After my last post about customer service, Orbea, the manufacturer of the bike frame I was riding when I was involved in an accident, a company representative contacted me. His explanation for the less than appropriate company response was that it was sent from Spain, the company headquarters, and the sender had challenges with the English language.
Whether this is true, I cannot say. But, Mr. Paul Alexander of the U.S. Orbea arm said that I should visit a local Orbea retailer and I would receive a 15% – 20% discount on a new bike. He said, "I look forward to getting you back on your bike and leave you a satisfied Orbea cyclist."
Thank you, Mr. Alexander. That should have been the first response from Orbea. My wife asked for information about the company’s "crash program." Even an expression of sympathy/concern and a statement that the company doesn’t have a crash program would have sufficed … and saved unfavorable ink in this blog. Commenting on Orbea’s warranty program was not the subject of my wife’s inquiry.
I’m glad to see that the company has recouped so gracefully. Some companies don’t do even that. Some time ago, you may remember that United Airlines committed a major gaff. By not treating their customers with due respect, a song was written about the company and it appeared in the social media. The company stock dropped 10% as a result! That is still the subject of some discussion.
I’m glad that Orbea represented the cycling industry more professionally and with greater sensitivity on the rebound.
Last week, I had an accident. A preoccupied driver who admitted she didn’t see me failed to yield the right of way and turned left before I could see her. My bicycle hit her right front fender. You can see a picture of the damage to the car. Sometimes, it’s better to hit than be hit. Because I hit her car, rather than she hitting me, I am alive and still walking, albeit with some difficulty. The fireman and paramedics said they’d never seen such damage to a car from a bike. “… Either the car was made of plastic or you are a man of steel!…”
If I were made of steel, I would not be so sore and bruised as I am still today. My thighs and quads have turned colors I never knew existed; like burnt toast. The bike down tube is cracked and very good, beautiful and cherished Orbea Orca carbon fiber bike is history. I’m lucky, frankly, to be alive … The alternative is not appealing.
Once things settled down, several days later, and a mechanic suggested that some manufacturers offer deep discounts for bike frame replacements needed because of a crash, my wife found the e-mail address for Orbea and sent them this note: “…My husband was involved in a traffic accident with his 2008 Orbea-Orca …. He is apparently okay with major bruising but his beloved Orbea has a damaged frame on the post between the seat and the pedals. Is there an incentive Orbea offers to encourage customers to replace a damaged bike with Orbea? … Thank you.
CANNOT MAKE THIS UP
The company response follows: “Good morning, Thank you for contacting with Orbea! In case of accident, Orbea’s Warranty is null and void. Sincerely, …”
We never entered a warranty claim; that was never in my mind. My wife was merely checking out the status of their crash program. Some companies retain the loyalty of their customers by allowing them deep discounts to replace a damaged bike (product) and then studying the returned item for future research and improved manufacturing processes. My wife’s response was classic understatement: “We were not expecting to file a Warranty claim. We understand that some bike manufacturers give a discount on purchasing a new bike when a bike has been in an accident. You might consider doing the same. We are in the market now for a new bike. Thank you for your concern.”
Lessons here are legion.
First, listen to your customer’s comments and requests. This reminds me of the classic instruction from a lawyer to his client: Listen to the question. Answer only the question. Then shut up! Wait for the next question. Don’t answer what you think should have been the question.
Second lesson: Everyone in your firm represents the organization. If a receptionist is rude, if a secretary fails to give you a message; if an associate is ill-prepared for a conference or court appearance, this reflects poorly on you as the senior lawyer and the firm as a whole. Education and training is not limited to the lawyers in the firm. Everyone needs to take continuing education programs to maintain and elevate skills and service levels.
Third lesson, don’t “piss off” the economic buyer (in this case, my wife) in your organization or you will never retain the business, and accompanying revenue.
Fourth lesson, live your life for now. There may not be a tomorrow. Yes, we have to keep an eye on the future, saving, planning and preparing. But, don’t do so without having some joy and value (your subjective opinion here) each day that passes. For me, the pleasure and reward is a vigorous bike ride, especially as a reward for something I did during that day. Whatever it is for you, “just do it.”
I’m sure you can provide other valuable lessons from this experience. Contact me or write your comment below. Let’s see how many lessons we can create from this one true-life experience.
Effective March 15, the Howrey law firm, which once employed as many as 750 lawyers, dissolved. As in past megafirm failures … Brobeck, Altheimer, Thelen, the list goes on … there never is just one, but a variety of root causes that feed the primary death blow, an exodus of lawyers.
In Howrey’s case as a litigation-focused firm, according to the firm’s CEO (quoted in the ABA Journal), up to 11% of the firm’s billable hours were devoted to contingency matters. “Some people, including some fairly high-level people, sort of bailed on us when they didn’t get exactly what they wanted,” the CEO said. “You have to ask your partners to be patient until it [contingency billing] pays off, and not everyone is patient enough.”
In pure contingency law firms, that’s exactly what every equity lawyer does, wait. Wait until the judgment or settlement is paid. Why should that be different with the Howrey firm? Lawyers working on contingency matters bring no money into the firm, yet are responsible for many dollars flowing out … in the form of lawyer and staff compensation and expenses advanced to sustain the lawsuit. And if the result of the case doesn’t benefit the firm, the loss can be substantial.
But, the lawyers of the firm knew that. Thus, the question, why is it now that there is objection? Though conjecture, apparently, Howrey partners wanted pure hourly billing, less contingency work … and were uncomfortable with advancing costs for matters in which they were at risk. They seemingly could not determine, to the satisfaction of enough, how to divide the compensation pool when revenues arrived out of sequence to the work performed connected with those revenues.
If fees to the firm based on contingency reached 11%, it’s almost like having one client exceed the 10% threshold, a level that I’ve said before is dangerous. Control of this much money was essentially out of the partners’ hands, unless the firm only took on matters that were virtually sure things … which conversely would lessen the likelihood of a big contingency payout.
Other factors to consider that would lessen the threat to my 10% rule is that it’s unlikely that any one matter reached 10%; if the intake decisions were wise, the firm benefited more than it suffered from periodic big revenue bumps; in today’s world of "value billing," the firm would be at the forefront of aligning its interests with those of its clients. The firm should have been able, with good cash flow management and a committed group of partners to the team concept, to marry both worlds of contingency and hourly billings.
The ultimate lesson in this dissolution seems to be that Howrey fostered an environment of solo silos (with some lawyers piling up cost but poised to earn a great deal of money if "their" ship came in), not an environment where everyone was pulling for the whole (irrespective of how they brought in the revenue.
Any firm that encourages lawyers to maximize their individual compensation may have fast near-term growth. But approaching compensation as an institution makes for greater firm harmony and longevity of the firm as an institution … and, in my opinion, greater long-term value for all.
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There is a song that suggests that "all things have a season …" And perhaps the time has come for the dismemberment of the mandatory bar, especially in California. My last post on the subject suggested that the current president of the Bar is doing a disservice to its members by complying with the implicit demand of the Legislature to eliminate lawyers from participating in the Board of Governors; lawyers should not elect its own governing body.
And, if you believe that the Bar has no business in addressing the needs of its members, then Mr. Hebert is right; the Legislature is right; let’s create a licensing agency and do away with the Bar as we know it. Let’s call it what it is, a tax, a fee for the privilege to practice law. A fee for the privilege to help people address their legal needs. After all, we "tax" plumbers, accountants and others for their privilege of earning a living as they do and helping their constituencies. Why should lawyers be different? Assess the fee for licensing and keeping lawyers on the path (the disciplinary process). And let lawyers form a voluntary association to provide economic advice and continuing education and lobbying efforts.
Seems simple. But, the current discussions are off onto a different path. President Hebert says that the only goal of the Bar should be to protect the public; that any benefit to or for lawyers is incidental and of little consequence.
Yet, if he (the president and other members of the Board and Legislature) truly believed in protecting the public, the first step would be to understand what the public concerns are. And that would require looking at the state Bar’s disciplinary report. If you did, you’s find that more than 50% of the complaints there against lawyers relate to issues of managing a law practice.
The number one complaint is still the failure to respond timely to clients. To address this and other such time and practice management issues, one need only to provide appropriate education programs. Help lawyers be more effective with their clients and more efficient in the delivery of their services. And, again, but only if you want to protect the public, require malpractice insurance at affordable prices. With its enormous buying power, California ought to be able to craft an affordable insurance program. The cynic in me says this won’t happen no matter how the Bar is re-configured.
Oh, the mandatory part might show up … but not the affordable part … Why, because neither President Hebert nor the Legislature cares much about the average practitioner who helps the average citizen. That may be a harsh criticism, but it is apparent from observable behavior to date of both.
Lawyers have a right to have spokesperson; lawyers have a right to have someone promote their interests in Sacramento. And lawyers have a right to organize for their own economic well-being. It’s clear the State Bar of California is not doing any of this!
On February 10, 2010, the California Supreme Court handed down its decision in Pineda v. Williams-Sonoma Stores, Inc., — Cal. Rptr. 3d —, 2011 WL 446921 (Cal. Feb. 10, 2011). This decision should be studied by everyone who accepts credit cards in payment for goods and services. Yes, this applies to gas station pumps that ask for your zip code as well as to attorneys and others.
The Pineda decision held that merchants who request a consumer’s zip code to complete a retail credit card transaction have violated California’s Song-Beverly Credit Card Act (“SBCCA”). The SBCCA contains a provision that prohibits merchants from requesting and recording “personal identification information” about the cardholder. Penalties for violating the SBCCA range from a maximum of $250 for the first violation to $1,000 for each subsequent violation. Needless to say, the potential damages for a retailer who routinely processes hundreds or thousands of credit card transactions per day could be astronomical.
What’s the big deal? Well, the zip code, plus the name of the person, can be reverse "mined" in order to get the address of the person along with other important personal information, the precise thing the law was designed to prevent.
Of course, if you have this information as part of your file, I would guess the law doesn’t apply because you’re not asking for the zip code specifically in relation to accepting the credit card for payment. But, be careful.
