On the Law & Technology Blog on Legal Solutions I continued my series on the upcoming changes to the rules promulgated under the Children’s Online Privacy Protection Act (COPPA) by discussing how the rules will define “personal information” as of July 1, 2013, since this is the data that website operators will need to protect.
Everybody understands and agrees that information technology (IT) is a key tool for launching and growing a successful business. Unfortunately, most emerging companies lack the time and resources to stay up with best practices and acquire all of the IT equipment that they would like to have. In most cases, the founders will need to take a few shortcuts until capital is available from investors and operations to begin creating a formal and scalable IT infrastructure. Here are a few simple tips to keep in mind from the very beginning:
Seriously consider leasing, rather than purchasing, IT equipment in order to take advantage of tax benefits and provide greater flexibility to upgrade to the next generation of equipment when the time is right. In general, IT equipment becomes obsolete well before the date that it is fully depreciated for tax purposes.
Most emerging companies lack the funds to invest in a trained in-house IT staff. However, IT for the business is usually not something that the founders can afford to spend the time learning about since they need to remain focused on the other key aspects of the business during the concept and launch stage—product development, marketing and contacting potential investors. The best solution is an alliance with an experienced outside vendor, perhaps even a company from which equipment is being purchased or leased (i.e., CDW, Dell or HP), for technology support and consulting services. These firms can assess the start-up’s network and other technology needs and design a solution that is scalable and fits within a modest budget.
When creating your IT budget don’t forget that most of the costs come after lease or purchase of the equipment—new hardware and software will need to be tested, properly installed throughout the company, and managed and maintained over its useful life. Another cost that needs to be considered is taking equipment out of service when it is time to upgrade and transitions should be carefully planned to make sure that there is no disruption in in-house productivity and/or service to customers.
There is always a crucial tradeoff between cost and performance. Start-ups often attempt to save money by selecting a low cost alternative that is not able to keep up with projected rapid growth of the business. The result is lost business and a major disruption to expansion plans. Whenever possible, companies should make the necessary investment to build a strong communications infrastructure that allows employees to load and share all necessary business data relating to finance, customers and suppliers on a common network that can be accessed from anywhere that the company is doing business.
IT equipment should be viewed as productivity tools that make life easier for employees and thus keeps them happy and motivated. Cell phones, including high end devices such as BlackBerrys, should be made available for mobile employees and work inside the company’s facilities should be eased by providing employees with several monitors so that they can work on multiple applications at one time.
Don’t forget to factor security and disaster planning into your IT strategy. Make sure that data on the company network is backed up and that security measures are taken to prevent the loss of sensitive data in the event that laptop and other off-site computers are lost or breakdown. Also take precautions against problems that may be caused by viruses and spyware on company networks including the possibility of outsourcing e-commerce activities and e-mail to third parties that are better positioned to deal with those problems.
Once the company is up and running it should be expected that a major IT upgrade will be required every three years or so, usually corresponding to the end of the warranty period on the prior purchase. This will be a continuing expense for as long as the business is operating and should always be an important consideration in the regular business and financial review process.
my April 2013 post for newer attorneys on Beyond the Bar I described the new
pro bono requirements imposed on applicants for admission to the New York bar
and the challenges and opportunities that they have created for new business
In my post for newer attorneys on
Beyond the Bar I discussed how shareholders’ agreements can be used to identify
potential problems among business partners and reduce suspicions that may
ultimately bring a promising venture crashing down.
One of the longest running debates between industrialized and developing countries focuses on the scope of protection for intellectual property rights. Industrialized countries, such as the United States, have argued for strong legal protections of their technologies and associated rights–patents, copyrights, trademarks and trade secrets–as necessary incentives for investment in innovation. On the other hand, developing countries seeking to accelerate their entry into global markets and improve the daily lives of their citizens have been reluctant to recognize intellectual property rights that would deny them access to technologies and basic essentials such as pharmaceuticals. This is a dilemna that Alan Gutterman, the Director of the International Center for Growth-Oriented Entrepreneurship, which supports this blog, first wrote about in a 1993 article that appeared in the Wake Forest Law Review. Since that time countries on both sides of the debate have been forced to review their positions and intellectual property protection has been a regular item on the agenda whenever multi-lateral negotiations take place on trade-related issues; however, significant gaps remain in content and enforcement of intellectual property laws around the world and exporters from all countries must carefully evaluate intellectual property rights for every new export destination and determine the best strategy to use for protecting their rights in the applicable foreign country.
Changes are coming to the rules promulgated under the Children’s
Online Privacy Protection Act (COPPA) and I launched a series of posts on those
changes on the Law & Technology Blog on Legal Solutions by looking at steps
that have been taken to expand the types of website operators subject to COPPA
and its rules. To learn more click here.
In my latest contribution to Business Law Currents I provided readers with a “Top Dozen” list of the issues that attorneys should discussed with their clients before taking on the onerous and challenging task of negotiating and documenting the terms of a new joint venture. Certainly a list of 12 issues will not capture all the details that must be considered in documenting a joint venture; however, the exercise will almost certainly focus the principals on the areas that are key influences on the success of the collaboration.
I completed a series of three posts
on Findlaw Corporate Counsel on various aspects of working with the HR
department by discussing the "nuts and bolts" of the attorney’s HR
"tool kit": documents, systems and compliance programs. To view the post click here. Earlier posts discussed the
activities and responsibilities of the HR department and legal and regulatory
environment in which HR professionals work.
Prognosticating the issues and trends that will drive the in-house counsel’s workload this year is not an easy task. With a wide scope of responsibilities and a skill set as diverse as those of the “typical” general counsel, it’s hard to know what general counsel and in-house counsel will take on in 2013. However, in a recent article for the ACC I tried to lay out, in no particular order, some predictions about corporate governance, regulatory risks, boundaries of the employer-employee relationship and other issues that professionals in the corporate legal department may be working on this year.