girls in tech talk (xavier & associates llc) - a legal survival guide to the first 6 months
TRANSCRIPT
Girls in TechXavier & Associates LLC
The First 6 Months - A Legal Survival Guide For Your
Business
XAVIER & ASSOCIATES LLC
• IP, Tech, Commercial and Corporate Law
• Big firm background, boutique firm service
• Over 36 years of collective experience
• Silos vs Collaboration
• Legal Strategy vs Legal Documents
• Affordable, 100% Fixed Fees.
OVERVIEW- WHERE ARE WE GOING TODAY?
• The Basics of a Legal Infrastructure
• Relationships
Founders/Shareholders
Employees
Service Providers
Customers
• Conclusion
BASICS OF A LEGALINFRASTRUCTURE
LEGAL INFRASTRUCTURE – WHY?
Name a time in history when laws were not required…
LEGAL INFRASTRUCTURE – WHY?
As I was saying, it’s
about time we had traffic
laws!
Game Time: “I Still Haven’t Found
What I’m Looking For”
Expectations are harder to figure out when
they’re not in black and white
Foundation Regulate relationships Protect the business
Enforce rights and dutiesResolve conflictsClarify expectations
SETTING UP A LEGAL INFRASTRUCTURE
An ounce of prevention, is worth a pound of cure
WHY THE FIRST SIX MONTHS?
LITIGATION
CONTRACT
A HEALTHY LEGAL INFRASTRUCTURE
Company
Founders/Shareholder
s
EmployeesService
Providers/Contractors
Customers
FOUNDERS/SHAREHOLDERS- LEGAL ISSUES
65% of startups fail because of “people problems”
- Noam Wasserman, “The Founder’s Dilemmas”
FOUNDERS/SHAREHOLDERS– LEGAL ISSUES
• Snapchat: The Case of “The Brogrammers”
Snapchat
US$10 BillionFrankBrown
Evan Spiegel
BobbyMurphy
FOUNDERS/SHAREHOLDERS– CASE STUDY
• Whose idea was it?• Whose IP?• Whose capital?• Time• Opportunity cost?• Part-time or full-
time?• Executive role in
company
• Industry expertise?• Future employees?• Group dynamics• What ifs?• Non-competition
restrictions• Shareholders who
leave
FOUNDERS/SHAREHOLDERS– CONSIDERATIONS
EMPLOYEES- LEGAL ISSUES
EMPLOYEES – LEGAL ISSUES
Employment Agreement:• Confidentiality obligations• Ownership of IP
(background and foreground)
• Non-competition• IT policy• Communications policy • Termination
EMPLOYEES – LEGAL ISSUES
The best employment agreements reference an Employee Handbook• Not a luxury, but a useful means to manage
employees• Incorporate incentives• Implement rehabilitation or corrective
measures• Establish formal procedures for dealing
with wrongdoing
SERVICE PROVIDERS- LEGAL ISSUES
• Facebook: The Case of “The Pinky Swear”
MarkZuckerberg
ConnectU
WinklevossTwins
FacebookUS$230B
Verbal agreement
“The Coder”“We have an idea”
SERVICE PROVIDERS – CASE STUDY
SERVICE PROVIDERS – CASE STUDY
• The Case of “Just Do It”
App Developer
Future US$M/B Start-up
• “Reputable” local developer• Service Provider’s terms• Brief on details• Milestones• Testing and acceptance• Paid fully Launch delayed, extra costs
• Confidentiality
• IP ownership – Background and Foreground
• Non-competition
• Customer Data
• Deliverables, Milestones, Testing and
Acceptance, Termination & Cure.
SERVICE PROVIDERS – LEGAL ISSUES
CUSTOMERS- LEGAL ISSUES
• Terms of Use(aka user agreement, terms of service,
licence agreement, EULA, etc.)• Privacy Policy• Identity of user• “Click-wrap” vs “Browse-wrap”
CUSTOMERS – LEGAL ISSUES
• Click-wrap: website user is required to take some form of positive action to express assent to the terms and conditions;
• Browse-wrap: terms and conditions accessible via a hyperlink appearing on website, with no requirement that a website user take any affirmative action to indicate assent to the terms and conditions.
CUSTOMERS – CLICK-WRAP VS BROWSE WRAP
CLICK-WRAP VS BROWSE WRAP – CASE STUDY
• The Case of “Close, But No Cigar”
ANGRYUSERS
• 24 million users• Customer data hacked• Multiple lawsuits filed• Tried to rely on arbitration clause in terms of use
CUSTOMERS – CLICK-WRAP VS BROWSE WRAP
“… the advent of the Internet has not changed the basic requirements of a contract, and there is no
agreement where there is no acceptance... A party cannot assent to terms of which it has no knowledge
or constructive notice, and a highly inconspicuous hyperlink buried among a sea of links does not
provide such notice. Because Plaintiffs did not assent to the terms, no contract exists, and they cannot be
compelled to arbitrate.”
CUSTOMERS/USERS – CASE STUDY
Use Click-Wrap Agreements
I Agree
CONCLUSION
• Budget for legal advice/documentation
• Seek legal counsel early and at every stage of
growth
• Lawyers are best deployed as minesweepers,
not salvage crew.
CONCLUSION
THIS IS BUSINESS NOT A SCIENCE PROJECT
Thanks to:
CONTACT US
Xavier & Associates LLC
11 Collyer Quay, The Arcade, #17-00
Singapore 049317
Tel: 6521 4550
Email: [email protected]
www.xavierlegal.com