Tag Archive: Personal Thoughts

Value of Human Assets vs. Value of Capital Assets

John Claassen, in a “guest column” in the February 4, 2015 edition of the Los Angeles Daily Journal entitled “PROTECT THE VALUE OF HUMAN ASSETS,” quoted Bill Gates’ opposition to increasing the federal minimum wage as follows: “If you raise the minimum wage, you are encouraging labor substitution, and you’re going to go buy machinery and automate things.”

The tension between machinery and labor is an age old issue. This precedes the development of the cotton gin and other industrial revolution equipment. In a 1983 trip to China, I observed hundreds of laborers sweeping the streets with bamboo brooms; in my community, this work was then being done by street cleaners driving trucks. More territory could be covered, with greater effectiveness and less labor. China understood that, in 1983, if they automated this task, they would have an even higher unemployment rate, risking such dissatisfaction which might cause an overthrow of the then current government.

Owners and employers in a private enterprise economy are always seeking greater efficiency and profits. They make the choice between labor and technology based on many factors, only one of which is return on investment. To say that increased mandated compensation such as a minimum wage would promote automation is no doubt true; however,  it was also true in the 1930s, the 1800s, the 1700s and likely will be true in the future. It is true in every industry and profession.

Society in the past has focused on the well-being of its populace, not just the numbers. This includes healthcare, minimum wages, regulations of civility toward one another and other aspects of human endeavor. We value human assets. We value new technology and research and development. New technology and increased efficiency improves our life and increases the well-being of all our citizens. We encourage the growth in each area of endeavor by tax policies and other approaches. If I read Mr. Claassen correctly, he suggests there is a tension between the two, and policymakers should not ignore nor discount the value of “lower wage workers.”

The legal profession understands this process. Thousands of lawyers have been laid off, fired or encouraged to retire since the Great Recession. Many of them were document review lawyers or lawyers with little or no marketing skills. In Mr. Claassen’s terminology, these were the “lower or middle income” lawyers of the profession. Such economic disruption never happened in the profession before. Despite the economic improvement of our economy, and law firm profitability, most of those jobs will not return. Why? Because technological improvements have made many obsolete or more expensive than clients want to pay. Discovery search technology is far more efficient and accurate than hundreds of document review lawyers. These jobs will not return. This is progress. Does it come with some pain to individuals? Yes. Should there be an economic soft landing for those affected? Perhaps. That is a matter for society to determine, but it is not reason to limit wage increases or disfavor research and development.


View page

Change of Plea Out the Window!

Most prosecutors will negotiate with accused offenders. Obviously, this is done to move the trial court calendar along, eliminate the need to tie up resources that could be used elsewhere, truly not needed when the defendant is willing to change a plea. Even in civil matters, parties negotiate settlements in order to achieve reasonable business outcomes and reduce the cost of litigation.

In at least one civil instance, an insurance company said they will not settle any case, large or small, that everything had to go to trial. This clearly delays the outcomes … and enables the insurance carrier to withhold payment for some time. I’ve not seen any studies about the merits of such activities from the carrier’s perspective. It does, however, frustrate plaintiffs. Frustration without economic benefit is hardly a good business outcome. And the carrier has since reversed this policy.

Now, we have a new version. The State Bar of California has announced that it will refuse to accept “no contest” pleas from lawyers accused of ethics violations. The issue here is not one of criminal liability, but rather of retaining one’s license to practice law. One has to ask what more can be given to the Bar once the lawyer-accused has agreed to take his/her punishment?

The Office of Trial Counsel maintains that accused lawyers are not accepting responsibility for their actions unless they are tried and convicted or accept a guilty plea. That is why they will not accept a nolo contendere plea. Other than civil damages, the effect of a nolo plea is the same … and punishment is no less. Criminal prosecutors understand this. But, the Bar wants its “pound of flesh.” It is questionable whether this is a question of morality.
This is just one more example of the California State Bar’s new adversarial attitude toward its members … Although the legislative directive to the State Bar is that its primary, if not sole, function is to protect the public (not help its members who pay all the expenses of the Bar), one has to wonder how the public is being better helped by this new approach.

View page

Defense counsel protest Congressional cut in funds

Can you imagine criminal defense lawyers going on strike because Congress decreased the money available for Legal Aid? Justice delayed is justice denied! 

Our brethren in England have done just that! And just before the 800th anniversary of the signing of the Magna Carta, the basis of our entire legal system!

England leads the way once again.

View page

Safety first

I’m pleased to note that California’s AB 1371, known as the Three Feet for Safety Act, becomes law in 2014. California is the 23rd state to establish a minimum buffer zone around bicycles that ride on public roads. It’s about time! Motorists passing a bike must allow at least three feet of space between the car and the bike, or slow to a safe and reasonable speed. As a cyclist myself,

I know how dangerous the roads can be; in 2011, I was hit by a car making a left turn, failing to yield the right of way to me. The driver just didn’t “see” me.  This literally changed my life and I still feel the impact of that accident. Drivers passing too close is one more problem behavior on the roads, especially with new hybrids that make little or no sound of warning as they approach.

Be careful out there on the roads this holiday season, and always. Selfishly, I want you back as a reader and commentator.  Happy holiday.

View page

Ageism on the rise

With the Baby Boomers advancing to the ranks of retirees, those who don’t want to retire are striking back in larger numbers. Rutgers, the largest public university in New Jersey, was sued for age discrimination early in 2012. The suit was joined by 3 others who were fired. Such claims are on the rise. In 2012, 22,857 such claims were filed with the EEOC, Equal Employment Opportunity Commission, compared with 16,548 in 2006.

Lest you think the legal community is exempt from such claims, look back at the Sidley Austin settlement of $27 million not all that long ago. A number of “partners” were terminated by the firm, claiming they were partners.  The EEOC claimed they were employees, irrespective of the title the firm gave them. If you look like a duck and act like a duck, you must be a duck, according to the EEOC. In the terms of the Internal Revenue Service, if the substance of the transaction is taxable, its form is irrelevant. The legal profession, and others, feared that Sidley would fight this in court, lose and thereby set precedent. Since they settled, no such precedent has been set. But, the bell has rung; the legal profession is being watched by the EEOC as are others.

View page

Lincoln’s religion

Abraham Lincoln, born in February, said:  "When I do good, I feel good; when I do bad, I feel bad. And that is my religion."  How simple and eloquent.

View page

Can an illegal alien legally practice law?

The California Supreme Court heard arguments this week in the matter of Mr. Garcia, an illegal alien, though with proper credentials, not to be deported. His request: Grant him a license to practice law now that he has passed the bar.

Like a model prisoner, he has been a model citizen.  But, does a model prisoner walk out of prison early?  On occasion, yes.  Can a model citizen attain a professional license?  Though Mr. Garcia can stay in the U.S., can he be licensed where it’s required to uphold all the laws of the country, including immigration laws of which he is clearly in violation?   While, he had no say in coming to the country (only his parents did) and while he knows only the U.S. way of life, the answer to the question is not so clear.

In part, this issue is not about Mr. Garcia, but about states’ rights.  What is your opinion?  Should an immigrant, staying here legally but not yet a citizen, be allowed to represent others as a lawyer?

View page

Building a bike, made in America‏

"Made in America," a new slogan started by ABC television some time ago is represented by Bike Friday. They are one of the few bike manufacturers left in this country, having been started more than 20 years ago.  Not only do they have a unique product, they also have a unique service creed. See the accompanying photos we took of their operation.
Of course, one cannot photograph service; it’s an intangible. But, it’s the service that creates the goodwill for an organization, it’s the service that builds loyalty, and it’s the service that creates advocates for what you’re selling.  Law practice is no different. I’ve seen "poor" lawyers get return business because their service exceeded expectations; I’ve seen great lawyers lose business because they failed to understand their clients’ wants and failed to provide outstanding (let alone just good) service.  Interestingly enough, clients cannot differentiate among the quality levels of legal capability; but they instantly can recognize levels of service provided.
What are you doing? Share with us what you do with and for your clients to provide outstanding service to them.

View page

State Bar: Friend or Foe?

Jim Heiting, former president of the State Bar of California, commented on my article in LawBiz® Tips last week. He said, "I fully agree with your article about bar associations … and the new push to create more unemployment and less opportunity for the solo and small practitioner. Why not develop a [Bar] program that assists solos and small practitioners to represent people for reduced fees to get experience, make money, provide services otherwise unavailable at that rate, etc. We have many, many who would like to make a modest living but can’t/don’t seem to do it. This would assist the needy in both arenas: client and attorney."

For my money, Jim Heiting has been the only California Bar leader who truly had members’ (lawyers) AND the public’s interests in mind. Others before and since Jim have seen the Bar as a regulatory agency for the public with little or no concern for members. Unfortunately, this is likewise the case across the country.

There are way too few leaders in the legal community, whether in the Bar or the law school, who understand The Business of Law® and are willing to focus on members’ (lawyers) needs. Instead, they focus on creating new licensure opportunities that will not truly help the intended market and will both weaken the value of the law degree and the economic well-being of members.

View page