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Legal Language & Long-Term Payoffs: The Beginning Of A Beautiful Friendship

The movie studio Warner Brothers and the comedians the Marx Brothers were once involved in particularly contentious exchange. The Marx Brothers planned to parody scenes from the classic film Casablanca. Warner Brothers, however, raised objections to the project. In a no-nonsense letter, Warner Brothers threatened severe legal action if the Marx Brothers continued as planned.

The Marx Brothers, for their turn, wrote a letter back to Warner Brothers, stating they “were brothers long before you were.” Although completely farcical, the Marx Brothers wrote that they would enforce ownership and control over the word brothers, as long as Warner Brothers maintained its stronghold on Casablanca.

This absurd exchange became legendary in movie circles, and represents a broader lesson about overbearing management [1].

“Fair use” clauses in copyright would likely protect the parody proposed by the Marx Brothers; nevertheless, even if Warner Brothers had a legal leg to stand on, was it worth it?

Money is a two-way valve that comes and goes. Reputation, on the other hand, is difficult to earn, easy to lose, and impossible to recover once lost

Casablanca went on to receive three Academy Awards, despite the fact that it was never expected to perform out of the ordinary [2]. It was the seventh highest grossing film in 1943. Today, it remains one of the most watched films of all time.

The exchange with the Marx Brothers turned Warner Brothers into Big Brother, aggressively enforcing policy and overseeing the “little people” in a menacing way.

Stewart McKelvey from Lexology warns, “While it’s true that cease and decist letters can have a strong deterrent effect on a rogue, if it is only a bluff without a solid legal foundation, the sender loses much credibility and the recipient capitalizes even more on the ‘culture jamming’ purpose of the satire or parody by waving around the ineffective cease and desist letter.”

The Marx Brothers’ ridiculous rendering of Casablanca could have served as a way to re-release a version of the film or increase legitimate viewership.

Law firms, for their part, should also learn to pick their battles.

Here are a few guidelines:

  1. Employee benefits – avoid the revolt

Are employees calling in sick for work because you haven’t approved extra holiday time? Are employees disgruntled that they are not free to work from home one day a week, so that they can have lunch with their young children?

These are all small sacrifices to avoid grumbling and discontent among your staff. Consider bespoke benefits at your firm. A one-size fits all policy may work against your desire for a happier and more productive workforce.

  1. Client discounts – don’t sweat the small stuff

Is your client arguing over a single line-item cost? Perhaps it’s for photocopying; maybe it is the fee for a phone consultation. Whatever the cost, if it’s small, don’t sweat it.

In the long term, if your clients feel that they are being heard, your firm will gain reputation and repeat business. In the moment, you may feel in the right (and maybe you are) but it’s decidedly wrong to fight over small incidentals when the choices for alternative legal services and rival law practices are vast.

  1. Threating letters – watch your language

Watch out for adopting threatening language in your communications, from cease-and-desist letters to regular emails

Monica Sanders for LegalZoom explains, “Creating a negative mood will only lessen your chances of reaching an agreement. The idea of the letter is to show the other person you are serious and give them the chance to consider their legal choices. It is not an opportunity to insult them or create an adversarial relationship.”

Remember, in the digital age, whatever you put in writing lasts forever.

“If the dispute ends up in court, remember that the same judge who will hear your case will read your demand letter.”

If it’s not the judge, it’s possible even your own firm’s internal audits will revive a particularly nasty email you wrote, and it may be grounds for dismissal. In general, write everything as if it will be read one day by your boss, a judge, and your mother.

Need effective and persuasive legal writing guidance? Take C4CM’s audio course, “Essential Tips, Tricks & Techniques for Lawyers.” You will learn the ten most costly mistakes that lawyers make in written pleadings and briefs; quick editing tips and techniques to use every time you put your fingers to the keys; and language and style usage rules and real-life examples of how to use them.

-WB

[1] The story about Warner Brothers and the Marx Brothers comes from Lawrence Lessig’s book Free Culture. Read and download it for free here.

[2] Ebert, Roger (September 15, 1996). “Casablanca (1942)”. Chicago Sun-Times. Archived from the original on February 28, 2010. Retrieved March 18, 2010.

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Work Better, Not Harder: Predictably Irrational Behavior & How Law Firms Can Avoid It

Imagine you locked your keys in your car. You call a locksmith to open your car door. An apprentice to the trade, the locksmith takes an hour or so to unlock the vehicle. Given it took one hour to complete this complicated and time-consuming process, you tip the locksmith on top of his normal fee.

Now, imagine the same thing happens again (perhaps you should loan a set of spare keys to a friend, but that’s beside the point). You call a locksmith to open your car door. An expert locksmith, she manages to unlock your vehicle in a mere 10 minutes. Having seemingly required minimal effort—and, after all, it only took 10 minutes—you pay the normal fee and do not tip for the service. In fact, for a short job, you are mildly outraged at the cost. 

This is the start of a story in an episode of NPR’s podcast Planet Money, which discusses the difference between hard work and good work, and people’s power of perception (listen to the rest of the episode “Hardwork is Irrelevant” here).

Economist Dan Ariely calls this predictably irrational.

In the locksmith tale, the first locksmith lacked the skills or experience to complete the job efficiently. And yet, he was rewarded for that inefficiency. The second locksmith, however, was highly skilled, and yet she did not receive the same compensation for her work as her less experienced counterpart.

Humans naturally see employees who work long hours as people with positive professional ethic and productivity. However, hard work does not always indicate skilled work. In fact, sometimes the less time spent on a task (fewer commands in a line of code; fewer distractions during the day), the more efficient and proficient that effort becomes.

As a law firm manager, this idea has two implications for your firm.

First, for clients, when your firm offers cheaper legal services, this can sometimes create the false signal that your firm is offering lower quality services. When a client is looking for the best representation, the client often associates “the best” with “the most expensive.” 

So, if you are hoping to attract clients with affordable services or competitive prices, consider offering a discount for those services instead. This way, the client perceives the counsel as high quality, and your firm is simultaneously able to avoid out-pricing its local customers.

Next, the idea that productivity and hard work are not necessarily correlated applies to law firm employees.

Law firms often measure an associate’s value to the firm in billable hours. And while it’s unlikely that firms will do away with this instrument for hiring, firing, and promotion, consider adding a goal-focused measure of success, as well.

During first- and second-year associate reviews, create a list of indicators for high-quality work that are not associated with time. For example, the number of court cases won, briefs written, clients brought in, repeat clients retained, tools developed, etc.

Talent for a trade, not just time, should be rewarded. 

End the era of hard work and begin the age of good work at your firm. 

For more productivity tips, consult The Center For Competitive Management (C4CM)’s webinars here.

-WB

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Head Case: Why Managers Should Offer Personal Investment Education To Associates

Some people store money in their mattresses for a rainy day. Others, in savings accounts. Still some, in 14th century wooden Chinese sculptures.

It turns out, when the Australian auction house Mossgreen sent a 14th century wooden Buddhist sculpture to be inspected, it found a little more than it bargained for—in fact, it found “one guan” or $2,000 to $4,000 more than it expected

Inside the sculpture of a Buddhist head, Ray Tregaskis, head of Asian art at Australia-based Mossgreen auction house, found a crumpled 700-year-old Ming Dynasty banknote. The banknote is among the earliest printed currency in China, and certainly a surprising way for its patron to have hidden his valuable IOU. 

China’s Ming Dynasty lasted from 1368 to 1644 and was a prosperous one. The bill itself contains three official red seals and warns of counterfeiting.

“It’s typical to find materials such as mantra rolls, relics, grains, incense and semi-precious stones that have been placed inside gilt bronze sculptures by a monk or lama,” says Luke Guan, a Mossgreen Asian art specialist to CNN.

“But we’ve never heard of anyone finding money inside a wooden sculpture before.”

An associate at a prosperous law firm, perhaps you are also dusting off your coffers, and looking for a place to appreciate your money.

But, poor investment decisions are among the biggest mistakes made by law firm associates today.

Because legal associates spend so long investing in themselves, via training and legal education, their careers start late in life. As a result, associates tend to be overly aggressive with personal investments.

Financiers make similar mistakes. In fact, in 2008, hedge fund manager Ted Seides made a $1 million bet with Warren Buffett regarding the benefits of aggressive hedge fund investments. Seides bet a portfolio of hedge funds would beat the more conservative S&P index fund over the next ten years. 

What happened? Buffett won. The S&P 500 is up 65.7%, well above the 21.9% gain of Seides’ hedge funds (via BigLawInvestor).

Warren Buffett, with a personal net worth of $80 billion (Forbes), has consistently advised steady and conservative monthly investments in a low-cost index fund. On page 20 of his 2013 letter to Berkshrire shareholders, Buffet advises:

“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors–whether pension funds, institutions or individuals–who employ high-fee managers.” 

As a law firm manager, it is important to educate your associates about smart financial decisions. Financial safety leads to better mental health. In high-stress work environments like the law, it is important for staff and associates to worry less about at-home investments to engage more in in-office activities.

In addition, by educating your firm about finances, this increases their skills in other areas of management.

Managers are the key to happier, more productive employees. And this can start with a little forward-looking advice on personal finance.

For more ideas about becoming a better manager and boosting employee satisfaction, consult one of the Center for Competitive Management (C4CM)’s online seminars and resources here.

You may think it’s for higher pay, but in reality, the No. 1 reason employees leave is the way they’re supervised.

Simply put…“People join companies, but leave managers.”

The good news is, regardless if you’re a new manager or a seasoned one, you can keep your great people on board (and happy) by learning the secrets to becoming a confident, effective leader through training.

Take a page from Buddhist sculptors—some of the most valuable things are stored in your head, not your wallet.

-WB.

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Trimming Your Ranks: Netflix, Law Firms & Workforce Overcapacity

Should your firm be trimming its ranks?

According to a recent industry report, nearly 60 percent of the 356 law firm leaders said that overcapacity is hurting their firm’s profitability.

What’s worse, 62 percent stated that demand for their services has not yet reached pre-recession levels. While some firms are addressing the problem by trimming their ranks, many aren’t doing enough. Is yours? 

Law firms are not the only organizations to face a mismatch between the number of employees and productivity, especially after hard times. In fact, it may be hard to believe in today’s “Netflix and Chill” climate, but Netflix was on unsteady financial ground just a few years ago.

In 2011, the company decided to split into two, one for their traditional business model of DVD-by-mail and another for online video on-demand. After the announcement, Neflix lost 57 percent of their value in two months (HR). The market was betting against the company.

However, Netflix still managed to become the $61 billion company today and climbing into the list of top five most innovative companies (Forbes). 

Some people attribute Netflix’s success to its unique human resources business model and culture. 

On its website, Netflix explains:

“What is unique and special about Netflix is how much we:

  • encourage independent decision-making by employees
  • share information openly, broadly, and deliberately
  • are extraordinarily candid with each other
  • keep only our highly effective people
  • avoid rules”

The key point here is the emphasis on people over process. Netflix highly values its most productive people. As a result, if an employee’s productivity or role at the company falls short, they have no problem firing them. In fact, Netflix strangely prides itself on its severance package (read its full statement about corporate culture here). 

“We model ourselves on being a team, not a family. A family is about unconditional love, despite your siblings’ unusual behavior. A dream team is about pushing yourself to be the best teammate you can be, caring intensely about your teammates, and knowing that you may not be on the team forever.” 

You may not be on the team forever, that much is true. Although Netflix does not abide by quotes, such as “cut the bottom 10% every year,” they do have continual performance evaluations, called “keeper tests.”

If you think “keeper tests” sound a lot like something out of the Hunger Games, you’re right. Masquerading around as the team mascot, “keeper tests” are simply a way to maintain a lean workforce. 

A lean workforce is vital, especially for law firms excessively penalized by the recession. However, Netflix culture may not be the best for your firm.

There are other ways to let supply meet demand, and your firm should educate itself on all its options. Yes, a “keeper test,” may not be a bad idea (although the name could certainly use an update). However, make sure your measurements for overcapacity address both the long- and short-term.

Although firing unproductive or unnecessary legal associates may be necessary, consider best practices for temporary workforce rebalancing. Associates may be willing to provisionally work part-time, as opposed to being outright fired. 

Incentivize associates of all ranks to bring in more clients. Include this as a measure of “success” on your own “keeper tests.” 

Netflix claims, “We do not seek to preserve our culture—we seek to improve it.” And that is certainly a mantra to adopt at any firm.

Learn more about corporate culture and workforce management with the Center for Competitive Management (C4CM)’s CLE webinar, “How Many Lawyers is Too Many Lawyers? Managing Firm Headcount, Capacity & People Power for Increased Profits.”

The CLE webinar presents key capacity metrics, discusses staffing arrangements, and presents a path your firm can follow to develop a more profit-driven model for managing people, practices and technology. 

Once you have managed your firm headcount appropriately, you will feel more free to Netflix and bill clients for higher profits.

-WB

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Nobel Prize Given To Economist Who Explains How To “Nudge” Better Workplace Behaviour

For an economist, there is no greater acknowledgement of a job well done than the Nobel Prize in Economics. Today, a University of Chicago economist, Richard H. Thaler, claims that honour for his contributions in the psychology of economic decision-making.

Thaler’s theory explains, “how people simplify financial decision-making by creating separate accounts in their minds, focusing on the narrow impact of each individual decision rather than its overall effect,” according to the Royal Swedish Academy of Sciences.

Thaler is probably best known for his book Nudge: Improving Decisions About Health, Wealth and Happiness, written with Cass Sunstein, which was an instant international bestseller. In this book, the authors address two sides of the brain, “one that is intuitive and automatic, and another that is reflective and rational,” (Sunstein and Thaler, p.19).

These are the two sides of the brain that lead mathematicians to solve complex algebraic problems, yet get lost walking to the corner store. These are the two cognitive systems that lead talented artists to paint a masterpiece, but forget to eat dinner.

According to Sunstein and Thaler, the Automatic System, akin to a “gut reaction,” and the Reflective System, the more rational side of the brain, are to blame for inconsistencies in the behaviour of people when it comes to personal finances or decision-making, more generally.

This is why, for example, British employees are now automatically enrolled in the U.K. pension system. When given the choice, employees will opt out of the pension system, despite knowing deep-down that they need to save money for retirement.

In fact, the book Nudge has influenced a whole system of government policies in the U.K. Prime Minister David Cameron set up the Behavioural Insights Team, colloquially known as the Nudge Unit, to solve problems associated with these behavioural biases.

Another source of bias in economic behaviour concerns language. According to studies, people behave differently to the same commands, depending on the way these commands are phrased.

For example, it turns out that personalized text messages, as opposed to stock letters with generic language, led people to pay their fines on time when sent by The British Courts Service. While this experiment in behavioral economics was implemented locally, estimates suggest that a national rollout would save £3m per year in unpaid fines.

Basically, Thaler got a Nobel Prize for teaching people how to do the right thing.

This information is vital for any government, organisation, or leader of teams looking to improve performance or individual-level decision-making. 

If you are a law firm manager, can you help your employees make better decisions? According to now Nobel prize winner Thaler, yes, you can.

First, consider a firm-wide reading list:

  • Nudge is not Thaler’s only book that can help reduce cognitive biases. Thaler also wrote Misbehaving: The Making of Behavioral Economics
  • Dan Ariely has an interesting book titled Predictably Irrational: The Hidden Forces that Shape Our Decisions
  • Kahneman’s work Thinking, Fast and Slow provides an accessible overview of the two systems of thinking
  • Halpern discusses Thaler’s influence on policy in Inside the Nudge Unit: How small changes can make a big difference

Second, encourage two types of thinking, but make these types of thinking setting-specific. For example, the Automatic System or a person’s “gut reaction,” is ideal for situations of safety, human interaction, or creativity.

Encourage employees to blurt out ideas during a brainstorming session. Encourage employees to trust instinct when dealing with new clients or service providers. Definitely encourage gut reactions when it comes to safety at the office (does a package or person look suspicious? Don’t overly process your environment, just report it).

However, encourage the Reflective System in other situations where controlled effort, deductive reasoning, or rule-following is necessary. After a brain storming session, spend time mulling over the pros and cons of each idea. Encourage employees to spend 24 hours thinking about their response to an uncomfortable e-mail or situation before acting. 

Finally, adopt the “nudge technique” at the office, which means indirect encouragement, as opposed to strict enforcement. Here’s how it works.

Enforcement: You want employees to attend a weekly meeting on Monday morning. You send out a memo calling the meeting “mandatory” and take roll.
Nudge: You want employees to attend a weekly meeting on Monday morning. You provide coffee and breakfast.

Enforcement: You want employees to live a healthier lifestyle. You buy gym memberships for everyone.
Nudge: You want employees to live healthier lifestyles. You take the lead by taking the stairs.

Enforcement: You want employees to attend a series of training seminars. You assign a date and time for each person.
Nudge: You want employees to attend a series of training seminars. You make the training seminars a game, where people compete to win by attending or earn points or prizes that go toward extra work leave.

Enforcement does not provide a choice. Nudging employees allow people to choose and provides incentives for better choices.

Small encouragement can make a large impact in creating a positive and productive workplace.

-WB

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How To Deal With The Unexpected At Work

German Chancellor Angela Merkel got more than she bargained for this re-election. She only won roughly 32% of the seats—far fewer than expected—and more worrisome still was the far-right political party, Alternative for Germany’s (AfD), gained a seat at the decision-making table for the first time since 1961 (The Guardian).

With the unexpected division of conservative and more liberal beliefs in the Bundestag—German Parliament—Chancellor Merkel must build a coalition government, where multiple political parties align to outvote the others.

Many believe that the AfD election was a result of backlash by voters to Chancellor Merkel’s decision to allow more than a million refugees into Germany during a time when Europe was undergoing a migrant crisis (CNN).

Meanwhile, Merkel is not the only leader to be caught off guard. AfD has garnered much attention not only for its historic placement in the Bundestag, but also for its internal strife. Today, AfD Chairwoman Frauke Petry walked out of a press conference that aimed to celebrate the success of her party.

Instead, she insisted that the AfD party was at odds.

“Today we must be open that there is internal dissent within the AfD,” said Chairwoman Petry at the press conference.

“We must not be silent about this. The community needs to know that we have controversial debates.”

After this statement, she also told reporters at CNN that she would participate in the Bundestag as an independent.

Political parties and government are no the only organizations that can be caught be surprise, either from interpersonal conflict or project-based disagreement. Firms face this issue everyday, from technological disruption to disruptions in corporate culture.

So how do you deal with the unexpected at work?

Reflect… productively. 

Amid great strife there is a need to reflect productively. When you receive an uncomfortable e-mail, you are often counseled to wait 24 hours before you respond. In that way, you are able to reflect, respond more rationally, and rid yourself of any emotion.

In the same way, when an event occurs that disrupts your work life, it is best to reflect. However, reflection does not mean idle time. Reflect, productivel. That is to say, reflect on your own reaction—why do you feel this way? Write down the answer. Circle the words that represent emotions and cross them out. Then, look at what words are left. Are these valid reasons to be upset?

Next, reflect on what data is available. For Chancellor Merkel, it is clear her coalition government will not include the far-right AfD party. However, what parties can she align with? Are there areas in which she can compromise in order to obtain a majority vote? It is expected that three parties—the Green Party and FDP, along with Merkel’s CDU Party—will join to form the “Jamaica” coalition. Although Chancellor Merkel is wisely staying silent—reflective—at the moment about this possibility. 

Make a plan.

Once you’ve reflected and perhaps gathered data, make a plan. This can be as simple as writing down a couple of scenarios. Think about possible outcomes—both positive and negative—and rank them in order of preference. Be prepared for the worst possible outcomes for your plans and decide whether or not you can live with it.

Ask around.

One of your plans may be to ask around for more detail. Maybe this event is affecting your colleagues similarly. What are they doing about it? Consult trusted colleagues and, above all, don’t confuse gathering information, a productive task, with gossip, an unproductive one. 

Don’t act. 

Finally, not every major event must be followed by an action or reaction. It could be that you do nothing at all in response to disruption in the workplace. Perhaps you prefer to see the circumstance play itself out.

In fact, that’s exactly how Chancellor Merkel is choosing to lead. When Martin Schultz for the political party SPD complained about the rise of the far-right AfD and proposed the AfD should be thrown out of parliament, Merkel simply offered to rethink the future and “talk about this again tomorrow.”

Always leave the option for a conversation to stay open.

-WB

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Beware Of The E-mail Hydra: How To Increase Productivity By Decreasing Responsiveness

Some people know how to ruin a good thing.

It was the first person to use a cell phone in the movie theatre or get too drunk at a work function. Now we have to watch advertisements about how “silence is golden” and drink from cash bars at office parties.

Not to mention, America used to be entertained by Donald Trump’s tweets; now the novelty is over and opening Twitter feels more and more like opening Pandora’s Box.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently,” Warren Buffett once said. In business, one failure, one event, or one person is all it takes to ruin a good thing.

Unfortunately, the same applies to the Internet (and politics—but we won’t go there today).

Once considered the best thing to happen to business, the World Wide Web is opening a world wide can of worms. From Facebook browsing during office hours to computer viruses, the Internet has put workplace efficiency in jeopardy.

With marketers trolling for bits, cookies, and IP addresses, say goodbye to your privacy. With sites like Wikipedia, forget finding reliable information online. With the immediacy of email, proper etiquette has been replaced by emoticons.

“As our inboxes have become more demanding, we have all become less responsive — because we get so many messages it’s hard to keep up. But the harder it is to keep up, the more messages (‘I just thought I’d send another email asking if you got my first two emails’) we send,” writes Sarah Green for the Harvard business Review Blog.

“The problem with ‘responsiveness’ is that email then becomes like a hydra—cut off one head (answer one email) and you spawn nine more,” continues Ms. Green. “The more responsive you are, the more email you receive, and the more responsive you need to be.”

Sometimes, increasing your productivity means being less responsive to e-mail. Put an end this inefficient desire to be “responsive” by following some simple steps here.

Or, you can tap into new technology. Take, for example, Yesware.

Yesware is an oldie but goodie ad-on to Google Mail that transforms what many have ruined in electronic communication—informal or inappropriate greetings, responsiveness, and excessive urgency—into a good thing once again.

Geared toward salesmen, Yesware is an ideal email productivity app for lawyers. With Yesware, law firm professionals can:

  • Get alerts each time someone opens an email or clicks on a link
  • Know exactly when to follow up with your clients and prospects
  • Know where in the world your message is being viewed
  • View the device that prospects are using to open your email

In addition, the Yesware app is customizable. Restore formal language in business communication with Yesware’s email templates:

  • Choose your best templates by seeing which ones your customers reply to most
  • Incorporate links and rich text to send great looking messages at the click of a button—every time
  • Use [brackets] to indicate custom fields to make your templates even faster and easier to use

Finally, seize business opportunities with Yesware’s analytics functions:

  • Know exactly who is best to follow up with by using our personal tracking reports and gauge your email opens for the last 30 days
  • See where in the world people open your emails from inside your inbox
  • Find out if your message is reaching top decision makers
  • Prioritize your email prospecting with subject filters and email activity sorting

Forbes says about the app, “If You Want To Be Awesome At Emails, Add Yesware To Your Gmail Today.”

But, whether it’s yesware or other productivity solutions, be carefuly what you say. And, more importantly, how fast you say it.

Taking more time to write messages (or tweets) may save your productivity and, in the end, your credibility.

-WB

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