Stacy N. Lilly News

Jul 25

Philadelphia, Pennsylvania – July 25, 2011 – The Law Office of Stacy N. Lilly, a law firm serving small businesses and entrepreneurs, received national certification as a Women’s Business Enterprise by the Women’s Business Enterprise Council of PA-DE-sNJ, a regional certifying partner of the Women’s Business Enterprise National Council (WBENC).

WBENC’s national standard of certification is a meticulous process including an in-depth review of the business and site inspection. The certification process is designed to confirm the business is at least 51% owned, operated and controlled by a woman or women.

By including women-owned businesses among their vendors, corporations and government agencies demonstrate their commitment to fostering diversity and the continued development of their supplier/vendor diversity programs.

To learn more about The Law Office of Stacy N. Lilly, please visit www.thelillylawoffice.com.

About The Law Office of Stacy N. Lilly

The Law Office of Stacy N. Lilly helps small businesses and entrepreneurs, providing cost-effective legal advice and representation in litigation, commercial transactions, and business planning.  The firm also serves as general counsel to small businesses to address risk management issues, corporate governance questions, and other concerns commonly encountered in business transactions, planning, and disputes.

About WBENC

The Women’s Business Enterprise National Council is the nation’s largest third party certifierof businesses owned and operated by women in the United States. WBENC is a resource for themore than 700 US companies and government agencies that rely on WBENC’s certification as anintegral part of their supplier diversity programs.

Jun 6

As a company grows, it is understandable that some business owners focus more on generating and completing the work, rather than on pursuing payment for the goods or services provided. Generally speaking, the longer a debt goes unpaid, the higher the likelihood that it will never be satisfied. Having a debt collection policy in place can help to immediately increase your accounts receivables and decrease headaches down the road. The most important part of debt collection is to have a plan and follow it. Here are some tips to help get you started:

Get it in writing.  Place your clients or customers on notice of your payment policy at the beginning of your engagement. Your written contract should set forth your expectation that payment is due upon receipt of your invoice and that interest may accrue if payment is not received. Another provision to consider in your initial contract is a clause to recover attorney’s fees if litigation is ultimately necessary to collect on the debt. 

Letters.  Work with a member of your support staff or bookkeeper to develop a schedule for following up on outstanding invoices. Typically, follow up letters are sent thirty, sixty, and ninety days after a bill is first submitted for payment. Standard form letters can be created and used for different accounts.  If you receive no response to your first letter, subsequent letters should be sent via certified mail to guarantee they are being received. 

Phone calls.   Some businesses may find follow up phone calls or face-to-face meetings useful, especially when there is an ongoing relationship with the client or customer. You may learn that the lack of payment was a simple oversight on your client’s behalf, or gain some understanding about why it has been delayed. Use this as an opportunity to verify or even change the terms of the payments.  It is important to keep communications open. However, a paper trail is also necessary for purposes of documenting your requests for payment, especially if you have amended the terms of your original payment plan. Consider following up your conversation with a letter or email that confirms what was agreed upon.   

Next steps.  If an invoice goes unpaid despite your efforts, your debt collection plan must include a strategy to handle long-term delinquent accounts. Small claims court may be one option for smaller debts. But a more substantial debt will require advice of counsel. If a significant account is delinquent more than ninety days, consider consulting with counsel to determine your next, and best, options. 

There is no one way to implement a successful debt collection policy. The most important part of this process, however, is identifying the past due accounts, and setting up a systematic process for reaching out to collect the payment. Unless a clear system is in place, some past due invoices may fall through the cracks, which will decrease reimbursement and potentially eliminate your legal options for recovery in the future.

Apr 5

Imagine you own a small appliance repair shop.  You send your new employee John to repair a long-time customer’s dishwasher one morning.  That afternoon police officers arrive at your door looking for John.  He is accused of sexually assaulting your customer while in her home. 

Imagine instead that you own a gym.  One evening two employees stay late to close.  The next day, you learn that a violent physical altercation occurred between them, leaving one employee hospitalized.  

Finally, imagine you own a small accounting firm.  One day you receive a letter from a lawyer accusing your prior secretary of using your clients’ social security numbers to open credit card accounts in their names and making unauthorized purchases totaling half a million dollars. 

If any of these allegations are true, as the business owner and employer, can you be liable for your employees’ criminal conduct?  The answer will likely depend on whether or not you properly screened the employees prior to hiring them.  If John had a prior sexual assault conviction, the gym employee a record of prior assaults, or the secretary a history of theft, your troubles are just beginning. 

Businesses are increasingly being held liable for the acts of their employees as a result of negligent hiring claims.  These claims are based on an employer’s failure to use reasonable care in the employee selection process.  A business can be liable for negligent hiring if an injured third party can show that the business knew or should have known about an employee’s dangerous or untrustworthy character.  The law therefore places the burden on employers to provide their employees and customers with a safe environment, free from the risk of harm by an unfit employee.    

There are certain lines of business that create a heightened need for protection from negligent hiring claims.  These include any service industry where employees enter homes for installation or repair purposes.  Employees who have access to private homes or apartments, such as maintenance personnel and real estate agents, and those that have access to financial information, such as a bookkeeper or administrative assistant, also create an increased risk of harm to third parties.  Employees who are placed in positions of trust, such as security guards, personal drivers, counselors, and health care providers, also pose a significant risk. 

The level of applicant scrutiny will depend on the position being filled.  However, all employers should use due diligence in their hiring processes.  The following are six considerations to help protect your business from hiring an unfit employee and to demonstrate your due diligence in your employee screening process:    

  1. Create detailed employment applications.  Potential employees should be required to complete and sign an application that asks about their education, prior addresses, prior employment, why the prior employment ended, and whether the applicant has ever been convicted of a criminal offense.  The application should also indicate that by signing, the applicant is affirming the information provided is true and accurate, and authorizing the potential employer to obtain background information about the applicant. 
  2. Conduct thorough interviews.  The formal interview is used to determine whether the applicant can successfully perform the job duties for the position being filled.  But it can also provide a wealth of information about the potential employee and answer any questions you may have about information contained in the written application.  Employers can inquire about gaps in employment history, the applicant’s current illegal drug use or addiction, whether he or she has ever been fired, and whether there are any criminal charges pending against the applicant. 
  3. Verify educational histories.  This step is most important where the applicant may be too young to have a work history, or if certain training or certification is required to properly fulfill the position’s duties.   
  4. Check references.  Many employers have a policy to disclose only a former employee’s position and dates of employment.  However, some may and do reveal information that could help future employers determine whether an applicant is a good fit for a particular position. You will only know if you choose to call.      
  5. Conduct background checks.  A background check can help to verify the information contained in the application and interview, find criminal convictions, and check credit and driving records.  If conducting background checks, employers must comply with the Fair Credit Reporting Act and other applicable state laws. 
  6. Require drug testing and/or physicals.  A mandatory drug test by a reputable facility can eliminate drug users from your applicant pool.  

Counsel can help you develop the best hiring procedures for your business.  But even if you have the most comprehensive screening process in place, it is only helpful if all efforts are documented.  Keeping a file on each employee is a small task to undertake for the protection it may one day serve.    

April 2011 edition of News You Can Use, thinkBIG Innovative Design and Marketing. All rights reserved. Further duplication without permission is prohibited. To view in the original newsletter, click here.

Feb 25

Angry about the delay in delivery of this holiday season’s hottest game system, your top sales person logs into your electronic store’s Twitter account and posts:

ABC Trucking Co. is terrible! They do not deliver anything on time and it is costing me sales! If you want on time delivery, use another service.

As the business owner, are you concerned about ABC Trucking Co.’s reaction to this post?  Will you be sued?  Does it matter that you did not give your employee permission to post the Tweet?  What if he used his personal Twitter account to voice his frustration, or his personal smart phone?  What if he posted it after work on his personal Facebook page?  Would it matter if he proudly identifies himself to his Facebook friends as your store’s top salesperson? 

With the increase in lawsuits resulting from content posted on social media websites, businesses must consider the issues and potential liability raised by this hypothetical.  The most common legal claims include allegations of defamation, libel, copyright infringement, and invasion of privacy.  Because employers are vicariously liable for their employees’ conduct, at least when that conduct occurs during the course and scope of their employment, many businesses are implementing social media policies to minimize the risk of such claims.  With the increasing popularity of social media — particularly Facebook, Twitter, LinkedIn, and blogs — there are simple steps every business should take to avoid legal action as a result of its employees’ social media use. 

Step 1.  Appreciate that social media is here to stay.  Prohibiting the use of social media altogether may be impossible, even at work, where many smart phones allow access to social networking sites.  A complete ban may also alienate employees and limit business opportunities.  Because social networking is here to stay, a better option is to implement a policy governing employees’ use of it. 

Step 2.  Designate someone to take charge of your social media policy.  Business owners who do not personally engage in or understand social media must designate a trusted person, or group of people, who understands not only how social media works, but also the potential legal liabilities for its misuse.  Of course, the necessity and scope of social media policies will depend on many factors, including the size of the business, the type of product or service offered, and the extent to which the business utilizes social media for marketing and communicating with customers.  Businesses should consider consulting with counsel at an early stage to assist in this process.      

Step 3.  Determine whether your current employee policies can be amended, or if a more specific social media policy is needed.  Once one is charged with the responsibility of reducing the risk of social media liability, a clear policy can be created.  Many businesses already have an employee code of conduct, and a social media policy may simply be an extension of the guidelines already in place.  In such a case, the current policy can be amended and the employees advised that the company’s expectations of employee conduct extend to their social media use. 

In other scenarios, a policy directed at social media may need to be more substantive.  Certainly the risk of claims is greater for larger companies, and those businesses that support and encourage their employees’ utilization of social networking as part of their marketing plans.  In these cases, a more detailed policy may need to be developed.    

Step 4.  Know what to include in your social media policy.  A sound social media policy should include a number of fundamental elements.  For example, employees should understand that the intellectual property laws that prohibit the unauthorized use of another’s work typically apply to social media.  The social media policy therefore should state that all employees must give others proper credit for their work, and obtain permission to use something before it is published.  Blogs pose a unique liability issue in this respect because they commonly permit third parties to post comments, which can include the unauthorized use of protected materials.  The Digital Millennium Copyright Act (“DMCA”) protects against such unknowing infringements.  It requires a takedown policy and a registered agent with the U.S. Copyright Office to receive complaints of alleged copyright or trademark infringements.  Therefore, a business may avoid liability under the DMCA if someone else has posted copyrighted video, for example, in a comment to a company blog.       

Social media policies should also provide clear guidance about what can or cannot be stated about third parties — particularly the businesses’ competitors, customers, clients, and vendors.  This policy may extend to an employee’s personal social media sites where that employee has indicated on the site that he works for a particular business.  Policies should inform all employees that if they choose to reveal their employer on their personal social media accounts, they should also indicate that all statements are the employee’s personal views, and do not represent those of the company.  Notably, the Communications Decency Act protects social media users from defamation claims where the statement is merely a quote from someone else.  So, for example, if an employee unknowingly reposts a defamatory statement on the company’s Facebook page, there would be no liability as long as the employee attributed the statement to the original author. 

Step 5. Train employees about the policy.  Once a social media policy is in place, it must be communicated to all employees.  Training on social media use and the affects of the policy are recommended.  It must also be enforced by trusted individuals and updated as necessary.  In addition, by establishing a clear process by which social media posts are reviewed, businesses reduce the risk of dissemination of a potentially problematic communication.

Step 6.  Consider social media use in your risk management program.  Because mistakes happen, and claims resulting from social media use are an emerging phenomenon, social media must be considered in every businesses’ risk management program.  Some claims will not be covered by a general liability insurance policy and many insurance companies have created special coverage endorsements and stand alone policies to fill this coverage gap.  Counsel can help you review your present policy and determine whether it effectively covers you for social media claims.    

These simple tips can help businesses safely utilize social media for what it was designed to do:  generate business, communicate with clients and customers, and exchange information with the world. 

Reprinted with permission from February 2011 edition of News You Can Use, thinkBIG Innovative Design and Marketing. To view article in the original newsletter, click here

Feb 21

“Project-Based Attorneys Make More Sense Than Ever” according to a recent article in The Legal Intelligencer. The article recognizes that the use of highly skilled project-based attorneys is on the rise, citing a recent survey by The Legal Intelligencer which found that 54 percent of the Columbus law firms that use project-based attorneys hired more of them in 2010 than in 2009, a 38 percent increase from the prior year.

The article also notes the win-win-win situation that results from an increased use of project-based attorneys: “The profession will be able to offer more options to those choosing law as a career; those that provide legal services – both law firms and legal departments – will have greater flexibility when it comes to managing their businesses; and clients will have a broader array of offerings to choose from (in terms of cost, timing and skill sets).” 

The legal industry has been slow to keep up with a general business trend to utilize temporary or independent workers as part of an overall workforce plan.  But more firms are relying on temporary attorneys to handle complex matters, fill temporary needs such as maternity leaves, and to expand expertise to better serve their clients. 

The economy has fueled the trend toward an increased use of freelance attorneys.  On the one hand, there are many highly-skilled, experienced lawyers in the market.  On the other, many firms and in-house legal departments have been forced to downsize leaving them short-staffed in certain areas.  As I’ve previously discussed here, the use of temporary or project-based attorneys can be much more cost-effective than hiring a permanent employee.  Therefore, freelance attorneys help to fill a need without burdening an already stretched budget.    

The increase in project-based attorneys has also resulted from a desire by many lawyers to have a more flexible work schedule.  Many freelance attorneys work on a part-time basis to have more time for family or fulfill a desire for a better work-life balance.  No matter what the reason, the future looks brighter for highly-skilled attorneys who offer their knowledge and experience to other firms on a freelance basis.