Technology is one of the fastest growing niches in Alabama’s law business. Almost all of the largest firms in the state have aggressively grown divisions catering to the needs of high-tech companies.
Tech law specialist lead start-ups through the maze of business and intellectual property law as the small businesses grow. And they advise maturing companies on ways to increase their market share and move on to the next level of private or public funding.
They are experts in patent law and intellectual property, but also can handle matters of business structure and employment law and can structure funding deals once the venture capital starts rolling in.
It’s a competitive business, and it’s almost obligatory that firms become actively involved in networking the technology community, even becoming boosters and fellow techies.
“I kind of live, eat and breathe working with technology companies,” says James Childs, who is a technology specialist and partner at Bradley Arant Rose & White in Birmingham. “It’s not just a practice; it’s kind of a lifestyle.
Beyond serving as chairman of the firm’s venture capital and private equity practice group and co-chairman of its emerging business and technology team, Childs has led several Birmingham business and technology associations. In civic clubs across the state, he pitches the need for a “technology ecosystem” in Alabama.
“It’s essential,” he says. “You have to grow these technology associations.”
Childs helped start the Technology Birmingham Tech Mixer, which recently drew 650 people to its event at the McWane Science Center. He also serves as a leader f the Alabama Information Technology Association.
He says Birmingham and communities across the state have the innovation necessary to support technology firms, but they must train their entrepreneurs. Through his work with the Birmingham Venture Club, he helped launch the Entrepreneur Accelerator Program, which selects 12 of the most prominent area entrepreneurs for an intensive, five-week training process. To date, 36 people have gone through the program, which attracts and trains top talent, Child says.
“We want to maximize the likelihood of the successful business in Alabama and minimize the mistakes that entrepreneurs make.”
During the training, the entrepreneurs learn about venture capital, public speaking, product development, sales and marketing and business ethics, among other sessions. Plus, a volunteer panel composed of successful entrepreneurs agrees to mentor the graduates of the program for a full year after its completion. The connections are vital to the successes of small business, Child says, and help lead to a collaboration across the community.
Once the innovation and entrepreneurs are in place, the next step in Child’s “technology ecosystem” is access to capital.
“There’s a lot of success up here, and a lot of momentum,” he says of Birmingham tech market. “We have some start-ups and some firm with $100 million of revenue. We take them all through different phases of the lifecycle. We taken them on as clients and grow with them as clients.”
MENTOR AND MARRIAGE COUNSELOR
The lawyers mentor role can become more like a marriage counselor, when partnered companies license and share their technologies in project partnership.
“We have been through a lot of tech marriages and divorces,” says Will Tankersley, a partner and lead intellectual property litigator at Balch & Bingham in Birmingham. “We have a good understanding of the issues that come up.”
Tankersley served as founder and first chair of the Alabama State Bar’s section on intellectual property in the 1990s. Balch and Bingham partner Kimberly Powell serves as current president of the section.
He says lawyers act as guides during the contract process, particularly when it comes to technology partnerships between different companies. Technology leaders may not realize that protecting their intellectual property is a complicated process, rather than an intuitive one.
Patent infringement is a problem for the technology sector, according to Tom Methvin, managing partner in the Montgomery-based firm Beasley Allen Crow Methvin Portis & Miles. The firm’s cases typically involve technology companies that feel their product has been stolen.
Tankersly says the most critical technology concerns evolve quickly with cyber-squatting giving way to problems with open-source license agreements. Hacking episodes remain a big concern. Unlike traditional legal issues that might develop more slowly, legal issues for technology clients unfold without warning.
“You have to be ready to help the company deal with the situation and offer intense efforts right away,” Tankersley says. “The fuse begins to burn. You’ve got to get in quickly and start dealing with it.”
PEOPLE WHO DO THE DONT’S
The most critical concerns for tech companies, however, are most often management issuers. And this is most evident in the state’s technology-centered region, says Michael Johnson, a partner with Lanier, Ford, Shaver & Payne in Huntsville.
“You’d be surprised at how many people so the don’ts,” he says.
Early decisions made by young firms can reverberate years later as they make decisions about capital funding, licensing or exit strategies.
“From day one, lawyers need to say to clients, “these are the issues you’re going to have to deal with.” Johnson says.
Technology is more than a business segment in Huntsville. “It’s what drives business up here,” Johnson says, whose firm represents technology practice in order to help technology clients with all different aspects of their business.
“You can’t look at intellectual property issues in a vacuum, “Johnson says. “you have to look at the business issues.”
Johnson says it’s important for lawyers to understand technology companies and their products for the same reason that it’s important for a lawyer to understand any client.
SUDDENLY YOU’RE IN CHINA
Understanding business in the technology sector also demands an understanding of the international area in which it is evolving.
“The legal system is struggling to cover new issues,” says Greg Jones, head of the business action at Hand Arendall in Mobile. “Both the technology and the legal side are paddling like crazy to keep up with the state-of-the-art in their fields of practice.”
Jones’ practice extends into the areas of business law, intellectual property and international law. His international law expertise is particularly helpful to his technology clients, who are often in partnerships with firms in other countries. At times, technology firms may have their manufacturing done in China, which can bring up a host of international legal issues, he says.
He says work for technology clients involves more than just start legal issues. A lawyer must understand how a client’s technology works, as well as have a good knowledge of the entire industry.
“Just being able to write a contract is not enough,” he says.
Jones uses public speaking and referrals from other lawyers to help grow his technology practice. Hand Arendall calls on a team of lawyers for its technology clients, including litigation specialist and those well versed in the nuances of intellectual properties.
Jones says that technology clients need lawyers who can help them navigate the constantly shifting tides.
“Technology is evolving, developing so fast,” Jones says. “The lawyer’s role in assisting technology clients is very proactive. We have to anticipate the legal issues coming in.