Tips to reduce attorneys fees

Attorneys fees can seem expensive, particularly  if you only concentrate on the rate charged.  The other component of the rate is the time it takes to do a task or the experience level of the lawyer.  A lawyer that charges $300 / hr and takes 1/2 hour to accomplish a task or that does not need to research the issue is more efficient than a lawyer or paralegal that bills at $150 / hr but takes 1.5 hours to accomplish the same task or has to research the issue.  So, what makes your fees higher and how do you mitigate them?

Below is a list of tips that we have gathered over the last 30+ years in seeing some bills end up higher than others:

  1. Organize your thoughts.  Just as in business, a more organized plan will get you where you are going faster and more efficiently.  Before you call your lawyer to “chit chat,” think through why you are calling, what information or advice you need, and be concise and to the point.  We love to chit chat and we will buy you lunch and chit chat on legal issues for free, but when we are at work we generally bill.
  2. Organize your documents.  The least efficient and most expensive resource to help you organize your documents is a lawyer or paralegal.  The more sorting, sifting, re-organizing and general searching we have to do, the more expensive it is for you.
  3. In a deal, pin down the big issues.  Transactionally, many clients think it is easy to shift a deal from one form to another (say from an asset to a stock purchase, or from a sublicense form of license to a order solicitation form) – it is not easy.  In larger deals, particularly where significant tax issues arise, structuring the deal first is absolutely key.  Use a non binding memorandum of understanding or letter of intent, or have a pre-call with your accountant or tax lawyer first.  Once a deal is set in motion, if it changes midstream, it costs more.  Consider if you got half way through college and changed your major from art history to electrical engineering.  It takes more time.
  4. Be responsive. Probably the single most significant complaint we lawyers have is when clients do not respond to issues that are on deadlines.  We have to remind, and call, and email . . . and so on, and you are billed every time we have to do that, trying to get you to provide us the responses.
  5. Don’t wait to the last minute.   Many clients think that waiting to the last minute and giving the lawyer no real time to draft the document or resolve the issue makes the lawyer more efficient.  It doesn’t!  It makes us less efficient.  Why?  Because we are at some risk if later we miss some issue that we should have raised, so compressing the work makes us worry more and hence, be inefficient trying to make sure we have caught everything.  Think about a construction project.  Whenever one company falls behind and the others have to “rush” you end up with “compression damages” – enhanced costs.  The same thing happens to lawyers.
  6. Make decisions.  Being indecisive can cause increased fees.   We often need decisions to be made, sometimes quickly.  When they are not made, they cause us to “start and stop.”  Being busy, we cannot always remember where we stopped, so we have to go back and get up to speed.  This costs us time and you money.
  7. Work as a team.  Your team includes your accountant, lawyer, banker and insurance agent, and sometimes a business consultant.  These team members must work together and *communicate*.   Now, sometimes this is hard for us because of the attorney client privilege.  If we share attorney client privileged information with many of the team members, it may waive the privilege.  But, there are still basic decisions and issues that can be shared and coordinated.

It may sound odd, but we actually want your fees to be as low as possible, and it sometimes troubles us that we have to charge for some things that have made us inefficient.  So let us help you!

Delaware or Maryland when starting a business?

We often are asked whether to file a Maryland or a Delaware corporation or limited liability company.  The chart below explains some of the factors that can affect this decision.  We do not believe that there is any material difference if you are forming a single member LLC or sole stockholder entity and you are a maryland resident and the property and business is located in MD – in these cases it is just easier to register in MD.  In any other case, this issue should be considered fully.

[table caption=”Delaware vs Maryland” width=”500″ colwidth=”100|200|200″ colalign=”left|left|left”]
Court System^Advantage Delaware:  Delaware has the Court of Chancery, which is a pre-eminent court system, and a significant body of case law that allows lawyers to give fairly accurate advice regarding outcomes in disputes^Maryland has a Technology Track in its circuit court, but many fewer decisions, so it is harder to predict how a particular issue might be resolved

Informal actions^Delaware has a very flexible law for approving informal actions – they can be approved with just the number of persons necessary to take the action, unanimous approval is  not generally necessary^Maryland law requires most informal actions to be unanimous, so as the number of members increases, this becomes inconvenient

Number of Members^As the number of members / stockholders increase, the harder it is to maintain a contractual stockholder agreement (this factor is about even for LLC’s), so the more you have to rely on applicable law.  Delaware law is more fully developed than Maryland law^As noted above Maryland law does not allow for easy informal actions, so as the number of members / owners increase, it is harder to maintain control over the minority members.

Taxation^Delaware has no state income tax so non resident members are not taxed on passthrough income (at the state level)^There is no material difference for pass throughs as long as all members are MD residents- however, for non resident members who own a Maryland pass through entity, there is a tax withholding requirement for the Maryland LLC.

Conversions^Delaware law has a form entry for entity conversions (i.e. LLC to Corp or Corp to LLC)^Maryland law does not provide for a simple conversion process – you must fully document a merger transaction (which makes such conversion transactionally more expensive)

Garnishment^Bank accounts in Delaware are not subject to garnishment^Bank accounts in Maryland are subject to garnishment, however, a Maryland entity may own accounts in Delaware, so this is more a matter of convenience


More countries join Madrid Protocol – Next Up India

More Countries Join the Madrid Protocol – Next Up: India

Effective July 8, 2013, India will join the Madrid Protocol – the international registration trademark system.  This is on the heels of Colombia, Mexico, New Zealand and Philippines, which have all joined the Madrid Protocol within the past 12 months.

The Madrid Protocol is one of the two treatises of the Madrid System (or the International Trademark System), which allows a trademark owner to seek international registration with one filing.  Businesses are growing worldwide today and as such, more and more businesses are finding they need international protection.  Under the Madrid Protocol, international registration is a more simplistic and cost-effective means of providing trademark owners with the ability to obtain trademark protection in up to 90 designated countries with only one trademark application filing. Registration under the Madrid Protocol is beneficial from a management standpoint as well as the international trademark registration can be managed more easily since only one step will serve to record any changes in the trademark registration, such as a change in ownership or even the address of the owner.

Thus, if your company wants to obtain trademark protection in fifteen15 countries, rather than having to file, pay for and manage 15 trademark filings in various countries, a trademark owner can obtain trademark protection in 15 countries with simply one application filing.  Not only is this cost effective in filing fees, but also it is also cost-effective in the time spent in preparing and filing the trademark application.  Although filing under Madrid Protocol is beneficial to all trademark owners no matter how small or large the company may be, smaller businesses that once thought international trademark protection was just not feasible from a cost perspective can now realistically move toward international trademark registration and protection on a global basis under the Madrid Protocol.

For more information, please contact Kim Grimsley at

Patent Law: The bell has not yet tolled for permanent injunctions in patent cases

On January 10, 2013, the United States District Court, N.D. California, San Jose Division entered a permanent injunction against a patent-infringing defendant in BROCADE COMMUNICATIONS SYSTEMS, INC. v. A10 NETWORKS, INC., Dist. Court, ND California 2013 – Google Scholar. The ruling restrained the defendant and parties in active concert with it from “making, using, selling, or offering to sell in the United States, or importing into the United States any AX series application delivery controller that includes features that infringe claim 25 from U.S. Patent No. 7,454,500, claims 13 and 24 of U.S. Patent No. 7,581,009, or claim 1 of U.S. Patent No. 7,558,195.”

While this result would not have seemed odd before May of 2006, Brocade is now one of the few cases where permanent injunctions have been issued since the decision in eBay, Inc. v. Mercexchange, LLC, 547 U.S. 388 (2006).  While the Supreme Court was careful to make it clear that permanent injunctions remained a viable remedy in patent cases, the eBay case changed somewhat well established case law that a prevailing patent infringement plaintiff was virtually always entitled to a permanent injunction.

A successful patent plaintiff must meet its “burden of showing that the four traditional equitable factors support entry of a permanent injunction: (1) that the plaintiff has suffered irreparable harm; (2) that “remedies available at law are inadequate to compensate for that injury”; (3) that “considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted”; and (4) that “the public interest would not be `disserved’ by a permanent injunction.”

While those factors might seem easy to meet, in practice, it is often very hard to show that legal remedies (damages) are inadequate.  In Brocade, the court found that Brocade “practices its patent, that [the defendant] is its direct competitor, and that Brocade does not license its patents,” and therefore that “Brocade has shown that it suffers the type of irreparable harm that a permanent injunction is intended to remedy” (emphasis added).

For more information on patent licensing contact Mike Oliver.

Brocade is a district court case and may be subject to an appeal, but it now stands as one of the relatively few cases post eBay in which a permanent injunction was issued.

One take-away from this ruling for licensing transactions, is that a patent holder must consider whether this type of remedy will be sought before engaging in licensing, particularly come one come all or non exclusive types of licenses.   That was one of the three key factors the court pointed to in finding irreparable harm and lack of an adequate remedy at law.