The Four Most Common Mistakes Dentists Make When Hiring a Website Developer

This is a guest post from our friend Kim Grimsley, an intellectual property attorney at Oliver & Grimsley.

We meet a lot of clients that fail to obtain a written agreement, or blindly sign the form provided by the developer - and when a dispute arises, only too late realize the problems created by that lack of diligence.  This post addresses critical provisions in a website development agreement.

First, you want to make sure you will own the material and content created by the developer.  Thus, you want a provision in the agreement (which must be in writing) that recognizes that the developer’s work for you is considered a “work made for hire” and you want a copyright and intellectual property assignment as well.  These clauses ensure that, although the developer is not your employee, you are the owner of the website materials and intellectual property rights.  You do not want to find that your website designer created something unique for you only to discover the same unique layout on another website.  Many businesses are surprised to learn that in the absence of this statement in a written agreement, an independent contractor (in this case the website developer) typically is the owner of work they create, and the business at most would be a licensee of the material. This means you don’t own the work; rather, you only have permission to use it. 

Second, you want to have a provision in the contract that states that the work on the website is the website developer’s original work and/or that the developer has the necessary permission/licenses from the owners to use the work on your site.  For instance, the website developer may place photographs on your website – you want the developer to represent that the developer has the right to use those photographs on your website (i.e. either the developer took the photos or it has the permission to use them).  If the developer uses photographs owned by a third party on your website without the third party’s permission, the third party could claim you are infringing on their copyright by displaying their work on your website without their permission, and would demand you cease use of the photos and may demand damages as well.  Thus, have your website developer represent the work is original or that he has permissions to use all work on your website.

Third, make sure to have an indemnification provision in your agreement.  This provision should provide that the developer will indemnify you in the event you incur damages or a loss due to a third party claim that you are infringing their intellectual property rights – where they claim the work on your website is actually their material.  For example, a business thinks the graphics on its site are original, however, it receives a cease and desist letter from a third party alleging that its use of the works on its website without the third party’s authorization is copyright infringement and demands damages.  Under Copyright Law, if the third party is the owner of a registered copyright in the work, the business as an unauthorized user could be subject to statutory damages ranging from $700 to $30,000 for unintentional infringement, and up to $150,000 for willful infringement. Thus, if material placed on your website by your developer is subject to a claim or legal action for infringement, you want your developer to indemnify you for these actions since you are relying on their knowledge, creativity and skill in developing and designing your website.

Finally, it is important that you make sure that the developer periodically delivers all source codes and native files to you, and that you control all passwords and access to critical website assets, such as the domain registration.  You want to make sure that such files and access rights cannot be withheld in the event of a dispute.  Thus, if a dispute arises, the developer's sole remedy should be money damages.  You should not be prevented from transferring the work done (to the point of a dispute) to a new developer, so you can finish your site, and deal with the dispute separately.  

For more information, please contact Kim Grimsley at Oliver & Grimsley, LLC -  kim@olivergrimsley.com 

Dentist and Spouse Roles - Financially Speaking

Here is another guest blog from our client Dr. Lurie.

It seems to me... the role of the wife (spouse) in a dental practice has not been discussed enough.  We take it for granted that the husband and wife are on the same page, but this is not necessarily so and has cropped up in discussions at many study clubs. Since I have written several articles on retirement preparation, I would like to interject that retirement begins with the start-up of practice. The role (or roles) of the doctor and spouse will obviously play a big part in the success and continuation of the practice and for the eventual plan that the team for retirement carry out.

There are several different scenarios to look into.  The doctor (male) with a non-working wife seems to be a common model.  When a good marriage is present, stable and open, financial interests will be discussed and the future planned for, with budgets for essentials and "fun", including shopping, vacation, hobbies etc...  Even with the so-called good marriage, sometimes the mate does not think that the cash flow will ever change or diminish and that status quo just continues.  Unfortunately, this does not always happen.  One of the problems is the lack of communication between the two.  Or worse, in unstable marriages, the lack of caring about the communication.  This can be a prelude for disaster.  Credit card debt is the killer and many doctors and wives are falling into the credit card debt chaos that then makes the practice a place where there is pressure to pay the personal debt along with the overhead of the practice itself (which, in today's times is getting more and more burdensome even for the mega practices.). One can only hope that the two can sit down and get a handle on this. Then, if needed, meet with the financial adviser to face the crisis and the facts.  Sometimes, it is the doctor who is the one who abuses the credit cards, or it may be the wife - or worse, both of them.  This added strain then makes the practice a pressure cooker and the joy of dentistry begins to fade.  We find that the emphasis is on paying the debt (at the sacrifice of quality) rather than reinvesting into the practice and escalating its return.  If the parties are not able to resolve this, then the situation might be doomed (as many of you know.) 

I have been there and was able, early on, to get the adviser to help us (and to reign me in since I was the abuser.)  We actually went a step further.  My wife started working in the office one day per week.  This was a great benefit in several ways.  The most important one was that she saw how hard I worked and what the overhead margin was all about.  It also enabled her to meet with the staff and she was directly under the supervision of the office manager.  This was made quite clear in the beginning.  She then was better qualified to work our personal household budget and to maintain our entertainment budget on a level compatible with the office.  The second benefit that we obtained was social security benefits that now (in retirement) really come in handy.  I was lucky (in that this conference with my team ) was early in my years of practice and marriage. 

Obviously, every practice (and doctor) has differences.  Not all doctors can have their wife in the office with them.  It can cause problems with staff if not addressed properly.  Conversely, it may be a benefit with staff knowing that the spouse is there. The communication and the personalities of the entire staff and doctor are the key. My Dental CPA has told me countless number of cases where credit card spending has caused practices to fail.  I urge you to look at this carefully and adjust wisely.  Remember that the beginning of practice is the beginning of retirement. There are many facets to this discussion and this is but one of them.  I wanted to share with you my personal story.

It seems to me… that we may have many variations on this.  I would love to hear from you and share experiences.

More Mistakes Made and Lessons Learned next time.

Dr. Donald B. Lurie

donald.lurie@att.net

Phone:  717-235-0764

Cell:      410-218-2228

5 Tips to Prevent, Detect and Deter Fraud in your Dental Practice

Run your practice like you did when you first owned it.  Do you remember when you first purchased your practice and cash was tight?  You had a huge loan payment, payroll to worry about, equipment to purchase, and a waiting room that needed some final touches.  You not only knew your daily production, you knew how much you were supposed to collect and when you were supposed to collect it.  You had your finger on the pulse of your practice and your staff knew it.  Don’t relax too much as your practice grows; stay on top of the business side of your practice. 

Engage a Dental CPA to do more than just prepare your tax return.  Your CPA should be engaged to closely review your financial information at least twice a year.  A detailed analysis of your financials including percentage and ratio comparisons may reveal production, adjustments, collections or expense relationships that just don’t make sense and may indicate possible fraud.   In addition, Dental CPA’s can compare your practice results with industry benchmarks and can help investigate areas that are out of line with industry norms.   If you’re only consulting with your CPA at tax time you should consider upgrading your services.

Pay Close Attention to the behavior of your front desk staff.   The greatest opportunity for embezzlement in your practice is by your front desk staff.  There are countless schemes that can be perpetrated by these trusted employees.  If your front desk person is extremely territorial so much that they avoid taking vacations, become upset when someone attempts to use their computer or hostile with outside consultants hired to improve practice results – you may have a fraud concern.   In addition, if your front desk person seems to be living beyond their means; you should take notice.  There may be a perfectly reasonable explanation for why your front desk person is driving the latest model BMW, is wearing the latest designer fashions straight off of a New York runway and carrying the latest designer handbags.  They could simply be gifts.  You just need to make sure they’re not gifts from you.

Have a Strong “Tone at the Top”.   As the practice owner you are setting the ethical climate of your company.  Include an ethics statement in your employee handbook as well as written fraud policies and procedures.  Discuss fraud concerns openly with your staff in a non-accusatory manner and inform them that fraud will not be tolerated in your practice.  Let employees know that if they embezzle, you will catch it.

Implement Bonus & Incentive Programs   Employees that feel valued and fairly compensated are less likely to find other ways to increase their earnings.  Set achievable goals for staff and reward outstanding performances with periodic bonuses or gift cards from a favorite store or restaurant. Not only will these programs increase staff productivity, they’ll also increase staff morale.

If you’d like to further discuss any fraud concerns within your practice or are interested in engaging a Dental CPA for ongoing accounting or tax services, please contact me, Kim Conlin, CPA, FCPA at kconlin@nlgroup.com.

Pitfalls for a Dentist to Avoid in Employer-Employee Relationships

Here is guest post from our friend Mike Limsky, Esq. 

Without proper planning, dentists may find themselves at odds with their own employees. The potential problems are many and include misunderstandings, resentments, and even lawsuits. As a Maryland attorney with 25 years of experience representing dentists and other medical professionals, I have seen firsthand the various pitfalls a typical employer-employee relationship may suffer. By taking proper precautions, however, many of these problems can be prevented. When counseling current and prospective clients, we often advise the following:

1. Maintain good personnel records.  Maintaining thorough and accurate records of all employees and independent contractors is the first step toward avoiding problems. These records should include the terms under which the individual is employed, including compensation amounts, bonus calculations, vacation allowances, continuing education provisions, and other benefits. Detailed information about any personnel problems, such as the nature of the matter, the date of each incident, and any disciplinary action taken, should also be included.
2. Avoid written office policies and employee manuals.  This may seem counter-intuitive, but we generally discourage clients from providing employees with written office policies or employee manuals. The problem is that employers may unwittingly deviate from the procedures specified in these documents. Especially when matters like compensation and termination of staff are involved, such deviations can lead to lawsuits, with your own employee manual as a primary exhibit.
3. Require employment agreements with restrictive covenants.  We strongly urge employers to have their professional and administrative staff sign employment agreements that include an adequate and enforceable restrictive covenant. Without these covenants in place, a dental practice may face unfair competition from a current or former employee whose activities were not properly limited for the benefit of the employer. For example, an employee could leave the practice and attempt to hire one of your other employees, market to your patients, or make off with office records.
4. Provide required post-termination compensation.  If an employee’s compensation includes a percentage of his or her collections, then as a matter of law, the employee may continue to receive such compensation after leaving the practice. Although the employee would no longer receive any base pay, he or she should still receive the percentage of collections attributable to his or her work. Employers who fail to provide such post-termination compensation may be subject to treble (“triple”) damages.
5. Be cautious about “independent contractors.”  Employers should be extremely cautious when attempting to hire someone as an independent contractor. Simply calling the individual an independent contract will not be enough; the IRS may conduct an investigation to determine whether the classification is appropriate. If the IRS concludes that the individual is not an independent contractor but an employee, the employer may be found liable for any deficiency in withholding taxes and the accrued interest and may be subject to stiff penalties. Before classifying a new hire as an independent contractor, the employer is strongly advised to seek the advice of an attorney or CPA to avoid running afoul of IRS rules and regulations.
6. Avoid common-sense problems.  Avoiding some pitfalls in the employer-employee relationship should be a matter of common sense. The following problems, however, occur often enough to make them worth mentioning:
   i.      Intimate relationships in the workplace. Employers should discourage their staff members from engaging in intimate relationships with other employees, especially between supervisors and subordinates.
   ii.      Cash payments to staff. Providing staffers with cash payments for compensation, reimbursement, etc., should be avoided. Issuing checks instead ensures a traceable paper trail in case a problem arises later.
   iii.      Inconsistent treatment of staff. All staff should be treated with the same degree of professional courtesy and respect.
   iv.      Denying overtime pay.  Be sure to follow state law requirements for overtime pay, which may include certain exceptions.
   v.      Discriminatory practices.  Decisions about matters like terminating an employee, providing bonuses, or giving promotions should not be based on characteristics such as age, gender, disability, religion, race, sexual orientation, etc.
7. Retain specialized professional advisers.  Before retaining an attorney, CPA, or other professional, look for someone who has extensive experience serving dental practices and whose client base is made up largely of dental practitioners. This experience and familiarity will be an essential benefit as you navigate the legal and professional intricacies that distinguish dentistry from other enterprises.

Working with dentists over the years has shown how often problems can arise between an employer and the staff. More importantly, it has enabled us to develop effective ways to prevent many of these problems before they occur. By taking sensible precautions, dentists can save themselves time, money, and a lot of stress.

Michael R. Limsky is a partner at the Maryland law firm of Summerfield, Willen, Silverberg & Limsky, LLC. His extensive experience as a business and corporate lawyer includes a special emphasis on the unique needs of dentists and other medical professionals. Please remember that the information contained in this article is intended to provide general information about legal topics and should not be construed as legal advice. Mr. Limsky can be reached at mlimsky@swsl-law.com or (410) 363-4444.

Are Those Images on Your Dental Website Really Yours?

One of our dental clients received a letter recently from Getty Images demanding a settlement payment for using Getty's images without a valid license.

I was asked if it was legitimate.

Yes, it is.

Call it what you like, scam, extortion, mean spirited, etc…

It doesn't matter - the law is on Getty’s side.

They have all the documentation and facts. Without a valid, up-to-date license to use the images on your site, you will lose in court.

Here is a paragraph from WomenInBusiness on About.com talking about how Getty finds you: 


Getty uses automated robots that crawl the Internet looking for its images. Getty's tools are so sophisticated that if you use even a part of their images in a logo, banner, or button, they can recognize an unlicensed image. Their crawlers can locate images that have been altered, inverted, flipped or turned upside down, regardless of what you rename the image file.

When a Getty image is found, it is compared to their license database. If there is no match between the image and the site where it is found, they send a snap shot of the image(s) found on your site, the name of the image (as they sell it) and demand a huge sum of money for copyright infringement.

The minimum fine is $1,500 plus you pay all court and legal costs.

The maximum fine is $150,000 and you pay for everyone’s legal fees and court costs.

This is per occurrence.

If you hired a web firm to build your site and you did not get warranties/indemnification from them that all the content was original/unique/legally obtained, you are the one who is liable.

Again, hate it or love it (if you are Getty) this is the law.

From what I have read, you can negotiate them down slightly in the fines.

I've also read that many other license holders of images besides Getty are getting into the game, because anyone can go to Google images and right click copy/paste almost anything. And the onus is on you to find the owner of the image, not on them to provide it for you.

What can you do?

1.     Check and see if you have up-to-date valid license agreements for all of the images on your website (and any printed collateral material).

2.     If you don’t, remove the pictures and replace with legally obtained pictures.

3.     Ask you web design firm (if you outsourced this) for copies of all the licenses for content/images.

4.     We hire professional photographers to take pictures of our offices, staff and client’s offices. We pay between $175 - $600 for a full shoot including post production editing. We also retain the full legal rights of usage of these images (and trust me, if someone stole them and tried to pass them off as their own, they would get a letter from me).

How can you tell if you have images on your website that are used elsewhere?

1.     Go to www.google.com

2.     Select Images

3.     In the right hand portion of the search bar is a camera icon, click on it

4.     Go to an image on your website and right click on it

5.     Select copy image url

6.     Paste that into the Google Image camera icon search bar