DIY e-Commerce Law

But there are still times when it really is dangerous to “do it yourself” and when it is best to rely on trained professionals. While I have a built-in bias as an attorney who practices business law, let me highlight areas of the law relevant to e-commerce where it is hard, if not impossible, for a person without legal training to “know what he does not know.”

And the need for would-be or even fledgling e-commerce entrepreneurs to have this knowledge is more than just my opinion. In my years of practice, including advising e-commerce ventures, I have seen clients who had to pay our firm to fix the problems they created by trying to do law themselves as the result of entrepreneurial hubris ' and the fees they paid the firm were perhaps more than it would have cost them to have counsel do the work properly in the first place.

Because I have been challenged frequently to identify to business clients how an attorney can “add value,” I think it is only fair to point out situations when not having competent counsel can subtract value from a business. It's also important for attorneys practicing e-commerce law to remind themselves that they shouldn't overlook some elements of what their clients might do as “routine” business steps that don't require consultation with, or action by, counsel.

Ask an Expert!

Foremost must be the purely economic argument: Unless you have unlimited time and funds, are your resources best spent educating yourself about potentially complex legal subjects? Wouldn't it be cheaper just to pay for the services of someone who already has that knowledge? Even the most frugal owner of a startup should recognize the “opportunity cost” of her own time, not to mention the risk of getting something complex wrong. In most areas of the law, particularly specialized topics, even the best self-education won't likely match the competence and expertise of a skilled professional, especially if the matter requires the owner to do something out of the ordinary.

Should You Sign That Document?

Perhaps the easiest place to turn to next is the scenario of what happens when an opposing party has counsel, and especially if that counsel is drafting documents for your signature. Even a sophisticated and experienced layperson may not realize the legal significance of agreements prepared by an attorney and that she is being required to sign. Signing documents prepared by an attorney who is not working for you, or, even worse, signing them without reading them because you trust the other side who told you that the documents were “standard,” is the legal equivalent of a lamb allowing itself to be led meekly to the slaughter by a wolf. (In fact, attorneys generally are subject to a disciplinary rule of ethics that requires us to refrain from speaking directly with an opposing party who is represented, absent the prior approval of that attorney, because of the perceived risk of abuse in such situations.)

Protecting IP

Turning to specific areas of the law, certainly the subject least likely to be able to be handled by a “generalist” ' much less a self-taught one ' is intellectual property law. For e-commerce businesses that may have only intellectual property, skilled management of those assets is a critically important competence. For example, patent law has evolved into a practice conducted almost exclusively by specialized firms, in conjunction with well-trained patent agents. In fact, there is a premium just on recognizing what is even patentable at all. After that, it is equally important to know the traps that can cause a patent application to fail because the inventor did not take proper steps at the time of discovery, long before ever contacting counsel about starting a patent application. Moreover, in our contemporary economy that transcends national borders, it is almost malpractice per se not to advise clients on the requirements of the treaties allowing international protection of patents registered in one country (and the technical requirements to be eligible for that protection).

Trademarks

The same types of procedures ' and concerns ' exist for trademarks. Those rights can be critical in the e-commerce marketplace, where branding and site promotion may be the only features distinguishing multiple online sellers, because competing sites often function equally well and have comparable pricing. Therefore, properly protecting a firm's marks, and making all of the periodic maintenance filings, in the United States and abroad, is just as important as the traditional minute-book maintenance, or of honoring other corporate formalities. Similarly, just as with patents, reserving the rights necessary to protect the integrity of the brand in foreign markets cannot be ignored, as selling products worldwide online also creates an opening for foreign fraud attacks on a firm's intellectual property.

When Domain Names Enter the Picture

In another curve of the twist, online firms must also understand the interplay between domain-name protection and trademark rights, because the domain name is the equivalent of real estate (see, “Location, Location, Location: Know Your Web Site Host,” in the November 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_7/news/152929-1.html).

As discussed at length in other articles in this publication, the continually changing landscape of available domain names (due to the expansion of available character sets, and the growing importance of pseudo-names like Facebook user names) requires the vigilance of counsel fully immersed in this area of the law (see, “What's Coming in e-Commerce in 2010? Here's What I Think,” in the December 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_8/news/153057-1.html).

Not only is it critical to be alert to new developments in name protection, but it is also important to understand what to do with a registered right, should it become necessary to go to court or to arbitration to stop use of an infringing domain name that could confuse potential customers.

Litigation!

In fact, “going to court” nicely segues to the next area of law that DIYers should not try at home ' litigation. Firms that depend on intangible assets, such as their intellectual property, sometimes must fight ' which requires paying an attorney to go to court (see, “IP Litigation: What Is It Good For? Absolutely Not Business!” in the September 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_5/news/152683-1.html).

At one level, simply having counsel raises the costs of a dispute for an opponent ' because the opponent must now also pay for an attorney, and that cost changes the settlement dynamics. At a basic level, even business attorneys routinely must rely on their litigation colleagues to properly format and present papers to be filed in a case that could not be settled in normal business fashion.

Beyond the often complex formalities of civil procedure, litigators understand alternative methods to achieve a business goal that may involve filing in a different jurisdiction, or using a different court procedure. Knowing how to use the litigation system to obtain results, whether as a plaintiff seeking the court to act, or as a defendant trying to resist a case, requires skills honed over years, often at the table of a mentor ' which are experiences outside the realm of most business founders. Being able to see the likely result of a litigated case ' where the requirements of law and justice often have little bearing on the outcome ' takes skills that entrepreneurs not only do not typically have, but that they may not even recognize as necessary to survive in a hostile court environment.

Litigation and intellectual property concerns are specific examples of another general category of disputes best left to the professionals: purely “legal” matters.

Competition-Restriction Agreements

One such concern is the creation and enforcement of agreements restricting competition (which overlaps greatly with litigation).

Those agreements can take two forms. Most commonly, distribution arrangements may establish specific sales territories, whether by geography or product differences, which courts will generally uphold as the prerogative of the seller, as long as the arrangements are reasonable (and do not violate antitrust laws regulating joint activity of firms and competitors that would restrict the ability of other firms to compete).

In addition, specific restraints on doing a particular type of business or soliciting prior clients or employees are frequently used to prevent a former employee, or former business partner (who was bought out), from using knowledge gained through a voluntary relationship against the source of that knowledge. For example, a former salesman might steal a customer account for his new employer if he was not properly subjected to a normal “non-solicitation” or “non-competition” covenant. Confidentiality duties go hand-in-hand with such agreements.

In all these cases, however, courts have narrowly interpreted the restriction, on the philosophy that any restriction that limits an individual's or company's right to work is akin to slavery, which is disfavored in our system. Against that institutional bias, therefore, knowing how courts will likely treat different types of competition restrictions can make the difference between getting protection that will hold up in court, and getting the opportunity to spend money fighting to save a worthless clause that is so excessive that a court may throw it out entirely.

More important, though, that knowledge and judgment allow a firm to negotiate for realistic covenants from the beginning of a deal or employment relationship. For example, why give up economic points to get a nationwide non-competition covenant for four years, if an experienced litigator could tell you that no court in your jurisdiction would ever enforce anything more than a two-year non-solicitation clause, or one that is limited to a narrow geographic area or product class?

Transactions

Real Estate Transactions

The need to avoid DIY mistakes in “pure law” is not limited to litigation, however. Transactional work has its own DIY pitfalls. For example, reviewing real-estate title documents, and the often archaic system that controls title to land, is not a skill that any other activity besides the practice of law prepares one to do, and even a general legal education does little that is practical in this area, either. While some title matters are routinely handled by non-lawyers involved in the system, such as title clerks and title searchers, those not in a real-estate business will not likely be able to work within this system, or recognize issues that may arise.

Also, lenders and others involved in a real-estate deal often will require a formal opinion of counsel, to make sure that particular formalities necessary to allow collection of the loan or foreclosure on real estate, or other collateral security, have been checked. No matter how thorough a CFO may be in documenting his company's assets, nothing he can do will satisfy a request for an opinion of counsel (unless the lender raises the cost of the financing because it demands more comfort in the absence of a legal opinion letter). Opinions involving the intangible assets critical to e-commerce can be particularly tricky and expensive to write, because the use of traditional searching methods for intellectual-property assets leaves room for error.

Securities

Similarly, formal issuance of securities requires compliance with many detailed rules. Certainly, public issuance of securities is rarely done without counsel because of the need for attorney opinion letters in the process. However, even for non-public companies, counsel typically supervises the maintenance of the corporate stock book and minute book, by guiding the corporate secretary in preparing minutes and equity transactions. Management “issuance” of shares by a mere accounting entry will not be legally sufficient. In case of a bankruptcy or ownership dispute, the absence of duly issued shares could leave a putative equity owner on the outside looking in at a profitable sale to a third party.

Appearances Count ' A Lot

The possibility of third-party scrutiny of a firm's legal documents leads to another area where a business owner's or manager's own work may prove inadequate. If a firm expects that a third party will have to review its internal documents, whether in due diligence prior to an acquisition or investment, or simply as part of a financing deal, the firm naturally wants the documents to be correct, so as not to give the third party any reason to question the deal, or renegotiate its terms. Particularly if the “reviewer” is a law firm, it will expect to see corporate records in a familiar format, which typically will have been prepared by counsel. The absence of such counsel-prepared records ' and the implication that the firm has not had proper legal guidance in its operations ' could be a negative factor, even if the firm has exactly the same information in a different, perhaps more ad hoc, format.

Board and Shareholder Meeting Minutes

Corporate minutes of board and shareholder meetings are a perfect example. A closely held firm may, in fact, have had meetings that satisfied the requirements of corporate law and good practice (especially if the shareholders and directors are the same persons, as often occurs), but never put the records of those meetings in a permanent record format of the type typically used by corporations (or expected by investors and lenders). When a major deal is in a firm's future, therefore, the cost-savings of DIY record-keeping may be more than outweighed by the revenue loss, or just the additional expense of having to recreate records in the format desired by the third party. (See, “Dressing Your e-Business Up for Success,” in the June 2008 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/25_2/news/150577-1.html).

Special Research Tools

A related area, albeit not law, where the DIY approach can be harmful, involves access to specialized data not generally available to the public, even to a person sophisticated in finding it. For example, no amount of hard work and diligence can create the database of properties offered for sale through a Realtor, or provide access to the referral networks and proprietary research tools used by a typical investment banker to locate potential buyers or investors.

Scrutinizing Deals

Due diligence on a potential business partner or opposing party in a deal can sometimes best be done through counsel, which has the experience through a breadth of deals to identify potential issues that a firm may not recognize itself (particularly in emerging areas of the law ' much as still occurs in e-commerce as firms explore new markets and techniques, as reported in this publication). The same philosophy applies to working with complex, interrelated, deal documents ' while business persons properly focus on the economic terms of a deal, the proverbial “fine print” that attorneys read may prove much more important in the long run. For example, procedural clauses that dictate when and how a fight will be settled, or require reimbursement of attorneys' fees, may play a much greater role in a party's decision to settle than the actual facts or law in the case.

Estate Planning

Finally, another legal concern that requires expert advice is estate planning: Getting a proverbial blue screen in life doesn't allow a figurative reboot, so the business owner's estate plan must be ready for implementation and vetted by the specialized attorneys who handle such matters. In a previous article, I demonstrated the extreme risks created when individuals attempt their own estate planning online through e-commerce sites (see, “When Death Is More Than a Blue Screen: e-Commerce Firms Should Plan to Access Critical Data After an Employee Dies,” in the April 2007 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/23_12/news/148371-1.html, and “DIY-ing to e-Plan: Considering, and Warning, Your Clients About The Ups and Downs of Online Estate Planning,” in the August 2008 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/25_4/news/150787-1.html).

Conclusion

Of course, the litany of areas where e-commerce and other firms need counsel shouldn't obscure the reality that there are still many more areas where legal fees can be avoided, especially in these times of economic struggle. In fact, in the immediate aftermath of prior economic slumps, I have championed entrepreneurs cutting legal expense by taking over potentially expensive tasks that do not require the types of expertise described in this article. Just as there is no reason to pay a CPA to organize a hodgepodge box of financial records at tax time, business firms don't need to pay to arrange their legal documents so that they can be easily located when needed. The same concept applies to basic due diligence about the other party to a key contract, or name selection.

While I certainly like to think that experienced business counsel adds value to e-commerce firms, I can certainly understand why well-managed firms like to control costs in any business climate, much less the current recessionary one. However, as I have tried to demonstrate, the key is knowing what some clients may be able to handle themselves, without doing long-term harm, and what should be left to the professionals ' especially if the cost of an error could be fatal to a key asset of an e-business.

Entrepreneurs in e-commerce have long thrived on serving those who subscribe to the “do it yourself” (“DIY”) method of doing business.

From booking travel arrangements to corporate procurement to routine shopping for entertainment, the Internet has become the weapon of choice for cutting out the middleman.

Legal services are no exception to this trend. Online self-help legal sites, such as nolo.com, have grown in tandem with the general expansion of online commerce. Such sites cater to consumers and businesses seeking low-cost guidance on routine legal matters ' like the cost-conscious DIY founders of many
e-commerce sites.

But there are still times when it really is dangerous to “do it yourself” and when it is best to rely on trained professionals. While I have a built-in bias as an attorney who practices business law, let me highlight areas of the law relevant to e-commerce where it is hard, if not impossible, for a person without legal training to “know what he does not know.”

And the need for would-be or even fledgling e-commerce entrepreneurs to have this knowledge is more than just my opinion. In my years of practice, including advising e-commerce ventures, I have seen clients who had to pay our firm to fix the problems they created by trying to do law themselves as the result of entrepreneurial hubris ' and the fees they paid the firm were perhaps more than it would have cost them to have counsel do the work properly in the first place.

Because I have been challenged frequently to identify to business clients how an attorney can “add value,” I think it is only fair to point out situations when not having competent counsel can subtract value from a business. It's also important for attorneys practicing e-commerce law to remind themselves that they shouldn't overlook some elements of what their clients might do as “routine” business steps that don't require consultation with, or action by, counsel.

Ask an Expert!

Foremost must be the purely economic argument: Unless you have unlimited time and funds, are your resources best spent educating yourself about potentially complex legal subjects? Wouldn't it be cheaper just to pay for the services of someone who already has that knowledge? Even the most frugal owner of a startup should recognize the “opportunity cost” of her own time, not to mention the risk of getting something complex wrong. In most areas of the law, particularly specialized topics, even the best self-education won't likely match the competence and expertise of a skilled professional, especially if the matter requires the owner to do something out of the ordinary.

Should You Sign That Document?

Perhaps the easiest place to turn to next is the scenario of what happens when an opposing party has counsel, and especially if that counsel is drafting documents for your signature. Even a sophisticated and experienced layperson may not realize the legal significance of agreements prepared by an attorney and that she is being required to sign. Signing documents prepared by an attorney who is not working for you, or, even worse, signing them without reading them because you trust the other side who told you that the documents were “standard,” is the legal equivalent of a lamb allowing itself to be led meekly to the slaughter by a wolf. (In fact, attorneys generally are subject to a disciplinary rule of ethics that requires us to refrain from speaking directly with an opposing party who is represented, absent the prior approval of that attorney, because of the perceived risk of abuse in such situations.)

Protecting IP

Turning to specific areas of the law, certainly the subject least likely to be able to be handled by a “generalist” ' much less a self-taught one ' is intellectual property law. For e-commerce businesses that may have only intellectual property, skilled management of those assets is a critically important competence. For example, patent law has evolved into a practice conducted almost exclusively by specialized firms, in conjunction with well-trained patent agents. In fact, there is a premium just on recognizing what is even patentable at all. After that, it is equally important to know the traps that can cause a patent application to fail because the inventor did not take proper steps at the time of discovery, long before ever contacting counsel about starting a patent application. Moreover, in our contemporary economy that transcends national borders, it is almost malpractice per se not to advise clients on the requirements of the treaties allowing international protection of patents registered in one country (and the technical requirements to be eligible for that protection).

Trademarks

The same types of procedures ' and concerns ' exist for trademarks. Those rights can be critical in the e-commerce marketplace, where branding and site promotion may be the only features distinguishing multiple online sellers, because competing sites often function equally well and have comparable pricing. Therefore, properly protecting a firm's marks, and making all of the periodic maintenance filings, in the United States and abroad, is just as important as the traditional minute-book maintenance, or of honoring other corporate formalities. Similarly, just as with patents, reserving the rights necessary to protect the integrity of the brand in foreign markets cannot be ignored, as selling products worldwide online also creates an opening for foreign fraud attacks on a firm's intellectual property.

When Domain Names Enter the Picture

In another curve of the twist, online firms must also understand the interplay between domain-name protection and trademark rights, because the domain name is the equivalent of real estate (see, “Location, Location, Location: Know Your Web Site Host,” in the November 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_7/news/152929-1.html).

As discussed at length in other articles in this publication, the continually changing landscape of available domain names (due to the expansion of available character sets, and the growing importance of pseudo-names like Facebook user names) requires the vigilance of counsel fully immersed in this area of the law (see, “What's Coming in e-Commerce in 2010? Here's What I Think,” in the December 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_8/news/153057-1.html).

Not only is it critical to be alert to new developments in name protection, but it is also important to understand what to do with a registered right, should it become necessary to go to court or to arbitration to stop use of an infringing domain name that could confuse potential customers.

Litigation!

In fact, “going to court” nicely segues to the next area of law that DIYers should not try at home ' litigation. Firms that depend on intangible assets, such as their intellectual property, sometimes must fight ' which requires paying an attorney to go to court (see, “IP Litigation: What Is It Good For? Absolutely Not Business!” in the September 2009 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/26_5/news/152683-1.html).

At one level, simply having counsel raises the costs of a dispute for an opponent ' because the opponent must now also pay for an attorney, and that cost changes the settlement dynamics. At a basic level, even business attorneys routinely must rely on their litigation colleagues to properly format and present papers to be filed in a case that could not be settled in normal business fashion.

Beyond the often complex formalities of civil procedure, litigators understand alternative methods to achieve a business goal that may involve filing in a different jurisdiction, or using a different court procedure. Knowing how to use the litigation system to obtain results, whether as a plaintiff seeking the court to act, or as a defendant trying to resist a case, requires skills honed over years, often at the table of a mentor ' which are experiences outside the realm of most business founders. Being able to see the likely result of a litigated case ' where the requirements of law and justice often have little bearing on the outcome ' takes skills that entrepreneurs not only do not typically have, but that they may not even recognize as necessary to survive in a hostile court environment.

Litigation and intellectual property concerns are specific examples of another general category of disputes best left to the professionals: purely “legal” matters.

Competition-Restriction Agreements

One such concern is the creation and enforcement of agreements restricting competition (which overlaps greatly with litigation).

Those agreements can take two forms. Most commonly, distribution arrangements may establish specific sales territories, whether by geography or product differences, which courts will generally uphold as the prerogative of the seller, as long as the arrangements are reasonable (and do not violate antitrust laws regulating joint activity of firms and competitors that would restrict the ability of other firms to compete).

In addition, specific restraints on doing a particular type of business or soliciting prior clients or employees are frequently used to prevent a former employee, or former business partner (who was bought out), from using knowledge gained through a voluntary relationship against the source of that knowledge. For example, a former salesman might steal a customer account for his new employer if he was not properly subjected to a normal “non-solicitation” or “non-competition” covenant. Confidentiality duties go hand-in-hand with such agreements.

In all these cases, however, courts have narrowly interpreted the restriction, on the philosophy that any restriction that limits an individual's or company's right to work is akin to slavery, which is disfavored in our system. Against that institutional bias, therefore, knowing how courts will likely treat different types of competition restrictions can make the difference between getting protection that will hold up in court, and getting the opportunity to spend money fighting to save a worthless clause that is so excessive that a court may throw it out entirely.

More important, though, that knowledge and judgment allow a firm to negotiate for realistic covenants from the beginning of a deal or employment relationship. For example, why give up economic points to get a nationwide non-competition covenant for four years, if an experienced litigator could tell you that no court in your jurisdiction would ever enforce anything more than a two-year non-solicitation clause, or one that is limited to a narrow geographic area or product class?

Transactions

Real Estate Transactions

The need to avoid DIY mistakes in “pure law” is not limited to litigation, however. Transactional work has its own DIY pitfalls. For example, reviewing real-estate title documents, and the often archaic system that controls title to land, is not a skill that any other activity besides the practice of law prepares one to do, and even a general legal education does little that is practical in this area, either. While some title matters are routinely handled by non-lawyers involved in the system, such as title clerks and title searchers, those not in a real-estate business will not likely be able to work within this system, or recognize issues that may arise.

Also, lenders and others involved in a real-estate deal often will require a formal opinion of counsel, to make sure that particular formalities necessary to allow collection of the loan or foreclosure on real estate, or other collateral security, have been checked. No matter how thorough a CFO may be in documenting his company's assets, nothing he can do will satisfy a request for an opinion of counsel (unless the lender raises the cost of the financing because it demands more comfort in the absence of a legal opinion letter). Opinions involving the intangible assets critical to e-commerce can be particularly tricky and expensive to write, because the use of traditional searching methods for intellectual-property assets leaves room for error.

Securities

Similarly, formal issuance of securities requires compliance with many detailed rules. Certainly, public issuance of securities is rarely done without counsel because of the need for attorney opinion letters in the process. However, even for non-public companies, counsel typically supervises the maintenance of the corporate stock book and minute book, by guiding the corporate secretary in preparing minutes and equity transactions. Management “issuance” of shares by a mere accounting entry will not be legally sufficient. In case of a bankruptcy or ownership dispute, the absence of duly issued shares could leave a putative equity owner on the outside looking in at a profitable sale to a third party.

Appearances Count ' A Lot

The possibility of third-party scrutiny of a firm's legal documents leads to another area where a business owner's or manager's own work may prove inadequate. If a firm expects that a third party will have to review its internal documents, whether in due diligence prior to an acquisition or investment, or simply as part of a financing deal, the firm naturally wants the documents to be correct, so as not to give the third party any reason to question the deal, or renegotiate its terms. Particularly if the “reviewer” is a law firm, it will expect to see corporate records in a familiar format, which typically will have been prepared by counsel. The absence of such counsel-prepared records ' and the implication that the firm has not had proper legal guidance in its operations ' could be a negative factor, even if the firm has exactly the same information in a different, perhaps more ad hoc, format.

Board and Shareholder Meeting Minutes

Corporate minutes of board and shareholder meetings are a perfect example. A closely held firm may, in fact, have had meetings that satisfied the requirements of corporate law and good practice (especially if the shareholders and directors are the same persons, as often occurs), but never put the records of those meetings in a permanent record format of the type typically used by corporations (or expected by investors and lenders). When a major deal is in a firm's future, therefore, the cost-savings of DIY record-keeping may be more than outweighed by the revenue loss, or just the additional expense of having to recreate records in the format desired by the third party. (See, “Dressing Your e-Business Up for Success,” in the June 2008 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/25_2/news/150577-1.html).

Special Research Tools

A related area, albeit not law, where the DIY approach can be harmful, involves access to specialized data not generally available to the public, even to a person sophisticated in finding it. For example, no amount of hard work and diligence can create the database of properties offered for sale through a Realtor, or provide access to the referral networks and proprietary research tools used by a typical investment banker to locate potential buyers or investors.

Scrutinizing Deals

Due diligence on a potential business partner or opposing party in a deal can sometimes best be done through counsel, which has the experience through a breadth of deals to identify potential issues that a firm may not recognize itself (particularly in emerging areas of the law ' much as still occurs in e-commerce as firms explore new markets and techniques, as reported in this publication). The same philosophy applies to working with complex, interrelated, deal documents ' while business persons properly focus on the economic terms of a deal, the proverbial “fine print” that attorneys read may prove much more important in the long run. For example, procedural clauses that dictate when and how a fight will be settled, or require reimbursement of attorneys' fees, may play a much greater role in a party's decision to settle than the actual facts or law in the case.

Estate Planning

Finally, another legal concern that requires expert advice is estate planning: Getting a proverbial blue screen in life doesn't allow a figurative reboot, so the business owner's estate plan must be ready for implementation and vetted by the specialized attorneys who handle such matters. In a previous article, I demonstrated the extreme risks created when individuals attempt their own estate planning online through e-commerce sites (see, “When Death Is More Than a Blue Screen: e-Commerce Firms Should Plan to Access Critical Data After an Employee Dies,” in the April 2007 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/23_12/news/148371-1.html, and “DIY-ing to e-Plan: Considering, and Warning, Your Clients About The Ups and Downs of Online Estate Planning,” in the August 2008 edition of e-Commerce Law & Strategy; subscribers, go to www.ljnonline.com/issues/ljn_ecommerce/25_4/news/150787-1.html).

Conclusion

Of course, the litany of areas where e-commerce and other firms need counsel shouldn't obscure the reality that there are still many more areas where legal fees can be avoided, especially in these times of economic struggle. In fact, in the immediate aftermath of prior economic slumps, I have championed entrepreneurs cutting legal expense by taking over potentially expensive tasks that do not require the types of expertise described in this article. Just as there is no reason to pay a CPA to organize a hodgepodge box of financial records at tax time, business firms don't need to pay to arrange their legal documents so that they can be easily located when needed. The same concept applies to basic due diligence about the other party to a key contract, or name selection.

While I certainly like to think that experienced business counsel adds value to e-commerce firms, I can certainly understand why well-managed firms like to control costs in any business climate, much less the current recessionary one. However, as I have tried to demonstrate, the key is knowing what some clients may be able to handle themselves, without doing long-term harm, and what should be left to the professionals ' especially if the cost of an error could be fatal to a key asset of an e-business.