Tag: Arizona business attorney

  • Ask the Hard Questions Before Starting a Business

    dock at dusk by Scott Ellis from Flickr
    dock at dusk by Scott Ellis from Flickr

    When business owners are launching their new venture, they can get so excited about launching the business that they don’t put the energy into making sure they have the structure of their business relationship laid out. Why would they want to do that? That sounds really boring and kind of a downer when you think about it.

    Even though it might seem boring or superfluous, people who are going into business need to have a meeting of the minds and address some of the hard questions that come with owning a business. It might be the first stressful conversation you have to have and it’s a good way to gauge how well your partner(s) communicate under stress. You might learn that they’re an irrational nutball when things aren’t smooth sailing and you don’t want to go into business with them.

    When I’m working with new business owners, here are some of the questions I throw at them to see how well they’ve thought through their plans.

    • When and how much will each owner get paid?
    • What happens if an owner gets divorced? Becomes disabled? Dies?
    • What are each person’s responsibilities? How much can each owner spend without getting the other owner(s) approval?
    • If the owners are deadlocked on a decision, how will you resolve it?
    • What should happen if an owner isn’t performing up to par?
    • What will happen if an owner wants out?
    • Under what circumstances can an owner kick another owner out of the company? What will the process be?
    • What’s the goal of the business, including the exit strategy?

    Ideally, these answers should be a part of the owners’ operating agreement if they have an LLC or otherwise documented in a master plan so everyone’s on the same page. Business divorces can be as messy as family divorces, especially when the owners didn’t figure some of these things out in advance.

    It’s much easier to deal with these questions when everyone’s happy and thinking about what’s fair and what’s best for the business than to wait until everyone’s pissed off at each other and looking for ways to get ahead or screw over the other owner(s).

    Before you start a new business, talk about the hard questions with your potential partners before you launch your venture and consider meeting with a business mentor and/or a business attorney to make sure that you’re setting yourselves up to be a success from all angles from the beginning.

    You can connect with me on Twitter, Google+, Facebook, YouTube, LinkedIn, or you can email me.
    You can also subscribe to the Carter Law Firm newsletter.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • How to Avoid Screaming Matches in Coffee Shops

    Office Cleaning Prank Played On Janitor In Frederick Md from Flickr
    Office Cleaning Prank Played On Janitor In Frederick Md from Flickr

    When you and a friend have a great idea for a new business, you create an LLC.

    When you create an LLC, you get super-excited about your new venture.

    When you get super-excited about your new venture, you forget to put in the business infrastructure behind the scenes.

    When you forget to put in the business infrastructure behind the scenes, you and your partner may have different ideas about how you’re going to run the business.

    When you and your partner have different ideas about how you’re going to run the business, you get frustrated with each other.

    When you get frustrated with each other, you get into screaming matches at coffee shops.

    Don’t get into screaming matches at coffee shops.

    Get an operating agreement at the beginning of your business relationship.
    This will make sure that everyone is on the same page and you can predetermine how you’re going to address certain problems before they arise.

    You can connect with me on Twitter, Google+, Facebook, YouTube, LinkedIn, or you can email me.
    You can also subscribe to the Carter Law Firm newsletter.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • When’s the Last Time You Reviewed Your Contract Templates?

    Inspiration as Commodity by exquisitur from Flickr
    Inspiration as Commodity by exquisitur from Flickr

    I had the pleasure of speaking to the Photographer’s Adventure Club last week. In addition to discussion the basics of copyright and how to protect their rights in their work, we talked a lot about the importance of contracts.

    I know the subject of contracts makes a lot of people’s eyes glaze over – it’s that fine-print-legalese-crap-that-no-one-reads-anyway stuff. A lot of people think contracts are boring and a lot of contracts are . . . but they don’t have to be.

    I love contracts. They create the basis of so many relationships – whether they are written, oral, or pieced together through a series of emails. Too often people come to me with a question about a problem in one of their professional relationships and when I ask, “What does your contract say about this?” the answer is “I don’t know” or “We don’t have a contract.” We can still resolve the problem but we could have avoided a lot of headaches and frustration by putting everything on paper in advance so everyone’s on the same page from the beginning.

    Having contract templates is often the best way to create the relationship with others that you want. In regards to photographers they should have a file of contract templates for clients who hire them, for other photographers when they have to hire an additional person to work a shoot, a copyright license for publications, a model release, and a location release. And contracts don’t have to be long, complicated, or riddled with crazy legalese to be effective. I prefer to write contracts in straight-forward English and I wish more of my legal counterparts would get on board with this idea.

    And contracts can be fun. Recently I saw an episode of Man v. Food where Adam Richman took on the Hellfire Challenge at Smoke Eaters – 12 wings covered in crazy hot sauce. Before he could begin the challenge he had to sign a waiver that required the person signing to acknowledge that “I am an idiot.”

    You can put almost anything you want in your contract as long as it isn’t illegal. And if you downloaded your contract templates off the internet, that’s not a bad place to look for ideas, but you should at least consult an attorney to make sure it suits your needs before you start using it. If the contract is valid and you sign it, you’re stuck with the terms so you want to make sure you’re not opening yourself up to get screwed over.

    If you need additional information about the minimum you need for a valid contract, please check out my video below or here.


    If you want to chat about your contract needs, please send me an email or contact a business attorney in your community.

    You can also connect with me on Twitter, Google+, Facebook, YouTube, and LinkedIn.
    Please subscribe to the Carter Law Firm newsletter for additional information about running your business more effectively. Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • How Work Made for Hire Contracts Work

    Photographer Devon Christopher Adams at Ignite Phoenix #10, photo by Joseph Abburscato used with permission
    Photographer Devon Christopher Adams at Ignite Phoenix #10, photo by Joseph Abburscato used with permission

    If you have ever hired a third party to do photography, video work, web design, graphic design, or to create website or marketing materials for your company, you should check your contracts. If you didn’t draft it correctly, there’s a good chance you don’t own the copyright in what they created.

    When you hire a freelancer or a company to create this type of content for you, you need a work made for hire contract. This contract should state that the person being hired is a contractor (not an employee) that they are being hired to create a works made for hire, and that you will own the copyright in everything they create under the terms of the contract. This contract needs to be in writing and signed before the contractor begins work on your project.

    If you don’t do this, you will not own the copyright in the work. You will only have an implied license to use the work in ways specified in your verbal or written agreement. The contractor will still own the copyright in the work. If you repurpose the work in another way without the contractor’s permission, there’s a chance that you will be infringing on the contractor’s copyright. The contractor could sue you for copyright infringement or force you to buy another license to use the work. They could offer to sell you the copyright in the content too, which basically means, from your perspective, you’ll have to pay for the same work twice.

    I work with companies and freelancers on both sides of this issue. I encourage companies to make sure they have a proper works made for hire in place with their contractors and to not let their contractors lift a finger until that contract is signed. I often suggest that they have provision in their contracts that states the contractor will indemnify the company against any infringement claims made against the company because of the contractor’s work. The company should make the contractor cover the attorneys’ fees and any damages if it turns out the contractor ripped off someone else’s work instead of creating the work themselves.

    On the flip side, I frequently write contract templates for freelancers to ensure that they understand what rights they are retaining and which ones they are giving up. Many freelancers want contracts that give the hiring party the copyright in their work and that also give the freelancer a license to put a copy of their work in their portfolio so they can use it to obtain other jobs.  Without this license, the contractor can’t use their work in any way without risking violating the copyright that the company now owns, even though they created it.

    If you are a freelancer or a company who hires third parties to create content, please contact a copyright attorney to make sure your rights and interests are protected by the terms of your contracts. You can connect with me on Twitter, Google+, Facebook, YouTube, LinkedIn, or you can email me.

    You can also subscribe to the Carter Law Firm newsletter.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • Publishing Contracts: Copyright Assignment vs Copyright License

    The best analogy for copyright is a jar of markers where each marker represents one of your rights - 10 things: Sharpies by Crystl from Flickr
    The best analogy for copyright is a jar of markers where each marker represents one of your rights – 10 things: Sharpies by Crystl from Flickr

    I had the pleasure of speaking about the legalities of publishing at Changing Hands Indie Author Conference on February 9, 2013. My session covered the basics of copyright, the importance of registering your copyrights and publishing contracts. I wanted to do a recap of the two types of publishing contracts from a copyright perspective: copyright assignments and copyright licenses.

    A copyright is the rights you get in your work. Your rights are created the instant you have an original work of authorship fixed in a tangible medium. As the copyright holder, you have the exclusive right to copy, distribute, display, perform, and make derivative works based on your original work. If you want to let someone publish your work, you need a copyright assignment or a copyright license. This should be a signed contract between the parties and it should be explicit about the rights you’re giving up (if any) and what you will get in return.

    Copyright Assignment
    When you give someone a copyright assignment, you give them your copyright. When you have a copyright assignment, you do not own your copyright anymore; the other party does. If you publish your work after you assign it to someone, you will be committing copyright infringement, even though you were the original author of the work. Some publishers require you to assign your copyright to them or else they won’t publish your work.

    If you give someone a copyright assignment and you later regret the decision, you have to buy your copyright back from them. I know at least one artist who sold the copyright in his work and later purchased it back because it was more lucrative for him to control it.

    Copyright License
    If you grant someone a copyright license, you retain ownership of your copyright and you give the other party permission to use some or all of your copyright rights. You may grant a publisher the rights to publish your work in print and/or as an ebook but retain the right to create an audio version of your work. J.K. Rowling retained her internet rights to the Harry Potter series when she negotiated her contract with her publishers, which is why she could create Pottermore.

    If you license your work, the license should explicit state whether the license is exclusive or non-exclusive, time-limited or perpetual, and clearly state how you will be compensated for granting the other party the license.

    Publishing contracts are complicated and it’s best to have a lawyer review the contract before you sign it to ensure you understand what rights you’re giving up and what rights you get to keep. As always, if there’s a portion of a contract that you don’t understand, don’t sign it.

    I also created a video this week about the difference between copyright assignments and copyright licenses here.


    You can connect with me via Twitter, Google+, Facebook, YouTube, and LinkedIn, or you can email me.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • Happy Birthday Carter Law Firm!

    Raul's Birthday Cake by lokate366 from Flickr
    Raul’s Birthday Cake by lokate366 from Flickr

    January 4, 2013 will mark the 1-year anniversary of Carter Law Firm. It’s been an amazing year. Some much has happened since the day I sent off my paperwork to the Arizona Corporation Commission and opened my firm’s bank accounts. I’ve learned so much about what it takes to be an effective business owner. Here are some of the key lessons I’ve learned.

    1. Networking Can Be A Full-Time Job.
    As a solo practitioner I am my business, so when I’m not doing work for my clients, I need to be out there promoting my business and networking with other business owners and potential new clients. I can easily attend 2-4 networking events a week. Networking Phoenix is a wonderful resource for networking opportunities in the Phoenix area. I used it a lot in my early days to learn about the chambers of commerce and other business groups in my area.

    Early on, I went to every event I could attend. I learned that it takes a while to find my niches and watering holes where I could find clients and referral sources. I was pleased to become a member of Local First Arizona. It is a great group to meet awesome business owners and they have wonderful seminars.

    2. Ask for Help.
    There’s no reason for anyone in business to feel like they have to tackle any problem alone. I’ve found there are lawyers and business owners who will share their experiences, provide resources, and be a sounding board whenever I needed it. During the early days of my firm, I was on a first name basis with the state bar’s ethics hotline because I wanted to make sure I was doing everything right. I’m glad I’ve been able to pay it forward by sharing my experiences with other lawyers and business owners.

    One thing I’ve learned as a business owner is that things are always changing so it’s impossible to know everything. It’s important to stay humble and teachable. And there are always new people to meet and connections to build.

    3. Go After What You Want.
    I’ve had to learn to be professionally bold as a business owner and to go after the experiences I want. If there’s a conference you want to speak at – apply. If you want to write a book – do it. If there’s someone you want to meet – send them an email or call them up. Just because you’re the new kid in town, it doesn’t mean you don’t have a lot to offer.

    Another thing I’ve learned is you’ll never know how great you can be unless you try. Don’t fear success and don’t sell yourself short just because you have a new business.

    I couldn’t be happier about my first year of business. I’m so grateful to everyone who helped make it such a huge success. I’m excited to see what the next year will bring.

    You can connect with me via Twitter, Google+, Facebook, and LinkedIn, or you can email me.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • Is Your Non-Compete Agreement Enforceable?

    Spider-Man vs. Batman by JD Hancock, Non-compete Agreements
    Spider-Man vs. Batman by JD Hancock

    When you started your job, did you read your employment agreement before you signed it? What about the employee handbook – did you read it or just sign the form that says you read it? There’s a good chance one of those documents contained a non-compete agreement (NCA).

    NCAs are a necessary evil, especially in this day when employees are less likely to stay at a company for their entire careers. These are contracts that restrict your ability to work in a similar position for a specified amount of time and geographic area if you leave the company.

    When someone’s thinking of leaving their job, they often review their NCA and ask if it’s valid. A lot of companies won’t hire you if it would violate your NCA. If you think your NCA is invalid, you can go to court and ask a judge to invalidate it.

    The court will have a hearing and weigh your interests against your employer’s. On one hand your employer doesn’t want to train someone and give them access to company information to lose them to their direct competition.  On the other hand, you have a right to choose where you work and you shouldn’t become unemployable because of a NCA.

    The validity of a NCA is governed by state laws and decisions from previous court cases. There was a great article in the September edition of Arizona Attorney Magazine by David Bray and David Ferrucci about the enforceability of NCAs. Here are some of the highlights.

    Courts generally want NCAs to have clear and reasonable provisions. If your NCA can interpreted in two ways – one that narrow and enforceable one that is overly broad and unenforceable and in the ex-employee’s favor – the court will usually rule in that it’s too broad and thus unenforceable. The court will look at whether you negotiated your NCA. Many new hires are given a nonnegotiable NCA as part of their employee handbook and they can either accept it as written or work somewhere else. If the NCA was negotiated, the court will be more likely to try to determine the parties’ intent when they wrote the contract.

    There’s also something called the blue-pencil rule in Arizona. This allows a court to excise “grammatically severable” and unreasonable provisions from a contract but keep the reasonable provisions. This keeps the whole contract from being invalid because of one invalid provision.

    You can also have step-down provisions in the contract.  An example of this would be, “This non-compete agreement will be in place for 12 months after the employee leaves the company. If a court finds this duration to be invalid, then the duration will be 9 months. If a court finds this duration to be invalid, then the duration will be 6 months.”

    A valid step-down provision will only have 2 or 3 choices and be written in good faith. A 2006 Arizona case said that good faith step-down provisions must be:

    1. Definite,
    2. Consistent with the underlying provision,
    3. Easily severable from unreasonable provisions,
    4. Have a narrow duration range, and
    5. Have a reasonable geographic scope.

    A valid NCA might result in you not being able to work for a direct competitor or in the physical vicinity of your previous employment, but your skills are likely transferable to other jobs or you can do the same job if you’re willing to do it far enough away from your previous employer.

    Read your employment contract carefully. If you’re an employee, get a copy of it before your first day on the job so you can review it and possibly have a business lawyer review it. If you’re an employer, hire a lawyer to write your NCA for you so a court will be less likely to rule that it’s overly broad or otherwise invalid.

    One word of caution: In contract cases, Arizona is a “loser pays” state. If you go to court to dispute a NCA and you lose, you’ll be paying for your attorney and the other side’s attorney.

    Feel free to connect with me via Twitter, Google+, Facebook, and LinkedIn, or you can email me.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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  • Employers Can’t Control Personal SM Accounts

    i love my job by peretzpup
    i love my job by peretzpup

    Last week a friend of mine asked about if employers can require employees to do anything with their social media accounts. Apparently, his friend’s employer asked the employees to change the cover photos and avatars on their Facebook pages to some type of advertising for the company.

    If a company wants to be involved in social media, they need to create their own accounts on Facebook, Twitter, and any other site where they want to have a presence. They should also have crystal clear contracts with the employees and/or businesses who manage these accounts that state how they should be used, who will own the intellectual property on the sites, and who will own the accounts and followers if the employee leaves or changes positions or if the company hires another company to manage their social media.

    Back to employers telling employees what to do on their personal accounts – your personal Facebook account is your personal property. Your employer can prohibit you from being on your personal accounts during work hours or work computers and they can discipline you for violating your employment contract on it (as long as it doesn’t violate the NLRA). But to require you to promote the company on your personal page? That would be a big “Oh hell no.”

    I checked out Facebook’s terms of service and they clearly state you must use Facebook Apps for all promotions and that you will not use “your personal timeline for your own commercial gain (such as selling your status update to an advertiser).” If your employment is contingent on promoting the business on your personal account, I see a valid argument that you essentially sold your part of your timeline to your employer.

    On the other hand, companies want their employees to be happy in general and want them to support the product. I see no problem in companies making images available if employees wanted to voluntarily change their profile photos. I think it would be awesome if the company allowed employees to take pictures of themselves with a company mural or sign to use in social media if they were so inclined. This would have to be completely voluntary with no consequences, positive or negative, based on employee participation.

    I’m a big proponent of employers leaving employees alone when it comes to their personal time and social media accounts as long as the employees aren’t violating company policies. If you think your employer is asking you to do something questionable with your social media accounts, check the website’s terms of service and consult a social media attorney (like me) in your community.

    Feel free to connect with me via Twitter, Google+, Facebook, and LinkedIn, or you can email me.
    Please visit my homepage for more information about Carter Law Firm.

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    Ruth Carter

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