Life

Sex Sells

Economics, Life
Sex Sells

Before they left the Garden of Eden, Adam and Eve were told to “be fruitful and multiply.” That is probably the oldest euphemism for sex still in use today.

Sex is a natural act. If no one ever did it, no one would be here. Even your mother had sex.

Wars have been fought over sex going back at least as far as the Trojan War. Paris did not carry Helen from Sparta to Troy because she was a good cook.

Long before European monarchs sent their off-spring to marry the off-spring of other monarchs to cement peace treaties and trade agreements that practice was well known in other older cultures. The participants often had not met until shortly before the wedding and certainly did not love each other in any real sense of the word. The arrangement might best be called “diplomatic sex”.     

I used to intersperse discussions of sex and sexual situations into my lectures to my freshman Economics students. The first thing I learned about teaching Economics was that I needed to find a way to keep the students awake. Discussions about sex always kept their attention.

I used the model of a displaced persons camp in Thailand as an example of how currency is developed and how wealth is accumulated. I had a friend who escaped Saigon in1975 and who spent 14 months in such a camp until he was allow to immigrate to the US. From him, I got a pretty good idea of what went on in the camp.

I asked my students to hypothesize a camp with 100 men and 100 women. One half of the population was married and the other half single. Each received the same rations every day; a bowl of rice, some small amount of protein and some vegetables. Women with small children were given a small container of milk. Every other day everyone got a pack of cigarettes. The cigarettes quickly became the camp currency.

Some women would get together and combine their ingredients into a soup. Combined with water, the ingredients were more filling. Some of the women would drink their milk and nurse their children seeking to benefit both bodies from the same amount.

I asked the students who, at the end of every month had the most cigarettes. Who did the best at monetizing their horrific existence? 

Answer: The women who were willing to sell their sexual favors had the most cigarettes. They traded those cigarettes and their sexual favors with the guards for extra rations. There are always willing customers for sex. Some of those men would take cigarettes from their wives to pay for it. There is a reason they call prostitution the world’s oldest profession.

In upper level courses I would often assign Richard Posner’s Sex and Reason for extra credit. Posner, an economist and Federal Judge, became interested in the subject when he realized that he was being asked to judge cases involving sex and sexual situations and motives when all he really knew about sex was from his own experience.

The economist in Posner suggested that the highest value that society places on sex comes with marriage. Given the overall cost, both financial and emotional, that comes with a marriage I think he was probably correct. When a couple splits up because of financial problems I suspect their sex life wasn’t so good at the same time. 

Following the economic logic of Posner’s thinking I would ask students how they would analyze this problem.  Assume a consumer in search of a particular sex act was in Honolulu. To acquire the service he sought legally, he might fly to Las Vegas where the sex act costs $500 or to Thailand where it might cost $10. Assuming the travel and ancillary costs where identical would the consumer fly east or west from Honolulu?     

Everything about classical economics suggests that the consumer would seek out the bargain price.  Theory clearly indicates that he would fly to Thailand where he would get more bang for his buck. (I truly apologize, but that pun wrote itself.)

But the rational, logical answer might not be the correct answer. Nothing about sex is rational and that is the point.

When he coined the phrase the “medium is the message” in 1964, Marshall McLuhan was talking about the medium of television which was still quite new.  At that time the content of everything on TV was very restricted and censored.  I can’t discuss the sexual content on TV at that time because there wasn’t any.

Lucille Ball was not allowed to share a bed with her TV husband even though she was married to him in real life. The censors would not let her tell him that she was pregnant on TV. The censors were concerned about offending the advertisers. If anyone in the audience had met Lucy in real life they would probably have said “congratulations.”

As time went on there was an ever evolving boundary between good taste and titillation. David Hasselhoff was, at one time, the most popular actor in the world. People did not watch BayWatch for its thought provoking scripts. They watched because all of the actors, male and female, looked good in their bathing suits. 

The marketplace evolved from sexual innuendo to explicit sex. Early on, cable TV was often expensive. Cable TV subscriptions exploded after HBO started airing uncut versions of R rated films after midnight.

Advertising has always exploited women. At the auto show in NY the new models of cars were displayed next to attractive female models.  Models in advertisements were described as “pretty” or “attractive” people.  Models in ads were always encouraged to “show a little skin” to help sell the product.  

I help companies raise capital. I use my blog articles and Linkedin posts to offer my services to a competitive marketplace. I focus on my years of experience and pragmatic advice. You will never, ever see me in a post or article wearing a Speed-O. Maybe I am behind the times.

Economics teaches that people will allocate their resources first to the things that they need most, food, shelter, clothing and transportation. What is left they will allocate to medical expenses, entertainment and so on. In many ways our consumer driven economy relies upon how much consumers will spend with their disposable income on things they really don’t need.

Sex and the City portrayed intelligent, successful women who enjoyed sex and who sought it out. It also featured a lot of high-end fashion. Advertisers paid top dollar to reach its audience. People who buy these products spend a lot of their disposable income.

Our economy supports multi-billion dollar fashion and cosmetics industries. I would ask my students if anyone thought it was necessary for a woman to spend $300 for bottle of perfume to get a man into bed. Enough bottles of expensive perfume are sold each year that a lot of women seem to think so. That is the power of advertising. 

What message would Marshall McLuhan see in the current medium of the internet?  What scholarly thoughts would he have confronted by the data that shows that day after day, year after year, one the most visited sites in the world is PornHub?

PornHub is banned from several of their potentially largest markets. If available everywhere PornHub would give Amazon a run for its money for the number one site visited every day. Think about that.

The Kardashian empire owes its origin to an explicit sex tape. Streaming services have brought explicit sex to our cell phones. Why watch a film with casual nudity that hints at sex when on another channel you can watch people actually “doing it”?

Is nothing too “dirty” in the media today for an advertiser to be reluctant to hand over their money? Apparently not.

How long will it be until sex permeates the world of finance? Investors have traditionally been motivated by fear and greed. How much longer will it take until they are motivated by lingerie and lace?

Will Goldman Sachs invest in a chain of gentlemen’s clubs to entertain clients? Will it issue a research report suggesting that an investment in Hooters will be more profitable than an investment in McDonald’s because the hamburgers are better?  

I wish I was still teaching today, because boy, would the lectures be fun.

Perhaps Woody Allen understood it best when he said: Sex is only dirty if you are doing it right. 

If you’d like to discuss this article or anything related, then please contact me directly HERE

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What the Women’s Movement can learn from Cesar Chavez

Capital Markets, Life ,
What the Women’s Movement can learn from Cesar Chavez

I got into an interesting discussion with a businesswoman who had posted on LinkedIn about the difficulties that women have in the workplace. Among other things, she commented that women are significantly under-represented in the executive suites and on the boards of directors of most large companies. I certainly agree.

Any intelligent person in the workforce today can see that women have more difficulty getting hired and promoted, are penalized for resume gaps when they take time off to have children, and overall, still get less pay for doing the same jobs as men. Women are too often exposed to toxic work environments, off-color jokes, inappropriate comments, and sexual overtures. That women face this type of discrimination in the workplace is a fact.

Some people approach the treatment of women in the workplace from the standpoint that this is a “gender’ issue. They assert that this conduct by men is our problem. Male business owners already know better than to discriminate against women. The simple truth is that men pay women less because they can get away with it.

I see this gender pay disparity as a labor issue. It is past the time for women to flex their economic muscles and actively purge this type of discrimination from large companies. If women were properly represented on the boards of directors of more companies, they would be in a far better position to rectify the actual problems of unequal pay and toxic work conditions at each company.

When I started law school my first-year class had 120 students including 12 women, exactly 10% based upon a pre-determined quota. Each of the women had been interviewed at the school before acceptance. None of the men had been required to sit for an interview. From the beginning, it was obvious to me that this small group of women was a little sharper than many of the men. That should have been expected as each of the women faced stiffer competition for each seat in the class.

Last week I saw the picture of a young woman wearing a tee-shirt that said: “I became the lawyer that my mother wanted me to marry.” To me, that one sentence encapsulates a generation of progress for women in the legal profession.

When I was in school it was commonly thought that women could only be trained to become nurses or teachers. Untrained, women might become waitresses, secretaries, or flight attendants. The uniforms of flight attendants were tailored to accentuate their figures and they were often fired as they got older and deemed to no longer be attractive to male passengers.

There is no question that women have broken through the glass ceilings put in their way in a great many industries. Women now work in construction and other traditionally male blue-collar jobs that would have been unthinkable not that long ago. Teachers, nurses, and flight attendants are now covered by union contracts that have raised their pay, improved their working conditions, and provided benefits and job security.

Women manage large numbers of employees within big corporations across all industries. As managers, they make decisions that define the company’s operations and impact its bottom line. Still, it is rare to find a woman as the CEO at a Fortune 500 company and virtually impossible to find a Board of Directors where women make up the majority of the directors.

Women represent one-half of the US population. The impact of women as consumers cannot be overstated. Even companies operating in niche industries deal with vendors, customers, and employees who operate in the much broader markets.

Shouldn’t seats on boards of directors be handed out equally to men and women so that the boards represent not just the perspective of the management, but the broader market that the companies serve and in which they operate?

Greater representation on corporate boards would seem to be an effective way for women to deal with issues regarding equal pay and toxic working conditions. Taking more control at the very top of the corporate governance pyramid would help women to rewrite the workplace rules at all levels.

Labor unions exist specifically to deal with issues like wages and working conditions. Unions representing workers with far worse conditions and far less power have been able to get what they want using a variety of tactics and strategies.

The last great strike, by the United Farm Workers (UFW), took place against the lettuce growers while I was in college and law school. The tactics employed by the union were quite different from those other unions had used in the past. The lettuce strike offers lessons that might help women successfully break into and take over corporate boardrooms.

Farm labor may be the world’s second-oldest profession. Growers have always had all the power and used that power to accumulate more power. Farm laborers had been excluded from the Fair Labor Standards Act and Social Security in the 1930s. Any attempt to organize farm workers was always met with a stacked deck.

In 1970, when the lettuce strike began, the working and living conditions of the lettuce workers were still medieval. Their pay was inadequate and provided only the barest necessities. The farm workers occupied the lowest rung on the ladder of American workers.

The lettuce strike organized by Cesar Chavez and the UFW was truly a David v. Goliath battle. Throughout, the growers used their considerable influence and deep pockets to thwart the workers.

Chavez succeeded because he did more than just throw up a picket line and negotiate as steel and automotive workers had done in the past. He used very different tactics to leverage support from larger groups to provide financial and logistical support.

Most importantly, the UFW successfully enlisted the lettuce consumers to alter their diets to support the strikers. The union effectively delivered a message that said 1) our working conditions are horrific and 2) don’t buy lettuce.

Traditionally unions and management negotiate contracts focused only on the numbers. Each side calculates how much each incremental boost in wages will cost the company. The union calculates the effect of lost wages on its members if there is a strike. Management calculates the effect of a strike on its bottom line.

By addressing lettuce consumers directly Chavez added the impact to the company’s reputation and customer base to the equation. The cost of winning back consumers after these boycotts would now need to be considered.

Chavez had tested out his new tactics during a 4-year strike against the grape growers. In that campaign Chavez, vowing to be non-violent, had tried out tactics adopted from the civil rights movement including long marches, prayer vigils, and a hunger strike. Local rallies in support of the union were scheduled. Media coverage of these events and the sometimes-violent protests by people opposed to the UFW kept the strikers in the public’s eye.

Chavez used the grape strike to garner support from church groups and other decent people who were horrified when exposed to the working conditions in the fields on television. By the time the strike against the lettuce growers began, Chavez already had all these tools in place. People who mattered, especially the media, had already been educated about the critical issues.

Opposition to the lettuce strike came primarily from the Teamsters Union which had negotiated sweet-heart contracts with some of the lettuce growers   The UFW strikers were physically attacked, and rallies and the union offices were firebombed. Chavez, the “pacifist” of the grape strike was much more aggressive. As the tempo and temperature of the strike increased Chavez was arrested for the first time.

Within a few days Ethel Kennedy, widow of Sen. Robert F. Kennedy visited Chavez in jail. As she was leaving a small riot broke out and Mrs. Kennedy needed to be rescued by the local police. It made for great television. Mrs. Kennedy’s appearance at the courthouse had been intended to be a carefully choreographed stop on the campaign trail. The violence ensured that every television station reported on it.

At this time, I was living in Brooklyn which was about as far from the California lettuce fields as one might get. After a while, it seemed that every telephone pole had a simple sign that said “BOYCOTT LETTUCE” stapled to it. That did not happen by accident.

The “BOYCOTT LETTUCE” signs had been stapled to those telephone poles as part of a well-thought-out and well-managed PR campaign. Originally, they appeared in about thirty cities and later in thirty more. Later signs went up urging consumers to boycott two supermarket chains, one east of the Mississippi and one to the west,which bought lettuce from growers not represented by the UFW. The PR campaign was targeted and periodically expanded to ensure that the number of supporters of the strike constantly increased.

Chavez won his strike and he won it not on the picket line. He kept the conditions of the farm workers in front of consumers, daily, for an extended period. Sympathetic consumers boycotted the product, and the growers took a far bigger hit to their bottom line than they would have if they had just paid the workers from the beginning.

It is fair to consider that similar tactics would get more women on the boards of directors of more companies. Women are the dominant consumers making the decisions whether to buy Tide or Cheer,Luvs or Huggies and whether to take the kids to Burger King or McDonald’s and many, many other products as well. Women can certainly utilize their economic power to have themselves appointed to the boards of directors of these companies.

Most consumers have no idea how many women are on the board of directors of the companies that make these products. Very few consumers know whether those companies are taking advantage of women by paying them less. But, as the UFW demonstrated, consumers can be educated, and they can be mobilized. And the UFW was working within the confines of 1970s technology and media.

I can certainly envision an organization seeking to fill many more directorships with women initiating a correspondence that said: “Dear Fortune 500 company: We have noticed that ten of the 11 people that you have nominated for your Board of Directors are male. Please replace five of the men with women. If you are having difficulty finding qualified women, we will be happy to send you the resumes of thousands of women who are more than capable of contributing to your board. If you have not replaced the five male directors with 5 females in 20 days,we will begin a national campaign advising women to boycott your flagship product.” 

I have no illusion that one tweet from Oprah or one of the Kardashians would be enough to sustain a national boycott of any product. I do believe that both could be included in a carefully planned, targeted, and executed campaign that includes a simple message spoken repeatedly by thousands of “influencers.”

I do not see a way for a large company can come out ahead from a public fight with its most important customers about board representation. There is no satisfactory answer to the question: “why can’t more women serve on your board of directors?” 

The success of the UFW and the tactics it employed will be a lesson to the unions when the next big strikes come along. Women have been fighting for equal pay and better working conditions since at least the 1970s. Despite all the progress they have made, I think they may need some new tactics and some “out of the box” thinking to finally get what they deserve.

If you’d like to discuss this or anything related, then please contact me directly HERE

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Grandpa was a Socialist – Solidarity Forever?

Economics, Life , ,
Grandpa was a socialist

My grandfather, Alexander, immigrated to the US from Europe in 1905. He apprenticed and worked as a carpenter. By the time I was asking about his early life he was already retired. What I got were anecdotal stories about his life rather than a comprehensive history.

It would be accurate to describe my grandfather as a “union man”.  I knew that he still spent a considerable amount of time each week at the union office with many of his union buddies.

I remember thinking that you needed to be “tough” to be in the union. It had been mentioned more than once around the dinner table that he had been severely beaten by the police while walking a picket line at some point in the late 1920s.

Around the dinner table that event was viewed as a sacrifice; a beating that he took on behalf of his union brothers.  But that was not what he wanted to talk about when I asked him about the union. 

Grandpa saw his union and his union brothers as part of an extended family. If I could synthesize what I learned about his relationship with them it would be “helping all brothers and their families to succeed; letting no brother fail”. 

Hunger was a reality in Grandpa’s community and in other immigrant communities then and now.  In many of these communities, then as now, religious organizations stepped up to care for the community’s needs.  Much of what was considered “radical” about socialists then was really just working hand-in-glove with the conservative religious organizations.      

Grandpa’s Local was affiliated with the Workman’s Circle; an organization formed in the late 1800’s to assist Jewish immigrants from Eastern Europe. The Workman’s Circle was a national organization in the US with branches in most industrial cities.

Workman’s Circle was certainly pro-worker and pro-union but it was much more. It helped immigrants to adopt and assimilate. Workman’s Circle sponsored schools, health clinics, food banks, business loans, English and job training and funeral and burial assistance. 

The Workman’s Circle’s world view was rooted in the raw 19th Century brand of socialism. I have no doubt that some members of the Workman’s Circle who organized alongside my grandfather might have heard Marx himself extol a group of workers to unite and strike for higher wages and better conditions.  

I do not think I ever heard anyone affiliated with the union complain about banks or condemn them as evil. My family had its bank account at a local Savings and Loan. It was the same account my father had since he came back from WWII. It was the same S&L where Alexander had his checking and savings accounts. Apparently this particular bank had always catered to union members.  

Nor did my grandfather particularly hate people who were wealthier. On more than one occasion, as we drove passed a local shopping center, he expressed how thankful he was that the developer had the backing to build it, as it had provided more than a year of steady work for himself and his union buddies in one of the worst years of the Great Depression.  

My grandfather was a US citizen, although I cannot tell you when he became one. As far as I know he voted Democratic as did most of my expanded family at that point in time.  I do remember conversations where Pres. Roosevelt was spoken of favorably. I cannot remember a single word suggesting that anyone in the extended family advocated the violent overthrow of the government.

When I saw him at home before he went into the hospital for the last time, he asked me to take $6 out of his wallet and to go down to the union hall and pay his dues. He could not accept dying if his union dues were in arrears.

I had been to the union hall many times over the years. It was the same crowd, just older than I remembered. The clerk Aaron, who took the payment, remarked how he was surprised to see me so “grown-up”.

Three weeks later Aaron and I were pall bearers at grandpa’s funeral. As the casket was wheeled into a little walled off section of the cemetery reserved for union members, I noticed my grandfather’s name on the plague next to the gate. He had been on the union’s cemetery committee when it was dedicated in 1927.

In 1970 the garment center, represented by the International Ladies Garment Workers Union (ILGWU) was the largest employer in New York City. By the end of that decade the ILGWU was running ads on TV asking people to “look for the Union label, when you are buying a suit, coat or dress.”

People did not take that advice and look for the union label. Those jobs moved to Southern states employing non-union labor and then off-shore where labor was cheaper still.

The argument can be made that the unions had only themselves to blame. As they pushed the price of their labor higher and higher, more and more people were willing to do the jobs for less.  From the 1970s forward, as global transport became cheaper and faster, more and more jobs moved off-shore. 

So what is the legacy of these 20th Century Socialists in America?  Coming out of the pandemic there is certainly an enflamed attitude among workers that they still need to be paid more and treated better.  More and more, unions still matter.

In May of this year, ExxonMobil, one of the world’s wealthiest corporations, shut down a refinery in Beaumont, Texas and locked out about 500 workers. The company claimed that the workers were about to strike anyway, so the lock-out protected the company from any “disruption” that a strike would cause.   

More recently, the company threatened to fire the workers if they refused to accept its current offer and disband the union. The workers, represented by the United Steelworkers union (USW) took a vote and essentially told the company to shove it.

That refinery processes about 400,000 bls. of oil per day. Closing it is one reason ExxonMobil can today talk about supply shortages and raise the price at the pump to over $5.00 for the rest of us.  The company will tell you those workers were offered a fair deal.

Right now there are 10,000 workers on strike against John Deere. Their union, the United Auto Workers (UAW) and the company negotiated a settlement, with a raise for the workers. Almost 90% of the union members rejected the deal.  

The membership argued that the company is making a lot of money and its stock price near all time highs. The executives and shareholders are well paid. The question “what about the workers” is the question that is always at the core of any discussion about socialism.

Today’s post pandemic labor market is unique. There are plenty of workers available today and at the same time a great many jobs going wanting. Workers are demanding more pay and better conditions to return to their old jobs.

Even the largest unions like the UAW are having difficulty delivering what workers want but I would not count them out. There is one other fact I learned from my grandfather, union members do not cross other unions’ picket lines. 

There are many more workers on strike today than in the months before pandemic.  As noted above, they want to be paid more and they do not like to be bullied. Marx, the socialist, is remembered for challenging the workers to unite.  What if they do?

What would happen if all the union members who work for ExxonMobil walk out in support of the union in Beaumont? What if the union members in trucking industry refuse to service any ExxonMobil or Deere facilities?  

Could there be general strikes as Marx envisioned in the US? I would think that workers would need to be pretty unhappy.  Autoworkers and steelworkers are higher paid than most workers and they want more.  If you have ever been a waiter (and I have), I would bet that you would be unhappy with the current minimum wage.

Perhaps the smartest person in the labor/management debate was Henry Ford. He famously doubled workers’ wages in 1914 to keep the unions out and forced the other auto makers to do the same. He believed that the workers needed to be paid enough to be able to purchase the cars they were making. There is no question that the overall economy is better when people have more money in their pockets to spend. 

If you’d like to discuss this or anything related, then please book a time to talk with me HERE

Practicing Law from Poolside – Post Pandemic Opportunities for Lawyers

Law, Life, Technology , ,
Practicing Law from Poolside

The American Bar Association (ABA) recently chimed in and issued an “ethics” opinion for lawyers who are working remotely from home because of the pandemic. The opinion interprets one section of the ABA’s Model Rules for how lawyers should conduct themselves and their business.

Rule 5.5(b)(1)

Rule 5.5(b)(1) prohibits a lawyer from establishing an office or other “systematic and continuous presence” in a jurisdiction where the lawyer is not licensed to practice law.

A lot of lawyers who practice in NYC live in New Jersey or Connecticut. They are no longer commuting into their offices. Working from home for a period of months they arguably have a “systematic and continuous presence” in a state where they live, but where many may not be licensed to practice law.  

The ABA’s opinion (Formal Opinion 495) bails out these interstate commuters reasoning that a lawyer does not have a “systematic” presence in a jurisdiction merely by their physical presence in that state. The ABA concludes that “The lawyer’s physical presence in the local jurisdiction is incidental; it is not for the practice of law”.

By that the ABA means that it is fine if a lawyer works from home in New Jersey, but is only licensed in New York, provided that they continue to run their practice through their New York office.  A lot of NY lawyers have always taken work home across state lines and billed clients for it.  So this just reinforces the status quo.

Once the pandemic is over, the ABA presumes that all will return to “normal” and that all lawyers will return to the office. That model was already outdated when I was a young lawyer and became an anachronism with the internet. If the pandemic has taught us anything is that a virtual office works quite well for many people.  

Many lawyers handle matrimonial, criminal, and probate matters where laws and procedures vary state to state. All of those matters are filed in state courts. Admission to practice before the local courts is essential to their practice. 

Many of the hearings now held by those Courts are themselves virtual with everyone assembling on the screen instead of in the Courthouse. An office in proximity to the Courthouse is no longer necessary for many of the lawyers who practice there.

I am already seeing ads for white label online platforms for lawyers that incorporate Zoom style conferencing with note taking, scheduling, and billing and payment options. Going forward, that some lawyers will meet and service clients exclusively online much in the same way that tax preparers do now, should be a foregone conclusion.

 

Practicing Law from Poolside

Sooner or later the kids will be back at school. It should be a lot easier to be productive from home without their interruptions. Commuting also adds stress to a lawyer’s life that already has way too much stress built in. 

The savings of the cost of commuting in time and dollars will be obvious to a lot more lawyers than the ABA thinks. Online conferencing will obviate the need for many lawyers to pay rent for an office as they move their office home.

Forgive me for stating the obvious, but where the ABA sees a lawyer’s “practice” as a street address, I rather see a lawyer’s practice as the tasks he/she performs. And many, if not all, of those tasks can be performed from home or from poolside at a nice hotel on Maui for that matter. 

The ABA went further when it wrote: The clear conclusion of Formal Opinion 495 is that the purpose of Model Rule 5.5—protecting the public from unlicensed and unqualified lawyers—is not served by prohibiting lawyers from practicing law in their licensed jurisdictions simply because they are physically located in another jurisdiction where they are in essence “invisible as a lawyer to a local jurisdiction.”

What the ABA and the local lawyers really don’t want is lawyers who are licensed elsewhere poaching local clients. You can hand out your business card, of course, but the address and phone number have to be those of your brick and mortar office located in a jurisdiction where you are licensed to practice.

That made some sense several decades ago, but in the modern internet world many law firms have a national or international practice. Can you really be “invisible as a lawyer in a local jurisdiction” when your firm is buying online advertising that reaches that local jurisdiction and many more?     

I had the occasion to move recently and when I took my own license off of the wall, I stopped and read it.  It was issued by a Court and signed by a Judge. It granted me the specific authority to “practice law before the Courts of the State of New York.”  It did not come with FAQs that asked and answered the question of what constituted the practice of law in the State of New York or elsewhere.

When I was General Counsel of a national real estate firm we retained a big Washington DC law firm that specialized in federal tax matters. The law firm would issue its opinion regarding certain tax matters that might result from specific real estate syndication we were preparing. The opinion would be included in the disclosure documents and reviewed by investors in many states. 

The law firm had no lawyers licensed to practice law in each of those states or in California (the location of the headquarters office of their client) for that matter. Its partners were all licensed in DC or Virginia. The law firm itself had clients in all 50 states.

Clients from all over the US seek and retain lawyers who have good reputations. In a great many cases it does not matter whether the lawyer is licensed in the state where the client resides.  Experience with local law is not what the client needs. This is especially true with a wide variety of matters where the US government is a primary regulator.

This would include matters involving the laws or regulations governing aviation, broadcasting, immigration, patents and IP, trucking, pharmaceuticals, shipping and ports, banking, securities and capital markets, toxic waste and Tribal lands. This list is far from inclusive. 

A lot of the lawyers who specialize in these areas already “practice” across state lines. Local laws and procedures are not relevant to what they do.

There are lawyers currently representing clients in administrative matters before a myriad of government agencies who are not licensed in the state where the client resides or in the state where the matter is being handled. There are arbitration forums that do not require any party’s representatives to be licensed to practice law in the state where the hearing is being held. 

There is already a lot of work for lawyers who never “practice before the Courts” of any state. Still, what they do for a living is practice law. Their physical location, as the ABA points out, is “incidental” to their practice. They do not need a brick and mortar office in the state where they are licensed to support their practice. The fact that they are “licensed” in one state or another is largely irrelevant to their practice as is the street address of their practice irrelevant to services they provide.

Post-pandemic I think that the “virtual” practice of law will flourish. Working from home will be just too cost effective for many solo practitioners and small firms.  I invite any attorney reading this to do the math and calculate the savings from giving up your office and working from home with a virtual assistant if you need one. 

Large firms that adopt a virtual model will be able to affiliate many more specialists if they can add partners and “of counsel” without regard to where they live or are admitted to practice. A large firm could have 50 virtual conference rooms occupied every day without adding or paying for a single square foot of actual space. 

I do not expect that the ABA will endorse any of this. It is far too ingrained with the status quo.  If thousands of lawyers adopt a virtual office model and are routinely living in another state or joining firms in another state, the ABA may have to re-think its entire view of state-by-state licensing and brick and mortar offices.

If you’d like to discuss this or anything related, then please contact me directly HERE

Or you can book a time to talk with me HERE

How are things, really?

Capital Markets, Economics, Life
How are things, really?

I speak with hundreds of people every year. Most are trying to figure out where their particular cog fits into the greater, global, capitalist machine. 

Some people seek me out to share their ideas and business plans, others ask the kind of questions that people always ask someone who served on a business school faculty. Many have already achieved financial success, others are just starting out.

I take these calls in part because they offer me the opportunity to ask a lot of questions to a widely disparate group of people. I get to consider what is going on in the world from many different perspectives. 

Studs Terkel

The result is a Studs Terkel view of the global marketplace.  In Working, Terkel told the stories of various working individuals to paint a picture of the complex relationships that people have with their jobs and with their employers.

Every year I get to hear the stories told by hundreds of business owners and executives, founders of start-ups and investors of all sizes. No two stories are exactly alike.

What are they saying now? As always people see what they want to see. 

There should be a lot of fear, doubt and hesitancy when a pandemic of this magnitude slows the markets so quickly, especially when so much of economic activity has simply been turned off. There are clearly a great many people who are suffering from the effects of the virus if not the virus itself.

No one should minimize the overall economic effects. A great many businesses will go out of business. A great many of the people who are now unemployed will never be rehired to the same job.

Overall, most of the people with whom I am speaking are realists and therefore optimistic.  Rational people understand that if they stay indoors they, and their family members are not likely to contract the virus or die from it. Rational people count their blessings at times like this.

Some people are complaining that working from home is too difficult because their kids are under foot or need their attention.  If you can’t make your kids understand that you need some “alone time” to get your work done, that is on you, not them. 

I wrote my first book after my kids went to bed, often working between midnight and 3AM.  Why? Because I wanted to write a book and I knew I would not get it done if I made excuses.

There are a lot of people sitting at home binge watching this or that which is fine. There are also people who are taking courses online, brushing up on accounting or marketing because when this is over, they want to start a business or get a better job. 

I got a packaged delivered yesterday and asked the delivery man how things were going. He replied over his shoulder that he had been laid off and very happy to have this new job. In his mind, despite being laid off and earning less, his glass was half full.  

You cannot turn on the TV without seeing the incredible jobs being done by doctors, nurses and first responders. They are true heroes.

But we also need to recognize the 20 something working as a cashier in the local market. She told me that all her regular customers are like family.  She has no idea why the market has no eggs as chickens are obviously still laying them. But she has a kind, uplifting word for everyone who passes through her line. “This will be over soon” she told me, “and then we will see what those chickens were up to.”      

Make no mistake, this will end.  Your life, after it is over, will largely depend upon how you act now.

I got a call this week from a former client, a chef who I helped to raise the money for his restaurant a few years back, He wanted the name of a good bankruptcy lawyer because he knows he is not going to be able to re-open. A lot of blood, sweat and tears down the drain.

At the same time, he asked me to help him start raising funds for the new restaurant he wants to open next year, That is the thing about Americans, when the shit knocks us on our ass, we get up, dust ourselves off and keep going.

He truly feels badly for the wait staff and kitchen crew he just laid off.  But he also understands that they got paid from the first day the restaurant was open. It took a year until he could draw his first check. That is the nature of capitalism. Business owners take the risks that create the jobs for others.

Worker Bees

How are things, really?

I read an opinion piece this week end by a disgruntled “influencer“ who was up in arms that the government was bailing out banks and profiteers and not the poor, worker bees who actually do the work.  These people, he reminded us, live paycheck to paycheck and have no savings.

He is certainly correct about that, but that is not the banks’ fault. They are always happy to open a small savings accounts.  It is up to the worker bees to spend a little less and save a little more. That advice has been around since I was in grade school.

I feel really bad for the author who apparently feels helpless because nothing bad has ever happened in his lifetime. I watched friends pulled into war, to die in the jungle. Shit happens and it happens to every generation.

I spent 5 months living on the cancer floor of a major hospital. When this passes, visit the cancer patients in your local hospital, many have no visitors. If there was ever a time to count all your blessings, this is it.

The most important lesson I learned from my experience with cancer is that the only thing that you can do in life is to play the hand you are dealt. If you are afraid or angry right now well that too, is on you. 

If you do nothing else in the next few weeks you can help out your neighbors. I don’t have to tell you why you should do that, you all went to Sunday school. You will be amazed how helping others will help you realize how fortunate you are.

And please ignore the angry political types of all persuasions on TV who are jumping up and down screaming and assigning blame to others. If this group would just sit down and shut the hell up they might be pleasantly surprised to see all the decent people around the US who are quietly giving each other a helping hand. 

That is what is really going on.

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