Dot-com failure over legal risk threatens investment

CYBER WORLD: Lawyers more important in contracting market

Many European dot-com companies are jeopardising their investment potential by overlooking legal risk management, according to a survey by Landwell, the correspondentlaw firm of Big Five accountancy practice PricewaterhouseCoopers.The survey - looking at the progress year-on-year of 190 dot-com companies in the UK, France, Netherlands and Germany - revealed that only 2% said that addressing legal risks was an issue for them, even though 30% expect to need additional funding next year.It found a wholesale failure by companies to secure their assets.

Nearly a third of dot-coms had failed to protect their trade marks in home markets, while almost 60% had failed to protect their assets abroad.

'In failing to cover their legal risks and liabilities, dot-coms are severely jeopardising their investment offerings,' the report said.Despite the fact that more than half the respondents' Web sites were accessed regularly in ten or more overseas countries, 58% had failed to address legal risks and infringements abroad.

UK companies fared best though.Latika Sharma, Landwell's head of IT and IP, said that although the dot-com market has got a lot tougher recently and confidence has been severely knocked, lawyers will still be in demand.

'The need for lawyers in a reducing market may appear less,' she said, 'but in reality there has never been a more important time for companies to get it right.'Andrew Towler