Compliance practice

  • Privacy
  • Cybersecurity
  • NIST Cybersecurity Framework
  • Health Insurance Portability and Accountability Act of 1996 (HIPAA)
  • E.U.’s General Data Protection Regulation (GDPR)
  • California Consumer Privacy Act (CCPA)
  • HITECH
  • PCI Compliance

Business Formation

  • Formation of Pennsylvania LLCs, corporations, and non-profit organizations
  • Drafting Operating Agreements, Articles of Incorporation, Founders Agreements, and other essential documents
  • Updating bylaws

Business Transactions

  • License Agreements
  • Customer and vendor agreements

Questions and Answers for Startups

A common question for startups is “When should I create my business entity?”  The answer is generally, “Now!”  If you’re at the stage of looking for legal advice, you either have a great business idea, or have a good or service that you’re looking to sell.  Before you take that first step, you need to create a business entity. Your new company will have its own bank accounts, be the party in all transactions, and potentially have assets such as intellectual property rights.

The quick and uncomfortable answer is that you could be personally liable for all of your company’s financial and legal liabilities.  The purpose of a business entity is to hold all of the assets and liabilities of the business.  The business acts as a shield against you or other owners being personally liable for business debts.  If, despite your best efforts, the business fails, you shouldn’t have to lose your house, your car, etc. as a result.  There are very specific corporate formalities to follow in order to enjoy the benefits of this liability shield, so you should absolutely get advice from both your lawyer and your accountant before you make decisions.  But if you set up and maintain the business structure properly, it can give you legal and financial security that you would not otherwise have.

This is a question that I get asked, and if I don’t get asked, then it’s still the elephant in the room.  Yes, there are business formation services, just as there are other do-it-yourself legal form services around.  The problem is that a) there are plenty of traps; b) you don’t know what the traps are; and c) you often can’t fix them when they’re discovered.

Of course I have a bias in this area; I’m a lawyer.  But I want to have satisfied clients.  If you think that you can create your business entity for $75 plus the filing fee, more power to you!  But here are a few of the traps I mentioned above:

  • Your business name or product could infringe on the trademark of a well-funded company. They can force you to change your company’s name or the name of a popular product, and you’ll spend money defending yourself in the process.
  • Your bylaws or operating agreement won’t necessarily match the needs of your business or of the people involved.
  • There are certain agreements that can create the ground rules for the founders of the business.  If things go well, an agreement explains how the responsibilities and money are allocated.  If things don’t go well, an agreement can prevent uncertainty, bad feelings, and litigation due to uncertainty.  These ideally need to be set up at the beginning stage of the business in order to be effective.
  • You could make a mistake.  Seriously. There are too many scenarios to mention, but it’s true.  This is where legal advice is valuable.

You obviously have a great sense of humor, and I can tell we’ll get along wonderfully.  Wait, that was a serious question?  OK, I’ll give you a serious answer: if you use a form agreement from the Internet, it’s a roll of the dice as to whether it will protect you.  In my experience, form agreements don’t address intellectual property protections very well, and usually don’t provide enough predictability and flexibility when there’s a problem.  In short, while they look good on paper, they don’t hold up when they’re actually needed.

I hate giving clients bad news, and I’d rather help protect you in advance.  You’ll usually spend less money and get better results.

I focus on intellectual property, technology, and general business agreements.  This can include monetizing creative works, cross-licensing agreements, and general technology licenses.  I’ve reviewed and drafted many, for clients in various stages of business maturity, and on a wide variety of topics.  I enjoy the process of getting to know your business and understanding what makes you unique.  Then we’re able to address current questions and potential future challenges to minimize headaches and exposure, and maximize your return on investment.  It sounds like a cliché, but it’s true.  If I ask you, “what potential issues keep you up at night?”, it’s because I want to address those issues in advance.  This holds true whether it’s a 10-page agreement or a 100-page agreement.

Questions and Answers for Established Businesses

It depends on a several factors, including: the relative sizes of the companies, the importance of the deal to each company, and the cost to each company of drafting and revising the agreement. As a general rule, it often costs less for me to draft a document and then revise it, vs. revising another company’s template to ensure that it sufficiently addresses the needs of my client. Legal drafting is precise; terms and logistics need to be outlined, and then applied consistently throughout an agreement. This is why it can take more time to modify an existing agreement than to develop a new one.

I work with clients so that they can make the choice that works for them, all while ensuring that their priorities are addressed.

Boilerplate provisions can include such items as limitations of liability, indemnification, dispute resolution, breach/termination, jurisdiction and venue, modification, assignment, and force majeure (act of God) clauses. The success or failure of an agreement can depend on these provisions, and experienced lawyers know to review them carefully. Here are a few questions that are addressed by these provisions:

  • If someone is harmed by the product or service, who is liable, and what limits apply?
  • If one of the parties fails to protect the proprietary information of the other party or the personal data of consumers, how does the party at fault indemnify the other party?
  • If there’s an actual or anticipated breach of the agreement, what happens? Is there an opportunity to cure the breach? What is the timeframe for termination? Can either or both parties terminate for any reason, or does there need to be cause for such termination? (Remember that the agreement’s price/fee can be tied to these answers).
  • If there’s a dispute, is it resolved by mediation, arbitration, litigation, or some combination? What jurisdiction’s laws apply? Where is the dispute resolved?
  • How can the agreement be changed? What happens if one of the companies merges, dissolves, or is acquired by another company?
  • In the event that one of the parties can’t perform its obligations for reasons beyond its control, what is the timeframe and process for addressing this?

Every boilerplate provision needs to be carefully reviewed and drafted, so that it meets the current and future needs of the parties.

As a general rule, the company should own its own intellectual property (IP). However, there can be strategic reasons for another entity to own intellectual property. Using a holding company to own and license the IP can result in financial benefits for the licensee and licensor, and can protect company assets in the event of litigation. Startups need to remember that the initial author/owner/inventor of a copyright/trademark/patent needs to ensure that their company has the rights to monetize this IP (usually via an assignment, license, or transfer); otherwise, very large problems can arise when the startup attempts to monetize something to which it lacks the rights.