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Businessman touching email icon
It seems that every other news story involves Hillary Clinton,[1]  emails, and the use of private servers, putting the topic of email deletion at center stage.  But what can a Chicago business owner learn from the Hillary Clinton email story?

There was a time when owning a business did not include words such as hard drives, flash drives, magnetic tapes and USB ports.  Now, every company has a fleet of computers, a server, and a complex back-up system.  Most businesses even have a least one IT expert on staff.  Computers have replaced typewriters, emails have replaced snail mail, and hard drives have all but replaced filing cabinets filled with documents.

When it comes to email communications, the use of cell phones and laptops has made them commonplace in and out of the business world.  It is almost expected that a business owner will send and receive emails over lunch, on-the-go, and over the course of the weekend.   For more than a decade, business owners have been warned regarding the pitfalls and dangers of electronic communications.  While those earliest concerns centered around the receipt of spam and the use of secure e-mail accounts[2] to preserve secret corporate information, the retention and deletion of e-mails was also discussed.

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ransomwareThe Democratic National Committee is not the only victim of computer hacking[1].  In June of 2016, Bloomberg[2] reported on black market access to 70,000 hacked corporate and business servers.  Even LinkedIn was victimized by computer hackers[3] who obtained 117 million passwords.

To further complicate things, these types of cyber attacks oftentimes have a global connection.  On September 28, 2016, one of the FBI’s former most wanted hackers[4] pleaded guilty to conspiring to receive extortion proceeds and illegally accessing computers.  Peter Romar, who had been arrested in Germany and extradited to the United States, was a member of a hacking group known as the Syrian Electronic Army.  The group hacked into the computer systems of The Washington Post, CNN, the Associated Press, Harvard University and many others, then threatened to cause damage or sell data unless the business paid a ransom.

Types of Ransomware

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A law firm recently announced that are employing IBM’s Ross to work in their bankruptcy practice, which currently consists of 50 lawyers.  What is interesting is that Ross is “the world’s first artificially intelligent attorney” combining apple’s Siri voice technology with IBM’s Watson cognitive computer.  According to the firm’s website, “You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings from legislation, case law and secondary sources to get you up-to-speed quickly.” Ross will be able to eliminate some of the preliminary research done in cases within 30 seconds.

artificial-intelligence-brain-29076006Artificial Intelligence in law has become a larger topic in the last decade.  The first sighting of Artificial Intelligence in law was in 1999 when Jay Leib and Dan Roth created “Discovery Cracker’ which helped lawyers manage electronic documents for litigation.  Instead of sifting through piles of paper, lawyers now deal with terabytes of data.  E- Discovery is now becoming more sophisticated due to this massive amount of data.  Then in 2013, Jay Leib once again saw a need in the market.  He and Dan Roth created NexLP, a company that used artificial intelligence to analyze data and identify trends. NexLP uses predictive coding, where the computer is able tell which documents are useful and which ones aren’t. This process reduces the time needed for e-discovery and document review since the program is looking for actual concepts and not just keywords.

Currently, nearly 80% of all Americans who need a lawyer cannot afford one.  This is despite the United States having a mass amount of attorneys. With Ross, attorneys currently out of work will be able to use the AI’s services to create a lower barrier of entry into the market, and will create cheaper and more affordable optartificial-intelligence-concept-illustration-29416761ions for prospective clients. On top of this, the addition of Ross into a law firm will enable the firm to lower some of its fees as they wouldn’t be paying humans for cases.  When it comes to opposing law firms battling, it doesn’t matter if there are 30 associates researching a case, or one Ross, the result will be the same. Artificial intelligence will allow the human attorneys to think of creative solutions or focus specifically on the client’s needs instead of leafing through textbooks and clicking hundreds of links looking for precedent or an obscure court ruling.  Ross will also keep you up to date on court rulings to do with the case that is currently being worked on. It can also narrow down the results to the most relevant answers and presents the answers in an understandable language as opposed to passages of law spoken word for word.

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crowdfunding-350lSmall investors in Illinois will soon be able to invest in start-up businesses in exchange for a piece of the action, but without some of the onerous oversight previously required by regulatory agencies. Signed by Governor Rauner in July, 2015 the Equity Crowdfunding Act (HB 3429) is a game changing piece of legislation that leverages the crowdfunding platform to the benefit of small investors and companies. Waiving many of the regulations that govern  traditional securities markets, Illinois’ intrastate crowdfunding law authorizes non-accredited investors (also known as “the little guys) to acquire equity in small business without all the red tape.

The law allows individuals with a net worth under $1,000,000 and annual incomes under $200,000 to contribute up to $5,000 per company in any given year. Creative business types will have access to capital that might been unavailable previously, broadening the choice of funding sources beyond the often burdensome small business loans offered by banks.

The law will also allow founders of startups to maintain tighter ownership control of their enterprise. Typically, venture capitalists who invest in new companies demand excessively large chunks of the business in return for their capital infusion. The Act opens doors to a broader lender base while creating the potential for a more even distribution of profits. In general the legislation should improve liquidity across the board.

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trollIt’s almost never a compliment when someone is referred to as a troll, but in the case of patent extortionists, it is an accurate and richly deserved description. Patent trolls are technically called  “non-practicing entities” (NPE) or Patent Assertion Entities (PAEs), but these euphemisms provide only a dim definition of what they are all about. And they pose a unique challenge to small business owners.

Whatever you call them, they all have a common business model: they purchase patent rights with the intention of generating fees through sketchy lawsuits or the threat thereof.  The patents themselves are generally obscure, shaky or acquired from bankruptcy.  Virtually none of them have ever been deployed legitimately in the marketplace, but that is not the intention of the trollsters. Rather, these organizations exist to exploit weaknesses in the U.S. Patent Office and legal system to generate bogus licensing revenue from legitimate businesses.

Generally, patent trolls have no assets other than the patents they intend to “protect.” They manufacture nothing and render no services. Many of the acquired patents were granted due to the Patent and Trademark Office’s systemic failure to keep up with a rapidly changing world over the past 30 years.  Quite simply, the federal agency has lacked the resources to determine what is really an “invention” in the context of the onslaught of digital technology.  In particular, the class of business method patents that arose that have arisen since 1998 has proven to be a thorn in the side of honest commerce.

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recording-policeIt is now legal in Illinois for citizens to record interactions with police without their consent, but it’s early in the game for too much celebration.

In 2014, the Illinois Supreme Court found the state’s strict eavesdropping law to be unconstitutional under the First Amendment (People v Clark).  Prior to that decision, Illinois had been an outlier among most states with regard to private citizens’ right to record law enforcement officials under any conditions. Most other states already allowed the taping of conversations with police or anyone else without obtaining all-parties’ consent or in most cases, without even letting them know they were being recorded.  But in Illinois, taping a conversation with a police officer without consent was a Class 1 felony with ten year prison potential.

Following that decision, it took a year for our state legislature to amend the Illinois Eavesdropping law, and now Illinois law gives citizens the right to record public conversations with police, arrests and other law enforcement activity without their consent.  720 ILCS 5/14-1 is an improvement.  Nothing promotes accountability like on the spot electronic documentation.

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teen-drinkingThrowing a party while Mom and Dad are out is a venerable teenage pastime, often regarded as naughty but ultimately harmless behavior.  For philosophically permissive parents, allowing the kids to have a party while the parents are home is sometimes regarded as a better alternative than letting their offspring run wild in the streets. According to this school of thought, “at least we know where they are.”

Unfortunately, there is an almost unlimited potential for things to go south when teens and alcohol/ drugs mix, and parents can end up holding the bag financially. When drunk or high party-goers are released into the world, they could get arrested, or  cause damage to property, or injury to themselves or others. They may kill themselves or someone else.  If any of these things happen, the parents of the hosting teens may well be held legally and financially responsible, even if they had no knowledge of the festivities or the illegal consumption of substances.

Whether or not the owners of the home end up being held accountable depends on a number of factors, some of which aren’t immediately obvious.

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shutterstock_143144308    In decisions involving two recent cases, the US Supreme Court has made subtle but important changes to the standards affecting retaliation and discrimination cases. By applying more stringent criteria in two areas, the Court has limited the ability of workers to file these types of lawsuits against business owners. The first criterion invokes a legally tricky principle called a “but for” causation standard and the second clarifies the definition of “supervisor.”

A complaining employee must establish what is known as a “but for” condition to satisfy the first criterion.  Specifically, the justices ruled that retaliation claims filed under Title VII of the Civil Rights Act of 1964 must be proven under this established legal principle. It is a term that lawyers are familiar with, but most business owners are not. In practice, it means that an act of discrimination – usually termination or demotion  –  must be shown to be contingent on a supervisor’s wish to retaliate against the employee.  By invoking this scenario, the plaintiff’s lawyer is compelled to convince a jury that the discriminatory action would not have taken place “but for” an conscious desire to punish or pay back the employee.  This concept is a little more accessible if we substitute the term “if it were not for” to replace “but for.”  For example, the supervisor would not have fired the employee if it were not for (but for) the supervisor’s desire for retribution against the employee for complaining about sexual harassment.

The second component of the ruling is more straightforward and involves redefining the term “supervisor” for purposes of discrimination cases.   In the case of University of Texas Southwestern Medical Center v. Nassar, the Court ruled that a supervisor is a person who has authority over the employee in the workplace, including the power to hire and fire.  More broadly, a supervisor has the power to hire, fire, promote, transfer or otherwise discipline an employee.  In that sense, the supervisor is a representative of the business ownership, who may be held legally accountable under the law.

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fraud     In a world preoccupied with internet spam and phishing attacks, beware the old school scalawags who operate their rip-offs through the U.S. mail!  Like their online counterparts, they are trying to lighten your wallet by offering bogus products – in this case “corporate compliance” services.

When your business registers with the State of Illinois, your company information becomes part of the public record and is readily available through the Secretary of State’s public databases. There are good reasons for this requirement. For one, it is important for customers and vendors to be able to confirm that you are a legitimate business. It is also necessary for various branches of government to be able to verify the company’s ownership and officer structure for the purposes of regulation and revenue collection.

Unfortunately, your contact information is also easily accessible to anyone who wants to send you solicitations in the mail. And not everyone who sends you mail has your best interests in mind. Focusing primarily on new business registrations, a specialized type of shady dealer out there is lurking, waiting to offer you their “help” in complying with government regulations. These promotional mailings are creatively worded to panic you into spending money for spurious compliance services, usually for hefty fees.

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facebook     The central tragedy of human existence is that our lives on the earthly plane are finite. Saint or sinner, the time must come when each of us departs this mortal coil.  But whether or not you believe in an afterlife, there is a higher power that dictates how one small slice of your legacy lives on – that power is Facebook.

As is the case with your other important assets and heirlooms, it now appears to be a key responsibility of your social media persona to arrange for a successor for your Facebook page.  Even if you have a legal executor for your “real world” estate, Facebook has recently determined that our state laws don’t apply to them and that you will need to name a manager to administer your page after your passing.   This Facebook as decreed.

Previous to this policy change, Facebook simply “memorialized” the pages of people who died when advised of their death. The deceased’s profile would be identified with a “Remembering” status, which allowed friends and visitors to share memories on the Timeline.  While family members could request that a page be taken down – a challenging process to be sure – they were not permitted to make any changes to the page.

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