How do I disclose a small startup I created on the side to my employer?


4

I am a lawyer in a mid-sized law firm and have founded a very small start-up to just sell one legal software program online.

I had the idea for the program, worked with a great software developer to create the program, and built a small website, all in my spare time and away from the office, and without using any of my law firm's resources at all. (I didn't even accept phone calls on my office phone or use my office computer for anything.)

The program has now been copyrighted and is ready for sale. I have a contractor who will handle pretty much everything from now on. I'm just looking at this as some revenue on the side- not enough to make me quit my regular job or even enough to put a dent in the time I devote to my day job.

I need to disclose the program to my employer; the employee manual (which is largely ignored at work) has some language about disclosing outside business activities. The program does not compete with my law firm's work or services at all. However, it will take some time, and it has taken some time, and it is a software program for lawyers.

I don't even have a version of the program developed yet for use on my employer's computer system- just a version now that works with a different version of the system that my employer has.

Any tips on how to approach the conversation, which I'll plan to have with a member of the firm's managing committee?

Thank you!

Employees Side Projects

asked Mar 8 '11 at 13:32
Blank
User6492
1,747 points
  • Please accept some answers, and I might answer this one. – David 6 years ago
Add Comment

4 Answers


1

You will want to frame the discussion around (a) wanting to validate that there is no conflict of interest between your outside business activity and your employment (b) intention to set mutually agreeable boundaries, if necessary, to protect your empployer's interests.

It was not clear whether you actually started selling the program yet. If not, it might be reasonable to construe that you are have not engaged in outside business activity until you begin attempting to sell the software. In this case, you would be engaging discussion in integrity with your employment agreement.

If you’ve already begun selling the product, it may get a bit more complicated. Unless you indicate that is the case, I won’t waste the keystrokes addressing that.

answered Mar 8 '11 at 15:14
Blank
C. Scott
85 points

1

It depends on the state that you live in, but it is very likely your employer owns some of the IP related to your program. In most states, it doesn't matter if you used company equipment or not.

You should review your employment agreement that you signed when you first started working there as that will have the final say on where you stand. I'd bet that in court if your employer argued that LEGAL software DID actually have a lot to do with their current business, that a judge would be sympathetic to that. (I'm sympathetic to that - it's legal software, they are a law firm -- it's not like you developed a photo sharing application).

I'd talk to the partner that likes you the most.

answered Mar 8 '11 at 23:14
Blank
Michael Pryor
2,240 points
  • +1. I hate to be snippy here, but the poster may be under another jurisdiction or be totally incopetent to overlook something like that. That said, this is rare jurisdiction, and I do see "legal software" different from "providing legal advice". Still there are funny laws... and it is a lawyers job to know those. Sadly we likely will never know - the poster is also not likely to disclose his employment agreement. – Net Tecture 6 years ago
  • @NetTecture admonishment removed. – Michael Pryor 6 years ago
  • yep anything and everything about moonlighting appears to be in that thread, thanks to Joel :) – Henry The Hengineer 6 years ago
Add Comment

0

Your firm needs to know about it and so do your software clients. This is the only way to make sure there is no conflict. You could end up with a technical support person in your software company that has a copy of a client's data (with their client data) for some type of trouble-shooting purpose and your firm is going against them in a trial. Depends on the nature of your application if this is even remotely possible.

The safest thing is to either become a distant investor in this company or sell it.

answered Mar 9 '11 at 06:25
Blank
Jeff O
6,179 points

-1

Thanks- I don't have an employment agreement (being a non-partner lawyer in a law firm, we generally don't). I re-checked the employee manual to see the exact language and I had recalled it wrongly; there is just language saying "full-time employees get salary and part-time employees work fewer than 30 hours a week" or something.

My software company is an LLC with other members in it- it's not just me selling my own software. I have no problem giving a stake to my employer, or assigning everything to the other members in exchange for some type of compensation.

I just don't want to cause a problem with my employer and get fired or be looked at as "the lawyer who devotes only some of his time to the common good, but his priority is his side business".

answered Mar 9 '11 at 11:45
Blank
User6492
1,747 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Employees Side Projects