I am Janet Croswell, a business law attorney with Alerding Castor Hewitt, LLP. I help clients with their corporate legal needs and work with them as they structure and grow their businesses. In this blog I'll discuss some of the issues that business owners face and some of the best practices that help them to succeed. I focus my practice in the areas of business formations, entrepreneurial law, contract negotiations, mergers and aquisitions, SaaS licensing, legal technology consulting, information technology law, securities law, and venture capital law.I am Janet Croswell, a business law attorney with Alerding Castor Hewitt, LLP. I help clients with their corporate legal needs and work with them as they structure and grow their businesses. In this blog I'll discuss some of the issues that business owners face and some of the best practices that help them to succeed. I focus my practice in the areas of business formations, entrepreneurial law, contract negotiations, mergers and aquisitions, SaaS licensing, legal technology consulting, information technology law, securities law, and venture capital law.
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Posted Thursday, February 18, 2010 by
Janet Croswell
Congratulations are in order to Brian Hewitt, the newest parter of Alerding Castor Hewitt, LLP, who was recognized this week as one of Indiana's 2010 top 50 Super Lawyers.Brian concentrates his practice on estate, trust, and guardianship planning, administration, and litigation; and mediation and business law.
He is a Certified Estate Planning and Administration Specialist, a Fellow of the American College of Trust and Estate Counsel, and a member of the Probate Litigation Committee of the American College of Trust and Estate Counsel.
Brian has spoken widely at continuing education seminars on estate planning, business succession, litigation, and mediation.
Congrats Brian!
We are proud that you have chosen to join us as a named partner of Alerding Castor Hewitt, LLP, an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.
Posted Tuesday, February 16, 2010 by
Janet Croswell
Keeping up with software clients can be a challenge for technology legal counsel. The software as a service industry evolves quickly, time-lines are condensed, and the playing field yesterday can look decidedly different than it looks today. The name of the game for a SaaS company is to stay ahead of the pack and become known as THE leader in its industry.
I recently read an article in Entrepreneur magazine about Search Engine Optimization titled What You Don't Know About SEO.
What I DO know is that many of our clients could have written this article.
For those of you interested in Internet marketing, here's an excerpt about targeting keywords to help drive search results that our friends over at Compendium Blogware could have written:
"Google, of course, is the web-search alpha dog. But all the others--Bing, Yahoo, Ask.com, Lycos--are sniffing out the same stuff.
What gets their attention? Good, fresh, focused content. Adding a blog is one of the easiest and most straightforward ways to bulk up on content. If you sell hair-removal devices, for instance, start a blog that explores all aspects of waxing, plucking, threading, electrolysis and so on. Over time, your site will accrue searchable heft.
The trick is to be hyper-conscious of your keywords. For example, if you want web surfers on the prowl for "eyebrow waxing" to find your site in search engine results, organically work the exact phrase "eyebrow waxing" into each blog post (maybe multiple times), and use it on all static pages related to eyebrow waxing. Lather, rinse and repeat with every term and phrase you want to rank for.
Before you start writing content, though, research and plan your keyword attack. Is geography important to finding your customers? Then maybe "California eyebrow waxing" is the phrase you want to home in on."
Just a brief example of the world I'm living in by working in the area of SaaS legal consulting, I have the absolute privilege of working with high-tech, fast growing companies. Truly partners in success, I and the other attorneys of Alerding Castor Hewitt, LLP who practice in the area of technology legal counsel welcome the challenge of keeping up with the pace of this industry.
Posted Wednesday, February 10, 2010 by
Janet Croswell
How many times have you signed up for a service on-line, scrolled past all the legal jargon, and clicked "I Accept" or "I Agree" without taking the time to actually read the terms and conditions you're agreeing to? Admit it. We all do it.
But, just as a warning to be careful the next time you're purchasing that new mp3, or more importantly signing your company up for something on-line... those shrink-wrap and click-wrap agreements have been held by the courts to be binding.
Contracting in cloud computing law doesn't necessarily require a signature these days. An affirmative acceptance of the provisions of a software service level agreement by an authorized agent can be given with a click of a button.
Take the recent trademark infringement case of Appliance Zone, LLC v. Nextag, Inc. for instance. Although this case was dismissed on grounds of jurisdiction (which, incidentally, was a term of the shrink-wrap agreement that was held by the court to be an effective document) the court discussed some important software litigation surrounding click-through agreements within it.
In essence, if the facts support a claim that a person (a) is authorized to enter into such a contract, and (b) had the intent to enter into it, then they will be held to terms of service they signed up for, including basic contracting terms such as jurisdiction, venue, etc, etc.
The court in this case cited Gallent Ins. Co. v. Isaac in ruling that there was authorized conduct that clearly demonstrated the acceptance of a valid contract by the 19 year old website manager of Appliance Zone who registered the company as a merchant on Nextag's website and clicked "I accept the Nextag Terms of Service" as part of the process.
While the enforceability of a contract can be destroyed with factors that make it unconscionable (such as inequality of bargaining power, or unreasonable or unknown terms) the court did not find those arguments sustainable in this case for a number of reasons, including the fact that clickable acceptance has become commonplace for on-line retail, and the registration process could not have been completed without the click-through acceptance.
The court in this Indiana technology litigation case fell back on Paper Exp., Ltd., Micrometl Corp. v. TranzAct Technologies, Inc. with the "fundamental principle of contract law that a person who signs a contract is presumed to know its terms and consents to be bound by them."
Next time, before you click "I Accept" make sure you really do.
Posted Monday, January 4, 2010 by
Janet Croswell
Alerding Castor Hewitt, LLP is proud to announce the addition of Indiana technology lawyer Bill Boncosky to the firm. The former General Counsel for ExactTarget, Bill has tremendous experience as technology counsel for one of the most successful technology start ups based right here in the heart of Indianapolis. A company that had just over a dozen employees when he joined, Bill has substantial experience in licensing agreement negotiations, ASP Law and Cloud Computing Law serving in that role for over seven years. He will be able to provide significant guidance based on solid experiences to many of our clients operating within this industry.
If you're looking for SaaS legal consulting, the attorneys at Alerding Castor Hewitt, LLP can help. The newest attorney to join the firm, Bill Boncosky, is no exception.
Posted Thursday, December 17, 2009 by
Janet Croswell
Employers invest so much time and effort into (a) finding and hiring the right candidates for the team, and (b) developing those individuals to work at their most efficient levels for the company. Let's face it, it can take years to get a company up and running effectively, and certain key individuals play a huge role in making that happen.
You don't want to lose them.
While I firmly believe that everyone is replaceable, some employees are just harder to replace than others because they add so much value.
Give them an incentive. One option is to tie their salary to the success of the company.
Instead of traditional stock options (which could make it difficult down the road should the employee leave the company for any reason) business owners may want to consider offering certain individuals profit interests.
Not only would it build loyalty and increase an employee's desire to see the company succeed, but the company owners would retain all of the equity interest.
A bit simpler than stock options, profit interests are typically tied to employment and end upon the employees departure. This eliminates employers dealing with minority shareholders and the host of issues that may arise from them.
Alerding Castor Hewitt, LLP is an information technology law firm that has helped dozens of start-ups with their business and legal needs, including documentation for profit interest agreements.
Posted Tuesday, December 1, 2009 by
Janet Croswell
So you've launched your company and hired a web-developer to breathe life into the idea you've poured your heart and soul into developing over the past several months, perhaps even years... Maybe you never even thought to ask the question, but at the end of the day who actually owns "your" website? You or the web designer?
Indiana software litigation in a ruling by the Supreme Court of Indiana, Conwell v. Gray Loon Outdoor Marketing Group, points to the fact that hiring a contractor for the development of content and programming of a website is considered a service rather than a purchase of a good.
In this case, the Indiana Supreme Court ruled that the independent contractor owns the property, while the hiring party owns a non-exclusive and perpetual license to use such property, unless of course, there is an agreement specifying otherwise.
Looking towards prior Indiana technology litigation the Supreme Court applied the definition of an implied non-exclusive license to the development of a website:
An implied non-exclusive license is granted when (i) a person (the licensee) requests the creation of a work; (ii) the creator (the licensor) makes that particular work and delivers it to the licensee; and (iii) the licensor intends that the licensee copy and distribute the work.
This definition applied to the facts surrounding the website development in this particular case ultimately led the court to its conclusion.
So, expect this to be the case (at least in Indiana) the next time you hire a webdesigner for your next project: upon final payment, the webdesigner owns the property, while you own the right to use it... forever.
(Unless, of course, you involve technology legal counsel first and negotiate otherwise.)
For an example of a newly developed Indiana-based website check out: GlobalToaster
Posted Tuesday, November 17, 2009 by
Janet Croswell
I saw a great article awhile back in Entrepreneur and thought I should post the article for those in the formation stages of their next business venture.
I can't stress enough how much time and energy it takes to launch a start-up, and just how much the success or failure of a budding new company rests on the people involved. I see it everyday as an Indiana technology lawyer involved in Indiana entrepreneurial law.
You can count on spending hours upon hours of the day with your business partners, so consider who those people are wisely. At the very least, read this article by Scott Gerber, who is a columnist for Entrepreneur.com's Young Entrepreneur and the CEO of Gerber Entertainment.
Partnerships can turn out to be a blessing or a curse. For every thriving partnership featured in Entrepreneur, there are thousands that end up stagnant, dissolving, dysfunctional or worse--in court. More often than not, performing basic due diligence can keep you from ending up in bad partnerships. So, have you done your homework? Are you ready to trust your financial security on someone else’s personality, work ethic and business acumen? Before you drink the partner Kool-Aid, here is a list of the top ten worst business partners for your start-up--along with some tips to help you avoid this cast of characters:
- Mr. Employee
Mr. Employee is a first-time entrepreneur with a pristine resume and an abundance of references. He enjoys collecting a weekly paycheck, health benefits, and eating dinner with his family nightly at 7 p.m. Unfortunately, Mr. Employee isn’t really self-sufficient and doesn’t know how to move the business forward without you instructing his every move. Plus if your investment deal doesn’t pan out soon he is going to need to find a “real job” to pay the kids’ college tuition. Tip: Risk-adverse individuals who do not share your priorities will not be productive partners. Pass up individuals who cannot commit equal time, energy and financial resources. - Mr. Perfectionist (also known as Mr. Procrastinator)
Mr. Perfectionist needs every “i” to be dotted and “t” to be crossed before he schedules an official product launch date. He enjoys researching competitors, building industry case studies and improving his 150-page business plan. Mr. Perfectionist really wanted the new business to be up-and-running by now, but still feels something isn’t quite right. He plans on putting together another comprehensive survey to send to all of his colleagues, friends and family in the next few weeks to help flesh out the concept further. Tip: A good plan today is always better than a perfect plan tomorrow. Steer clear of excuse-prone procrastinators. Seek out self-starters who run with the ball and make things happen. - Mr. College Buddy
Mr. College Buddy had a stroke of genius while out at the bar one night, wrote it on a cocktail napkin and asked you to help him “make it happen”. He enjoys bragging about his great idea and giving you directions on how to execute (he’s not into the “heavy lifting” thing). The issue: he’s moving across country to start med school in the Fall. But fear not, Mr. College Buddy will make himself available by phone when he’s not studying, working, in class or on a date. He’ll be sure to forward you the address where you can mail his 50% of the profits. Tip: Never assume all of the risk in exchange for half the reward. Ideas are worthless without proper execution. Before you bring a co-conceived idea to fruition, make certain that your partner plans to be around for the long-run. Napkins are not legally binding. Always execute an operating agreement. - Mr. Inventor
Mr. Inventor thinks he’s created the next billion-dollar widget. He enjoys giving two-hour dissertations on Chinese electrical engineering standards to investors and making business decisions based on ‘nice people’ and ‘gut feelings’. Mr. Inventor doesn’t really understand the phrase ‘in the black’, but feels it’s imperative to spend all of the company’s investment proceeds on research and development. Tip: Brilliant academics are not necessarily brilliant businessmen. In lieu of a partnership, first consider licensing deals or strategic partnerships. If you decide to go ahead with a partnership, be sure your agreements clearly distinguish the differences between product control and operational control. - Mr. Right
Mr. Right will be the first person to tell you that he is never wrong. His favorite phrase is ‘my way or the highway’. He will rarely discuss his decision making process because he views such discussions as a weakness. He enjoys demeaning partners who don’t agree with him and making decisions without telling them. Funny thing about Mr. Right: he always seems to blame everyone but himself when his plans don’t pan out. Tip: Communication is the key to a successful partnership. Find a collaborator, not a dictator. No one is always right. - Mr. Dreamer
You’ll hear Mr. Dreamer say this line a lot: “One day, when we’re millionaires…” He loves talking about retiring by 29 and how he intends to spend his hypothetical millions on a gold plated yacht that he’ll dock off the coast of his private island. One small problem with Mr. Dreamer: he doesn’t seem to know how to keep the business above water next month. Tip: Big paydays come from years of hard work and persistence, not excessive rambling and daydreaming. While it’s important your partner be both positive and optimistic, it is equally important that he or she is grounded and focused. - Mr. Spender
Mr. Spender can’t possibly survive without a six-figure salary, lavish office and an in-house cigar roller. Price is no object when it comes to entertaining a client or flying first class. If you’re lucky, Mr. Spender might even invite you to one of the extravagant dinner meetings that he charges on your company’s corporate card. Tip: There is no such thing as the unlimited checkbook. Partner with fiscally conservative, financially responsible individuals who strive to make every dollar benefit company growth and development--not their personal lifestyles. - Mr. CEO
Mr. CEO feels compelled to tell everyone that he is a CEO within 30 seconds of meeting him--even if his company is worth less than the paper on which his business card is printed. He loves cocktail receptions, his name written in fancy fonts, and stacks of luxury car magazines neatly piled on a coffee table in plain sight of customers. The only thing he doesn’t seem to like: real work. Tip: Successful companies are not built on titles, talking and toys. Keep away from selfish, egotistical individuals who want to talk the talk versus walk the walk. - Mr. Vacation
I’d tell you more about Mr. Vacation, but I don’t know much about him. He never seems to be around. Tip: No-shows are dead weight and eat away profits. Make sure that your operating agreement clearly outlines partner responsibilities and vacation days.
And the partner to avoid like the plague is… - Mr. Personal Issues
Mr. Personal Issues always has a sad story. On the same day as your company’s keynote presentation at the big conference, his son’s wisdom teeth need to be pulled and his dog died of pneumonia. He would love to attend next week’s investor meeting, but his divorce hearing might tie him up all day. Unfortunately, Mr. Personal Issues can’t afford his legal bills, so he’ll need to pull a little more money out of the company this month to avoid his ex-wife from taking 50% of his equity in the settlement. Thankfully, this will be the last time he needs money… Tip: You’re not in business to be a babysitter or a psychiatrist. Know everything there is to know about a prospective partner before you sign on the dotted line. Discuss everything from business to politics to family life to finances. If a potential partner seems to have a few screws loose, run as fast as you can in the other direction.
Posted Monday, November 16, 2009 by
Janet Croswell
Here at Alerding Castor Hewitt, LLP, often times we work with clients who have software that inherently transcends state and national borders. Not just brick and mortor storefronts, many of our clients have customers nationwide and around the world.
Such is the realm of cloud computing law, and it's up to us as technology legal counsel to answer the inescapable question of what state, federal, or even country's law applies should a lawsuit arise.
Well, if you haven't contracted for this simple jurisdictional provision specifically in the terms of your license agreement or software service level agreement, as a SaaS company you may just find yourself flying over to London someday to deal with a breach of contract under U.K. law and their interpretation of your agreement.
All I have to say is good luck, and I hope you are prepared for those Barristers' premium legal rates.
Even if you win your case, you just wasted a tremendous amount of valuable time and money unnecessarily on SaaS litigation in the "wrong" venue.
I'm all for making the deal, but before you go shaking hands and rolling out your new Software as a Service application with a form agreement and without proper advisement, be sure to consult with reliable technology counsel to help you draft a solid agreement for your company's SaaS product.
Posted Monday, September 21, 2009 by
Janet Croswell
Operating under Indiana entrepreneurial law, I have seen a great number of contracts across my desk, and many for new business owners plunging into a world of negotiations. Fresh out of the gate, it's important for savvy business owners to get up to speed quickly on essential provisions that should be included in their contracts.For instance, for business owners who are retailers, wholesalers, or merchants who otherwise sell "property" (essentially, products that you can pick up and move), they are operating under the Uniform Commercial Code (UCC). This is a uniform act passed by the Federal government to provide consistency between the states.
Each state has adopted certain provisions of this act and incorporated into their state statutes, thus becoming state law. In litigation, courts will abide by the state business law statutes and look to the UCC to fill any gaps that may be subject to interpretation. Generally speaking, the UCC has been adopted fairly uniformly across the board with some discrepancies between the states, so it's important to understand how it may apply to your transactions while being aware of the local implications.
As an example, within the UCC, there is a definition for consequential damages, which are sometimes referred to as special damages that can open up a seller to a tremendous amount of liability if they don't negotiate this out of their contract with a disclaimer.
While direct damages are exactly that, damages that are caused directly by a breach of a contract (such as the cost to repair or replace the item, loss of value to it, damages caused to the product), consequential damages are a step beyond. Consequential damages are those that are:
- reasonably foreseeable by the parties
- at the time of contracting, and
- caused by a breach of the contract
Don't get caught contracting without the proper terms in place to protect you, such as a disclaimer statement to consequential damages. These disclaimers are often accepted by the courts as a reasonably negotiated term of an agreement and enforceable (depending on the jurisdiction).
Business law firms like Alerding Castor Hewitt, LLP are here to help. Give us a call.
Posted Monday, August 10, 2009 by
Janet Croswell
It's exciting to be apart of the city of Indianapolis, and even more so when you get to be involved with those who are shaping the future of Indiana technology.
Business law firms are a great place to practice as a technology attorney. I am fortunate to live in a world where software start-ups and fresh business ideas (that often times are solving tomorrow's problems) crop up everyday and are a way of life. You would be amazed at some of the exciting new software developments that are underway for Indianapolis in the next couple of years.
Surrounded daily with people who are focused on creating that next great idea, I firmly believe that entrepreneurial law may be the most rewarding area for an attorney to practice. I enjoy being able to participate in such a positive way- at that initial level where private equity investors may be considered, or assisting in the strategy for the co-founders to create the most beneficial corporate structure for their entity.
An Indianapolis start-up that I'm particularly excited about is one driving e-commerce, using Compendium Blogware's software, called Global Toaster.
Posted Wednesday, July 29, 2009 by
Janet Croswell
In the world of legal technology consulting, it's my job to turn that glossy marketing piece that sold you on new software development into a binding contract that ensures you actually get what you paid for. When hiring an independant consultant or outside firm to create software or technology for your organization, I have two recommendations: (a) negotiate the terms wisely and (b) get it all in writing. Nothing is worse than paying a huge consulting and services fee and not get the deliverables that you thought you had bargained for. Terms to think about should include specific deadlines on project phases and deliverables, acceptancy testing to your satisfaction (especially on the final product), warranties by the developer, indemnifications from liability to any third-parties, and confidentiality provisions for your proprietary data, etc, etc, etc... I could go on and on. If you are considering purchasing anything that involves software licensing or development, consult a technology law firm first.
Posted Tuesday, July 7, 2009 by
Janet Croswell
There are several obstacles to face with a young start-up company, and typically one of the main concerns is raising capital in compliance with funding law. One method companies can use is offering the sale of stock or membership interest in their company through private placement offerings to a limited number of private investors. A private placement offering is differentiated from a public sale of securities that must be registered with the Securities & Exchange Commission, namely because of the dollar amount being raised and the sophistication level of the investors. These investors are presented with a Private Placement Memorandum or an Offering Memorandum which contains key information that must be disclosed to the investors to make an informed decision. This offering memorandum should include such relevant information as the company history, managing team and/or key members, the financial statements, products, and business/marketing strategy.
Typically costing a fraction of the fees involved in registering securities on the open market, a private placement offering is a fund raising strategy that small to mid-size companies might want to consider if they are seeking a capital infusion.
Posted Wednesday, July 1, 2009 by
Janet Croswell
One of the business law firms located in downtown
While I practice mainly on the transactional side of the law, working with clients on such projects as: strategizing and negotiating multi-million dollar agreements, preparing private placement offerings in accordance with funding law, and offering legal technology consulting for SaaS licensing, we work collectively as a firm for our clients and have many attorneys who focus more on litigation.
For instance, litigators, who spend most of their lives in the courtroom, have an eye toward recent courtroom rulings and interpretations of the law (because they have spent countless hours researching court opinions and crafting their arguments against opposing counsel). So, I find that in order to provide my clients with the best possible legal advice, at times it is absolutely essential for me to discuss and carefully consider the perspective of our litigation attorneys – and they are always glad to provide me with that insight.
That is what a team is all about: utilizing the strengths of every member for the collective benefit of the team… which ultimately means the client.
As an
Posted Wednesday, June 24, 2009 by
Janet Croswell
As an Indianapolis
Here’s a quote from a business owner in a recent Entrepreneur Magazine article: Turn Passion Into Money:
"You've got to love it on a level deeper than a pastime you enjoy," she says. "There are obstacles, there are disappointments, there are setbacks, there are victories, and you've got to be able to have something that makes all of that worth it." And be nimble. Noting that she has made significant changes to her business plan and operations along the way, "You have to be able to learn and [then] apply it."
I couldn’t agree more. There will be hurdles to face, mountains to climb, many of which may have legal ramifications… but, that’s why you surround yourself with a good team. When you work with the right people, you’ll be better able to focus on what you do best- your passion. Leave the headaches (business law) to us, that’s what we are here for.
If you can do what you love, and love what you do, why wouldn’t you?
Here’s my advice. Find your passion and let us help you get started.
