As a student in an Internet Management program, Lena met two of her classmates: Beth and Peter. Beth and Peter were cousins who had emigrated from Eastern Europe with their extended families several years earlier. Lena was a South Asian immigrant herself, so the three of them had something in common: the shared experience of a new country, as well as their choice of career.

In his last semester, Peter told Lena about his idea for a business after graduation: a website design company that would specialize in small ethnic/immigrant businesses. He explained how he and Beth could target clients from their home country, while Lena could be a partner targeting South Asian clients. They would help set up multilingual sites for these businesses (each spoke multiple languages) and between them, they already had all the computers and software they would need. Peter told of an office he had found at a reasonable price. He said that each of them could keep the business money they brought and that they would split all the expenses three ways.

Lena was excited and agreed to the idea in principle, but said they would have to work out the many details of their partnership. Peter agreed, but said that for the next few weeks, everyone would have to focus on making sure the three of them got their diplomas.

A few days before the end of the semester, Peter announced to Lena that he had signed a lease on the office they had discussed. He explained that someone else had been trying to rent it, so he quickly made a deal with the owner for a slightly higher rent than they had originally expected. He said Beth felt she had done the right thing and asked Lena, are you still in?

She assured him it was, but suggested that the three of them immediately go to a lawyer and draw up a partnership agreement. Peter argued that there was no point in making that expense when the business might never get going. “Let's see if the idea works and then if it looks like we can make money; “We are going to make everything official.” “Besides,” she said, “we have to have a little trust in each other.”

Lena decided to accept this, realizing that there were bound to be some problems as the new business began. And trouble arose, starting with Peter going out and purchasing a sign for the business that said, "WEB CONSULTANTS FOR ALL NATIONS" in big, illuminated blue letters. Lena complained that he had no right to name the company on his own, but Peter responded that he felt it was fair since he had personally paid for the sign and would let the company pay him back only when it was profitable. Beth supported her cousin in this, so Lena dropped the matter. There were a few other problems (Lena felt like she'd been cheated out of a fair share of the office space, and Peter had bought advertising that the others hadn't approved of), but she decided not to get into petty arguments for the sake of the business.

From the beginning, business was good. Surprisingly, most of the business

She came from Lena's South Asian community and was soon working fifteen hours a day to serve her clients. Because of this, she was less involved with overall business decisions and she had to rely on Peter and Beth to handle billing and expenses.

One day, four months after the opening, Peter introduced Lena to a young man from Lena's home country. Peter explained that he had hired the young man, a recent IM graduate, on a salary basis, to handle some of the growing South Asian business that Lena was becoming too much to handle on her own. Stunned, Lena said that she wanted to talk to Peter and Beth in private.

Angry, Lena told Peter that he had no right to make hiring decisions without consulting his partners and that she wanted to immediately clarify this and other authority issues in a written agreement.

Peter responded that he did have the right since, technically, he was the sole owner of the business. He had registered the business in his own name, he explained. Furthermore, he had signed the lease and personally owned the trademark in the company name. When Lena looked to Beth for support, Peter intervened saying that Beth was planning to leave the business soon anyway, so she could work for her father. All of this was a shock to Lena.

Peter tried to reassure Lena that he would keep their agreement that she could keep all the revenue from the clients she dealt with personally, minus a fair share of overhead. But, he noted, he would be the one to determine what constituted a “fair share” and that any business handled by his new employee (or any other South Asian he might hire) would belong to the company.

“Don't worry,” Peter said, patting Lena on the back, “you're still going to make a lot of money.

1. What mistakes did Lena make?

2. What legal position is Lena in?

3. What can and should she do now?

4. Why might this trio have been inadequate as a partnership anyway?