Monthly Archives: May 2007

Facts Count

One theory says my outside counsel should know my case better than I. He’s scoured the transcripts, grilled the witnesses (ours and theirs) and poked the experts thoroughly. On the other hand, as in house counsel, I know which of my clients and colleagues has the better memory, the better work habits, the troublesome idiosyncrasies and so forth.

No matter what, however, he should know the facts as least as well as I do.

Case in point: Employment counsel prepares and files a position statement with the EEOC. He knocks these off in his sleep, so he figures I don’t need to review it first. I finally get a copy when I have to call and ask, “Say, didn’t we have to file a position statement a while ago in this case?”

He replies, “Oh, didn’t we send that to you? We filed that last week,” and proceeds to blame his secretary. Shortly a copy arrives by email. I glance at it, and immediately see that he identifies our parent company as the employer. Wrong. (The complaining employee works for a subsidiary.) He says the parent company does business in the state. Wrong again — only the subsidiary does.

I mark up the document with the necessary changes and send it back to him with a note asking him to amend the statement, as failing to do so threatens to place our parent company’s multi-million dollar income stream at the mercy of the state’s taxing authority. This would be bad. Apologies abound, promises are made, and another lesson learned. For the both of us. Facts count.

The Bigger Client

So today I have a very upset internal client calling me to complain that one of our outside counsel has “swapped” lawyers on him, and he’s obviously received someone from the “second tier.” This happened earlier this week without any kind of advance notice.

The lawyer is a C+ player at best. Slow response time. Not very insightful. Purely reactive.

Everyone in my internal client’s department has worked with this guy, and they all say the same thing: never again. A call goes to the managing partner with whom I have “the relationship.”

Naturally, he’s not in. I leave a message with his secretary. (Yes, law firms still have secretaries. We clients have assistants. What gives?)

He calls within the hour (good) to tell me he would have called me sooner but he was having lunch with [insert dropped name here] and was on his way to a meeting with [drop another name here] (bad).

“Listen,” I say, “we’ve got a very unhappy customer here. Y was working on project Xanadu, and my guy tells me that Y was assigned to another “urgent matter” and Z was going to take her place. Z is not hitting the ball out of the park. In fact, Z is taking strikes and balls all day, and won’t swing at anything. My guy has no confidence in him.”

And then the defensiveness starts: “But Z is one of our best! Order of the Coif! Law review!” Blather, blather, blather. Followed by blame the victim: “I’m sure there must be a misunderstanding. Are you sure your guy understands what a great lawyer Z is?”

“No misunderstanding. He’s non-responsive, tentative and lets the world wash over him. We need Y back on the team.”

“But Y is working on a deal for [insert Fortune 100 company (which we are not)], and is essential to that transaction. Your transaction is in the early stages and can handle a change of staffing.”

I just let him stew in silence for about 20 seconds. I couldn’t resist, “You’re right. I can call [partner at competing firm] and get them going on the matter while it’s still in the early stages. Good idea.”

“Now, c’mon, that won’t be necessary. Z will be great! He’s worked with you guys on a lot of deals,” he implores.

“Z is not great, at least in the eyes of my guy who has to work with him every day. Say, I’m a little confused why we’re still on this subject. If you needed to change the team on us, it would have been nice to know in advance.”

“I didn’t think you’d mind.”

“We mind. Seriously, we really need Y back on the team. Is that something you can take care of, or should we just make other arrangements.”

After a pause and deep sigh, “I’ll look into it.”

About an hour later, Y was back on the deal team. Managing partner calls, strutting, “Wow, it was like pulling teeth, but I managed it. Y is all yours.”

“Thanks. I appreciate the effort.”

But why should I? Why did I even have to debate the issue? Why was it that nothing was going to change until I threatened to change law firms?

I spoke to Y earlier today to welcome her “back” to the team. She was reluctant to talk about the transition, and was eager to help any way she could. After we hung up, I realized I had forgotten to give her some information, but when I called back her secretary said she was on the phone with my guy (good — already back in the saddle). I asked to have her return my call when she was finished. The secretary said “o.k.”, and then added, “it’s a good thing the [Fortune 100 company] transaction fell apart — I don’t know how she’d work on both transactions at the same time!”

That was an easy one. She wouldn’t have.

Learn Some Accounting

Litigators who say they specialize in “business litigation” ought to know something about business. Unfortunately many don’t. Accounting or other business courses are not found in traditional humanities-based undergraduate “pre-law” curricula. And while most law schools offer rudimentary accounting and business electives, these are often under-enrolled.

For example, in recent months, we’ve come across counsel (on both sides of litigation) who’ve had no grasp of:

How a balance sheet “balances”

The difference between a cash flow statement and a profit & loss statement

Accrual versus cash methods of accounting

Payments due in advance versus due in arrears

Amounts “realized” versus “recognized” under the tax code

The concept of “aged” receivables

Earth-shattering? No, of course not. It’s more embarrassing than anything else, and not likely to lead to repeat business. Yet it becomes more on-the-job training (make that: on-my-invoice training).

Google tells us that in 0.11 seconds one can get several pages of search results for the query “accounting basics.” This seems like a reasonable investment of time for any lawyer whose practice depends on resolving business disputes.