In the first Business Development session of day two, technology lawyers David Snead of W. David Snead and Jeffrey A. Cohen of Cohen & Richardson discussed the process of creating and structuring a business in such a way that will minimize legal costs and enhance the value of the hosting company.
Titled “Keeping the Trolls at Bay: Effective Legal Strategies for your Business”, Snead started the presentation off with the issues companies should address when drafting a contract.
Price, expertise and support are three major areas that companies ought to look at, said Snead. Price includes service level agreement, cultural fit, what the company is selling, and current corporate focus.
Expertise includes the type of customer, measurability, who is the end user, and time to market. Finally, support includes technical fit, flexibility, in-house capabilities and strategic advantage.
Snead emphasized that companies should look at contracts not as a “litigation tool but more as a guide to a successful agreement.”
He then highlighted the key contract terms which include acceptance, term, early termination, price, billing disputes, warranties, security and privacy — all of which he said should be clearly addressed in a contract.
Cohen then took over from this point on, where he gave some hands-on advice about how companies can handle an upset customer who demands to “talk to their lawyer”.
He said that someone at the company should have a direct to legal counsel, that you can apologize but you should not admit liability, avoid lengthy explanations, responses ad overpromises.
Perhaps the one telling piece of advice that any session attendee could take away with them is Cohen’s summary of litigation:
“Anybody can sue anybody for anything. There is nothing you can do to prevent that. The questions are, how well are you prepared to defend yourself, and ultimately, what will be the outcome and cost.”
All companies should prepare themselves for potential legal defense in the event they get sued, said Cohen.
Web hosts should have favorable agreements/contracts in place, develop litigation hold policy, records preservation, what to do with email/backup, how to choose counsel, insurance, investigation, offers of settlement, and ask themselves if they should sue first.
Cohen reviewed some of the strategies a hosting provide can employ for dealing with a lawsuit, on the defendant side and on the plantiff side.
Snead took over for the remainder of the presentation, where he showed an example of a Cease and Desist Letter (which he said that at least one of his client’s gets on a daily basis) and the strategic process a hosting provider can take to respond to this.
He closed with some advice on dealing with nasty customers, subpoenas and warrants, and nasty letters.