administratively accurate.  The registration is not conclusive evidence of anything.

I don’t know how much it costs to register your copyright, but whatever it costs, think very carefully about whether there is any better way of spending that money.  It’s not that this is a con like those grubby sods that try to trick you with their false invoicing scams when you file a trade mark application, but it’s just not what you might think it is.

And don’t even get me started on the difficulty of pursuing copyright infringement in a software scenario these days…

 

 

6 Myths That Lawyers Tell Start-Ups (and 1 that others tell start-ups about lawyers)

I am on a mission.  Not a mission from God but a mission to persuade anybody starting a business that getting a lawyer involved early can prove really useful. I know that it sounds counter-intuitive. Bear with me…

If you follow the advice of Jon Bradford, you’ll blag whatever free advice you can from whichever lawyer might be prepared to spare you a few minutes. If you listen to Seth Godin, you will muddle through without lawyers at all until you have had a chance to build a convincing business model.

Who, then, am I to argue with these start-up heroes? I am a lawyer, dammit.

You see, conventionally, lawyers ARE bad for start-ups. Go and see a lawyer and you will expect to walk away with a long list of jobs you will need that lawyer to do for you and an hourly rate upon which those jobs will be done. The sufficiently risk averse amongst you will want to make sure everything is absolutely tickety-boo and you will waste thousands on unnecessary legal fees, money your business probably can’t afford and can be better spent elsewhere. The more naturally entrepreneurial will either NOT see a lawyer at all, or decide that everything that your lawyer says is surplus to requirements.

But if we can dispose of some common myths that lawyers that are NOT accustomed to dealing with start-ups will try to reinforce, you will see that there are very real benefits to speaking with somebody that knows what they are talking about because they have demonstrable experience in working with start-ups. Because what you need right now is ADVICE, not a shopping list.

In what follows, I have included some links to some of our content.  Other providers are available.  You may not like the cut of our jib, but please do try to seek out another service that is backed by real live lawyers (we don’t much care for the business model, but Rocket Lawyer is an alternative, for example), not a machine that churns out obscure documentation.

Myth 1 – You Need to Create a Company Right Now

Whooah, hold on there soldier. It is part of the human condition to desire a nice job title, and “Managing Director” is right up there, but remember that this is just vanity talking. Absolutely, it’s always a good idea to trade through a company. You will never hear us say anything else. But are you ready for that yet?

The first thing to bear in mind is that incorporating right away costs money. Not a lot of money, but some. Then you need to bear in mind the legal responsibilities you will have. Running a company is a lot like raising a child. Except that a company is much less likely to throw up its breakfast over your freshly-pressed shirt. Have you agreed between yourselves exactly how the company should be owned? What about where somebody is working full time with somebody else to join later? And what about if somebody leaves? These are considerations for your Shareholders’ Agreement.

Myth 2 – You Need a Shareholders’ Agreement Right Now

So you are ready to incorporate or maybe you have already. How do we regulate the relationships between those that own the company? We do it by using a shareholders’ agreement, which you might sometimes see referred to (especially by me) as an SHA. Getting that apostrophe in the right place is always a nuisance.

In any start-up involving 3 or more people, I always expect that within 2 years, no matter how successful the business, one of the founders will be wanting to leave their full-time role to go do something else. This is particularly true amongst businesses run by 20-somethings, who get offered great jobs, want to go travelling, want to move out of the region, pay a mortgage, etc. So having an SHA is a good idea if only for that purpose, and there are stacks more besides. But do you need one now?

If you have started a business that will need equity finance in order to scale effectively, your early doors SHA ain’t likely to be worth so much as a hill of beans once the investor’s lawyers get involved. It’s nice to demonstrate that you take these things seriously, but from that point forward, the investment agreement will be where the action is at.

If you are a husband and wife team or a team of siblings, then, to be honest, your expensive SHA is likely to be much less relevant should you fall out. You will probably have much bigger problems to overcome. And in the husband and wife example, the divorce settlement would override the SHA terms anyway.

If you do have to have an SHA, can you make do with something simple. If you give your conventional corporate lawyer a chance, s/he will want to throw everything in there from deadlock provisions that you may not need to the choice of furnishings for a company boardroom you will never have. Oh OK, so I exaggerate, but the point is that a basic SHA can be done for hundreds. Let your lawyer off the leash and it is going to cost you thousands. Think about when it will be that you will have something of worth going into the company (whether that is resources or revenue) that requires this most expensive of corporate safeguards.  Then think about what you need to agree with your co-founders.  You’ll thank me.

Myth 3 – You Need Director’s Service Contracts and Employment Contracts Right Now

Let’s address this one bit at a time. If you are employing someone who is just going to be an employee and not, for example, a co-founder, they are entitled to have some written terms of employment. But they don’t need to have a full scale 19 page employment contract. Basic employment terms are readily available on the web for just a few pennies. We have a template on www.particular.pro in fact.

Co-founders don’t have to have a written contract of employment. If you are going to have a shareholders’ agreement then it would make sense to have director’s service contracts as well since there is considerable overlap between the roles you play. Also, if you are looking for equity investment or you think you may be required to defend your IP, you should have contracts that confirm that the company is the owner of any IP generated by the directors.

Even if you do need director’s service contracts at the outset, don’t be fooled into thinking that you need something bespoke. To begin with, all the co-founders should have the same template, so that will save you a bit. Second, you need a draft that covers the core issues. You don’t need something that runs on for dozens of pages. If you want to know a bit more about this, have a look at Deb’s videos “Why You Need to Know About Employment Law” and “Guide to Employment Contracts“.

Myth 4 – You Need Commercial Terms Right Now

Are you already selling? If so, how does that selling take place? If you are running a clothes shop and all your sales are to folk coming in buying t-shirts or whatever, then you’re probably not going to need terms of sale at all.

If you are building something and working towards a launch in 3 or 4 months maybe, then that’s when you need some terms. Not now. And if you are building something new and you really don’t know whether it’s going to work at the outset or whether the business model might not be right initially – and especially if you are bootstrapping – do you really need bespoke terms straightaway? Your first customers will be the innovators and early adopters on the product acceptance curve. These guys like something new. They’re usually not so bothered about the terms of registration/sale. As long as you’ve covered the basics (which you could do by adopting something like our standard service terms as Bloo.ie did, for example) you should be fine for the time being.

When your revenue graph starts bending upwards, you do need to think about investing in some decent terms, preferably something written in plain English or at least what we call “softened legalese”. But the problem with writing your terms too early is that terms of sale or registration or whatever are heavily dependent on your business model. Every time you pivot, you need to review or even replace your terms and that will cost more money.

Oh, and one last thing. I have had a couple of occasions recently when, a client with funding has been asked by a start-up contractor to produce a supply agreement. You can usually translate such a request as “can you have some terms written for us as you’ve got funding and we don’t.” To which, of course, the answer is a firm “no”. The sub-contractor should have their own terms (it would worry me that they don’t). You review them and suggest alterations that will be drafted up by their lawyer as special conditions for your consideration. Job’s a good ‘un.

Myth 5 – You Need Me to Write You a Privacy Policy Right Now

The exception at the early stage is a privacy policy, especially if you are in the tech sector. Your innovators and early adopters are likely to be MORE likely, not less, to want to check on how you are dealing with their personal data. So if your business model relies upon the use of the data provided or generated by your customers and clients, you need to describe this carefully in your privacy policy. This is, after all, a notice, not a legal document. You should describe how you use the personal data of those with whom you engage. If you do that, you won’t go too far wrong.

For everybody else with any kind of web presence, a basic privacy policy (such as our core template) should be fine. And if you are doing anything with data relating to children or you a handling what’s called “sensitive personal data” – which is about things like ethnicity, health-related issues, etc – you do really need to investigate what’s involved. If you want to speak to a lawyer, make sure you find one with provable experience in data protection (there are a few of us around) because, without exception, EVERY commercial or corporate lawyer will tell you they can help with this.

However, if you can’t find a specialist to speak to for half an hour who can give you a nudge in the right direction (for example, at our #CafeClinic) try the Information Commissioner’s Office website. They have a helpline and they’re super helpful.

Myth 6 – You Need to Protect Your Intellectual Property Portfolio Right Now

So this is probably the most controversial of the myths, but here it is. You don’t need to PROTECT your intellectual property at the start-up stage. What you DO have to do is to ESTABLISH whether what you are doing will infringe anybody else’s rights and IDENTIFY your intellectual property and what it will take to protect it. Then, you have to make a decision on whether the cost of that protection is warranted at this stage.

So, for example, you may have come up with a distinctive brand for your product that is still 6 months from launch. You think your main markets will be Europe and North America and perhaps the Pacific Rim, if things go really well. Do you need to start filing trade mark applications now? Well, even if you do it yourself, a Community Trade Mark application is going to cost you a €900 filing fee. That’s like buying a spare MacBook Air. Not many bootstrapped start-ups have that much cash lying around uncommitted.

So what are your options? Wait until closer to your launch and file your application then. After all, you may come up with an even better identity by then. And if you don’t, what’s the worst that can happen? Somebody else gets in there first and registers the same name or something similar and you have to rethink. If you are really committed to the identity in question, this might not be a risk you feel you can afford to run. If you are not, but you still feel a registration is important, then it might be.

Let’s look at the other major IP right that has start-ups jumping: patents. There are two risks to delaying the filing of your patent application. First, there may just be another team working in some part of the world on solving the same problem as you and they may have come up with the same solution. The first to file their application wins and it really is winner takes all. If you are second, you get nothing, nil, zero, zilch, diddly-squat.

The second problem is that if you run the risk that your invention becomes public knowledge (it is “anticipated”) or that something happens that means your invention is no longer sufficiently inventive (it has become “obvious”). If either of these things happen, your invention will no longer be patentable, or if you still manage to get a patent, it could be revoked.

There is not much we can do about the second limb of this second risk other than to say that you should, in any event, have checked that what you are building won’t infringe the rights of anybody else. In doing that, you should get a pretty good view as to how fast things are moving in your field. But as far as the first limb is concerned, whether your concept becomes public knowledge is very much down to you. You can keep it confidential until you are ready to file by using non-disclosure agreements with suppliers and partners. You might be able to test market by disclosing WHAT your product does without disclosing HOW it does it.

Now look at it the other way around. Is there any danger associated with filing your patent application too early? Yes there is. If you file a patent application and then find that some tweaks to your invention make it much more effective and much more valuable, you may find that you are unable to protect those improvements because once your own application is published, those tweaks have become obvious. Your eagerness to obtain protection will have been your own undoing.

Myth 7 – Speaking to a Lawyer Will Cost You a Lot of Money

And so, to conclude, the biggest myth of them all, but one that, unlike the first 6, is not perpetrated by lawyers but by those consultants and advisers that will love to share their opinion with you: Lawyers cost you money.

Well, of course, lawyers DO cost you money. But legal fees need not be a waste of your resources provided you use your lawyer effectively. If you need help from a lawyer, it is because you are doing stuff and it’s doing stuff that causes you to rub up against the sort of things you need a lawyer’s help with.

Any lawyer that is experienced in dealing with start-ups, especially start-ups in the tech sector, is likely to be able to give you a pretty clear plan of how you need to proceed within the time it takes to drink a big mug of the frothy stuff at a leisurely pace, especially if you are prepared to pay for his or her coffee yourself (always a good sign for potential clients that, I find). Make sure that the lawyer you are going to talk to DOES have that experience though. Ask around, check his or her LinkedIn profile for recommendations and examples. Don’t be suckered into thinking that for a lawyer, working with a start-up is like working with any other kind of commercial client because it isn’t.  But if all you do is ask them, they’ll SAY they do, whether they do or not.

You do need guidance and, yes, a plan at this stage. But your plan should not be written in stone. Your business will evolve over the coming months and you and your plans need to adapt to account for its evolution. Ultimately what you need most of all from your lawyer is a relationship, not a shopping list.

“What do you think of ACTA?”

At a seminar I was presenting at Northumbria University on Tuesday, I was asked by a Masters student what I thought of ACTA.  “Hmmm…”, I replied.  “That would depend on what ACTA is”.  It turns out that this is something that has been big news in the EU recently but not widely picked up on here, but just happened to pop up in an update last night from our chum Jeremy at www.ipkat.com.

“ACTA” stands for the Anti-Counterfeiting Trade Agreement, an international agreement that, the general view seems to be, permit rightsholders to censure free speech on the internet.  “Not so”, says EU Commissioner Karel De Gucht.  “But just to be sure, we’re going to let the ECJ have a chance to review it first before we start putting it into action”.  Well, he didn’t quite say that, but that was his sentiment.  You can read his actual words here:  but we should warn you, it’s not for the lighthearted.

As for ACTA itself, make up your own mind by examining the text of the draft agreement, although 52 pages later, you might find yourself reflecting on the Commissioner’s view that this agreement doesn’t actually change anything in European IP law.  You have to ask yourself, if, in fact, it doesn’t change anything, why create it in the first place?

I haven’t read it – yet – but sooner or later I will and I’ll give you a view, if you’re still interested…