Stay Out of Court At (Nearly) All Costs

Posted on | March 30, 2009 | No Comments

  

Stay out of court, because courts often make bad decisions that can have enormous impact on your business, your personal life and your finances.  If you stay out of court, you increase your chances of controlling your own fate.  If you let a judge decide, you have no control.

 

One of my law partners has a great expression about clients who get themselves entangled in lawsuits:

 

“When a client has to file a lawsuit or gets sued, he has already lost.”

 

What’s that mean?

 

It means lawsuits cost.  They cost you or your business:

• Time spent in the courtroom, in depositions, reading documents, talking to your lawyer, in mediation, reading court documents, searching for evidence, etc.
• Money for attorneys’ fees, expert witness fees, photocopies, travel, etc.
• Opportunities to make money elsewhere doing other things, to grow your business, or to take personal time to be with family and friends.
• Your health.  Lawsuits are stressful.  The only thing more stressful than getting sued is having to file a lawsuit.  Lawsuits are fun for lawyers.  I love them, from a professional vantage point.  I get to exhibit and sharpen my advocacy and strategy skills, but lawsuits are no fun for my clients.
• Goodwill or reputation.  Getting sued can hurt the image people have of your business or you.  The newspapers rarely report stories accurately.  Allegations and even rumors are often reported as facts.  People who really, truly know you and your ethos will be unaffected.  Everyone else,  including your customers, vendors and potential customers, will develop doubt in you to some degree.

 

A good lawyer-friend of mine just got a horrible ruling from a judge in a divorce case.  The judge was wrong and should be appealed, but at what cost to the client?  The judge robbed a father of all time with his children in a visitation ruling.  The father in the case is not a bad guy at all, but the judge, for whatever reason, decided that the man should no longer see his own children. 

 

Amazing isn’t it?  How can one human being exercise that much power over another human being.  This father is dying inside, because he no longer can see the children he loves so much.  It’s very sad, and that judge should be ashamed of himself.

 

In a divorce case, there is not much you can do in advance to avoid a divorce lawsuit.  Save your marriage, if you can.  Or, don’t marry THAT woman in the first place.  Ladies, don’t marry THAT man!  That is the only lawsuit prevention available in a divorce context.

 

But what about your business affairs?

 

Do you take these preventative measures:

• Meet with your lawyer when you are unsure of your rights?
• Meet with your CPA, lawyer and insurance agent at least once every year?
• Have your lawyer draft or review all your contracts?
• Have your lawyer develop an asset protection plan?
• Use limited liability entities properly to create a “corporate shield?”
• Train your staff on a regular basis?
• Have processes and procedures developed into an operations manual?
• Properly use insurance to transfer liability risks away from you or your business?
• Etc.

 

If you answered “no” to any of these questions, then it’s time to go see your lawyer.

Real Estate “Flipping”- What happened to the “Simultaneous Closing?”

Posted on | March 27, 2009 | 9 Comments

 

A Question from one of Matt’s readers-

“Matt-

I have a purchase agreement from a buyer and deposit on a house that I am buying as a short sale and selling to a rehabber.  How can I close both transactions in one day?  Do you know a title company in Lafayette, IN that would do it?  What about  a title company in Indianapolis that would do a double closing.  Title seasoning should not be an issue on these deals since they are all cash.  I am just finding that the title companies I contact say that their underwriters will not approve it because it is a “flip” which is illegal. 

S.L.”

 

Matt’s Answer-

Back in the “good old days,” a real estate investor could find a great deal, lock up the deal with a contract, option or purchase agreement, and then “flip” the deal to another buyer.  The investor was then rewarded for finding the good deal and for finding the buyer with a fee, charge, profits, etc.  The nature of the investor’s reward depended on how the deal was purchased and then re-sold.

 

Often, the investor would assign her rights to purchase the property to her buyer.  The investor would never take title to the property.  There would be one closing-  called a “simultaneous closing” or “double closing.”  In other words, the investor’s assignment of the deal to the buyer, and the buyer’s ultimate purchase of the property would happen at one closing.  Think of it as two deal closings in one.  At the closing, the investor would be listed as a payee and would receive her assignment fee at that time.

 

What happened to the double closing?

 

We started hearing about mortgage fraud cases.  There were so many cases of mortgage fraud over the past 10 years that there developed a presumption that “flips” were illegal.  The rationale was that a property purchased on Day 1 for $100,000, for example, could not be “flipped” for $120,000 on Day 2, or Day 5 or even Day 90.  The rationale was the property could not appreciate that quickly.  Therefore, the final purchase price ($120,000 in our example) had to be fake, false and fabricated.  There was no credit given to the investor for having negotiated a great purchase price and a better sales price.  The presumption is that the second sales price had to be the product of a fraud on the mortgage company.  Soon, title companies began refusing to hold  “simultaneous closings” for fear of being accused of participating in mortgage fraud.

 

What if the ultimate buyer was not using mortgage loan funds to buy the property?  What if the buyer were paying in cash?  How could there be mortgage fraud on a flip, if there is no mortgage lender?

 

Sadly, state and federal prosecutors have scared appraisers and title companies to the extent that no title company will do a “simultaneous closing,” even if there is no mortgage lender involved!   If any of my readers know of a title company that will still conduct simultaneous closings,” please let me know.  Other readers are still looking to do simultaneous closings on cash-based flips.

 

It is true that mortgage fraud was and is a serious problem, although most of the really bad mortgage fraud practices seem to be happening less and less often.  There’s more public awareness of mortgage fraud today, which has helped.  More than 10 years ago, I started preaching about mortgage fraud.  I remember announcing the formation of the Indiana Mortgage Fraud Task Force.  I’ve lectured, written and begged investors to increase their awareness of mortgage fraud.  Not only is it a crime, but the number of fraud cases has had a tremendous chilling effect of real estate investing.  A few bad apples have screwed up simultaneous closings and flips for the rest of the real estate investing community.  And that’s a bad thing for all of us, as flips served a legitimate purpose.  Flips reward investors for finding good deals and matching buyers and sellers.  As this is often work that realtors and brokers will not do, we should be encouraging, not prosecuting, investors for fair, honest and legitimate flips, even if they require a simultaneous closing to complete the transaction.

 

Years ago, I wrote a series of articles on mortgage fraud-  “Mortgage Fraud-  Just Say No!”  If you’d like to learn more about mortgage fraud and how to avoid it, send me an email or comment.  I’ll send you a copy of my articles on the topic.

 

One final thought. . .  there is another type of flip.  If you buy that property for $30,000 and add $20,000 of improvements, it is possible that the improvements raise the fair market value to $85,000, $90,000 or more.  In that scenario, you should be able to sell the property for $90,000 or so, and not have to worry about mortgage fraud claims.  Keep your receipts and photographs showing the before and after condition of the property and your improvements to it.  You’ll have to prove the $20,000 of improvements, plus the increase in equity as a result of the improvements.  Getting good appraisals and keeping lots of documentation are key to doing these “rehab flips.”

 

I was also asked recently about selling an LLC or corporation that owns a “flip house.”   Selling real estate and selling an LLC or corporation are quite different.  I’ll try to address that scenario in another blog post soon.

Kyle Lacy, Social Media – Indianapolis

Posted on | March 26, 2009 | No Comments

Developing and then guarding your brand is becoming more and more important.  It can be a large portion of your company’s value.  Yet, few businesses monitor their brand.  Here are soom tools for doing just that.

Be a Pelican- Dive In!

Posted on | March 24, 2009 | No Comments

 

 

Two weeks ago, I was sitting on a beach, looking out across crystal clear blue Caribbean waters with the sun about three hours from setting.  That’s when I noticed this pelican fishing.  Pelicans are large birds, so it takes some effort to lift off, clear the ocean’s surface and fly nearly straight up 50 feet or so.

 

The pelican slowly drifted in flight a few yards, searching for fish just below the surface, 50 feet in the air, and then the pelican folded in its wings to its sides, and would dive straight down to the ocean.  It torpedoed into the water, using its beak to stab at and capture a meal of fresh fish.

 

Amazing.  I watched that bird for nearly an hour.  It must have made 15 dives while I was watching.

 

What in the World does this story have to do with business?

 

You need to be “pelican like” in your business operations.  I know, I know. . .  we’re in a recession.  You have to watch cash flow.  You can’t afford to make mistakes.   Blah, blah, blah.

 

What was your excuse when we weren’t in a recession?  Frankly, you can’t afford NOT to take risks.

 

Too many businesses are too passive in exploring growth opportunities or bettering existing operations.  In a recession or in good times, you’ve got to be calculating, smart and aggressive.  Sometimes, you’ve got to go for it, just like a pelican diving for a meal!

 

You can be smart and aggressive.  You can take calculated risks.  Sometimes, a pelican dives but misses the fish.   Sometimes, businesses take chances that don’t work out well.  However, doing the same thing over and over without innovation, calculated risk taking and determination leads to slow deaths, for pelicans and businesses both.

 

Virtually every successful entrepreneur had several failures before their first success.  Then again, successful entrepreneurs understand the art of being “pelican like.”

 

What are you doing this week to catch more fish?

Landlording Group Meeting Tonight

Posted on | March 23, 2009 | No Comments

 

Once each month, I host the “Landlording Subgroup” of the CENTRAL INDIANA REAL ESTATE INVESTORS ASSOCIATION.  The next meeting will be held in my law office building- 151 North Delaware Street, downtown Indianapolis at 6:00 p.m. on Monday, March 23.  If you’re a CIREIA member, register to attend the meeting at www.cireia.org.

 

For driving and parking directions, visit my law firm’s website at Thrasher Buschmann Griffith & Voelkel, P.C.- Contact Us page

 

At these classes, I can answer any landlording question you can think of, because I’ve seen it all at this point in my law career.  If you are a landlord and have not attended one of my classes, please do so soon.  If you are not a member of CIREIA and are serious about real estate investing, GO TO WWW.CIREIA.ORG AND JOIN ASAP!

Marketing Organization Chart

Posted on | March 20, 2009 | No Comments

 

 

 

 

 

 

 

I am a huge fan of visuals!  I’m talking about concepts and ideas presented in a visual format of some type.

 

Why?

 

Because we are visual creatures.  Most people learn faster and better by seeing it first.  Then, after they can “see” the concept, we are more likely to grasp/understand the details and nuances that are best explained through words in sentences, paragraphs, articles or books.

 

I believe in visuals in my teaching.  I use charts, graphs, diagrams, etc. when I coach, counsel, lecture or teach.  I even use role playing, chair positioning, etc. as a way for my clients to learn and remember the lessons I teach them.  Years ago, I bought a book called “The Great Big Book of Process Visuals (or Give Me a Double Axis Chart And I Can Rule the World)” by one of my learning mentors, Alan Weiss, Ph.D.  I don’t use all the visuals in Doctor Weiss’ book, but I did learn a great deal from reading and studying it.  Mostly, I learned that I need to use visuals as often as possible to help my clients learn faster, learn better and retain more of that learning.

 

Here’s a great example of a visual from John Janash, of Ducttape Marketing:

Can you imagine trying to teach this concept by words alone?  Better yet, can you imagine that your listener would better understand the words alone?

 

I think not.  I think this chart shows and reveals and teaches a great deal about marketing, without any explanation at all.

 

However, I’m a lawyer by training.  And lawyers love to use lots of words.  So, I am going to dedicate several blog posts to exploring the concepts presented in this chart.  Until then, take 5 to 45 minutes simply to read and read again this chart.  Consider how it was outlined and structured.  Consider the color scheme.  What do the words mean to you?  Are there other words you’d use instead.  What is missing?  What is unnecessary?

 

Most importantly, what does this chart make you think about when considering your company or organization?

 

How can you use visuals to educate clients or customers?

How can visuals help you in management?

 

 

On the subject of what’s missing, read this:  http://www.roundpeg.biz/2009/03/marketing-organization-chart-revisited/.

 

 

SPECIAL THANKS TO LORRAINE BALL.  I got this chart from Lorraine Ball at Round Peg.  I follow Lorraine on Twitter and through my blog reader, and you should too!

Vacations Are Essential to Good Business Operations

Posted on | March 20, 2009 | No Comments

 

 

If you run a business, you need a vacation.  In fact, you need to take a vacation regularly.  And NOT just a vacation to “recharge your batteries.”  I’m talking about a great vacation that makes both your personal life and your business life better.

 

Here’s what I did on my recent vacation and how my experience can help you as a business person.

 

Rule #1-   Do NOT try to “get away from it all.” 

 

DO take your cell phone.  Do check your email.  Do call into the office.

 

It’s hard to relax on vacation when you’re stressed out about your office, missed calls, office emergencies, clients or customers looking for you, etc.  The notion that we have to separate our business life from our personal life with a “Chinese Wall” is completely ridiculous and completely unrealistic.  If you feel better while on vacation by checking in with your secretary, assistant or manager a few times, then do so.  Don’t WORK, but do check in a few times.  You’ll have a better, more relaxed and fun vacation, if you know that you’ll return home and not have to face a catastrophe.

 

Rule #2-   Eat well.  Exercise.

 

Vacations are  a time to replenish, refocus, re-establish and renew.   That applies to our minds, bodies and souls.  Our hectic lives at home wear us down and wear us out.  We fall into bad eating habits and exercise routines.  You can stop those bad habits and establish new ones during vacations.  In fact, establishing good habits is really the best thing you can do on vacation.

 

I just returned from sailing through the Caribbean, and time in Panama and Costa Rica.  I always wanted to sail through the Panama Canal.  Now I have!  It was fun, adventurous and relaxing.  And, I ate well.  There are no fast food or drive-thru restaurants in the mountains of Costa Rica or along the Panama Canal.  I ate locally cooked rice, beans, chicken, plantains, etc.  Normally, I try to cut out caffeine during vacations, but I wasn’t going to pass up fresh coffee served at the haciendas in Costa Rica.  I did refrain from processed foods almost entirely, and I exercised.  Now my job is to get past the difficult first week back and stay on track to eat well and keep exercising.

 

Rule #3-    Read.  Something fun.  Something educational.

 

I read often at home and every day at the office, but there is always a growing stack of books and magazines by my bedside table.  Vacations allow me to read important business books and books of leisure.  I also read those magazines that have stacked up.  I read the magazines first, usually in the airport and in the plane.  I cut out the articles I want keep or read again.  Then, to lighten my suitcase, I throw away the other parts of the magazines.  I save the books for the beach!

 

Rule #4-   Come Home With Ideas.

 

Take some paper and a pen.  This is a time to reenergize and become motivated to be a better person and businessman (businesswoman).  You should outline ideas, hopes, concepts, aspirations, etc. that you’d like to accomplish when you return home.  Do NOT rewrite your business plan.  DO think about larger, exciting and interesting ways to come back from vacation and become better than ever.  Consider a few new ideas that you could implement when you’re back at it next week.  If you took the right books and magazines, you’ll have new ideas that excite you about the future of your company, firm or career.

 

And this Rule #4 applies to your roles as a father, husband, wife, daughter, girlfriend, friend, partner, etc.  This is not just about business.  I came home with ideas about being a better friend, father, son, brother, etc.

 

My financee and I spent hours on vacation talking about her law immigration law practice, our pending nuptials, and our future together.  We took a very fun “marriage workbook” with us, and had a blast going through it.  We talked about a wide range of topics, both personal and professional, and we came back ready to take on the World together.

 

Rule #5-    Make It Memorable

 

Have a great time.  Try doing something you’ve always wanted to try.  Maybe try white water rafting.  Or deep sea fishing.  Or, sailing through the Panama Canal.  Whatever it is, give yourself reason to remember how good it felt to reward yourself with time away from your routine and sources of stress.  Take a few vacation photos and tape them to your PC or desktop.  If you can remember your positive vacation experiences, you’ll remember that the routine stuff is worth it.  And, you’ll be more likely to take another vacation sooner than later.

 

Rule #6-   Follow Up When You Get Home

 

Now that you’re back, make the most of your vacation.  Schedule time on your calendar, or in your PDA or planner to follow up with things planned on your vacation.  Do these things:

• Do eat better.
• Do get better sleep.
• Do exercise.
• Do implement those business concepts, plans and goals.
• Review your notes and the magazine sections you kept.
• Do make changes in your personal life to feel more successful as a father, daughter, wife, etc. . .  and businessperson.

 

Here’s a final idea. . .  print a copy of this blog today, and put that copy in your favorite suitcase.  Tomorrow, schedule your next vacation.  Then, when it’s time to pack the suitcase, pull out and read this blog again.  Pack your magazines and books.  Get on the plane and start at the top with Rule #1.

 

Do these things, and your business will benefit tremendously.

REAL ESTATE QUESTION- Tenant Screening

Posted on | March 17, 2009 | 2 Comments

 

Question from one of Matt’s readers-

“How should I screen tenants?”

Matt’s Answer-

That is a great question and more important today than ever. As the foreclosure wave pushes more and more people out of their production homes and into the rental market, landlording is seeing a rebirth. Once again, it is not so bad to hold rental properties. Generally, the number of vacancies is dropping. And, more and more investors are moving away from the more creative real estate investing techniques and back to buying and holding rental properties.

 

Landlording is back!  (I never thought it went away, actually.)

 

For both the seasoned landlord and the newest of real estate investors, it is important to screen tenants and have a command of the tenant screening process. There are a number of factors to consider, such as:

· What forms do I use?

· Do I require an application fee?

· How do I screen?

· What is my screening criteria? What makes a good tenant?

· How do I avoid discrimination claims? What are my duties and rights?

· How do my rental application and lease agreement work together?

· Was does it really mean to “pre-screen” tenants?

· Should I use a tenant screening service?

These are great questions, and the answers are relatively simple. It does, however, take some time to learn about your rights, responsibilities and opportunities, as they relate to tenant screening. I cannot address all these topics here, but let me take the last question- “Should I use a tenant screening service?”

The answer is: Yes, you better. Using tenant screening services is the most cost- and time-effective way to improve your chances of a successful landlord-tenant relationship. Good tenant screening services are a bargain. I have written for more than a decade on the subject, and believe in them more today than ever.

Do “bad” tenants slip through, even with a tenant screening company helping you? Yes, it happens. But, for the most part, professional tenant screening greatly improves your odds of finding the best tenant in your pool of tenant applicants. I believe in tenant screening services so much that I agreed to teach a class on landlording, called “Landlording 101,” for the local office of the National Tenant Network, last year. WE WILL PROBABLY OFFER THE CLASS AGAIN THIS SPRING!  IF YOU ARE INTERESTED IN ATTENDING, EMAIL ME.

 

Also, once each month, I host the “Landlording Subgroup” of the CENTRAL INDIANA REAL ESTATE INVESTORS ASSOCIATION.  The next meeting will be held in my law office building- 151 N. Delaware Street, downtown Indianapolis at 6:00 p.m. on March 23.  If you’re a CIREIA member, register to attend the meeting at www.cireia.org.

 

At these classes, I answer the questions listed above. If you are a landlord and have not attended one of my classes, please do so soon.  If you haven’t established a relationship with National Tenant Network or another such service, do so this week. That is one of the first and certainly most important steps in the tenant screening process.

Congressman Burton to Co-sponsor the Homebuyer Tax Credit Act

Posted on | March 17, 2009 | No Comments

 

 

 

 

 

The current recession started with a crisis in the real estate market, and the solution, in large measure, remains tied to the real estate market.  However, there are three problems with the massive stimulus plan Congress passed, as it relates to housing.

 

First, the current stimulus plan limits the $8,000 tax credit to first time home buyers.  Those buyers are in the lower end of the housing market.  So, there is no direct stimulus for middle to upper-end home buyers, who tend to buy larger and more expensive homes.  It made no sense for Congress to stimulate demand for the lower end of the housing market and essentially ignore the other portions of the housing market.

 

By offering a tax credit to all home buyers, not just first time buyers, Congress would provide needed stimulus for the entire residential real estate industry.

 

Secondly, Congress failed to account for the fact that all real estate markets are not alike.  Some areas of the country are suffering more than others.  Southern California, Florida, Arizona and Nevada have horrible real estate troubles.  California has seen a drop of nearly 75% in home values in particular areas of that state.  Supply in those markets is out-pacing demand.  There are too many homes, and too few buyers.

 

In Indiana, we have not suffered huge drops in values, because values here were never over-inflated.  The fall in Indiana property values has not been so deep, because the rise in values was not as high over the past few years.

 

We need a program that accounts for the differences in local real estate markets across the country.  Congress should establish a formula for determining what constitutes “excess” housing supply for a particular market.  For example, Congress could determine that a normal amount of housing inventory is five months of home sales, on national average.  Then, Congress could provide greater buyer incentives for those markets with excess inventory (greater than five months of inventory), until housing supplies have dropped to a “normal” level.  This would enable Congress to direct more aid to those markets in greatest need.

 

Thirdly, there is a difference between stimulating the sale of existing homes and stimulating demand for new home construction.  In Marion County, Indiana, we have too much housing inventory.  We need incentives for home buyers to purchase existing homes.  We do not need incentives for new home construction.  By contrast, housing inventories in the surrounding counties are much lower.  Arguably, Hamilton County, Indiana is seeing a housing shortage.  So, new home construction should and could be stimulated in those counties that do not have excess inventory.

 

What’s the first rule of selling real estate?   Location, location, location.  Congress has ignored that basic principle.   All real estate is not the same, nor are all real estate markets the same.

 

Are there any solutions in development?

Sort of.

 

Indiana Congressman Dan Burton is going to co-sponsor the Homebuyer Tax Credit Act, H.R. 1245.  The goal of the bill is to stimulate the entire housing market by offering a $15,000 tax credit to individuals who purchase a home in the next year.  The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.  The bill, if passed into law, would replace the current $8,000 housing tax credit.

 

H.R. 1245 would address some, but not all of the concerns I have expressed in this blog.

 

What are your thoughts on the subject?  Post your comments.

Bloggers Beware! Copyright Laws Apply to You, Too.

Posted on | March 16, 2009 | No Comments

 

There is a battle developing between bloggers and traditional print newspapers.  The battle is over content, and copyright law is at the heart of the dispute.  And, I believe that the battle is likely to spread from newspapers to other on-line content providers.

 

Is this a serious matter for bloggers?

 

Yes.  There have already been lawsuits filed against bloggers over content.  So, it’s important for bloggers to understand what this new trend is, and how to guard against claims and lawsuits.  I believe in prevention over the cure.  That means that I am first a “teacher” of the law to my clients.  If I can empower my clients with information and knowledge about the law and the legal consequences of their decisions, then they are more likely to make the right business and legal decisions in the future, even when I’m not around to help them.  Knowledge leads to wisdom, right?  So, the more knowledge you have, the wiser your decisions will be.

 

Plus, who wants to pay their lawyer to review each blog before its posted?

 

Why a battle now?

 

Increasingly, newspapers are seeing their markets evaporate as fewer and fewer people read the daily paper.  Subscriptions nationwide have been falling for years, and the trend seems to be increasing in pace.  Just in the past few months, we have witnessed dozens of newspapers stop printing second or weekend editions, or close their doors altogether.  Many newspapers are consolidating sections.    Here’s some of the carnage:

 

Rocky Mountain News-          shut down

The Journal Register Company-   bankruptcy

Philadelphia Enquirer-     bankruptcy

Chicago Tribune-    bankruptcy

Minneapolis Star Tribune-      bankruptcy

San Francisco Chronicle–    near death

Seattle Post-Intelligencer-    online-only publication

Gannett, owner of USA Today-   dividends slashed

The New York Times-   dividends slashed

Cincinnati Post-    dead

New York Sun-   dead

 

So, as a result, two things seem to be happening in the newspaper world:

 

#1-   Some newspapers are becoming non-profit, public interest entities.  Examples of this are ProPublica (“investigative journalism in the public interest”) and MinnPost.com.  ProPublica is funded by the Sandler Foundation and other trusts, while MinnPost.com gets funds from certain trusts, the wealthy and foundations.

 

#2-  For-profit newspapers are trying to generate revenue on-line. 

And that’s where you come in, my fellow bloggers.

 

The for-profit on-line papers cannot charge readers for content, if bloggers are copying, re-posting or re-blogging meaningful parts of the newspaper’s articles, especially original stories/works generated by a single paper.  Readers won’t pay the papers for the same content you’re giving away for free.

 

EXAMPLE OF ONE LAWSUIT-     Silicon Alley Insider, a business blog, got sued for quoting 25% of Peggy Noonan’s article in a February issue of the Wall Street Journal.  And get this, Silicon Alley Insider even gave credit to and referenced Dow Jones, which publishes the WSJ.

 

Amazing, right?  You’d think that the WSJ would appreciate the free marketing.

 

The reality is that newspapers are nervous, and nervous companies do stupid things.  Take the music recording industry, for example.  Those geniuses started suing individual music lovers for on-line music sharing.  There was virtually no attempt to be creative in preserving their market share or generating other income streams.  Rather, they elected to sue their client-base and sought huge punitive damages awards.

 

Today, we are starting to see the same knee-jerk, reactionary approach from print newspapers.  I fully expect the trend to escalate.  So should you.

 

This blog entry is getting too long.  So, I’ll follow up on this soon.  In a future blog, I’ll explore the arguments on both sides.  This concerns federal copyright law and a concept known as “fair use.”  I’ll explore copyright rules and the “fair use” defense, and I’ll try to help you understand how this new trend might impact your “scraping,” copy-paste practices , and re-blogging.

For now, please recognize that you can’t fight City Hall, and you can’t fight Dow Jones either.  Most bloggers are too small to wage a legal battle with a large newspaper, even if the paper is slowing dying.  So, start to develop the mindset that you’re going to have to exercise more caution than you did before reading this blog; review your policies and procedures for re-blogging content; and develop ways to minimize the risk of drawing fire from an angry source you quote or paraphrase.  It may be that you’ll have to start getting permission in advance to re-blog meaningful amounts of someone else’s content.  You might have to change several things you do now.  For now, just start thinking about this topic.

 

Keep reading.  More to come.

Meet Matt

Wouldn’t it be great, if your business coach was also an attorney? Owned other service and manufacturing companies? Was an entrepreneur himself? And truly understood business, marketing, finance, accounting, taxes and the law? Meet Matt.

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