January 13, 2007
Real-time sighting of law professor reference in "That's So Raven"
Posted by Nancy Rapoport.
As I'm cleaning the public parts of our home today, I'm listening to whatever plays on ABC, since I started with the news this a.m. and never bothered to change the channel afterward. I've been half-listening, but then I heard the words "law professor," and went back to watch the TV. The current episode of "That's So Raven" involves a stereotypical absentminded law professor who has lost Raven's mother's assignment. I may have seen this episode before, but then, I'm a bit absentminded myself.
January 12, 2007
Opportunism or Justice?
There are three Starbucks just about equidistant from Porter Square in Cambridge, and my real estate agent went to the first two before finally finding me at the third this morning. And that gave me time to mull about two articles I had just read in the New York Times business section, not apparently related, but which started me thinking about the relationship of law, opportunism, and justice.
Bear with me a moment here to set the stage. The first article was a retrospective on the most recent executive pay flap: Robert Nardelli's (right) severance pay. The particular angle here was the employment contract, or as Patrick McGurn of Institutional Shareholder Services, referred to it, "the smoking gun." (I am being facetious, so I should provide the whole quote. "'Time and time again, the smoking gun of any major compensation problem is in the form of a contract that was executed at an earlier date,' said Patrick McGurn of Institutional Shareholder Services, a proxy advisory firm. 'It was at the heart of Home Depot. People never imagine when they ink these contracts that it could go wrong.'" Well, notwithstanding the Disney case, a group of shareholders down in Georgia are seeking to enjoin The Home Depot from paying Nardelli the severance. DISCLAIMER: I only have second hand accounts of that case.)
The second article, seemingly unrelated, was about the punitive damages verdict in the Hurricane Katrina-related insurance coverage case in the U.S. District Court in Biloxi, Mississippi. There, the plaintiffs' home had been knocked off its foundation and torn apart by high winds, which itself would have been a covered loss under the State Farm policy. But then the storm surge from the Gulf scattered the debris. State Farm argued that this meant the house was destroyed by a flood, and nullified the wind damage coverage. The judge agreed that the policy did not cover flood damage, but held it was State Farm's burden to prove how much was wind-caused, and how much was water-caused.
For how I see these cases as raising similar issues, go below the fold.
The standard explanation for the institution of contract law in the law and economics literature is the efficiency created by contract. If I own a widget that I value at $100 and you value at $200, it increases social welfare if I transfer it to you. There is $100 of consumer surplus sitting there untapped. (Welfare economics doesn't care about the price at which I sell to you - that is just a question of the allocation of the consumer surplus between you and me.) But if you and I sign a contract to sell the widget at $150, and Joe comes along and offers to pay me $200, and I tell you to buzz off, I'm selling to Joe, you might be less inclined to enter into transactions by which we unlock consumer surplus (note this is an instance of rule-utilitarianism rather than act-utilitarianism, because as long as Joe also values the widget at $200 we are no better or worse off in the single instance). The term for "buzz off, I'm selling to Joe" is opportunism.
The concept of opportunism makes perfect sense when we are talking about the performance or non-performance of simple contracts for standard or fungible commodities (the first year contracts problems involving the sale of wheat), but is quickly subsumed in many real life cases by issues of interpretation. When the case turns on interpretation, and each side has an argument, the other side is opportunistic, and we are merely seeking justice.
In these two cases, who is opportunistic and who is seeking justice? The Delaware Supreme Court in Disney finally had to absolve Sanford Litvack of liability to the shareholders for declining to be an opportunist (he and Michael Eisner concluded there was no basis on which Disney could contest Michael Ovitz's severance package). But if you are an outraged shareholder, is filing an ex post lawsuit, and cobbling up an argument why Ovitz or Nardelli shouldn't get paid, an exercise in opportunism or the pursuit of justice? When State Farm tries to get out of paying Katrina claims by contending that it was the flood that did it, and it never insured against flood damage, is it an opportunist? Are the plaintiffs and their lawyers seeking justice? Or are the defendants in both cases entitled to look upon them as mere opportunists?
I went back to Larry Solum's Legal Theory Lexicon from this past weekend (January 7, 2007), and conclude from that brief synopsis this is a hard question. Distributive justice? Corrective justice? Procedural justice? Political justice? Both cases seem to me to invoke notions of distributive justice that are well-removed from the positive law. In the executive pay case, even McGurn seems to be acknowledging that a contract is a contract once it's signed; the "smoking gun" was ever entering into it in the first place. If paying Nardelli so much so shocks the conscience, why stop at the niceties of fiduciary obligation to halt it or ameliorate the effect of paying it? So what if there is a contract? Why not hold that it offends our notions of distributive justice? Is it respect for the amoral but positive law that stops us?
Maybe there's something to be learned from the State Farm case. The judge held that the policy clearly didn't cover flood damage, but placed the burden on State Farm to show that the loss was caused by the water and the wind (that's effectively finding for the plaintiffs because the burden will be everything here, as there is nothing left of the scraps of the destroyed house). If you are making a claim, isn't it ordinarily your burden to show not only the contractual duty of the defendant, but also that the breach of that duty caused the loss? It seems to me this reflects some kind of political or distributive justice (i.e. a political decision about who should bear the loss) rather than an attempt to determine which of the parties is being opportunistic.
I sense far more hesitation in seizing Nardelli's contract expectation than in seizing State Farm's. But I can't quite figure out why that would be.
News From the Gulag
Iowa, with its uniquely restrictive rules on attorney advertising, has been referred to as the "Advertising Gulag." In a recent case, the Iowa Supreme Court revoked the license of a lawyer who had been subject to two prior admonitions and a reprimand for advertising violations. The attorney made statements of an unverifiable and self-laudatory nature such as that his "scholarly achievements are unmatched", he was the "foremost authority on drunk driving", and that his efforts had "resulted in overwhelmingly favorable results for his clients." He also violated an Iowa rule that requires that direct mail solicitation of potential clients because of an occurance known to the lawyer (here drunk driving arrests) be filed in advance with the Iowa Board
Notably, the attorney was found to have presented false and misleading testimony in a prior disciplinary hearing. In my view, that misconduct should invariably result in severe discipline, as it demonstrates present unfitness to practice law. The court found other vioations as well. (Mike Frisch).
January 10, 2007
More on lawyers & CEOs
Posted by Nancy Rapoport.
Jeff Lipshaw hits the nail on the head (sorry about the Home Depot pun) in his post, More on Lawyers as Leaders. In the Wall Street Journal article on lawyers & CEOs, I was happy about one particular omission. I'm glad that Alan Murray, who wrote the column, didn't trot out the hoary old saw about how law schools teach law students to "think like lawyers," as if other professions didn't also teach ways to understand and dissect arguments, think logically, and argue convincingly. I've written on this particular brand of arrogance before. More below....
(By the way, I actually think it's possible to comply with regulations and do well in business--but the culture has to support the decision that compliance is a necessary part of doing business and not just something to circumvent.)
Mr. Murray also hit upon a very important point: the general differences in risk tolerances between lawyers and businesspeople. Law schools encourage risk-averse thinking: lawyers are supposed to think of problems before they happen and then come up with ways to solve those problems. But companies don't make money by being risk-averse. They make money by taking risks. By imprinting law students with risk-averseness, we encourage a culture with good points ("coloring within the lines," if you will) and bad points (misunderstanding what drives for-profit businesses). Until we also teach law students to understand the ways that business people think, and the various pressures that they face--pressures about budgets, targets, market share, etc.--we're not training law students to give complete advice to their business client. It's as if we're training our students to survive in one environment, say, the Arctic, and then sending them out to an entirely different environment, say, the desert. Some of their skills are useful in both environments, but if they don't acquire additional skills, they'll die.
I grew up in deep East Texas, a subtropical environment full of greenery. For a while, we had all-white squirrels that someone had brought in from elsewhere, but they all soon fell victim to predators because they couldn't adapt. If the lawyers heading companies use their legal training and their understanding of what motivates business people, they can make very good CEOs, indeed.
New Website Ms. JD to Explore Issues of Women in the Profession
Posted by Alan Childress
This notice is distributed generally now to various law student groups, and is a call for active participation in the new website devoted to issues of women in law practice, the profession, and the academy:
This past year, a group of women from law schools across the country met to discuss gender issues both at law school and in the legal profession. This conversation led to the idea to start an online community that law students and professionals across the country could use to explore and receive information about the state of women in the profession. At this time, the website, entitled Ms. JD, is ready to emerge as the only online forum of its kind.Ms. JD is poised to unite female law students and professionals, and we would like to invite students from your school to join our efforts to promote gender equality in law school and the legal profession. If you are interested in interviewing women legal professionals, writing about your own experience in law school, or assisting Ms. JD to gather content and promote its agenda of increasing the representation of women in law, then we invite you to visit our website, ms-jd.org, to learn more about us, or to contact email@example.com for more information. In addition, Ms. JD and Yale Law Women are hosting a launch conference for Ms. JD on March 31 at Yale Law School entitled "Legally Female." More information about the conference is available at legallyfemale.org. We hope that many of you will be able to attend! Sincerely, The Ms. JD Board of DirectorsElizabeth Pederson
Stanford Law SchoolAnna Nelson
Yale Law SchoolKaren Hernandez
UCLA Law SchoolJill Russell
University of Michigan Law SchoolBecca Bell
University of Chicago Law SchoolRenuka George
Cornell Law SchoolAnna MacCormack
NYU Law School
More on Lawyers as Leaders
Posted by Jeff Lipshaw
Several days ago, Alan invited me to comment on Ben Heineman's lecture on lawyers as leaders. I think it's particularly appropriate to do so in view of Alan Murray's column in the Wall Street Journal this morning "When Firms Turn to Lawyers."
The subject is the recent succession of two lawyers, both of whom happen to have been Ben Heineman proteges from GE, who have ascended to the top job in major corporations in recent weeks: Frank Blake (right) replacing Bob Nardelli at The Home Depot, and Jeff Kindler replacing Hank McKinnell at Pfizer. I think something has gotten buried or conflated by the circumstance that both of these lawyers have replaced CEOs whose severance packages have inflamed shareholder activists and business journalists.
Murray's thesis is that these companies have turned to lawyers because they are in trouble: "Lawyers are trained to foresee risk, making them well-suited for times of trouble. Perhaps more important, they understand what it means to be a fiduciary, acting in trust on someone else's behalf. Messrs. Nardelli and McKinnell clearly failed to grasp that basic tenet of leadership."
I think the comment is, in some ways, a cheap shot, but not at Nardelli and McKinnell. (I am less outraged than many by the severance packages, but that is another subject for another time.)
It's something of an insult to Blake and Kindler to suggest they would take the reins of two huge corporations with their primary skills being their ability to bail water out of the sinking corporate canoe. Indeed, the boards of the respective companies must have thought so much of their abilities that it would counteract the natural presumption, embodied in Murray's piece, that something is sorely amiss for a LAWYER to attain a position of leadership. A personal note: back in 1994 or so, when we were looking to institute major six sigma productivity changes within AlliedSignal Automotive, a senior executive was to be the "champion" (that's corporate lingo for a person who doesn't really do the work, but who acts as visionary, spokesperson, cheerleader and barrier-remover). I volunteered, and was told by our division president, who had previously been the corporation's chief financial officer, that the business would think it odd and troubling that a non-operational type like him had appointed not only a non-operational type like me, but a LAWYER no less, to this critical position. But he did appreciate my cojones.
More below the fold.
Here's where I endorse Ben Heineman's lecture. His was the vision of the modern in-house law department; before Ben Heineman got to GE, in-house lawyers were, generally, a disrespected and uninspired crew. There is something of a lineage between Heineman and me. Jack Welch hired Ben Heineman. When Larry Bossidy, Jack Welch's best friend and the Vice-Chairman of GE left in 1991 to take over AlliedSignal, he replicated what Welch had done: he hired a great lawyer with varied experience like Heineman, about whom I have blogged here before: Peter Kreindler. In 1992, Peter hired me. So, as a matter of expectation or possibility for what lawyers can do as leaders, this is, to me, like reading the hymnal.
But what Heineman gets, and Murray does not, are the additional following attributes, nay, professional skills, that a lawyer just might bring to the table:
- An ability to cut to the core of arguments, particularly those being made to the CEO by the leaders of the various business units, that are pleas for the allocation of the corporation's investment capital (my characterization of annual strategic planning sessions).
- An ability to communicate and persuade
- A hands-on style of leadership
Having said all that, there is often some kernel of truth at the core of a stereotype. The image of lawyers as backward-looking, ass-covering, word-smithing, risk-averse, non-value generating, fine-distinction-drawing deal killers, who spend most of their time trying to separate the pepper from the fly poop, and the rest of the time saying "no you can't do that" to their clients, probably has some empirical basis. That's why we don't naturally think of lawyers as entrepreneurs, something I have begun to think and write about more recently.
January 9, 2007
Blogging for Lawyers Event by DC Bar 1/23
The D.C. Bar is sponsoring this program [at 1/23/07 entry] on "lawyers and blogging" Tues., Jan. 23, from 12:00 to 2:00 pm at its conference center on H St NW. The moderator is MyShingle's Carolyn Elefant, and speakers include the founder of SCOTUSblog and other successful blawgers. Law students are welcome, too, at a cheap admission price. [Alan Childress]
Lawyers and customer service
Posted by Nancy Rapoport.
Has our society changed its tolerance for the quality of customer service? I've just spent the past month wrestling with customer service problems at Large Overnight Package Delivery Service and Small, Ineffective Garage Door Company, and it caused me to wonder if lackadaisical customer service is now the norm.
Or it might be the norm outside the legal profession. What I've seen recently, at least in large law firms, is the uber-customer-service model, where firms pull out all the stops to serve their clients. Their lawyers and legal assistants are on call all the time, even on vacation, and -- in some places -- it's a point of honor to bill massively long yearly hour totals.
There has to be a happy medium somewhere, right, between no customer service at all and such intense customer service that the burnout rate is excessively high?
Texas Amends Bar Exam Repeat Rule
Tim Zinnecker (South Texas College of Law) passed along a link to the story that the Texas Supreme Court (below right) has amended its "four times and you're done" rule on taking the bar exam, allowing four time unsuccessful takers to get a waiver of the limit by showing "good cause." I'm not sure why anybody would care how many times you take the exam, and it's not clear from the story whether the applicant seeking to take it a fifth time was complaining that the rule or the exam itself was unfair. By the way, it looks like Supreme Court justices in Texas are elected. I didn't see any limits on how many times you could run before you were disqualified from running.
January 8, 2007
Heineman on The Lawyer as Leader
Posted by Alan Childress
Ben Heineman, a distinguished fellow at Harvard Law's Program on the Legal Profession and previously the GC of GE and its Senior VP, delivered the Pieskel and Silverman Lecture at Yale last year, and its text is posted here from the PLP website. He spoke on "Law and Leadership."
His call for unabashed acceptance of and training for the legal profession's role in leadership and decisionmaking--not just advising the leaders--is thought-provoking and concrete. Other grad schools candidly and proudly train leaders, he reasons, so why should law schools squander the talent before them by deemphasizing their leadership potentials and emphasizing their "advisory" roles? Good questions, with the start of some good answers, are found in the speech.
Many of his points remind me of Jeff's previous posts on legal training for vision, responsibility, and entrepreneurship...and I hope Jeff will take a look at the speech and offer some examples and insights, or disagreements, from his own experiences from a perspective and academic-transition background similar to Heineman's.
January 8, 2007 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack
Abetting Unauthorized Practice By Using Disbarred Attorney?
That's the allegation today in this story from the New York Law Journal leveled against a local attorney who may have had a disbarred attorney cover two cases by appearing in criminal court. [Alan Childress]
Don't Kill Your Wife [And Use a Checklist]
Posted by Alan Childress
While blogger Is That Legal? newly posts on stupid spouse-killers, I'm reminded of the story that long-time New Orleans sportscaster Vince Marinello is accused of turning his lowgrade OCD into a virtual confession. His estranged wife was, surveillance tapes showed, shot by a man wearing a hirsute disguise who rode off on a bike. Then authorties searched his FEMA trailer: "In the trailer, the sheriff said, they found a handwritten checklist of the alleged plans for the attack," reported the AP. A later story by UPI alleged more details of the to-do list:
There were meticulous checks beside each entry that included the words "mustache and beard," "bicycle" and "gun," .... There was even a reminder to discard the weapon, police alleged.
LPB Named "the law-professor blog with an attitude"
"I'd call this one the law-professor blog with an attitude," writes Minor Wisdom's Raymond P. Ward as host of this week's Blawg Review #90, the rotating carnival of blogs from Law.com. Thanks! [Alan Childress, a/k/a The Godfather]
UPDATE: Jeff Lipshaw celebrates the achievement in overtly uncool rap here.
January 7, 2007
Use of Lawyer in Sprint Commercial
Posted by Nancy Rapoport
I've just seen the new Sprint-Ron Livingston commercial, in which every time Ron Livingston makes a statement, he looks behind him to the lawyer, to see if the lawyer has OK'd the veracity of the statement. Of course I like it--who couldn't like seeing one of the Office Space actors working with a lawyer on a "more truthful" ad (or testing the lawyer's abilities by stretching the truth with the line about meteors)?
What made me smile is that, at least in this ad, the lawyer isn't seen as trying to facilitate lying about something. That's a small step in the right direction.
Under No Circumstance Should a Beginning Law Professor Read This Post
Posted by Jeff Lipshaw
Let me start this off with the obvious disclaimer. I am a "beginning" law professor (personally, I like to think of myself in the same vein as my hero Horace Rumpole who, having never "taken silk," i.e. become a Q.C., is consigned to the category of aging "junior" barrister). But I think I may be in a very select group of "beginning law professors" who spent as long as I did in practice before being called to the academic bar.
So while I took with substantial gratitude the advice offered last Friday morning at the AALS New Law Professors section, I also listened to it with the perspective of starting what is at least my third career, the first two of which resulted in the equivalent of tenure. And one piece of advice, in the midst of all the other good advice, buried in the middle, and perhaps not, and offered up by that wisest and kindest of academic mentors, Larry Solum, stood out among all the other combined wisdom. (Note: this picture captures the real Larry far better than the taxidermic one Paul Caron used at the session!)
I strongly urge all take to heart his message to concentrate on the intrinsic value of the work. I am too much of a Kantian to be able to assure anyone that if you do all the right things, the real world results will come. As they say, shit happens. But I am positive, to a moral certainty, that there is no other alternative. The paradox in every meaningful achievement is that you focus on the independent variables to the function y=f(x), because you simply cannot force y into being.
Let me try to be more concrete about this in a different way. In my function, y is about ME. It's the result I want for myself. In Humean terms, it's the passion for something to which my reason is slave. It is the inward focus on me, my needs, my desires, my career, my life that in my other careers I have seen (in myself and others) transferred into an organizational inward focus - where what this all means for me (a partner or an executive) or us (the law firm or the company) far outweighs any consideration of what this all means for others (our clients or customers or employees). But, ironically or paradoxically, it's the outward focus that lets us achieve our inward goals.
Unfortunately, the impact of the normal or standard curve doesn't end when we get onto the tenure track, any more than it did when we were accepted at elite undergraduate schools or or elite law schools. Everybody we hired in our law firm had already experienced several levels of stardom, but some people didn't make it to partnership. In every one of these circumstances, we hope to hell it's not us. But I'm fifty-two years old, I'm not going to be the President, or even a Senator, or on the Yale faculty, and there are very few things as to which I can say I'm in the top ten in world. We walk a fine line between ambition and despair.
We will get lots of instrumental advice: how best to game the law review system; what kind of publications work best for tenure committees; how best to dress when teaching classes. But the advice that resonates with me is the kind given by Larry: look outward because, paradoxically, the result of the inward look is instrumental to our passions and ultimately unsatisfying. Write because you have something to offer the world; teach because you have something to offer your students; serve because you have something to offer your institution. We didn't make this choice of career for an instrumental end, and we shouldn't conduct it that way either.
Yes, Tulane is Up and Running
Posted by Jeff Lipshaw
At the just-concluded AALS annual meeting in Washington, D.C., one of the great benefits of wearing a badge that identified me as being from Tulane University was that I got to answer on elevators, in hallways, or gabbing before a session started, or at the bar, some variant of the following question: "so, has Tulane restarted classes yet?"
My friend and co-editor Alan Childress has already expounded at length on the topic: YES! TULANE IS UP AND RUNNING AND HAS BEEN FOR A FULL YEAR NOW.
This is not to minimize at all the social, political, and environmental problems facing New Orleans. This is a city that had significant issues before Katrina, most of which I think were masked by the boozy haze of Bourbon Street partying and the humid, languid charm of the live oaks in the Garden District and Uptown. And there are parts of this city that are still not habitable.
But if you find yourself plopped down at Tulane, or over at the Whole Foods Market on Magazine Street on any evening, or on the levee in Audubon Park on a Sunday afternoon (if you don't look at the FEMA trailer camp at the end of Tchoupitoulas Street), or at Cooter Brown's during a football game, or grabbing a cup of coffee at PJ's or CC's or the Starbucks that opened this fall on Maple Street, it feels pretty normal. Here in the law school, we are going to start classes for the fourth time post-Katrina (counting the summer session), and law students look and sound just like law students everywhere.
New DaimlerChrysler GC
DaimlerChrysler has announced that its long time general counsel, Bill O'Brien, is retiring, and his successor will be Gerd Becht, who is described over at Law.com as follows:
Becht, who is German, spent much of his career with multinational companies, including 13 years at General Motors Europe AG, three years at Banque Paribas and eight years at AEG Aktiengesellschaft. Going to DaimlerChrysler made sense: "If you look at my résumé, there's a strong emphasis on international legal education and business alignment."
Alan Childress is our resident scholar on comparative legal professions, and my observations are anecdotal, but I would have been shocked to have seen this fifteen years ago when I was heavily involved in negotiating deals with German companies. My impression then was that continental lawyers were more academically inclined than business-oriented, removed from the business people themselves, and viewed by their clients essentially as scriveners, not counselors. While there were exceptions (the general counsel of Robert Bosch GmbH, Dieter Berg, was a dynamite lawyer under anybody's standards), Becht's view of cross-cultural and cross-functional linkage was certainly not the norm in European legal circles.
In the meantime, oh Lord, won't you buy me a Mercedes-Benz?
Six Degrees of Nancy Rapoport
Posted by Alan Childress
By way of my own welcome to Nancy Rapoport, whom Jeff substantively welcomed to LPB earlier, I must note that his mention of her role in the Enron movie and listing on IMDB begs the question of her Six Degrees of Kevin Bacon. I can get her there in five. You may be able to link her to Kevin in fewer, but my way has a special twist true to this blawg that I doubt works for your pathway: in all five of the links I use, the linked character is a lawyer in at least one of their two roles (and sometimes in both). I'd be impressed if your way is 100% legal profession immersed. [Void in Wisconsin. Nancy Rapoport and family may not participate. Jeff will kill himself trying.]
As for my own connection to Nancy, unbeknownst to her or Mike and Jeff, I can link to her in three almost via the movies -- or officially in one step via the law firms (she may not know we both practiced with Morrison & Foerster in SF in the 1980s, albeit at different times [I am, of course, older]). That links her as well to Charles Craver here at GW.
By the way, if you are from Wisconsin, don't you hate it that you can never seem to play nationwide marketing contests? Does not a towel appear in your every box of Breeze? Anyway, we look forward to her contribution.