Legal Issues for Entrepreneurs

It is important for the manager, particularly the manager of a new venture, to understand and use the law as a tool in corporate strategy. Law is too vital and strategic to be left to the legal department or external counsel alone. A company should cultivate compliance strength.

It is vital to appreciate and understand the role of the law in the value creation chain. Expertise in the rules [of any game] provides a competitive advantage. In business, legal knowledge helps organisations gain profits in three ways:
· Property – Law which usually penalises monopolies is quite generous in granting ‘legal monopolies to encourage innovation and development. Copyright – the form of intellectual property at the heart of the Napster case – provides a great example of the evolution of modern property rules and their growing importance to business.
· Rules defining Markets – The law creates competitive advantage by defining the boundaries of markets.
· Legal capabilities – The development of specialised legal capabilities – resources and skills allows a company to spot opportunities, take initiatives and fend off attacks especially well, relative that is, to rivals.

Five Factors [as developed by Michael E Porter] for enterprise success continue to be the legal touchstone –
· The Merits;
· Public Legitimacy;
· Strategic Position;
· Resources;
· Access.

Here is my list of ten points [relating to the law] that entrepreneurs should keep in mind -
· Understand the Law – contemplate legal risk in any action;
· Know the Rules [and play by them];
· Cultivate Compliance for Strategic Strength [Comply with all laws, commercial or general, including and especially environmental ad waste management related laws];
· Use Contracts to Define and Strengthen Relationships;
· Use the Intangible Edge [Capture the Value of Intellectual Capital];
· Protect the Brand [Corporate Reputation, Brands, Trademarks and Domain Names];
· Harness Human Capital – Be mindful of employment law and especially of problem areas like sexual harassment. Design fair and effective human resource policies;
· Manage Disputes – Do not always litigate or rush to arbitration, deploy mediation and other conciliatory measures;
· Be Open to good legal advice – cultivate an attorney-client privileged relationship;
· Develop a legal sense – Spot legal issues before they become legal problems.

PreCYdent Creates New Search Technology for Lawyers and Public [International]

PreCYdent, a start-up based in San Diego and Milan, Italy announced today that it has created a new legal research technology that is many times more effective at finding relevant case law than the decades-old Westlaw and LexisNexis. The search engine's alpha version is available at http://www.precydent.com/ and is free to users. (Logo: http://www.newscom.com/cgi-bin/prnh/20080303/LAM012LOGO)

"Our technology mines the information in legal citations," said co-founder and CEO Tom Smith, who is a professor at the University of San Diego Law School. "It makes searching for law as easy as searching the Web, which means anyone can do it."The search algorithm was created by the PreCYdent team, led by Antonio Tomarchio, a mathematician from the Politecnico di Milano, Italy's most prestigious technical university. Politecnico professors Piero Fraternali and Stefano Ceri are the company's scientific advisors. "By adapting web-style mathematical measures to the legal citation network, we can identify the most authoritative legal cases in any area," Tomarchio said. "According to our tests, our search engine is four to five times more effective than both Westlaw and LexisNexis natural language engines in identifying relevant cases." Smith said the PreCYdent algorithm has been tested against Westlaw and LexisNexis by examining each engine's predictions of what citations would occur in over 200 articles, notes and comments written by legal experts. "One patent law expert said our search quality was so good it was 'astounding,'" Smith said.

The PreCYdent website has a number of Web 2.0 features. Users may comment on cases and rank their importance. Lawyers can upload documents to help potential clients find them and identify their expertise.PreCYdent is free. "We have all U.S. Supreme Court cases, U.S. Court of Appeals cases to 1950, and recent Supreme Court cases of large states such as New York, Florida, Illinois and California. We will have all 50 states soon," said Smith. "Our technology can be extended to other legal systems. We plan to cover the UK, Canada, Australia, India and other common law countries," Smith said."PreCYdent technology can be extended to other verticals," Tomarchio said, "such as bio-medical databases, e-discovery, e-commerce and online advertising. The algorithm is very fast and scalable."