Why Are Lawyers So Expensive?

Get An Experienced Lawyer.Lawyers are expensive because we all wear $1000 suits and want you to pay for it.

Just kidding. That’s definitely not true. I get most of my suits from Macy’s.

In fact, you may be surprised to learn that most small firm lawyers barely make a living after the expenses and regulations related to the practice of law. It is a myth that most lawyers are rich. There are rich lawyers, of course. But it is easier to be rich as a businessman than as a lawyer. (Hint: Business people are the lawyers’ boss because they are the lawyer’s customer.)

There are a lot of reasons why law and lawyers are expensive. But I try to sum it up in this 60 second video:

Video Transcript:

Why are lawyers so expensive?

Why are lawyers so expensive? Two reasons: First, really good lawyers are hard to get because they’re in demand. Cheap lawyers do exist, but do you really want a discounted professional to deal with some of your most important problems in life? An expert lawyer spends a lot of time thinking and crafting the best solutions for you. They have experience, contacts and are uniquely talented at law, which is not an exact science or just a matter of filling out papers. The second reason is, no matter who you hire, legal work is complex, detailed and precise, and generally requires a lot of effort to complete. It is necessary for lawyers to do a competent job and not just give you “close enough” because little mistakes can have big consequences. Got more questions? Visit us at bellatrixlaw.com for more answers or to schedule a consultation with one of our attorneys.

You can see more of Alicia Dearn’s helpful videos on her YouTube channel.

Non-Disclosure Agreement

NON-DISCLOSURE AGREEMENTS

Non-disclosure agreements are called by many different names: NDAs, confidentiality agreements, confidential disclosure agreements, and proprietary information agreements, among other terms. Regardless of the terminology or type of business entity which is involved, all non-disclosure agreements share the same basic objective: protecting businesses against financial losses arising from the disclosure of trade secrets and confidential information. They must not be confused with non-compete agreements, which are designed for a different purpose and are of limited use in the state of California, where they are typically considered unenforceable.

Startup Tools Toolbox

Because clear and enforceable non-disclosure agreements are a dynamic and effective means of protecting proprietary information, well-constructed NDAs have proven invaluable for countless business owners and employers across a diverse range of industries, and should be included in every company’s legal toolbox. But remember, NDAs which violate state or federal laws often create more problems than they protect against.

At Bellatrix PC, our knowledgeable business attorneys have extensive experience helping start-ups, partnerships, limited liability companies, and corporations draft detailed, favorable, and enforceable non-disclosure agreements.  We pride ourselves on our sophisticated understanding of state and federal business and employment law, and will work closely with your company to determine and pursue a strategic and cost-effective means of resolving any NDA-related matter.

To schedule a confidential legal consultation, call our law offices today at (800) 449-8992.

Understanding the Difference Between Non-Compete and Non-Disclosure Agreements

As noted above, it is critical for employers and business owners to familiarize themselves with the fundamental differences which separate non-disclosure agreements from non-compete agreements. The two contracts serve different purposes, yet the terms are often transposed or mentioned in the same context, which creates confusion and misunderstandings regarding their actual purposes.

Non-compete agreements impose restrictions on a current or former employees future employment opportunities. For instance, a non-compete agreement may state that when an employee leaves Company A, that employee cannot work at a competing company for a certain period of time.  In addition, it may state that the employee cannot start a competing business for a finite period of time. Because non-compete agreements expressly restrict both competition and a person’s ability to earn a living, they are rife with potential problems and are seldom enforceable in California.

NDA’s on the other hand are designed to prevent a party, often an employee, who will be exposed to confidential, trade secret, or proprietary information  from divulging that information without expressly restricting competition or future employment. In the instance of an NDA, an employee may agree that when they leave Company A, they will not divulge or misappropriate any confidential or proprietary information obtained from Company A. Breaking the terms of a well drafted non-disclosure agreement  would expose the breaching party to substantial liability  based on breach of contract (damages for breach of an NDA are discussed in more depth later in this article). Because NDAs do not prohibit competition per se – they merely prohibit misappropriation and use of the employer’s confidential information, they do not face the same enforceability problems as non-compete agreements.

NDAs can be “mutual” (meaning two parties share trade secrets, often used when two businesses collaborate on a single project) or “one-way” (meaning only one party shares information, often used when an employer is entrusting trade secrets to an employee).

For California business owners, the important thing to remember is that NDAs do not struggle with the same enforceability issues as non-compete agreements.  Therefore, NDAs are consistently the more effective and reliable means of protecting confidential information and preserving a business advantage.

What Are Trade Secrets?

Trade secrets are as varied as the businesses who hold them.  Depending on what the entity does, trade secrets might include formulas, computer software, algorithms, recipes, databases, product designs, methods of manufacturing, businesses strategies, and other pieces of information which give the business a competitive edge.

Cal. Civ. Code § 3426.1, which is part of the Uniform Trade Secrets Act, defines a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process” which both (1) “derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use” and (2) “is the subject of [reasonable] efforts… to maintain its secrecy.”

While there is no bright line rule for what constitutes a trade secret, it’s safe to say that any business which has created, designed, or implemented something that gives it an economic advantage or a competitive edge should take measures to protect it.

Recovering Damages for Breach of Contract and Confidentiality Violations

The Uniform Trade Secrets Act doesn’t simply define what trade secrets are: it also sets forth potential consequences of violating a non-disclosure agreement.  Cal. Civ. Code § 3426.3(a) clearly states the following:

A complainant may recover damages for the actual loss caused by misappropriation [defined as “acquisition of a trade secret… by improper means” or “disclosure… without express or implied consent].  A complainant also may recover for the unjust enrichment caused by misappropriation that is not taken into account in computing damages for actual loss.

The Act also supplies some additional guidelines pertaining to civil lawsuits and compensation:

  • Even if it cannot be proven in court that misappropriation of a trade secret led to unjust enrichment or financial damages, the court can still “order payment of a reasonable royalty” for a limited period of time (see Cal. Civ. Code § 3426.3(b)).
  • If the misappropriation was “willful and malicious” (i.e. intentional and with the intent to do harm), then the plaintiff can potentially recover damages up to twice the award under Cal. Civ. Code § 3426.3(a) or Cal. Civ. Code § 3426.3(b) (see Cal. Civ. Code § 3426.3(c)).

As with any type of contract or written agreement, the use of generic boilerplate documents is a recipe for legal and financial disaster. The importance of drafting unique, customized NDAs with assistance from an experienced business lawyer cannot be overstated.  Businesses have maximum protection when they have NDAs which account for specific details and conditions unique to their business.  Using a clear, comprehensive, and tailored agreements drastically reduces the chance that the contract will be breached or found to be unenforceable in future.

Employers are urged to steer clear of the numerous generic templates available for download from the internet. NDA templates are often overbroad, unenforceable, and include non-compete clauses which violate California law. The breach of contract attorneys of Bellatrix PC have years of experience representing a broad spectrum of entities in the preparation and defense of business contracts like non-disclosure agreements and covenants not to compete. Whether you simply need assistance drafting or reviewing new or existing NDAs, or you need aggressive legal representation from a commercial litigation attorney, our team is ready to help yours

To talk more about how we can help you meet your goals and resolve your disputes, call Bellatrix PC right away at (800) 449-8992.

What You Don’t See Can Hurt You

Black widow Spider wrapping its preyAs an attorney, it is never a surprise when I find things missing from a business contract.  Even if you work in an industry where most contracts are “standard” or “boilerplate” they should always be reviewed and (almost always) modified to suit the specific circumstances of each business transaction.

There are three areas commonly overlooked (or intentionally omitted) in business contracts.  Check your documents to be certain these are included.

Venue and Law

In the event of a dispute, where the dispute will be adjudicated is critical.  If you are dealing with a client across the country and this section is omitted, they could file a lawsuit in their location.  This would force you to incur significant fees to travel to that venue to respond.  You would be at a significant disadvantage.

If you add this provision, you select the venue. This could tilt the playing field in your favor.

At minimum, you should select a mutually agreeable location, equally inconvenient to both parties.

There is also something else to think about: The applicable law.  Just because you select a specific venue does not guarantee that jurisdiction’s law will be applied.  You must specify the specific law you want to be applicable to enforce the terms of your contract.

Legal Fee Responsibility

Litigation is not designed to be easy or inexpensive.  When you enter into a contract, you should give careful thought to the costs of enforcement of your rights.  If you prevail in a lawsuit, you should be compensated for expenses required to do so.

If this is not included in the contract, a business with an in-house attorney, or a business owned by an attorney, has little financial risk in filing a lawsuit or breaching a contract.

It’s a big red flag to me when a business’s in-house lawyer refuses to agree to an attorneys’ fee provision. That means that they want to avoid consequences should they choose to breach.

Protection for Your Intellectual Property

Most business owners do not think about the value of their intellectual property.  Your business methods, trade secrets, marketing copy, standard operating procedures, all have value.  You should take steps to protect them.

When you enter into an agreement with a service provider, he/she will have access to all of these assets.  You must contractually require all service providers to protect your intellectual property.  If they intentionally (or carelessly) expose them to your competitors, it could damage your business.

The fact these provisions are overlooked in many contracts can work in your favor.  If the other side has drafted the contract and omitted them, you can usually add them with a bias toward your interest, without much resistance.

The best approach is to have your attorney review all your contracts before you sign them.  The worst time to find out if something important is missing is when you have a problem.

If you’d like my team and me to review your contracts we have a special process set up to do this. We call it our “Business Risk Review” and it is designed to uncover any deficiencies in your documents.  Once uncovered, we can reach out to the other party and attempt to correct your documents (or address them when the current term expires).

Don’t give up your rights due to an oversight.  Address this issue today.

Does It Matter If I Have An Employee Handbook?

4 Good Reasons To Have An Employee HandbookIt shouldn’t surprise you that an employment lawyer will advise you to have an employee handbook.

But it may surprise you is that I would rather you have no handbook than one you write yourself.

Why would I say that?

Well, a handbook is an important legal document in lawsuits and labor audits. If you have non-compliant policies, it can create presumed liability automatically. In other words, non-compliant policies are like an admission of guilt.

In some cases, no written policies (for example, with respect to certain breaks, required notices, and pay policies) can also create a presumption of guilt. But non-compliant policies are a greater danger.

By far, my recommendation is that you have a lawyer-drafted, compliant employee handbook. Here is a short video on four good reasons why:

So now you know why you should have an employee handbook. Is downloading one off of an internet resource good enough?

NO! Employment laws are complex and numerous. Boilerplate employee handbooks often have provisions that sound reasonable to you as the employer, but are in fact illegal in some jurisdictions or may mislead you into doing something illegal.

I write several handbooks a year. I have never found a good template off a website (and I have tried several). I ended up creating my own template and checklist for management decisions. (You can choose different policies depending on how you want to run your business, and I advise on the financial, business and legal implications of those decisions as part of the drafting process.)

An employee handbook is a 50 page legal document that you should not attempt to DIY. Call a pro. And keep it updated!

Video Transcript:

Does it matter if I have an employee handbook?

“Does it matter if I have an employee handbook?” Yes! Here are four good reasons why. 1. A handbook teaches your managers and your employees the proper and legal way to do things. It’s not always commonsense. 2. A handbook empowers you to politely tell an employee “No” to a special request because it is against policy. This keeps everything fair. 3. A handbook can be used to defend you, should an employee lie about a situation to a court or governmental agency. 4. Employers are required to provide certain notices in writing to their employees, and a handbook is a good way to do it. Failure to provide these notices can result in lawsuits, fines and even criminal penalties. So yes, a handbook is essential and it should be reviewed by an employment lawyer annually. Does your business need employment law help? Visit us at bellatrixlaw.com to apply for our Employer Protection services.

You can find the full video on Employee Handbooks on YouTube.

How To Get Out Of A Frivolous Suit Quickly

Show Up And ParticipateOne of the hardest things about my job is getting clients to understand lawsuits. No one wants to pay for lawyers and lawsuits. Lawsuits are destructive, not creative. They take forever. Everyone is angry.

They cost a lot (A LOT) of money.

Lawsuits are designed to be painful. They are designed to encourage everyone to work things out without having to go to court.

And when you do go to court, expect to feel like a whipped mule for months (maybe even years).

I fully appreciate how much lawsuits suck. I live with them every day as a lawyer. I am an empathetic person and I feel my clients’ pains and frustrations. Sometimes I get the brunt of those frustrations, which is also stressful for me.

As a business owner, I have been sued several times. Each of those lawsuits were completely frivolous. I have never paid a dime out to anyone who has sued me; but, you know, it takes time, a lot of effort and tolerance to get to that point.

Every client I have ever had wants to know how to get out of a frivolous lawsuit quickly. It is rare that you can do so.

Here’s my 60-second explanation why.

 

Video Transcript:

I’ve been sued, but the case is frivolous. What is the fastest way to get rid of it?

What if you’ve been sued, but the case if frivolous? You want to know how to just get out of it, RIGHT NOW! Well, to be quite blunt, only a few can be disposed of quickly, even when they are frivolous. Why is it that? Because of due process. The plaintiff is allowed an opportunity to get evidence from you and others, and to bring their case to a judge or jury. So even if you know that the plaintiff is lying or mistaken, the judge cannot just take your word for it! That is not fair to the others involved in the lawsuit. What if you are wrong? So once a lawsuit is filed, you are required to show up and participate through trial, or else face a default judgment or contempt of court. Frequently, the whole process takes a year or more and requires a lot of work. Have you been sued? Visit us at bellatrixlaw.com to request our ebook Help! I’ve Been Sued! or to schedule a consultation with one of our attorneys.

Why I Avoided The DMV for Weeks

frustrated fearful horrified woman pulling hair outLast December, the license plates were stolen off my company car in San Diego. As I was in Saint Louis, I requested replacement plates by mail. But the DMV rejected my request because I did not send the original title. This was pretty frustrating because, when I bought the car in 2013, I sent in the original title with a request for transfer to my name. The DMV sent me back a photocopy of the title and then refused to register the car because all I had was a photocopy of the title. It took me a full year to get the car registered. I still haven’t received the title.

When my request was rejected, I knew that I would have to personally go to the DMV to try to get plates.

When I arrived back in San Diego, my imagination started to run. I worried that they would not help me and that I would waste days at the DMV filling out forms. I worried that I would never get the title and could never sell the car. I worried that I would have to take legal action to get the title. I worried that the car would get impounded for not having plates and that I would lose it or have to pay thousands to get it released. I worried that I would go to the DMV and have a frustration meltdown with the clerk and get arrested.

So I avoided it. It took me three weeks to go to the DMV. In the meantime, my staff was driving around without plates. And I was very aware of how dumb and risky that is.

Everyone indulges in avoidance behavior. It happens all the time.

The phone rings and you know it is someone calling about a bill you forgot to pay. You avoid the call because you have no good answer for the person on the other end of the phone. Maybe you ordered some inventory based upon a purchase order and your customer reneged. Now you owe for the inventory and your cash flow doesn’t support paying the bill.

Or maybe you are waiting for a check from your biggest client and, once it comes in, you can pay the bill that’s been sitting on your desk for two months. So you don’t take that phone call because you don’t want to have the difficult conversation.

Here’s another common scenario: You receive a letter from a lawyer or a government agency. You open the letter and it’s bad news. They want something. Usually it’s money. You don’t reply to the letter because you don’t know what to say. Then you ignore all the letters that follow. Or maybe you don’t open any of them at all, and send them straight to the trash can.

This behavior is dangerous.

Why?

Because, most of the time, these situations do not resolve through lack of action.

In fact, ignoring phone calls and letters can lead to horrible and unnecessary consequences. Ignoring letters from lawyers and governmental agencies can lead to loss of money, loss of your business, and, in a few rare instances, loss of your freedom. That’s why you need to be proactive in handling difficult conversations related to business activities.

If funds are short, accommodations can almost always be made between parties. If performance is the issue, discussing the barriers will help everyone understand the reality. This is always better than waiting to “see what happens.” If there is some other issue, a conversation at least brings peace of mind.

The thing to remember is: Everyone has been in your shoes.

If you have a difficult time thinking about responding to a notice because you are clearly in the wrong, you must realize everyone makes mistakes. Mistakes can be fixed, but you have to face them. The person on the other end of the phone or the writer of that letter has probably been in the same (or a similar position) in his career.

Don’t let your thoughts carry you away to the worst-case scenario.

The worst-case scenario rarely happens. When I mustered my courage and went to the DMV, for example, the clerk said, “you must be very frustrated,” fixed the problem, and gave me new plates, all within 30 minutes. I suffered from all those anxieties for nothing! I felt both silly and relieved.

Flying horse pegasus

And in my many years of practice, I have never had a situation spiral to the “worst-case scenario” once I got involved. When you face things and proactively deal with them, usually the worst-case doesn’t happen.

If you are concerned about the worst possible outcome, call me and we can discuss possible responses.

In many cases, I can teach you what to say and how to say it. Or I can speak for you. I can also help you with a follow-up letter to a business demand that will keep your relationship in tact and offer you relief.

In some cases, (like a letter from a governmental agency) any response you provide can be used against you. Those are times you definitely want me to help out.

No matter what, ignoring the problem will only make it worse.

Always take action to resolve the problem. You will feel relieved when you do!

But before you do, contact me.

We can discuss the situation and create a plan for your response.

This is not just good business advice. It is good advice for your health and emotional well-being.