Lawyers vs. Apps: A Grudge Match To The Death

I like to give away lots of free legal information on this blog because I think it's important for artists to have a basic understanding about how the law interacts with them. I was once in your shoes. I've had my ideas stolen, my copyrights compromised, and been in situations where a little legal knowledge could have saved me from a jam or two. At the same time, you can't cut lawyers entirely out of the equation simply because you possess that knowledge. Legal information without analysis is just raw data. It can't give you advice or insight. It can't examine your specific situation and provide you with synthesized options based on that data (i.e. just because you know the fair use factors doesn't mean you know how to apply them). No two situations are the same and everyone's needs will differ depending on a variety of unforeseeable factors. Only a properly trained lawyer familiar with your circumstances will be able to navigate that minefield.

Such was my mindset when I wrote this review of Shake last Monday, a new app that allows users to generate contracts right on their iPhones without the need for a lawyer. I wrote that the app had promise primarily because it does something I support: bring clarity to the law. My exact words were, "Shake makes [contracts] easy to make, easy to read and best of all, short. By doing this, it incentivizes people to use contracts in their work, and anything  that gets artists thinking about their work from a legal perspective is a good thing." But the app had several larger issues that I found troubling; namely, the lack of flexibility provided by stock contracts and the ambiguous usage of the term "work made for hire" in the freelancer contracts.

Three days after my review posted, I found myself on the phone with Vinay Jain, the app's chief legal officer, talking about my concerns. The call was very productive and when I hung up 45 minutes later, the following was clear to me:

1. Vinay was open-minded, thoughtful, and took my concerns seriously. Regardless of what he does with my input about the "work for hire" issue, I felt heard.
2. He puts a lot of time and energy into researching contract law and making sure that the intricacies of different state laws are addressed in each of the agreements provided by Shake.
3. The Shake team is committed to democratizing the legal transaction process by making it less intimidating.

In other words, I came away from the call with my reservations addressed and feeling deeply impressed by what the Shake team was trying to accomplish and the manner in which they were trying to accomplish it. The app certainly isn't perfect (what app is, frankly?), but there's room for growth, and it's pretty clear that growth will occur over the coming weeks and months. More important to me, Vinay assured me that the team behind Shake agree that their app cannot and should not be a replacement for lawyers. Per the app's FAQ page: "We designed Shake to let you quickly record agreements for everyday transactions that you otherwise might do with a verbal 'handshake' agreement... Shake isn’t for complex or high-stakes transactions. Are you selling your company? Shake is not for that. You should talk with a lawyer. Are you selling your used computer on Craigslist or hiring a freelance designer for a basic job? Shake is perfect for either of those."

My hope is that if you use Shake, you use it as intended - to make quick and easy contracts where you otherwise wouldn't - not as an excuse to get out of hiring a lawyer just because of inertia or disdain (lawyers aren't very well liked in this country, in case you didn't know). A good lawyer isn't a black hole for your money. A good lawyer protects and elevates you. The people behind Shake seem to understand that, so I will support them.

Legally Binding Contracts? There's An App For That

The future is now, and it's filled with apps that render most learned professions obsolete. On the docket for today: an app that replaces lawyers.  Hooray?

Shake is an app for your iPhone that allows you to "[c]reate, sign, and send legally binding agreements in seconds, all from your phone." The app contains a number of stock agreements, such as non-disclosures, buy and sells, personal loans, and freelancer contracts, with more types of agreements getting added in the near future. The app is simple to use as well. You answer several questions and then the app generates your contract, which both parties can sign right on the phone. Voila! Legally binding contracts without ever wasting a sheet of paper or paying for legal services!

A friend told me he thought this was really sketchy [although the signatures are digital, they are still legally binding], and several lawyer colleagues were horrified by the app. Being a lawyer myself, I understand why. No one wants to invest time and resources to learn a trade only to have that trade rendered obsolete by technology. Even if the technology is very pretty.

I spent a few days playing with Shake to see if my friend and colleagues were right, and despite some big problems with the app (see below), I've decided that I'm okay with it. Kind of. Shake does one thing really right, and for that reason, I can't hate it: contracts are hard; they're usually long and often boring to read and write. Shake makes them easy to make, easy to read and best of all, short. By doing this, it incentivizes people to use contracts in their work, and anything  that gets artists thinking about their work from a legal perspective is a good thing.

But there are several big caveats that prevent me from recommending the app outright.

1. Stock contracts offer no flexibility in their terms and are not tailored to the specific circumstances of your transaction. While this may not be a big deal for some of you, I strongly advise caution. Your work is unique to you, and only you know the terms that will make the transaction worthwhile.  Stock contracts, by their nature, cannot give you the flexibility to ensure that your best interests are being served.
2. Contract law isn't regulated by statute at the federal level, like trademark or copyright.  Contract law varies from state to state, and what may be legally permissible in one state may not be in another.
3. When you use language you didn’t draft yourself or authorize a lawyer to draft for you, you could end up consigning yourself to something in your own contract that you don't intend. For example, in Shake's stock freelancer agreement, it states that the freelancer's work is a "work for hire."  This is wrong because in most cases, a freelancer's work is only considered a "work for hire" in a very limited number of circumstances. To confuse matters, the agreement later uses language that directly contradicts what a "work for hire" actually is.  These types of drafting issues can certainly be fixed by a software update, but right now, the contract is  ambiguous and confusing at best, and unenforceable at worst.

If the choice is between using Shake or nothing, I'd tell you to use Shake every day of the week and twice on Sundays. But if you want a contract done right and in a way that serves your legal interest, draft it yourself or, even better, hire a lawyer.  

Tortious Interference on Parks and Recreation: How Rent A Swag Can Fight Back Against Tommy's Closet

[Parks & Recreation is the best comedy on TV these days, so in honor of its new season, I've taken a look at one story issue that's been bugging me since last season's finale.  Enjoy!]

Tortious interference occurs when a person intentionally damages the  business relationships of another.  Parks & Recreation occurs at 8:00pm, Thursday nights on NBC.  The former is a type of civil liability imposed on one party who financially harms another party.  The latter is an exceptionally sweet and intelligent sitcom that none of you are watching.  What do the two have in common?  A lot, surprisingly.

Last season, Tom Haverford - played by Aziz Ansari as a pop-culture obsessed, clothes horse, mogul wannabe - started a business called Rent-a-Swag, a store where the "teens, tweens, and in-betweens" of Pawnee, Indiana could rent "the dopest shirts, the swankiest jackets, the slickest cardigans, the flashiest fedoras, the hottest ties, the snazziest canes and more!"  Per the store's fake website, "before you waste your money on something that won't fit in a month, or fight with your parents over that sick velvet blazer they won't buy for you - step into Rent-A-Swag."  It's a good idea, right?

Anyway, the business took off and Tom was thisclose to leaving his job at the Parks and Recreation Department.  Unfortunately, Tom discovered that a competitor opened a rival store directly across the street called Tommy's Closet.  The competitor (whose identity I won't reveal here) informed Tom that Tommy's Closet was designed specifically to drive Rent-a-Swag out of business.

I don't know how the Parks & Recreation writers intend to resolve the situation (it will likely be sweet and goofy), but if I was Tom's attorney, I would advise him to sue the pants off (hehe) the owner of Tommy's Closet.  In tort law, there's something called tortious interference with an expected economic advantage and it gives business owners a way to stop those who maliciously attempt to drive expected consumers away from their business.  To win, Tom would have to prove that:

1. Tom had a reasonable expectation of economic benefit from the operation of Rent-a-Swag,
2. The competitor had knowledge of that expectation,
3. The competitor intentional interfered with Tom's expected economic benefit, and
4. Tom suffered economic damage as a result of the interference.

It wouldn't be very entertaining to watch, but Tom would most assuredly win a lawsuit against his competitor.  First, Tom had a good reason to expect an economic benefit; he was already receiving it!  His business was booming during the tail end of Season 5.  Tom was even able to hire employees and pay dividends to his stockholders.  Second, the competitor told Tom (in front of other people, I might add... witnesses!) that he was aware of Rent-a-Swag's financial success.  In fact, during the Season 5 finale, he tried to buy Rent-a-Swag from Tom because it had become a known moneymaker.  Third, the competitor admitted his desire to drive Tom out of business out of a misplaced sense of revenge and was actively luring customers away with free pizza and prizes.  Finally, we see in the Season 6 opener that Tommy's Closet had succeeded in drawing customers away from Rent-a-Swag; the episode shows Tom alone in his store, all the customers having fled across the street.  Tom has clearly suffered an economic damage.

While these kinds of malicious actions are rare, they do happen.  Therefore it's important for all artists and small business owners to be aware that there are options available to them should they become victims of tortious interference.  As a rule, the law doesn't look kindly upon those who open a business solely to spite another business.  In the real world, Tom has options - and so do you.  Of course, this is TV and I'm sure that whatever the Parks & Recreation writers come up with, it will be a hell of a lot funnier than watching this play out in a courtroom.

[You can also make a credible argument that Tom has a trade dress claim - a form of trademark infringement that protects a store's interior design - against the competitor since we learn that the interior of Tommy's Closet looks exactly like the interior of Rent-a-Swag.]

Don't Throw Out The Baby With The Bathwater: Changing Laws, The "I Have A Dream" Speech, And Copyright Policy

This Wednesday is the 50th anniversary of Martin Luther King's "I Have A Dream" speech. If you're like me, then you've probably seen snippets of that speech a hundred times, but never seen the full unedited version. That's because the speech is protected under copyright law until 2038, and anyone who copies, distributes, shares, or posts a video of the speech online will be violating copyright law and will legally owe restitution to the video's owner... Sony.* [Like when Sony ordered advocacy group Fight For The Future to remove the video from its website.]

Am I the only who thinks this is terrible? What kind of policy allows a major corporation to sue someone who wants to share with others THE ICONIC CIVIL RIGHTS MOMENT OF OUR TIME? Who is this policy protecting?

You may have noticed that I'm pretty vocal when I think changes should be made to U.S. policy, specifically copyright law. As a result, I've been accused several times of pursuing a "throw out the baby with the bathwater" agenda. But that's not really accurate since I've never called for scrapping laws wholesale. I have, on the other hand, advocated for revising laws that don't work as intended. I personally see advocating for better and smarter laws as my duty, not just as a lawyer, but as an American citizen (which, not so ironically, was kind of the point of Dr. King's speech).

And what's wrong with supporting change anyway? Not to be overly dramatic here, but America was founded on this whole idea of "it's not working out, so let's do something better." We went to war with England because we didn't like the way they governed us. We constructed a republican system of government that permits us to remove and replace politicians we don't like. We gave Congress the power to revise, update, and repeal laws because we recognized that people are imperfect and they will pass imperfect laws. When a law doesn't achieve its goal, it should absolutely be amended. The U.S. Copyright Act alone has been amended at least 10 times since 1790.

I keep saying it, but it bears repeating: copyright law wasn't created solely for the purpose of rewarding the artist. It was also designed to foster originality and ingenuity for the betterment of society (the founding fathers didn't measure capitalist success purely through personal wealth. Community prosperity was also a driving factor) and to shield artists from theft. It wasn't intended to be used as a weapon to attack others. Which is why the problem isn't that Sony owns the copyright to Dr. King's speech; the problem is what it can do to harm individuals who wish to share it. Simply put, Sony has the muscle and will to litigate against anyone who posts the video, regardless of the intent of the individual or their ability to fight back. And I don't think that's right.

In that spirit, here are two ideas that I think will be effective in revamping copyright law to better serve the American people.

1. Shorten the term limits on copyrights. Yeah, I've talked about this a lot. That just shows you how much I care about this issue. Copyright law was not designed to allow copyright owners to make money off a work in perpetuity. In fact, under the Copyright Act of 1790, copyright terms were set by the founders for a mere 14 years, specifically to prevent perpetual ownership. By shortening copyright terms, major corporate copyright owners such as Sony won't be able to bully individuals when they share something as innocuous and educational as Dr. King's speech. You can read a more complete take on that here.
2. Create exemptions in our copyright laws for works that hold special historical significance. The "I Have A Dream" speech literally changed lives and shaped events in the 20th Century. Yet under our current copyright law, it's treated like every other work of artistic expression. A work of such historic stature shouldn't be owned by any one entity. It belongs to all Americans in the same way the Declaration of Independence and the Emancipation Proclamation do and it should be available to everyone, free of charge.

Change is in our national DNA. History has borne that out repeatedly, so why fight it? Dr. King believed that. Who are we to assume differently?

*****

* Dr. King himself owned the copyright and even sued to prevent unlawful reproductions of the speech so that he could distribute profits from it to civil rights causes. After his death, the copyright passed to his family, who sold the copyright to EMI in 2009. EMI was purchased by Sony in 2011.

When The Media Talks About Law School, They Only Tell Half The Story

[I'm biased, I admit it.  I loved law school, so if that means you want to call BS on everything I say after this sentence, I'll understand.]

Three weeks ago, The New Republic made a big splash in the legal community with this article examining the death of Big Law (huge multi-national firms with thousands of attorneys making over $150K per year).  The article describes how the old model of legal hiring is no longer applicable in a world of downsizing and economic uncertainty.  In the past decade, at least twelve major law firms have collapsed and the job market for lawyers has all but dried up.  And while the article never says the words "law school is a bad investment", it can't help but point out that

The odds are increasingly long that a recent law-school grad will find a job... In addition to the emotional toll unemployment exacts, it is often financially ruinous. The average law student graduates $100,000 in debt.

Even though the New Republic won't say it, every other mainstream media outlet already has.  Over the past three years, The New York Times, The Washington Post, Gawker Media and countless others have piled onto the "law school is a bad investment" bandwagon.  And whenever those stories get passed around between my friends and colleagues, I get annoyed.  "How can they paint with such a broad brush? Is what's good for the goose good for the gander?"

The premise is always the same: Law school is expensive  → since most people can't afford the tuition, they have to take out loans → the job market has shrunk for legal work, so there are fewer jobs for too many lawyers  → when lawyers can't get work, they drown in loan debt.  The New Republic article even quotes a lawyer who was let go from her Big Law job and believes she's facing bankruptcy as a result.

These arguments are all correct, and it seems like these stories are having the desired effect.  Law school enrollments in 2013 were down 13% from 2012 which were already down 7% from 2011.  I can't argue that law school is for everyone.  Law school is worth it for one group of people only: those who want to practice law.  No one else should consider it.

The media isn't wrong to point out these facts.  The media also isn't wrong to question the current model and to search for better options for long term sustainability.  The media IS wrong, however, to paint the choice to go to law school as a purely societal issue.  Yes, there are too many lawyers.  Yes there aren't enough jobs for them.  Yes it's contributing to the education loan debt crisis.  But you can't look at this issue solely through a macro lens.  These are individual people making a monumentally personal decision.  How will I pay my tuition?  How will I pay my bills for the next three years?  What are my job prospects after law school as opposed to now?  I can say from personal experience that my long-term job prospects in the entertainment industry weren't promising, so incurring all that law school debt seemed like a worthwhile gamble if there was a chance I could get a stable job after school.

By leaving out the human element, the issue turns into a binary Law School Is For Everyone vs. Law School Is For No One battle royal.  Even the articles defending law school education like this one build their case on the fact that lawyers will earn more money over their lifetimes than those without law degrees.  I understand that tactic.  As a lawyer, you want to use credible, citable evidence to prove your case - figures from the American Bar Association on enrollments, or a Seton Hall study on the economic value of a law degree.  Anecdotal evidence is less compelling if you're trying to convince an entire generation of people that something is or isn't for them.  If you want to justify something at the aggregate level, you need hard data.  That's how policy is made.

I lament the absence of the human element because I think we lose a real teaching moment.  People are drawn to law school for a variety of complex reasons (we weren't all wooed by promises of big paydays at firm jobs).  Reducing the entire argument to a numbers game diminishes the legitimacy of an entire profession.

There are certainly a lot of problems with the current law school educational system, but this isn't just a social issue.  It's a deeply personal one.  And the media hasn't done a good enough job telling THAT story.