Monday, September 24, 2007

"Astronomical" Bonuses, Marble Lobbies and Other Legal Fictions

The headline with the biggest font on the front page of this morning's WSJ is captioned: "A Stingier Job Market Awaits New Attorneys."  The piece is pretty significant and well researched, attributing the glut in lawyers to a variety of factors. The critical component is demand: more young Americans want to become attorneys in the U.S., and in response more universities opening new law schools, which are big money-makers.  After giving us a couple of colorful examples (including a recent Seton Law grad earning $50K in Manhattan who calls his law degree "a waste"), the article then moves on to discuss the economic climate in the big law firms, concluding that "the prospects for big-firm lawyers are growing richer".  My favorite line in the article:



"While offering robust minimum salaries, those firms are paying astronomical amounts to their stars."



And therein, precisely, lies a key problem afflicting the U.S. legal sector.  I recently wrote the "$1000/hr." attorneys who made ANOTHER cover of the WSJ not too long ago.  In that article, one senior in-house counsel didn't think it unreasonable to pay that kind of money for a true expert.  Perhaps not, but the question for corporate decision-makers responsible for legal budgets is quite simple: "Do I need a megafirm attorney with a megafirm hourly rate to deal with routine legal processes?"  I venture to guess that 95% of the legal work outsourced by the Fortune 500 is neither esoteric nor sufficiently complex to warrant that kind of pricing.  And right there is both the waste and the smug entitlement plaguing our distinguised profession.



The truth is that our culture has taken the vile reality of the Gordon Geckos of law and deified them.  We joke about them, but we sure we like to be in on that joke.  We listen to a pompous Donald Trump as if he actually has something to contribute to our knowledge and his seminars are packed with wannabe billionaires.  We read the articles about the PI attorney with his three jets and think "man, just ONE jet..."



But the truth is obvious to all of us, smacking with resonance of your grandfathers' pragmatic response to this phenomenon:  It's all bullfeathers.



Gordon Gecko was a bad person.  He was a caricature of unethical, ruthless greed gone wild in our culture, the same greed plaguing the legal profession every bit as much as it has Wall Street.   



Ironically, young legal grads like the $50k-per-year Manhattan attorney -- I'm still trying to imagine how he can survive on that in the city -- are the ones graduating with hefty six figure student loans...loans which will increasingly end in default.  For reasons which continue to escape me, we have turned a generation of Mr. Rogers-driven "I am special"/"I can be anything" and somehow left them with the notion that all that adds up to the right to great financial success irrespective of the realities of the economy in which they intend to exist within.  They believe they are immune from market forces.  Moreover, for those of us who became attorneys for reasons beyond our potential income, hearing a new grad call his law degree a "waste" saddens us; the article goes on to mention a Texas law grad oozing with compassion in his criminal practice, saying that it's sad to find himself "thinking it's a great day when a crackhead brings me $500."



Honestly, it just makes me feel old.



Sigh.



We who practice law -- old timers or new grads -- are no more entitled to a fat paycheck than anyone else.  With increased globalization -- hate it or love it -- it is the responsibility of every player in a free market economy to A) Identify his/her part in the marketplace, B) Reconcile their skill set with their areas of personal interest and C) Undertake the training/education/personal growth needed to harmonize A and B and create for themselves a marketable position in the economy which will meet their personal and financial goals, subject to their limitations and strengths.



To paraphrase Jay Foonberg, author of "How to Start and Build a Law Practice": set out to become a rich lawyer, you'll get nowhere fast; set out to become a great lawyer...and you can't help but make a lot of money.  It is innovation, not entitlement, which shall drive the success of tomorrow's "player" attorneys, and the times are indeed "a-changin".



As the Fortune 1000 awaken from their dogmatic slumber and realize that the best interests of their companies are not being met by their current outside counsel, the trend will shift toward more cost-effective legal solutions better integrated into existing internal processes.  Shareholders will applaud, the delivery of legal services will change...



...and that jet you wanted will be available at a very attractive price...



"Astronomical" Bonuses, Marble Lobbies and Other Legal Fictions

The headline with the biggest font on the front page of this morning's WSJ is captioned: "A Stingier Job Market Awaits New Attorneys."  The piece is pretty significant and well researched, attributing the glut in lawyers to a variety of factors. The critical component is demand: more young Americans want to become attorneys in the U.S., and in response more universities opening new law schools, which are big money-makers.  After giving us a couple of colorful examples (including a recent Seton Law grad earning $50K in Manhattan who calls his law degree "a waste"), the article then moves on to discuss the economic climate in the big law firms, concluding that "the prospects for big-firm lawyers are growing richer".  My favorite line in the article:



"While offering robust minimum salaries, those forms are paying astronomical amounts to their stars."



And therein, precisely, lies a key problem afflicting the U.S. legal sector.  I recently wrote the "$1000/hr." attorneys who made ANOTHER cover of the WSJ not too long ago.  In that article, one senior in-house counsel didn't think it unreasonable to pay that kind of money for a true expert.  Perhaps not, but the question for corporate decision-makers responsible for legal budgets is quite simple: "Do I need a megafirm attorney with a megafirm hourly rate to deal with routine legal processes?"  I venture to guess that 95% of the legal work outsourced by the Fortune 500 is neither esoteric nor sufficiently complex to warrant that kind of pricing.  And right there is both the waste and the smug entitlement plaguing our distinguised profession.



The truth is that our culture has taken the vile reality of the Gordon Geckos of law and deified them.  We joke about them, but we sure we like to be in on that joke.  We listen to a pompous Donald Trump as if he actually has something to contribute to our knowledge and his seminars are packed with wannabe billionaires.  We read the articles about the PI attorney with his three jets and think "man, just ONE jet..."



But the truth is obvious to all of us, smacking with resonance of your grandfathers' pragmatic response to this phenomenon:  It's all bullfeathers.



Gordon Gecko was a bad person.  He was a caricature of unethical, ruthless greed gone wild in our culture, the same greed plaguing the legal profession every bit as much as it has Wall Street.   



Ironically, young legal grads like the $50k-per-year Manhattan attorney -- I'm still trying to imagine how he can survive on that in the city -- are the ones graduating with hefty six figure student loans...loans which will increasingly end in default.  For reasons which continue to escape me, we have turned a generation of Mr. Rogers-driven "I am special"/"I can be anything" and somehow left them with the notion that all that adds up to the right to great financial success irrespective of the realities of the economy in which they intend to exist within.  They believe they are immune from market forces.  Moreover, for those of us who became attorneys for reasons beyond our potential income, hearing a new grad call his law degree a "waste" saddens us; the article goes on to mention a Texas law grad oozing with compassion in his criminal practice, saying that it's sad to find himself "thinking it's a great day when a crackhead brings me $500."



Honestly, it just makes me feel old.



Sigh.



We who practice law -- old timers or new grads -- are no more entitled to a fat paycheck than anyone else.  With increased globalization -- hate it or love it -- it is the responsibility of every player in a free market economy to A) Identify his/her part in the marketplace, B) Reconcile their skill set with their areas of personal interest and C) Undertake the training/education/personal growth needed to harmonize A and B and create for themselves a marketable position in the economy which will meet their personal and financial goals, subject to their limitations and strengths.



To paraphrase Jay Foonberg, author of "How to Start and Build a Law Practice": set out to become a rich lawyer, you'll get nowhere fast; set out to become a great lawyer...and you can't help but make a lot of money.  It is innovation, not entitlement, which shall drive the success of tomorrow's "player" attorneys, and the times are indeed "a-changin".



As the Fortune 1000 awaken from their dogmatic slumber and realize that the best interests of their companies are not being met by their current outside counsel, the trend will shift toward more cost-effective legal solutions better integrated into existing internal processes.  Shareholders will applaud, the delivery of legal services will change...



...and that jet you wanted will be available at a very attractive price...



Thursday, September 6, 2007

(Starship) Enterprise Management

Whether you are an in-house attorney at a busy corporation or in private practice, you can probably relate to this scenario:  your paralegal -- with whom you have a codepenency rivaling that of the most dysfunctional sitcom couple -- is finally off for a week-long vacation he/she planned a year ago.  Your desk is full of sticky reminders and your Outlook calender is peppered with a rainbow of conference calls, kid's soccer practice, cases due, and client follow-up calls.  You arrive Monday morning, optimistic but wary...and then all hell breaks loose.



By the time you are able to track the overnight you sent for the last minute filing (not your fault but the client's fault), you have 12 half-intelligible messages from the new receptionist, who isn't quite as detail-oriented as she presented herself to be when interviewed by your HR Director.  The school calls because your son is sick, you call your spouse, and when you get their voicemail, you remember that he/she is handling a big site visit today...and can't be interrupted.



By the time you have managed to pickup your son and take him home and arranged to have your daughter's friend's mom to drive her home after soccer practice, it is 5 p.m. and you've had to cancel two calls and two filings due tomorrow sit staring at you on your desk.



How the best laid plans so easily go awry, eh?



Now, compare your reality to Captain James Tiberius Kirk, he of the Starship Enterprise.  Your missing paralegal is his damaged deflector shield.  Your failing receptionist is his unstable dylithium crystal down in Engineering.  Your unattended and overdue casework is the humanoid planet relying on the Enterprise for protection from an imminant Klingon attack, and Scotty can't get the big girl up to light speed with the dylithium crystals acting up.



But note the difference between your enterprise and Kirk's Enterprise:  while all this is going on, Kirk stays on the bridge.  As Atticus' Mark Powers would say, he stays at his "dashboard".  His control center is built to preserve his stability and steadiness when the you-know-what hits the fan.  Kirk pesters Scotty, who's always "givin' her all she can take, Captain, she can't take much more".  He doesn't go through the sliding doors, get in the elevator, and get in Scotty's face to micromanage because he's not an engineer!  Kirk knows what his team is doing and knows what they can deliver.  He knows that the resolution of the problem is in the most competent hands and that's what makes him Captain: he's assembled a team of professionals upon which he can rely and for which the idea of micromanagement is unthinkable.



That, my friends, is what hybrid outsourcing operations can do for your in-house immigration department or private immigration  practice.  I sold my law practice four years ago; in the five preciding years, the crew of MY enterprise -- attorneys, paralegals, and other personnel -- did not need to be micromanaged.  While my life wasn't exactly a Corona commercial, I really did spend a great deal of time on the beach, laptop in hand, thousands of miles from where my team was making it happen.  Through scaling, we were able to handle international accounts firms our size would never dream of approaching; through systems engineering, training, and an unwavering commitment to client service, the firm continues to grow.



You went to law school to practice law, yet the delivery of legal expertise takes up perhaps 10% of your day; the other 90% is spent on things best handled by the Scottys and Uhuras of the world, not by you.  Simple as that.  And whether your ambition is to work less hours or to make more money, enterprise management is the key, and our profession is as adaptable to efficiency as any other.



Email me your questions and I'll show you how, using today's technologies and intelligent resource partnering, you really can transform your business immigration practice into a Corona commercial.



Wednesday, September 5, 2007

Okay, I really HAVE to get a new photo on this...

Went to visit my 85 year old mother for lunch and when I showed her the new blog, she said (translated from Spanish):



"Wow, that looks very interesting...and complicated...and who's the young man in the picture, your boss?..."



As Hootie and the Blowfish complained..."Time...why you punish me...?"





"Compassless" Colleges: Why America Will Increasingly Rely on Imported Talent

This morning's Wall Street Journal features a provocative editorial by Peter Berkowitz, a professor at George Mason University's School of Law.  Berkowitz, a senior fellow with the Hoover Institution, is an astute observer of trends in American education.



The editorial piece, entitled "Our Compassless Colleges" asks a simple but important question: is it unreasonable to expect U.S. colleges to define curricula intended to produce "educated human beings?"  Mr. Berkowitz specifically analyzes what we know as "liberal" education, as in the general education requirements college students must work their way through before focusing on their major.  He delves into this pretty profoundly, but he sums up his point like this:



"A university that fails to teach students sound mental habits and to acquaint them with enduring ideas handicaps its graduates for public and private life".



Here, here.  Speaking as the father of a very bright sophomore at one of the nation's "Top Ten Party Schools" (my beloved alma mater, the University of Florida), I can attest to the validity of Mr. Berkowitz's point: Alex and I spend infinitely more time discussing his fraternity, his ponderous consideration of changing majors, etc. than we do in discussing these very cornerstones of education, "sound mental habits" and "enduring ideas".



I submit that the problem is not so much with an educational system gone soft but, rather, with a society gone soft.  Visit any major university with high admission standards and you will find a student parking lot crammed with new BMWs, tangible realization of the "Do well in school and we'll pay for everything" mentality prevalent in the middle America value system.  The kid's got a four point bazillion GPA, what's another car payment, we rationalize.



In doing so, we have inadvertently spawned a nation of Art History majors (and the like) with the economic appetite of a multi-platinum rapper, aspirations of Bill-Gates-ness, and the inability to fix a simple Windows error.



In the Philippines, where I had an office for a few years, churning out medical graduates for "export" is part of the economy; money arriving from abroad is a pivotal economic force for the nation.  In India, hundreds of colleges churn out thousands of IT graduates who have spent years laboriously toiling over the very programming codes Mr. Gates toiled over when this whole computing thing was just getting rolling.



Meanwhile, back at the ranch we have...Art History majors.



The U.S. remains the most powerful economy on the planet, but it isn't thanks to the workforce our educational system is producing.  The government can tax employers who need foreign hires and make the money available to U.S. students willing to study these "high demand" professions, but the government can't instill the culture of compassion and respect for the elderly fostered by Filipino society upon a young American who has systematically been taught that the elderly are to be quietly tucked out of site and forgotten.  Similarly, school counselors can hammer away to demonstrate to students that the future for them lies not in some vague pursuit of a nebulous dream -- be honest, how many of us really know what we want out of our lives in our teens and early twenties? -- but in an earnest attempt to develop skills which will both fulfill their interests and establish them as a marketable resource in a changing economy.



We are the privileged and we are the blessed, but until American society replaces the myth of economic entitlement with the instilled understanding that globalism means meritocracy, PERIOD, our youth will falter and our need for skilled offshore labor will continue to expand.



Tuesday, September 4, 2007

The Immigration Crackdown: the End of Corporate Complicity

Today's Miami Herald screams the main front page article loud and clear:



"IMMIGRATION CRACKDOWN"



Drive through the urban portions of Miami, my de facto hometown (well, since I left Cuba at the age of four) and you will see them, lunch buckets in hand and hard hats perched on their noggins.  An army of undocumented aliens has built this city these past few years, obvious yet invisible, critical yet irrelevant (to many), as essential as they are collectively incognito.



Along Miami Beach, they wait on tables, clean hotel rooms, and manicure lawns.  Entire teams of indocumentados descend upon our golf courses and corporate parks, neighborhoods and public property to mow, trim, and clean up what the rest of us take for granted.  They make up an invisible underclass, the big pink elephant in the room no one down here really wants to mention.



Like so many individuals, the companies which employ these folks -- both small and global -- preserve the historical ostrich-like poise: head buried in the sand in denial of the obvious legal violations around them, well-feathered company butt sticking up in the air, obvious to anyone who bothers to look.



Well, this administration is looking:  faced with a resounding defeat of the immigration reform he'd hoped to leave as his legacy,and stinging from criticism of the war and a cabinet all too contentious, President Bush has but one weapon in his arsenal with which to appease his remaining conservative base: enforcement.  And nowhere is that more visible than in immigration.



With Americans demanding enforcement of existing laws, the Bush Administration has reached deep into existing rules and, all of the sudden, the ostrich isn't safe.  As the Herald reports, since August 10 the Homeland Security Administration has launched a 17 point initiative including everything from Social Security's so-called "no match" letters, advising employers of possible enforcement due to SSN irregularities in their employees' records to increased bed numbers in detention centers to new pre-clearance rules for federal contractors.  Fines have gone up, people are scared, share value will drop and corporate heads will invariably roll when the selected enforcement targets are made public.



Given that the vast majority of the Fortune 500 have SOME kind of federal contracting relationship, the stakes are high.  The tools for compliance are there:



-internal I-9 audits



-HR/Immigration compliance database liaising



-HR training and hiring protocols which establish real time compliance from point of hire



And yet the majority of heads remain firmly stuck in the sand.  I encourage counsel for these corporations to consider the historical fact that when it comes to enforcement, the bigger the USG's catch, the better.  Mr. Bush is scrambling to leave a positive legacy; Congress is tangled up over the chronic need to address the high skill worker shortage with the need to secure our borders.  The new enforcement directives will define the President's final period in Washington and if he cannot be remembered as the President who fixed the broken U.S. immigration system, he'll settle for "the President who enforced our immigration laws".   



Drop me a line if you think it's time to cover your company's well-feathered yet pretty obvious liabilities...



Saturday, September 1, 2007

How much is TOO much? Attorneys fees are out of control

From the August 22, 2007 Wall Street Journal:



"The hourly rates of the country's top lawyers are increasingly coming with something new -- a comma"



Quietly and without much fanfare, leading law firms have been steadily increasing their hour billing rates and the WSJ's timely article broke the silence, creating an online avalanche of outrage and disbelief via blogs and editorials from diverse sources.  Everyone seems to be asking: "How on earth can attorneys possibly justify $1000+/hour billing rates??"



Well, Microsoft may have perhaps put it most succinctly:



“This is grossly excessive by any measure, and truly proves the maxim that human greed has no bounds..."



That comment, triggered by $4702.50/hour billing rates from plaintiffs' counsel in a Wisconsin antitrust class action suit against Microsoft, was included in court pleadings after Microsoft -- which admitted no wrongdoing -- decided to settle the case via the payment of plaintiff counsel fees.  Lead plaintiffs' counsel Richard Hagstrom was apparently perplexed by the defendant's comment and is quoted as saying that he "can’t figure out what they are talking about".  He patiently explained to the newspaper that  in contingent fee cases like the one in Wisconsin, plaintiffs lawyers deserve a premium. Okaaaaay...



What Mr. Hagstrom describes as an entitlement befitting the heroic defenders of the hapless general public sounds a lot more like greed to the rest of us...even those of us not known for our low hourly fees.  Look at it this way: broken down into a 40 hour work week, that hourly fee adds up to $188,100 per week.



That's some premium.  But it's downright reasonable compared to what high flying Willie Gary, the flashy Florida plaintiff's attorney, bills per hour: $11,000.  Quoted last April in the WSJ online, Gary had this to say about a settlement agreement wherein he asked for hourly compensation in that amount:  “Look, had we won the case, we would have gotten $4 billion in fees.”  The poor guy was getting stiffed!



As egregious as these rationales sound to the rest of us, they are but the tip of an iceberg of legal billing practices and philosophies that corporate America and its shareholders are increasingly unable to choke down.  The reason: a fundamentally ineffecient business model which the U.S. bar continues to perpetuate despite global economic realities and pressure from its corporate client base. 



As early as the mid-90s, other service sectors -- most notably the accounting sector -- realized that without intelligent evolution responsive to client needs, they would become dinosaurs.  In contrast, our increasingly litigious society has deified those who milk the system's inefficiencies.  The bar members most recognized in our communities can be gauged not by their published articles or A/V ratings but by their advertising budgets.   And let's be honest: behind the barrage of advertising that the plaintiff's bar has deluged upon the U.S. for the past few decades is a population which, more often than not, views any minor fender bender as a potential lottery winning ticket.  By no means is the greed we witness limited to those of us with law degrees.



One sector of the population which can and is doing something about this is corporate America, which has had enough of the nonsense, and general counsels are leading the way.  Thomas Sager, assistant general counsel of DuPont Co., told the WSJ in that same article that he recently balked when a New York lawyer cited $1,000 as his hourly rate. Instead, Mr. Sager says, he agreed to pay the attorney a flat monthly fee. "One-thousand dollars may be someone's choke point, but mine is actually a lot lower," he says.   Others like legal maverick James Buda, vice president and general counsel for Caterpillar, have decided that enough is enough and created competetive bidding processes and other mechanisms to keep outside counsel fees under control.  Mssrs. Sager and Buda are representative of a growing number of inside counsel who realize that while law is far from a commodity, neither is it some sort of mystical force immune from the rules of the market economy.



Recently we presented an immigration services proposal to a significant international client.  The client, which is growing very rapidly, has about a dozen folks in its internal immigration team, operating in an offshore jurisdiction favored for high workforce ability and low cost.  The team could not keep up with volume and outside counsel was relied upon more and more for immigration solutioning.  Given that the outside firm was billing the client about 300% the going per-visa rate for large-volume clients, we were fishing in a barrel.  But imagine our surprise when, after crunching the numbers, we realized that our per-visa delivery cost was lower than their in-house offshore per-visa cost...even though we were doing 100% of the work inside the U.S.!  Wherever it is being deployed, the efficient delivery of legal services is what corporations and their shareholders demand, and intelligent process workflow is what leads to cost control.



Law is anything but a commodity and skilled legal practitioners are entitled to the economic benefits associated with expertise.  But we are also ethically bound to our clients, and protecting their financial interests is an inherent part of that.  In these Dylan-esque changing times, law firms will increasingly fall into two camps: those who respond to their clients needs and those with nostalgic memories of "how great things used to be..."