Computer Counselor - October 2000
Using the Internet to Stay Up-to-Date on High-tech Issues
As technology races ahead, lawyers do not have to lag behind
By Carole Levitt
Carole Levitt is an attorney and president of Internet For Lawyers, an Internet legal research training and seminar company. Her e-mail address is firstname.lastname@example.org.
Clients whose businesses are Internet-related or high-tech are different from other clients in three respects. First, they sleep under their desks. (With a need to get established quickly, spend quickly, and grow quickly, who has time to commute home?) Second, they wonder why their lawyers do not also sleep under their desks. Third, they assume that their attorneys are as Internet savvy as they are and know everything about e-commerce-including incubators, start-ups, venture capital, stock option plans, licensing agreements, and IPOs. Fortunately, attorneys using online resources can keep pace.
Given the rapidity of change in the e-commerce and high-tech industries, print magazines or newsletters may not keep an attorney current enough. Information more in keeping with cybertime can be found at Web sites that are updated daily or even continuously throughout the day. Visiting these sites is a better time investment than reading print articles. Moreover, a visit to a Web site is typically free, unlike most print subscriptions.
In many cases, a lawyer can subscribe to Internet and e-commerce Web sites' free newsletters, which arrive via e-mail, rather than visit the sites on a regular basis. One of these is E-Business Alert, a free newsletter from ZDNet that issues three times per week (www.zdnet.com/business/filters/newsletters/). The newsletter focuses on general e-commerce topics at a national level. Another newsletter is the Standard.com Daily News (http://www.thestandardwww.com/newsletters/#List), which professes to provide "intelligence to the Internet economy." The Standard also publishes free industry-specific newsletters ranging from the mobile technology industry (Wireless News) to the entertainment Web site industry (Box News). For lawyers whose focus is more regional than national, news about Southern California's technology community-from dot-coms and entertainment to telecommunications-can be obtained by subscribing to The Zone Daily 'File, a free newsletter. Web users can link to the Daily 'File from http://www.zonecommunications.com/.
Whether a client is a start-up, an established e-commerce business, or at the IPO stage, the drafting of such documents as contracts, business plans, patent and trademark applications, and SEC filings is one of its biggest needs. Identifying investors, from angels to venture capitalists to incubators, is another. Much of the information needed to accomplish these tasks can be found on the Internet.
For example, writing a business plan is a must to crystallize a business concept and to attract financing. Advice on how to write a strong business plan can be found at Inc.com's site (www.inc.com/guide/
item/0,7462,CHL1_GDE66,00.html). Attorneys who need to draft a stock option plan for a biotech client can see what the top performing biotech companies' plans look like. Using the Red Herring IPO 100 index (www.zdii.com), attorneys can search by industry. Searching for "biotech" generates a response including two top-performing biotech companies and links to their SEC filings. A link leads to a list of filings, one of which is the S-8 (employee benefits). The full text of the stock option plan thus becomes available for review. The user can then copy and paste the entire document (or selected clauses). Additionally, detailed research information regarding IPOs can be found at Hoovers IPO Central (www.hoovers.com
Attorneys can use this method to obtain other sample documents as well. For example, to draft a competitive executive compensation plan, attorneys can review a host of plans drafted for other executives by searching under company name (e.g., Amazon) or executive name (e.g., Joseph Galli) at Findlaw's techdeals site. Users may link to executive compensation on the techdeals page (found at http://techdeals.findlaw.com/) to perform these searches. To find plans containing specific provisions, users may enter key words into the techdeals search engine. To locate a plan that covers how disability affects an executive's entitlement to an agreed-upon bonus, search "bonus and disability." For news stories about high-tech and Internet company executives' deals, The Standard's search engine, located at http://www.thestandard.com or the ZD Net E Commerce search engine works well. ZD's power search offers detailed search tips, displays the sources from which information is being drawn, and provides the choice of searching through all sources or specific sources. (Visit http://www.zdnet.com/ecommerce.) Confidentiality agreements and covenants not to compete are typical in the high-tech industry. These forms are free at ILRG (www.ilrg.com/forms) and at the 'Lectric Law Library's Forms Room (www.lectlaw.com/rotu.html); for free patent, trademark, trade secrets, and copyright forms, attorneys may visit Lexisone.com (www.lexisone.com).
If a client is a content provider to a Web site and requires a content license, the techdeals area of Findlaw is a good place to look. The site features samples of content license agreements that have been culled from exhibits attached to SEC filings. Searching on techdeals is much easier than searching the SEC's Edgar database.
Attorneys who are advising their clients to consider an incubation business model may visit the National Business Incubation Association Web site for an explanation of the attributes of incubation (www.nbia.org/whatis.html). The NBIA explains that incubators nurture start-ups by providing hands-on management and technical assistance, access to financing, and support services. The NBIA site also lists incubators and contact information (www.nbia.org/incs.html). To learn about an incubator for start-ups on the Westside, a quick search of the Zone (www.zonela.com/august00_8/focuson_8.htm) reveals a profile of Ecompanies. Half of its 42 firms are located on the Westside.
If a client prefers to seek venture capital funding over the incubation approach, lawyers can identify venture capitalists by checking the Net Deal Monitor for a current list of the lead investors in start-ups (www.thestandard.com/article/display/0,1151,17137,00.html). Venture capitalists can also be identified by purchasing Red Herring reports for $10 each. The reports rank the top 20 VCs by 1) number of companies funded, 2) amount invested, and 3) number of rounds funded, among other criteria (www.redherring.com/market /vcreports/index.html). To identify angels (those who invest well before venture capitalists enter the picture), go to the Zone and click on the June 2000 issue for a story about a group of San Diego angels (www.zonela.com/finnews.html). For clients facing Internet law disputes that concern domain name, free speech, or gambling issues, attorneys can consult the John Marshall Law School's Cyber Space subject index, which will point to leading cases and law review articles on the subject (www.jmls.edu/cyber/index/index.html).
Drumming Up Business
Attorneys who are interested in networking with Internet-savvy people for client development purposes or in meeting venture capitalists to fund client businesses can search the Web for information about Internet-related conferences, which are great for networking. Attorneys may find Internet-related conferences (such as "Net Returns-the Standard's Conference for Senior Internet Strategists") by reviewing the conferences listed at http://www.theindustrystandard.com.
Besides attending conferences, attorneys may network by joining technology associations such as the Venice Interactive Community (VIC), an Internet networking group with 2,000 paid members. Read more about VIC (and their Digital Evolution Center in Santa Monica, with 10,000 square feet of space for meetings and industry events) at the Zone (www.zonela.com), a site that focuses on Southern California's technology community. Los Angeles Venture Association, consisting of entrepreneurs and venture capitalists, has information about meetings and conferences and other regional venture associations (www.lava.org/).
High-tech and Internet clients often need to file patent and trademark applications quickly. To ensure that the U.S. Patent and Trademark Office (USPTO) will review trademark applications without delay, attorneys should file electronically. Electronic filing for trademarks has been available since July 31. The USPTO asserts that electronic applications will be reviewed sooner than applications filed on paper. (Visit http://www.uspto.gov/teas/index.html.) Additionally, 2.8 million pending, registered, and dead trademarks can be searched using Tess, the USPTO's new database, found at http://tess.uspto.gov/bin/gate.exe?f=tess&state=6q248n.1.1. Users may fill in search boxes using key words and boolean connectors ("and," "or," etc.) or perform even more advanced types of searches. However, pending registrations for the past four months may be incomplete. Soon, lawyers will also be able to file patent applications online (www.uspto.gov/ebc/notices/efs082000.html).
If a client is going public, the attorney will need to stay up-to-date on the SEC's rules and learn about electronic filing. Attorneys may search Edgar for sample SEC forms filed by other public companies for aid in drafting documents. See the SEC's Web site at http://www.sec.gov/index.html. When searching for SEC filings in the Edgar database (www.sec.gov/edaux/searches.htm), attorneys should remember that not every form is filed electronically, so Edgar is not comprehensive (for example, forms 3, 4, and 5 are not required to be filed). Edgar can be searched by company name using the Quick Forms Lookup with searches limited by date (for example, "last week") and by form type. The site can also be searched with key words and connectors when using the Edgar Archives area. Edgar is one day behind in posting filings. Use the free 10K wizard (it offers all forms, not just 10Ks) to obtain filings in real time at www.10kwizard.com. This site offers most of the same features as Edgar and more, such as full text searching and searching by ticker symbol, industry, and SIC code. Using the 10K wizard may be preferable to using the government's Edgar database. Finally, for a complete overview of upcoming Internet legislation in the year 2000, see LLRX.com at http://www.llrx.com/congress/011700.htm.
Attorneys may not need to be quite as Internet savvy as their e-commerce clients but should know that for each stage and type of e-business, the Net offers resources to make the best use of a lawyer's time. Even better, most of these resources are free.