Category: lawyering

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Forming an Entity: Watch for Issues

Most creative professionals start their businesses without doing anything more than accepting the first freelance project offered. That is, they don’t bother to do anything about forming a legal entity like a corporation. That’s fine; if you don’t do anything and you work solo, you are a sole proprietor. After that first project, if you continue doing business, getting projects, cashing checks, you probably won’t think about your business structure any further.

At least for a while.

One day, you, the now-successful creative pro hires an accountant to do your taxes and that CPA tells you you should incorporate or form an LLC. The accountant is concerned about the relative tax burdens and, often, it does make immediate financial sense to form an entity; that is, you can save a bundle on your taxes. But, the accountant doesn’t (probably) know about the copyright ramifications, and (usually) neither does the average creative pro.

Yes, there are copyright ramifications.

Overall, there are a whole host of legal issues to consider when it comes to potentially forming an entity. Most people focus on the tax issues, and that makes sense, but there are other legal issues and I highly encourage anyone considering forming an entity to talk to a lawyer before taking that step. Anyway, for this post, I’m only going to focus on the copyright one as it is most often totally ignored, and it shouldn’t be.

So, let’s imagine you have formed a single-member LLC and, as per your CPA, you’ve made yourself an employee of that LLC. Your tax bill thanks you. Now, however, when you make your art (whatever kind of art you make–doesnt matter), who owns its copyright?

If you said you do, you’d be wrong. Even though you are the only member of your entity (the LLC), it’s that entity that owns the copyright in the art you make as an employee of that entity. It’s an automatic work-made-for-hire. No writing required.

Well, I hear you saying, but I am the entity so it’s the same thing. Nice try; but, under the law, no, you aren’t and no, it isn’t at all.

First, since the entity is now the author of the work, the length of the copyright is no longer life of the author plus 70 years. A copyright authored by an entity lasts either 95 years after its first publication or 120 years after its creation, whichever is shorter[1]. By the way, there is an exception to this to get back to the authors death +70 years length, but it requires more paperwork and I know how much y’all love paperwork.

Second, when you register that copyright, you need to do it correctly. You have to name the entity as the author and the claimant because you, as an individual, by law did not create and do not own the copyright. While screwing this up doesnt necessarily totally void a registration, it certainly will be an issue if you ever get infringed. You (and your lawyer) don’t want to have to fight about the validity of your registration. I’ve seen it in cases and it could result in a great case becoming a loser. Remember, if you sue for infringement and lose, you might end up being required to pay the other side’s attorneys’ fees and costs; you don’t want something like this to scuttle your otherwise watertight ship.

Third, let’s say you get hit by a bus and shuffle off the mortal coil, who gets the copyrights your entity owns? And what about existing licenses and royalties based off those copyrights–who gets the money? It’s not so easy, if you havent planned ahead. Do you have a succession plan in place for your entity?

None of these issues are insurmountable at all. For example, you can have a writing that keeps the copyrights created after the entity is formed as your own (if you want to do that and there are reasons to do that, or not). Overall, the issues beyond the tax ones that come up when you form an entity, including copyright ones, do require some thought and there are decisions that need to be made and new processes need to be learned if you decide to go ahead and incorporate.

Don’t go it alone and hope it all works out–thats a lousy business strategy. Talk to your own attorney and get good, personalized advice.

[1] 17 USC 302(c).

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How to Work With Your Lawyer: Trust

Creative professionals are usuallyvery smart people. Whether formally educated or not, your brains tend to fire pretty well (even if some people think they fire, um, differently). This is generally a good thing (especially the differently bit) and can definitely make for better art, no matter what your medium. The downside is that sometimes some of you think you know more than you really do*, especially abouta very technically precise field like the law. That attitude can bite you in the ass.

When I was in law school, I wrotea post on my Burns Auto Parts Super Premium Blog about how, before law school, I thought I knew copyright law pretty welland how wrong I was. See, I learned that while I knew more than the average person, what I knew was actually very, very little, especially compared to, say, a copyright lawyer. There is so much more to copyrightlaw (and law in general) than I ever could have imagined without having gone through all of law school. There is the interplay between the statutory scheme and constitutional issues, and how it works in day-to-day business, and how the courts interpret all of it, and more.Unless you immerse yourself for three years in intensive, undistractedstudy (hello,law school) and then get out there in the trenches, you just can’t know. I sure didn’t. Even after all that, you still have to do what I do: spend a ridiculous amount of time reading cases and highly technical academic articles to learn more, every day, just to keep up.

But I was one of you before law schoolone of those who even debated the woman who would become my mentor, Carolyn Wright, on legal questions that appeared in places like the old APA Forums. I look back on those debates with more than a little embarrassment. I thought I knew the law well enough to challenge her opinions when, really, I knew just enough to probably frustrate the hell out of her when she was trying to help by teaching the community the (actual) best practices (I will always appreciate her grace–not once did she later say “Do you remember…?”).

Now, after practicing for years, I know what itfeels like to be challenged by people who think they know more than they do. I have the headdesk-induced scars to prove it.

The most frustrating thing that happens in my practice isnt when the opposition pulls some chicanery or even when I get called names by defendants. Nope, the worst is when someone comes to me with a question which I answer based on my expertise (and often I do additional research to make sure my info on that particular issueis current), and then s/he doesnt like the answer, saying, Well, I feel that youre wrong.

First, you dontfeelthat Im wrong, youthinkI am (language matters!); and second, if you arent going to trust my opinion, then you shouldnt ask for it. Thats not me being petty, thats me knowing that I cant do the bestfor you unless you trust me when it comes to legal issues. My job is to fight for you and to have your back, but I cant do any of that if you dont trust that what I am telling you is the best, most accurate answer and advice based inthe law that I can give you. I’m not making stuff up or telling you what I think you want to hear–I’m being 100% straight with you. Im happy to talk to you and explain what I can, but in the end, you just have to trust me.

There are ethics rules that say we have to do what is best for you, sure, but I think most lawyers actively want to do what is best for our clients; that means telling you the truth, even the hard truth. None of us lawyers likes having to tell a (potential) client bad news. We know its unfair that a screwed-up copyright registration can scuttle an otherwise beautiful case and that the Copyright Office makes it damn easy to screw up (especially the published/unpublished thing). It sucksthat if we cant get you statutory damages (register, please) or documentthe value of yourlicenseis $10K we cant get $10K for you. It’s frustrating as hell that while any normal human can see your work has been knocked off, stylistically, proving its actually an infringement isn’t so clear and itwould cost gods own wallet to litigate and we could still lose, so we cant take the case on a contingency fee basis. And it’s not easy to tell you that you cant not do X now (without repercussions) because you agreed in your contract to do X.

Lawyerswant to be able to help people; thats why Ido what Ido (honestly, I think all good lawyers still hold that as their first principle). We look for ways to sayyesto whatever it is that you want, to enable you to achieve your goal, to fix the wrongs, promote the good, and to defend your rights, but sometimes we have to saynoornot like that you cantorwell, you can try it, but heres what youre risking, orit just isnt worth that much, or even,it sucks, but justwrite the check and move on. Your job, then, is to trust your lawyer; s/he is offering you the best advice possible.

I (and others) have describedlaw school like military bootcamp for the brain: a law student is stripped of her old way of thinking and taught a new way in her first year, then trained to use that new way to alevel of competence in the next two years. Then, we go out and apply it all in the real world, honing our knowledge and skills as we go. Maybe the Vulcan Science Academy is a better analogy, actually, because we learn toprocess a ton of data with dispassionate logic. But the best of us also reintroduce humanity to the practice and become weird hybrids of logic and compassion. That’s what I shoot for (and I know others that do the same).

The result of this training is that lawyers think strategically as well as tactically about each of your issues and formulate a plan to achieve yourobjectives, if at all possible; or to minimizethe bad stuff, if not. There is balance and judgment involved. Its tough work that requires more time and energy than you know. And that’s not me being egocentric–it’s just like howyour work is much more complicated and subtle than any outsider ever understands. Your work is pretty miraculous to me, even whenI don’t care for it aesthetically.

So, to have the best relationship with your lawyer, you dont have to like what you hear, but you do have to trust that it isseriously considered, bestadvice, with your best interests in first position.

Oh, and if you don’t think it really is, then don’t hesitate to get a second opinion from another lawyer.
But don’t be surprised ifthe answer is pretty much the same.

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*This is true for all of us–we all have those areaswhere we think we know more than we really do.

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Excited and humbled

Today is the first day of this new practice. My new practice. It is the culmination of a lot of dreaming and a lot of work and many years of patience.

I wanted to go to law school for a very long time. In fact, I took the LSATs 3 times, not because I did poorly (the opposite, actually) but because my scores expired before I could get all the pieces to work so that I could attend. Scores last for 5 years so you can do the math there. Finally, everything came together and I happily did the work of being a full scholarship law student. I graduated a trimester early and passed the notoriously difficult California Bar on my first try. Then Istarted lawyeringwith Carolyn Wright (photoattorney.com) which was outstanding training in exactly the work I wanted to do (she is a great mentor to whom I owe so much).

And now, today, I get to hangmy (virtual)shingle. Burns the Attorney. Wow. It’s very exciting for me.Thank you to everyone who made this possible. I’m humbled to get to do this.

Thank you also to the clients who have already contacted me for new representation (and it’s not even 9am here as I type this!). It is my intentionto serve you all well, honorably, and as much like a decent human as any lawyer can be.

Let’s do this.

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What’s With the “Compassionate Lawyering” Stuff?

You may have noticed the practice’s tag line, compassionate lawyering for creative professionals, and wondered “What the heck does compassion have to do with lawyering?” Well, I’ll tell you.

First, I refer to myself, semi-jokingly, as a “bad Buddhist.” I meditate, I read a lot by people like the Dalai Lama, Pema Chodron, and Thich Nhat Hanh, I believe in the Four Noble Truthsand try to follow the Eightfold Path. I also still drink alcohol, eat meat, and far too often suck at my practice.

See, bad Buddhist.

Anyway, a big part of Buddhism is being compassionate–understanding that all beings suffer, even the bad guys. My clients suffer too, of course, and I want to help them suffer less. So, voil, compassion.

How does this affect how I practice the law? I think it makes me a better lawyer. I take the time to see the whole case before proceeding and I am very present in the process. To use a sadly overused term today, I practice mindful lawyering.

Instead of coming into any interaction with the other sidewith overt aggression, swinging right off, I try to point out the issues and then give the bad actor the understanding and space to correct its bad behaviour. I listen, I try to see things from the opposition’s perspective (to understand, not to agree). I don’t humiliate or threaten, and I hold the line with, I hope, a certain graceful strength. Importantly,I don’t react to the hateful stuff that can be dished out (remember, when we feel attacked, even if we aren’t actually being attacked, we humans tend to lash out). When I get called names or otherwise get personally attacked (and that happens, a lot), I don’t retaliate. I don’t permit the other side to distract me from my purpose of protecting my client, her/his rights, and getting her/him satisfaction (besides, it’s never about me anyway–it’s about the case). That is being present and mindful; it is not being passive or weak.

These techniques have worked much more often than you might at first expect. I’m proud of my success rate. I think thatthe bad actor feels heard (is, in fact, heard), isn’t attacked (no retaliation, remember), and eventually has no place to go with all its aggressive energy so it becomes able to get my client’s position; that opens the doorto working together toa solution. Boom,an honorable win with no loss of face for the other side.

If, however, those techniques don’t work, I use what I’ve learned in that process to, um, let’s say lead the bad actorto a change of mind. Subtle pressure applied in the right manner, so to speak–in this case, using logic applied to the facts, including the additional data learned in the previous process, and arguing effectively until the other side has no choice but to recognizethat it’s got a loser case on its hands*. A colleaguereferred to what I do as legal jujitsu, and I think that’s pretty accurate since that practice is all about using the opponent’s energy against him/her. Eventually, the opponent will tap out*.

Lawyers are often called “pit bulls,” but that is definitely not me. I know some who are and I respect their process–it just isn’t mine. I think of myself more like the great shepherding breeds who get the sheep to do what they ought, without ever actually attacking them. Think Border Collie–they are damn fine and running circles around the sheep and wearing them out. Maybe that’s why I have a thing for black-and-white (clothes, car, photography…).

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* To be clear, I don’t win every matter and I certainly don’t mean to imply that; also, past results are not predictive of future outcomes.

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