Making It Legal:

The small business mentor's guide to entrepreneurship and law

By Nina Kaufman

Archive for August, 2007

Privacy Policy Dangers
Thursday, August 30th, 2007

For anyone with a website, here’s an instructive post from my namesake, California attorney Nina Yablok on privacy policies.  She raises the excellent point that you need to be careful what you promise in your privacy policies.  As long as you’re in control of the website, you may want to promise that you won’t share the information with anyone.  Ever. 

But that policy could come back to haunt you, should you want to sell your company . . . and the mailing list as one of its assets.There are a couple of ways to work around that.  You could carve out a specific exception on your website (“won’t disclose except if the company is sold�).  Or, if you run into a situation where disclosure might come up, you could contact each and every one of your subscribers, inform them of the situation, and ask for their consent to disclose the information.  It’s tedious, but at least you are respecting their privacy. 

The Green Entrepreneur’s Toolbox
Tuesday, August 28th, 2007

For any number of reasons, “going green� is gaining steam.  And whether your idea of going green strictly pertains to the environment, or reflects a social consciousness that you want your company to espouse, there are ways to make it happen. 

For ideas on how other women entrepreneurs have created a business structure around “done well by doing good,� have a look at my WomenandBiz.com article, “Green, Global, or Just Plain Good: Cause Marketing and Socially Conscious Companies.� 

And if you’re definitely focused on “going green,� check out Bootstrapper’s “The Green Entrepreneur’s Toolbox,� with 100 networking resources, guides, and links!

New Hiring Law Spurs Identity Theft Fears
Thursday, August 23rd, 2007

States across the country are trying to deal with the problem of illegal immigration.  According to a recent report by the National Council of State Legislatures, “as of July 2, 2007, no fewer than 1404 pieces of legislation related to immigrants and immigration had been introduced among the 50 state legislatures.�

A number of states, like Arizona, have turned to sanctioning employers who are caught hiring illegal immigrants.  Leaving aside the policy implications of whether businesses should play the role of immigration police (the Small Business and Entrepreneurship Council is definitely opposed to that approach), there is a practical problem with these new laws.  They have the real potential to catch innocent employers who relied on what seemed to be valid identification documents . . . even if those documents were fakes.  And authorities are concerned that the laws could spur an increase in the identity theft of authentic numbers.

Employers already have a federal obligation to ensure that every employee fills out Form I-9 and provides proof of identity.  The Bush administration has announced new rules subjecting employers to prosecution if they don’t fire workers whose names and Social Security numbers don’t match.  But, as reported by Daniel Gonzalez in the Arizona Republic, 

“the database [with that information] can’t flag documents made with stolen identities, where the names and numbers match. As a result, a proliferation of fraudulent IDs, combined with identity theft, could undercut the employer-sanctions law.â€? 

All the more reason that you should take extra steps to verify the identity of potential hires, including checking references, cross-referencing identities against state databases (when available), and asking for multiple forms of identification.  Consult your attorney to develop a hiring procedure that both protects your company and ensures you won’t have to reinvent the wheel with each new employee you want to bring on.

A New (and Free!) Resource for Online Entrepreneurs
Tuesday, August 21st, 2007

Last week, the American Bar Association launched a new online resource to help individuals and small business owners with questions about setting up, launching and operating an online store or other e-commerce venture.  As reported in Computerworld.com, among the sections covered at SafeSelling.org are obtaining a domain name, selling out of state and how to verify who your customers are.

SafeSelling.org is a helpful resource, but not one that can answer every question.  For example, the site talks about the kinds of terms and conditions that should be included on your website (“warranties, delivery terms, and return policies, in addition to any legally-required terms, based on the nature of the transaction�).  But it doesn’t provide you with the legal language to communicate those terms clearly.

So by all means, visit the site.  Learn a little.  It will provide you with a good overview.  Once you’ve done so, be sure to visit your attorney, who can help you craft the language that will protect you!

Beware DIY Legal Sites!
Friday, August 17th, 2007

Do-it-yourself legal sites drive me crazy.  I came across a DIY legal site called Negonation this week – yeah, OK, it’s in Brazil, but the principle is the same.  It touts a “get-your-contract-off-this-site-and-avoid-legal-feesâ€? service.  It claims that “its contracts are legally enforceable in the offline world, even if the parties are in different countries.â€?  That’s quite a bold claim.

Online sites don’t necessarily empower the lawyer in all of us.  What they do is delude many people into thinking that they have an “inner lawyer�.  Not everyone does, and that’s okay.  I don’t have an “inner doctor� –- if I have a medical need (even a regular check-up), I get help.  I don’t have an “inner accountant� – I make sure that I have one on call who can provide guidance as to how I should handle my financial statements and taxes.  I am who I am:  anal, cautious, and detail-oriented (among other things).  That makes me perfectly suited to being a lawyer.  I am not cut out for many other professions, and that suits me just fine.  I’ll leave those areas of specialty to the experts.

What’s dangerous about these sites is the false sense of security that entrepreneurs get from taking legal agreements from the Internet, without having the background or training to fairly evaluate whether what’s in the agreement is in their best interests, or whether there are other things that should be in the agreement that aren’t.  There’s no one affiliated with the sites who will give you the legal advice about your specific situation –- they’re just selling you a product (the agreement).  Take it or leave it.  They don’t take your own needs into account when creating the agreement –- it’s an off-the-shelf product. 

It would be like walking into Bloomingdales and buying a suit without looking at the size.  You know you need a one, but if it doesn’t fit properly, you could end up spending more for alterations than you paid for the suit.  Getting the right legal protections in place for your company isn’t just a matter of one-size-fits-all merchandise. 

Lawyers provide a hybrid:  product and service.  And it’s the service you receive that ensures that the product truly meets your needs.  For more guidance, see my article “What You Should Know Before Copying Contracts from the Internet.� 

7 Tips for Finding a Good CPA
Wednesday, August 15th, 2007

Mani Malarvannan gives some helpful tips in finding a good CPA in his aptly-titled article, “7 Tips for Finding a Good CPA,� in the Small Business Informer.  He also points out the importance of preparing for the interviews with these CPAs by having a list of questions you might want to ask.  He alludes to a few of them in his article, which I think are very insightful, for example, “what kinds of strategies or tips have you given to your clients to help them save money?� 

Personally, I think the suggestion that “you show the CPA your company’s past accounting statements and ask to comment and provide advice for the same� is probably not something that a CPA would prefer to do off the cuff in an initial interview, and/or without getting paid.  Usually, the purpose of an initial interview is to determine if you and the CPA feel comfortable with the skill sets, chemistry, and fee structure.  Going into an analysis of prior financial statements takes more time and depth.

For more questions to ask during an initial interview, listen in to my free postcast on Choosing and Using Attorneys at my Wise Counsel Press site.  Many fo the questions are perfectly suited for screening other professionals (like CPAs) whom you’ll want to have on youor business team!

Is the Legal Meter Ever NOT On?
Tuesday, August 14th, 2007

“The meter is always running,� is a perennial complaint of small business owners when dealing with their attorneys.  And yet, if our attorneys aren’t properly informed about what we’re doing, they can’t give us the appropriate advice.  The latest plaint I’ve heard is:

My lawyer charges me so much money whenever I call him. I try to refrain from calling him but sometimes its important to give him updates. I pay all my bills to him. Are there lawyers that exist that don’t charge you like this for phone time? I feel taken advantage of… 

As business clients, there are a few things to keep in mind. 

  1. This is a business relationship.  Your attorney sells his or her expertise, often measured in terms of the time spent.  Would you expect to regularly give of your own expertise without compensation?  Would that be fair to you? 
  2. As I mentioned in my post, “Why Can’t My Attorney Be My Friend? � think carefully about why you are calling the attorney.  Are you looking for advice, or do you want to vent ad get general business advice?  If the latter, there may be more appropriate professionals whose time is not as costly. 
  3. Many things can be negotiated with an attorney.  I don’t know what hourly rate you are paying, but you could ask for a reduced rate (or no charge) for things like listening to voice mail messages – particularly if the attorney is going to call you back any way to find out more about the situation.  Or, if the purpose of your call is just a status update (and not an in-depth exploration of your attorney’s expertise), a reduced rate might be appropriate.
  4. If this particular attorney’s fees are breaking your bank, find another attorney whose fee structure fits better within your budget.  After all, you wouldn’t lease a Rolls Royce if you could only afford a Kia.  There’s no shame in making the price part of the reason you are choosing to work with someone.
Do You Need Insurance for Your Home Business?
Monday, August 13th, 2007

You betcha you do!  Home business, office business – doesn’t matter.  If you’re in business, you should have it.  Like the old American Express tagline, “Don’t leave home without it,� I caution entrepreneurs not to go into business without it.  Particularly as many of them prefer to operate as sole proprietorships, in which case their personal assets are at risk in the event of any problem or calamity.

And make sure to read the article, “Do You Need Insurance for Your Home Business?� by George Devendorf on the Professional Insurance Blog.  It provides the very apt example of an eBay entrepreneur . . . and you’d not be alone in thinking, “Everything’s online!  What would someone like that need insurance for?�  Read on to find out why.

Copyrightable Content from My Blog Has Just Been Ripped Off!
Thursday, August 9th, 2007

This is becoming a burgeoning issue – and I’ve just found myself on the victim’s side of it!!

Thanks to the way WomenEntrepreneur.com set up my blog, I’m able to see some of the comments and trackbacks to follow where my blog content is ending up in cyberspace. I followed one trackback link to another site . . . only to find that an entire blogpost of mine had been taken and posted onto this other person’s blog.

Now ordinarily, I’d enjoy the free publicity, but what didn’t feel quite right was that there was no obvious attribution to me or the blog (such as, “Here, in an amazing flourish of brilliance, is Nina Kaufman’s post on BlahBlahBlah . . . “). Yes, the header was hyperlinked back to Making it Legal, but if you didn’t know to look for it, the first impression was that the content-taker was the author. Not cool. Not “fair use” under the Copyright Act (from my interpretation of it). Not the spirit of “sharing” that is supposed to underlie our social media interactions. For what’s the good of having my content plastered all over the Internet if no one knows it’s mine?

Therefore, I have emailed the content-taker, thanking “CT” for the link, but requesting attribution. I’ll give CT about a week to comply and then make a phone call. I will keep you posted on what happens next . . . but if I don’t get either the attribution (which I would prefer) or the removal of the post, I’m prepared to alert the blog’s hosting company and alert them to copyright infringement o their servers.

The most galling part of this? CT is a lawyer!

When Ebenezer Scrooge is Your Employer
Tuesday, August 7th, 2007

I’ve received several unhappy (and incredulous) comments and emails in response to my July 9th post, “How Small Businesses Handle Employee Holidays.� “What do you mean an employer doesn’t have to give vacation time?  And that they can set ‘blackout dates’ for taking vacation?  Isn’t that illegal?  Isn’t that discrimination?  Isn’t that . . . just . . . wrong????�

Generally, no . . . no . . . and, yes.  As I mentioned previously, non-union small business employers in the United States are generally not obligated by law to give any paid vacation time.  Just check out the New York Times Sunday Magazine – it had a very telling chart embedded in last Sunday’s article, “Vacation, All I Never Wanted,� about legal required paid annual leave around the word (France tops the list at 30 days; the

United States bottoms out the list at . . . zero).

If employers do give vacation time, they cannot discriminate on the basis of race, sex, national origin, or other protected classification as to who receives it and how much they receive.  As long as the employer states the policy up front and is consistent in its implementation, the employer has the right to set the vacation policy.  This applies to blackout dates, too.  Of course, if your employer is changing policies mid-stream, or is depriving you of previously-approved holiday time, then you may have different situation on your hands than simply working for a miser. 

If it’s any consolation, my first law firm employer would only give me one week’s vacation once I had worked there for at least eight months.  And you should have heard the fuss he raised when, in my seventh month of employment, I asked for a single day off . . . to attend my attorney swearing-in ceremonies!!

Web Design Legal Horrors
Thursday, August 2nd, 2007

Few aspects of marketing are as crucial to a company’s identity than its website.  And fewer marketing vehicles can become as much of a money pit and time suck as . . . a website.  It’s a never-ending process of evolution, a frustrating “work in progress.�  Just when you think you have it figured out, your customer base changes, or your pitch changes, or your business model changes – something always changes.  And heaven forbid your site stay static!   

Websites can be a trap for the unwary . . . but you can easily acquaint yourself with the right questions to ask.  Learn from some of the aggravation that others have endured.  Business Week’s article, “Web Design Horrors: Be sure you get the site you bargained for,� points out several of the key issues such as (1) who registers (owns) the domain name? (2) what details should you spell out? and (3) where does the human being who’s building the site actually work?  Plus, you get the “gossip� from readers who have commented on their own tales of woe.

I, too, ran into web design problems in developing my Wise Counsel Press site, which you can read about in my article, “Playing Ostrich is for the Birds.�  By the time you look at those two sources, you’ll have a solid idea of the kinds of discussions you should have with a web designer well before you plunk down that hard-earned deposit money!

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