When do you need a Lawyer? January 16, 2009 IT’S DIFFICULT FOR A LAWYER TO TELL SOMEONE WHEN THEY NEED A LAWYER BECAUSE I SOMETIMES BELIEVE THAT ATTORNEYS FEEL THAT THERE ISN’T A QUESTION WE CAN’T ANSWER OR A PROBLEM WE CAN’T SOLVE. I DON’T KNOW IF IT’S A COURIOSITY WE HAVE TO FIND OUT WHAT PROBLEMS OTHERS ARE HAVING OR WE ACTUALLY BELIEVE WE CAN SOLVE EVERYTHING. HOWEVER I’M GOING TO DO MY BEST TO GIVE YOU SOME BASIC THING TO CONSIDER. DRAWING UPON MY MORE THAN 25 YEARS AS AN INHOUSE ATTORNEY WHERE I ACTUALLY HIRED OUTSIDE LAWYERS…AND PAID THEIR BILLS ONCE WE’RE THROUGH WITH THAT WE CAN WALK THROUGH SOME OF THE BASIC DECISION POINTS YOU WILL HAVE AS YOU MATURE IN YOUR CORPORATE LIFE.

Five Basic Questions When do you need a lawyer's help? What should you consider before you hire a lawyer? How quickly should you consult a lawyer? What are you trying to achieve? What type of lawyer do you need? QUESTIONS 4 AND 5 REALLY GO HAND IN HAND

When do you need a lawyer's help? No Brainer Items Get arrested Get sued What’s at Stake? Financial Interests Legal Rights NO BRAINER ITEMS YOU MAY BE ABLE TO REPRESENT YOURSELF BUT YOU CANNOT REPRESENT YOUR COMPANY IN COURT. (GIVE PETER AS AN EXAMPLE) WHAT’S AT STAKE? – THAT IS THE BASIC QUESTIONS YOU’LL HAVE TO ANSWER. DOES IT AFFECT A FINANCIAL INTEREST OR DOES IT ENCROACH ON YOU OR YOUR COMPANY’S LEGAL RIGHTS. IF SO TO WHAT EXTENT? IF GREAT ENOUGH YOU MAY WANT TO CONSIDER CONSULTING A LAWYER. THE BOTTOM LINE IS THAT IF YOU ANSWER THE QUESTION HONESTLY YOU WILL HAVE A GOOD BASIS TO DECIDE WHAT COURSE OF ACTION YOU SHOULD TAKE.

What should you consider before you hire a lawyer? Consultation Alternate Sources Consumer Protection Agencies State Attorney General Offices Regulatory Agencies LOOK AT ALTERNATE SOURCES FIRST BUT IF YOU REMAIN UNSURE YOU SHOULD CONSULT WITH SOMEONE. IT MAY BE A FRIEND OR A LAWYER. MOST LAWYERs ARE WILLING TO SIT DOWN WITH YOU FOR 30 TO 60 MINUTES TO DISCUSS YOU SITUATION. IT THEY ARE NOT THEN I WOULD RECOMMEND YOU FIND SOMEONE ELSE. THE KEY IN THIS STAGE IS TO START COLLECTING INFORMATION.

How quickly should you consult a lawyer? Obvious Situations Litigation Demand Letters Not so Obvious Land Disputes Contract Disputes WHILE I PUT DEMAND LETTERS IN THE OBVIOUS CATEGORY I HAVE FOUND THAT MANY PEOPLE DON’T TREAT THEM WITH THE RESPECT THEY DESERVE. THEY REALLY ARE IN MOST CASES THE FIRST STEP IN THE LITIGATION PROCESS. I’LL GRANT YOU THAT SOME ARE WRITTEN BY ATTORNEY FRIENDS IN AN ATTEMPT TO ‘SCARE’ THE REPIENT IN ACTING. I SUGGEST IF YOU GET ONE TO LOOK AT THE TONE AND ALSO WHAT IF ANYTHING ARE THEY THREATENING TO DO. FOR OTHER ISSUES/DISPUTES YOU NEED TO RETURN TO THE QUESTION “WHAT’S AT STAKE?” ANSWER THAT AND YOU WILL HAVE A GOOD IDEA HOW TO PROCEED. SOMETIMES IF YOU SIT ON YOUR RIGHTS WITHOUT ACTING YOU COULD LOSE THEM.

What are you trying to achieve? Clear Objective Litigation Defense Unclear Objective Wrongful Termination Theft of Intellectual Property Breach of Contract CLEAR OBJECTIVES - FILING A PATENT, GETTING A DIVORCE UNCLEAR - WRONGFUL TERMINATION – LETS SAY YOU COME TO WORK ONE DAY AND OVER LUNCH YOU TELL YOUR BOSS THAT YOU’RE THINKING OF QUITING BECAUSE YOU HAVE THIS GREAT IDEA FOR A NEW COMPANY. YOU COME TO WORK THE NEXT DAY AND YOU’RE FIRED. WHAT RIGHTS DO YOU HAVE? WHAT HAPPENS IF YOU’RE NOT ONLY FIRED BY THEY GIVE YOU A LETTER THREATING TO SUE YOU FOR BREACH OF CONTRACT (YOU SIGNED A NON COMPETE AGREEMENT) AND FOR THEFT OF INTELLECTUAL PROPERTY IF YOU START YOUR NEW COMPANY. YOU HADN’T EVEN THOUGHT PAST THE IDEA AND NOW YOU’RE OUT OF A JOB AND YOUR FORMER EMPLOYER IS THREATENING TO SUE YOU. WHAT SHOULD YOU DO? WOULD YOUR DECISION CHANGE IF YOUR NEW COMPANY WAS AN ICE CREAM STORE AND YOUR OLD COMPANY MADE DOOR KNOBS? WHAT ABOUT IF YOU NEW IDEA FOR A COMPANY WAS THE DEVELOPING AND SELLING A FASTER MICROCHIP FOR GAME PROCESSORS AND YOUR OLD COMPANY DEVELOP SOFTWARE FOR THE GAMING INDUSTRY?

What type of lawyer do you need? General or Specialized Educate Yourself Seek Referrals Interview Prospective Lawyers ONCE YOU DECIDE THAT YOU ARE GOING TO ENGAGE COUNSEL, NOW YOU NEED TO NEGOTIATE FIXED FEE V. HOURLY RATE ESTIMATE OF COST/ NOT TO EXCEED WHO WILL BE DOING THE WORK WHAT DO YOU GET BILLED FOR…WHAT HAPPENS IF YOU HAVE WITH A QUESTION AND THE CALL LASTS 2 MINUTES. DO THEY BILL FOR COPIES, LOCAL FAXES, ETC. IF SO DO THEY CHARGE A MARKUP? REQUIRE A RETAINER

Practical Examples for Entrepreneurs Corporate Structure/Formation Employment Agreements Non Disclosure Agreements License Agreements Distribution Agreements Stock Option Plans Financing Transactions Others RESEARCH SITES US Patent and Trademark Office http://www.uspto.gov/ Texas Secretary of State http://www.sos.state.tx.us/ Texas Comptroller http://ecpa.cpa.state.tx.us/coa/Index.html State Bar of Texas http://www.texasbar.com/ Dallas Bar Association http://www.dallasbar.org/ VC Experts http://vcexperts.com/vce/ National Venture Capital Association http://www.nvca.org/ Texas Startup Blog (Alexander Muse) http://www.texasstartupblog.com/ TeXchange http://www.texchange.org/texchange/ NTAN (Chuck McCoy) http://northtexasangelnetwork.angelgroups.net/ Lone Star Angels http://lonestarangels.angelgroups.net/ LEGAL FORM SITES FindLaw.com LegalZOOM.com Bizfilings.com Incorporate.com

Questions?

Tod V. Mongan Mongan Law, P.C. tod@monganlaw.com 214-914-0439 Thank You Tod V. Mongan Mongan Law, P.C. tod@monganlaw.com 214-914-0439