Jesse Lamb is Not My Lawyer

Getting along.

Wed, 14 Jul 2010 14:28:51 -0400

Conflict between people isn’t just inevitable, it’s pervasive. People have distinct, incongruent motivations and expectations, so conflict is the default state of any relationship. And that’s okay. Getting along isn’t about eliminating conflict. It’s about managing conflict so that everyone involved is satisfied. But sometimes when someone’s not satisfied, things get out of control, emotions take over, and a conflict ripens into a dispute. Disputes hurt. They distract and discourage, and dampen the same-team feelings that facilitate cooperation. So how do you deal with disputes?

The law is [ostensibly] designed to regulate conflict and resolve disputes. But in business, the law never offers an optimal outcome because the transaction cost is so high, both in time and expense. What’s worse, legal remedies are inadequate to fully redress the emotional component of a dispute, which, when you think about, it where all the caring about the outcome actually happens. Plenty of litigants in legal disputes remain bitter long after a case is settled, even if they’ve won. If that’s true, is the dispute actually resolved?

People are not primarily rational. They’re emotional. Emotions don’t yield to systemic remedies. Emotions are subjective and personal, and the emotional layer of a dispute can only be resolved with particularity. The law will never be able to do this. But you can. At least you can try.

First, try to understand the root of the negative emotions surrounding the dispute. Is there some core concern that isn’t being addressed in the person who’s aggrieved? By core concern, I mean those perceptions we get from others that validate our identity. They include appreciation, affiliation, autonomy, status, and role (I’m borrowing this framework of concerns from Beyond Reason, an excellent book on negotiation). People want to feel that others appreciate their value and contribution, they want to feel connected, they want to feel like they have control and discretion, they want to feel respected, and they want to feel like they have purpose. Start with yourself. Can you pinpoint any area where you aren’t being validated from the others involved? You might have to dig a bit. Your core concerns rarely manifest themselves directly. Work your way down from the top: what are you asking for in the dispute? What interests are you trying to protect or advance? How do those interests reinforce your core concerns? Try to answer those same questions about everyone involved. If you can dissect the dispute into everyone’s demands, their interests, and their core concerns, you can start to get a picture of what full resolution looks like.

Once you have a working map of the dispute, look for opportunities to reinforce each person’s core concerns and build on that. If you find the areas where people need validation and satisfy them, you can lower the emotional barriers to reconciliation. If you are one of the aggrieved people, you may have to put your own feelings aside to get things started. If you can’t, find someone to mediate, either someone who’s known and respected by everyone involved, or a professional counselor or mediator (Protip: most lawyers suck at this). It’s messy, but sorting out the emotional layer of a dispute can get you back to a place where you can manage the conflict, play nice, and move on.

You need help.

Mon, 12 Jul 2010 14:24:00 -0400

Ok, you’re awesome and you know it, (at least when you’re in a good mood). It seems like people just know to ask you for help or information, because if you don’t know the answer, you know how to find it. Maybe it’s always been that way. Friends, family, classmates, coworkers, have looked to you to save them when they’ve thrown their hands up. Those people have done you a huge favor. They’ve trained you to be self-sufficient, which is critical if you want to do anything worth doing, including starting and running your own business. But, in your role as the perennial go-to person, you may have developed a blind spot to an important truth that, without correction, will dilute and limit your ability to be awesome and do big things. The truth is: you need help. Lots of it.

Self-sufficiency teaches you to indulge pride in your abilities. Appreciating the things you can do is fine, but when your identity is too tied up in what you are capable of, it can make asking for help when you need it feel like failure. That’s crap. You don’t have to prove the worth of your abilities in every challenge you meet. Give someone else an opportunity to shine. They may have a lot more practice at tackling that type of challenge than you do, and they’re probably happy to help. Benefit from their experience and find a way to compensate them for their effort.

It can be hard to rely on other people when you’re good at figuring things out for yourself. But it’s absolutely imperative if you want to make an impact. You are one person, with a sustainable max of twenty conscious hours in a day. Even if you have the capacity to master anything, it’s dreadfully inefficient to be your own resident expert on everything. You’ll end up spending more time finding information than applying it. That’s acceptable if you’re pursuing a hobby, but if you are trying to make something meaningful, you need to commit as much time as you can to creating value.

So go get help. You need it.

It's okay to take a day off.

Mon, 05 Jul 2010 18:05:30 -0400

When you have your own business or you’re working on a startup, it’s essentially a 24-hour job, especially at the beginning. When you’re not actively “producing,” you’re thinking about the business, planning, or wrestling with the latest choices you have to make. The idea of a “day off” feels as illusory as a month on Mojito Island, because you’re never really off. You’re just working inside your head. And if your mind is occupied with your business anyway, why not just get something done?

But you should take a day to let yourself escape into a non-work activity as often as you can. Really escape, not just change the setting in which you’re thinking about your business. Take a day to engage with the people around you, the people you care about, in activities that you can enjoy.

Sometimes you might feel guilty or anxious when you take time away from your business, which in turn can create an aversion to taking breaks. You might actually forget how to enjoy being in the moment with people or with what you’re doing. That’s a warning sign. You need the break, the balance in how you occupy yourself. It will help you maintain the creative energy you need to solve new problems as they come up, and it will help you keep your perspective properly calibrated. It also gives your brain the space it needs to process problems in the background, which can yield insights you’d never get to without the break. Plus, the relationships in your life may improve because you’re easier to relate to and be around when you aren’t pre-occupied.

If all goes well you are going to have your business for a long time. If you can indulge balance along the way it will be a lot easier to enjoy the ride.

A Founder's Job

Wed, 30 Jun 2010 11:36:00 -0400

When you’re starting a business, it’s really easy to forget how amazing what you’re doing really is. And understandably so. There’s a lot to consider when starting a business. Is there a market for the problem you’re trying to solve? Do you have the right business partners or founders? How are you going to fund your business initially? The choices you have to make are endless, and it’s normal to get bogged down and stressed. But those decisions are just the details. Give them their due attention, but don’t let them get in the way of the big choice you have to make: Who is your business going to be?

A business is more like a person than anything else. It has a personality. Strengths and weaknesses. And, most importantly, people relate to businesses with the same emotional vocabulary they use with people. So, who is your business going to be?

Ideally, your business will be an amalgam of the best parts of every person on the team. Like a puppet where each person is responsible to pull just the strings they understand best. But it’s usually not obvious who is going to be best at what. Each member of the team is going to have their own strengths and weaknesses. These make up the “nature” of your business. Your job as a business founder, with the help of your advisors, is to choose who your business is going be and nurture your team into becoming that person (or puppet, if you like that image better). It’s a hard job, especially at the beginning when there may only be one or two of you. But it’s also amazingly wonderful, and working to answer that question is a good place to start in providing the leadership your team needs to make your business awesome. Isn’t that why you started your business in the first place?

Evaluating potential co-founders? Try going camping.

Mon, 28 Jun 2010 11:05:56 -0400

Time commitment: Less than 5 minutes.

Choosing co-founders might be the most important decision you make in your business when you’re getting started. A business is lot like a marriage. Co-founders commit to long term entanglements shaped as much by each co-founder’s weaknesses as by their strengths. Yes, you need to find co-founders whose strengths complement your own, but you also need co-founders whose weaknesses are tolerable, manageable, and don’t somehow exacerbate your own shortcomings. With marriage we’ve developed a loose system of courtship designed to help us evaluate potential mates. But how do you evaluate the strengths and weaknesses of a potential co-founder? Try going camping.

Just as in a new business, camping puts you in an unfamiliar environment to solve problems you don’t usually face (e.g. building a fire, etc.), and solutions to more pedestrian problems like food, water, and shelter become a new challenge.

You should stay in smallest tent that will fit all of your co-founders. It will be uncomfortable, and you will be getting in each other’s way at times. That’s the point. Starting a business is close quarters, and you will be sharing more of yourself with your co-founders than you might imagine. Your relationships with each other will be some of your biggest stressors, and the opportunity to experience those relationships under stress will let you see how well you can manage it.

You should make your camping trip as long as is safe and practical. Hopefully long enough for the novelty of camping to wear off a bit. As in camping, there’s a lot of excitement when you first start your business. That will fade eventually and what you will be left with is problems to solve and co-founders to solve them with. When the camping trip gets old it’s comforting to know relief is coming soon. The commitment is low. Everything from your real life is waiting for you right where you left it. But when you start a business, you are fundamentally changing your life, and making your co-founders a permanent piece of who you are, even if your business eventually ends. It would be nice to experience the best and the worst they have to offer before you make a life-altering commitment to them.

Also, camping is really really fun.

"Just in Case"

Tue, 30 Mar 2010 01:38:36 -0400

Time Commitment: 10 minutes if you also read Jason Fried’s post I’m responding to.

Yesterday Jason Fried of 37Signals put up a post asking: Employment contracts: What are they good for? If you haven’t read it it’s worth checking out. I responded to the post with a comment, which I’ve reproduced here:

First off, I am a lawyer, but this isn’t legal advice, and I’m not your attorney. :) Having a writing goes beyond issues of trust. At least, beyond trust of the individual. A writing is there as an affordance to human frailty. We simply aren’t very good at communicating and understanding things comprehensively, and we aren’t very good at remembering those things we do understand. So we write it down.

“Just in case” may be a weak argument, but let me try to give it a fair hearing at least before dismissing it.

A contract is just an agreement between two parties that the law will enforce. And, although there are some notable exceptions, a contract doesn’t have to be in writing to be formed. The advantages of having the agreement as a writing that’s signed are, among others:

(1) the formality of a writing assures that parties can be objectively treat as if they’ve entered an enforceable agreement, ‘just in case’ they don’t subjectively appreciate the import of what they’ve done;

(2) the agreement is memorialized in a way that’s resistant to imperfect recollection, ‘just in case’ each party later remembers the agreement differently;

(3) the parties are on notice of what the agreement is, ‘just in case’ there is a defect in either’s understanding;

(4) and the parties can override any default provisions of law that may apply, or otherwise may materially change the agreement, ‘just in case’ the defaults are unfavorable or counterintuitive.

Advantage (1) probably isn’t of much use in the employment setting because a reasonable person under the circumstances would know they’ve entered an agreement, whether or not there was a writing.

Advantage (2) is useful even when you are hiring great people. Memories fail and sometimes people harbor misunderstandings of their relationship based on bad recollection. The writing can serve as a reference to correct a misremembering.

Advantage (3) is probably the strongest. By making a writing you either resolve any misunderstandings or remove them through the ‘integration clause,’ which says that the writing comprises the entire agreement between the parties. This likewise stops problems before they start.

Advantage (4) is useful because the default provisions of law usually only come in to fill the gaps in the parties’ agreements, and without a writing there are likely more gaps to fill. And unless you’re a practicing attorney in the state where the agreement is formed and you’re familiar with the UCC, it’s hard to know what agreement you’d actually end up with once you apply the law.

The big “Just in case” though may be ‘just in case’ there is a dispute. But I contend that by having a writing you are actually decreasing the chances that a dispute arises, not just covering yourself in case it does. That goes beyond insurance.

Regarding the Backpack page, generally speaking employee handbooks are considered part of the contract between employee and employer, so you may be able to move most of the substance of the contract into a BackPack page and supplement with a simple one or two-page written agreement. You should consult your attorney about that though. I’m not licensed in Illinois yet and don’t know the rules there.

P.S. I’ll be at LessConf if you want to talk about this some more.

Why things you think are private, aren't.

Mon, 01 Feb 2010 08:30:00 -0500

Time Commitment: 7 minutes if you try to count the commas while you read. 5 minutes otherwise.

The post is about avoiding even the appearance of wrongdoing, not about doing the wrong thing without getting caught. Seriously, be good guys! :)

I recently had an exchange with a friend about using the content from a third-party site to populate our own app we’re working on. I’m going to leave the copyright implications aside for now and just talk about the conversation itself.

It went something like this:

Him: Our site is empty right now, and their site is full of the data we need. We should consider partnering with them. I already wrote a script that can parse their data to use for now. “I’m guessing this is completely illegal, but I kind of don’t give a s@#*.” (actual quote)

Me: I doubt we can use any of that data.

Him: How would they ever know?

Let me first assure you that my friend on the whole does care about being a good guy. And even in this situation, his language belies a general respect for others and their rights, and in this case the data probably doesn’t carry much, if any, copyright protection anyway. Still, we eventually agreed that it was best not to use the third-party data, and decided instead to populate our site the old fashioned way (inputing seed data ourselves and incentivizing users to help). But let’s say hypothetically the owner of that other site saw our content, suspected we did scrape it from their site, and sued. What would happen then?

Without getting too bogged down in civil procedure (because even most lawyers hate it), if the suit were to survive some preliminary steps, the discovery phase would begin, where each party can request and compel the other party and relevant third parties to share their documents, records, and all sorts of evidence they probably don’t want to give, including access to computer files and emails. It’s a hassle, and it feels intrusive (because it is). In our case, we would probably be compelled to give them a copy of this conversation, which happened over email (along with this post too, now that I think about it). We wouldn’t look good in the eyes of a judge, and it could make the case more likely to go trial despite us not really doing anything wrong. We’d probably end up having to settle, not because we’re liable, but because it would probably be cheaper than defending the suit.

The takeaway

Whenever you are communicating, assume whatever you say will be discovered by any interested party. The assumption might not change what you say one bit, or may even inspire you to embed easter eggs that seem like they’d be fun to explain in a deposition (if so, I’d love to hear about it). But you should be cognizant that the law provides the means for an adverse party to discover your “private” communications, including many things otherwise considered confidential, either because your confidentiality agreements don’t withstand a subpoena, or they explicitly create an exception for lawful requests from a court or government authority. And whatever is discovered may make you look bad. And you never want to look bad if you can avoid it.

Also remember, there are rules against spoilation of evidence, which normally make it worse for you to conceal or destroy evidence than if you just gave the other party what they are entitled to. There are also certain privileges to consider that prevent certain evidence from being discovered or brought against you, but that topic deserves its own post.

So did anyone actually count the commas?

Be at least as smart as a parking lot.

Thu, 10 Dec 2009 04:56:22 -0500

Time Commitment: 10 minutes.

The gist of this post is that everything is negotiable (except when it’s not). If you want a real world example to anchor that reality in your brain, read on.

A few weeks ago my wife (@sweetielamb) and I went out with some friends to Ybor City for Steve Bristol’s (@stevenbristol) birthday. We don’t get out to Ybor very often so I, being the terribly paranoid person that I am, was concerned about where we would park and whether our car would be safe. Nick and Stephanie (@nickstamas and @stephwunder) suggested a parking lot convenient to our first stop, so we headed there.

The parking lot was an open-air, single-level lot near the heart of Ybor’s nightlife. The lot had a single attendant and no fences or any other means of keeping people out (I’m going somewhere with this, I promise). My car was no safer there than anywhere else in Ybor as far as I could tell. But I was armed with some vestigial knowledge from law school: if I left my vehicle at the parking lot and something happened, the lot owners would probably have to help cover my losses (A side note: if you have any obsessive tendencies at all, don’t go to law school. It will ruin you). I gave the parking attendant our ten dollars, took a red ticket to put on my dashboard, and we caught up with everyone in time to see Steve get a birthday tattoo.

As was statistically predictable, nothing happened to my car that night, Steve completely drained Ybor of Patrón, and the sun came up the next morning. The unpleasant surprise didn’t come until a few days later when I took a second look at the red ticket the parking attendant had handed me.

The ticket had a serial number, some handwritten initials, and a block of legalese text. The text read something like the following:

By displaying this ticket, you agree to hold harmless the owner of this parking lot for any theft, loss, or any other damage to your vehicle. This agreement does not constitute a bailment.

Frustrated by my lack of attention to detail and my apparent exposure to all the risk Ybor had to offer, a fleeting wave of retroactive worry hit me.

The takeaways

As I came down from my baseless fit of fear, I was left with an important reminder: When you form a contract, you are the master of the agreement. You get to decide whether to accept or override default provisions of law, and you can make any agreement you want as long as it isn’t illegal. This creates the following correlating situations.

1. When the parties of a contract have unequal bargaining positions, the party in the better bargaining position tends to get away with whatever they want. In the example above, the parking lot in Ybor had a substantially superior bargaining position to mine. As a consequence, they could present their terms as a take-it-or-leave-it arrangement and they could take liberties with the fact that I was unlikely to quibble with or even read their terms before accepting them. These non-negotiable agreements are sometimes called contracts of adhesion, and the law imposes some reasonable limits to maintain sanity in the system. These limits tend to curtail overreaching provisions, but they don’t keep those provisions out of the agreement in the first place.

2. When the parties of a contract have relatively equal bargaining positions, the terms of the agreement are only limited by the parties’ creativity and by each party’s willingness to accept the other’s provisions. This means that if you are negotiating a typical contract, don’t consider any changes off the table until you’re met with serious resistance from the other party. For example, If you don’t want to accept canned indemnity language, then don’t. (more on indemnity…) If you want to get paid in Gold Krugerrands, say so. Don’t accept someone else’s “standard practice” or even the default operation of law if it doesn’t fit with what you want.

Because people are confronted with form contracts and contracts of adhesion so often, it seems like they frequently fail to assess what their bargaining position is before they begin to make an agreement. When that happens, they may end up agreeing to unfavorable terms without even realizing they had a choice. Don’t let that be you. Weigh your ability to dictate and negotiate terms and use whatever position you have the best way you can.

Be at least as smart as the parking lot.

Rethinking Contracts

Tue, 01 Dec 2009 04:05:21 -0500

Time Commitment: Less than 3 minutes

I’m betting if you were to ask most people what a contract is, they would probably describe a written document with signatures at the bottom. That’s a fine image for most people, but not for you. You need to know better.

A contract is simply an agreement that the law will enforce. Said another way, a contract is a set of promises that the law will make you keep. And while there are some very important exceptions, those promises do not need to be written down to be legally enforceable. Generally you just need one person to offer an exchange of value and another person to accept that offer. That’s it.

Why does this matter? It matters because if you think a contract has to be a written document, you may be inclined to consider some of the informal deals people make everyday as something less than contracts. They aren’t. I’m talking about “gentleman’s agreements,” “handshake deals,” “pinky swears,” or whatever your preferred contractual foreplay may be. Don’t let the casualness fool you, an agreement sealed with a handshake or a kiss can be just as enforceable as one made in writing. Sure, without a writing it can be harder to prove the existence of an agreement, but it can still carry legal significance. Just something to keep in mind.

You Are Not Your Business - Choosing a Business Entity

Wed, 25 Nov 2009 14:37:08 -0500

Okay, sometimes you are. But we’ll get to that.

Time Commitment: About 5 minutes if you go quickly

The law gives you lots of ways to organize your business into an entity distinct from you as an individual. Almost too many. There are tons of intricacies to consider when choosing which type of entity to establish, but two of the biggest considerations are taxes and limiting liability. There are others that might be more important in your situation (e.g., options in issuing stock), but taxes and limiting liability tend to make you lean towards one type of entity over another. Just to save you some time, if your business is a silicon valley style startup that will be courting venture capital, I’ve heard that investors are only interested in C corporations, particularly if they’re incorporated in Delaware. Don’t take my word for it, but that’s my impression. For the rest of us, here’s a rundown of your options.

Sole Proprietorships

This is just a fancy way to say you really are your business. With a sole proprietorship, you essentially conduct business using your personal identity. You don’t have partners and no one invests in you. You are a lonesome capitalist soul. The advantage is in most types of businesses you don’t have to file any paperwork or get any special license for a sole proprietorship. You also are generally only taxed once on your earnings (as opposed to corporations where you are taxed twice; more on that in a moment).

The advantages of sole proprietorships sort of end there. Many people start out this way, but the unlimited personal liability tends to push people away from sole proprietorships as soon as they either start making serious money or start doing things that could have major consequences. The free enterprise side of me loves that sole proprietorships are legitimate, but the lawyer in me can’t help but want to put an asterisk on legitimate* because in most instances a sole proprietorship is not the optimal way to conduct business.

Partnerships

Partnerships are a funny thing because there are several different types and there can be a wide variance among them. These differences can be hard to discuss because of a lack of creativity in naming the different types. There is the general partnership, the limited partnership (“LP”), the limited liability partnership (“LLP”), and the limited liability limited partnership (“LLLP”). To avoid details that you probably don’t care to know, the biggest differences in these types lie in the liability each kind of partner carries. The unifying thing among them is that they generally involve more than one owner and partnerships are all taxed similarly. Partnerships are “Pass-through entities,” meaning they aren’t taxed as entities themselves. The earnings and losses are “passed on” to the partners according to the partnership’s arrangement.

Of note, the general partnership is analogous to the sole proprietorship, but with more than one person having ownership in the business. If you are operating a business with other people and you don’t pick which type of entity you want to be or file the necessary paperwork, this is the default the law gives you. And it sucks.

General partnerships have a huge disadvantage: unlimited liability, not just for your mistakes, but for your partners’ mistakes too. So one of your partners can screw up and you can be left holding the bag with no shield to protect your personal assets. This is probably the worst type of business to operate as. Like the sole proprietorship, it’s nice that you don’t have much or any paperwork to file and you don’t get taxed twice, but do you really want to be on the hook for you partners’ mistakes? Didn’t think so.

Limited Liability Companies

The Limited Liability Company (“LLC”) is probably the most versatile entity on the list. Members and employees typically enjoy limited liability, and LLCs can generally be taxed either like a partnership or like a corporation. Despite its versatility, the LLC is not optimal for every business. Depending on the arrangements you want between the owners, the default provisions for one of the partnership types may be a better fit, which means lower legal fees in making the entity conform to your intent. Also, unlike a corporation, LLCs generally can only issue one class of equity to its members, which can be a deal breaker for some investors.

Corporations

Corporations are the granddaddy of entities for limiting liability. Like LLCs, Corporations are a legal fiction that creates a “person” distinct from the owners, directors, and operators of the business. Corporations are fancy and complicated, both to start and to maintain. They also have a huge disadvantage: double taxation. Earnings of the corporation are taxable for the organization, then whatever profit an owner realizes is taxed again as personal income. There are a host of reasons to organize as a corporation instead of a particular type of partnership or LLC, including the relative durability of a corporation and the more extensive funding options. You need to decide whether these advantages offset the increased tax burden.

Lots more to talk about.

I guess we can stop there for now, but there’s lots left to talk about, including the limits of limited liability, the importance of default provisions for the type of entity you choose, dissolution, and more. I feel a follow-up post coming up pretty soon.

Resist Rationalism, Unless You Want to Suck.

Thu, 19 Nov 2009 02:45:03 -0500

Are you wondering what an entry with this title is doing on this blog? Me too! But this idea has been bouncing around in my head and I feel like it’s just as valid as anything else I might post here. So I ask that you forgive this indulgence.

Time commitment: Less than 10 minutes

Ok, so I’ve been thinking about mental ruts lately and how limiting they can be (I wish @timchilcott had a summary of his potato talk to link to). It reminds me of a school of thought called Rationalism that wreaked havoc on American Jurisprudence for a time.

Rationalism, in my limited-probably-incorrect understanding, is the idea that Reason is a key path to knowledge, and, in some cases, an ultimate source of knowledge. Despite sounding all well and good, this is a silly, sometimes dangerous premise. I don’t want to sound anti-intellectual because I love Reason. I try to be reasonable whenever practicable. It’s a useful tool for understanding what you observe. But Reason as a path to knowledge is troubling for a number of, wait for it… , reasons. Here are just a couple.

Reasonable Minds Can Differ.

Have you ever met somebody whom you respected intellectually, but who disagreed with you on something you thought was common sense? Me too. That’s because as much as we extol Reason, the reality is that it’s possible, even probable for people to have conflicting, but nonetheless reasonable understandings. I’m tempted to put an example here, but it might be more illustrative for you to think of one. Think hard about a time recently when you disagreed with somebody. It may have been on an issue that you were passionate about. You may have taken personal offense at the person even considering an alternative viewpoint. Now, consider for a second that the person may not be trying to offend you or make your life more difficult. Try to imagine that their difference in understanding was thought out and genuine. If you can think of an example (and I hope you can), this should be a clue that Reason does not, without more, prove anything. It only serves to either apply rules of understanding to facts or derive rules of understanding from facts. Reason alone is not a basis for Truth. I think a lot of people confuse Reason with Truth, which is ok for some applications. But such confusion tends to close your mind. If you arrive to a reasonable conclusion, you may be in conflict with an equally reasonable conclusion. This brings me to my next point.

Reason is Imperfect.

Ok, this isn’t really a criticism of Reason per se, but Reason is limited by our available facts. The biggest limitation to Reason is our inability to completely know anything. Most of us don’t have the luxury of exhaustive research before we commit to a conclusion. As a consequence, all of our reasonable conclusions are vulnerable to being unwoven by some unknown fact. This undermines the reliability of our conclusions more than we realize.

Indulging Rationalism Limits You.

When you either tacitly or explicitly assume a reasonable conclusion is valid and applicable, you are necessarily excluding other equally valid reasonable conclusions. In doing so you have artificially narrowed your solution set to exclude potentially superior solutions. For instance, say you are considering moving to a new city and you know you have a preference towards warmer cities. Notwithstanding any other preference, it would be reasonable to narrow your scope of cities to exclude those with the fiercest winters, but in doing so you may be excluding a city that is preferable in other ways. Preferable in ways, as it may turn out, that outweigh any disadvantage the city’s climate may present. The reasonable conclusion you reach may nonetheless be harmful to your well being because you’ve excluded some useful information from your analysis. I know this is a pretty weak example, but I think you might get the point.

Rationalism is not the way to anything.

Pure Rationalism assumes that Reason will win out, which could be true if every conclusion we make existed in a vacuum. But none do. The more realistic perspective is cognizant of the limits of Reason and, in recognition of those limitations, endeavors to test every reasonable conclusion. It’s amazing what a bit of evidence can do to ignite or squelch a fighting faith.

To frame all of these assertions in a more practical way for your business, let me suggest this. Test everything you hear, and everything you believe. For example, are you hearing the agile development is the way forward for the industry, and by proxy your business? Test the agile methodology and see what works for you and what doesn’t. There are probably a dozen perfectly rational arguments for or against agile development in your business. You know what? They are all probably valid. Test them and see which pieces work. Be willing to buck the industry trends where they don’t make sense for your business. If you don’t, you will end up with someone else’s best fit, which will make you suck. And you don’t want to suck.

Choosing a valid Trademark - Takeaways from the BarCamp talks

Wed, 18 Nov 2009 04:52:00 -0500

I’ve had the opportunity to speak at a few BarCamps recently about choosing a protectable trademark. I will have a podcast covering this topic soon with examples and more complete explanations, but I thought it would be useful to put up some highlights in the meantime.

Trademark law deals with identity.

Trademark law is primarily concerned with identifying goods or services with their respective sources. Virtually anything can be used as a trademark, but the law sets some limitations to avoid losing the common meaning of whatever a business adopts as their mark.

The more a Trademark describes your product or service, the harder it is to get protection.

Trademarks require distinctiveness to be meaningful. Otherwise a mark would not be effective at identifying a business. Generally speaking, the more your trademark relates to your good or service, the harder it is to gain legal protection for the mark.

The framework (known as the ‘Abercrombie’ test):

Generic marks - Never valid.
Descriptive marks - Valid upon a showing of “secondary meaning.”
Suggestive marks - Generally valid immediately.
Arbitrary or Fanciful marks - Generally valid immediately.

Explanations (skip this if you don’t like details):

A generic mark is the common name for a class of good or service. For instance, COMPUTER, VIDEO GAME and RESTAURANT are all generic marks as they relate to computers, video games, and restaurants, ~~obviously~~ respectively. So a business would not be able to use any of these phrases exclusively for those goods or services.

A descriptive mark is one that describes the good or service literally, but is not merely its common name. An example might be RED ROOF INN as it relates to an inn with a red roof. By default these types of marks are not immediately valid, but can become valid if consumers begin associating the mark with a particular business. This is called acquiring a secondary meaning.

A suggestive mark is one that is somehow connected conceptually to the good or service, but requires some use of imagination to understand how the mark relates to it. An example might be RACETRAC for gas stations. Generally speaking, these types of marks are immediately eligible for protection.

An arbitrary or fanciful mark is one that has no logical connection to the good or service. Arbitrary marks are existing, unrelated words, while fanciful marks are invented words. AMAZON as it relates to an online retail store might be an example of an arbitrary mark, and MICROSOFT as it relates to computer software might be an example of a fanciful mark. Like suggestive marks, arbitrary or fanciful marks enjoy immediate eligibility for protection.

Whether a mark is valid is only the beginning.

Whenever you are choosing a mark, you must balance the ease of gaining trademark protection with the marketing advantages or disadvantages a mark gives you. You also need to avoid using a mark that overlaps with an established mark. There are other factors to consider, so it’s best to consult with an attorney when the time is right. Still, this framework should give you some guidelines when you are initially naming your business, product, or service.

I’ll cover more in the podcast.

If you are one of the over 6 billion people who didn’t catch any of my BarCamp talks, stay tuned for my upcoming podcast, which will include more examples and (hopefully) more accessible explanations.

Don't Vouch for a Fool

Thu, 12 Nov 2009 04:47:00 -0500

The Campaign Monitor Blog has a new post titled “Who pays the price when your client doesn’t have permission” about the implications of a client requesting services that may end up being wrongful in some way. While the post specifically deals with Campaign Monitor’s white label email service, it brings up the broader question of indemnity.

Indemnity generally refers to a contractual arrangement where one party agrees to bear the losses or obligations of another party arising out of an agreement. In practice that can mean the indemnifying party steps into the shoes of the party that screwed up or suffered misfortune and becomes liable for any damages covered by the agreement. A common example of this is automobile insurance, where the insurance company indemnifies you for the damages resulting from an automobile accident, compensating whomever you harm for their injuries, and possibly compensating you for your own losses.

In the context of the above article, clients may request services that end up breaking the law or causing damage to others. Beyond the practical tips they provide to avoid problems, an indemnity clause can offer an additional layer of protection if the client is open to it. Whether or not the client is receptive to the idea of indemnity, it’s probably worth fighting for indemnity in situations where it seems like the client is likely to do something stupid, reckless, or just plain risky that could be illegal or harm others.

It’s important to realize that a single agreement can create indemnity from either party to the other, and can even create mutual indemnity where each party agrees to bear the other’s losses. If an agreement you are considering has an indemnity clause, make sure you understand who is indemnifying whom and whether you are comfortable with the arrangement. CYA guys.

Do you guys have any stories where an indemnity arrangement saved you or left you holding the bag? Do you think I misused “whom” anywhere above? Let me know!

"We consider Jesse a good friend and we're excited to help announce his new podcast 'Jesse Lamb is NOT my lawyer'."

Mon, 09 Nov 2009 15:12:46 -0500

Allan Branch (@lessallan) wrote a blog post about Jesse Lamb is Not My Lawyer! Thanks man! I can’t wait to see you guys this weekend at Barcamp Philly!

Episode 0: An IP Overview Steve Bristol from Less Everything...

Thu, 05 Nov 2009 10:35:59 -0500

Episode 0: An IP Overview

Steve Bristol from Less Everything joins me for an overview of the four main bodies of intellectual property law: Trademarks, Copyrights, Patents, and Trade Secrets.

Thu, 05 Nov 2009 09:42:00 -0500

Here is the RSS feed for the podcast.

Obligatory Introductory Post

Wed, 04 Nov 2009 00:00:00 -0500

Hello. In case you couldn’t tell from the logo above or the name of the site, my name is Jesse Lamb, and I am not your lawyer. I am a licensed attorney, ~~but I don’t practice law, and I don’t really have any intention to.~~ What I’m really interested in is technology and entrepreneurship. Not wanting the 3 years of my life spent in law school to go to waste, I’m starting this site with hopes that some of the basic legal knowledge I’ve acquired might be useful to you in whatever business you are trying to start or grow. I can’t guarantee everything I post here will be useful or even worth your time, but I do hope that it is. I look forward to meeting all of you that I can on twitter, at Barcamps, or wherever. Welcome!

[Update in the interest of disclosure: I am practicing law now on a part-time basis, but my heart is still with technology and entrepreneurship.]