Gruntled Employees

Fire stupidly, lose your own job (eventually)

US Attorney General Alberto Gonzales resigned today, largely because of how he mishandled the firing of nine Assistant US Attorneys last year. We covered the story last March in "Attorneygate moral: Don't fire stupidly," where we sagely predicted that Gonzales would be out by Opening Day. (Missed it by this much.) For comprehensive background on the firings and their aftermath, read the excellent summaries at Peter Lattman's ever-fabulous Wall Street Journal Law Blog here and at the Washington Post's site here.

Gruntled Employees doesn't much care about the politics of the issue. Instead, the important lesson for employers and managers and HR professionals is the one we talked about in March:

The moral is: Fire who you want to fire, own the decision, and then shut up about it.

It's hard to fire someone, if you're any kind of a real human being. And it should be, because it's someone else's life your messing with. You should struggle with the decision. But once you've made the decision, you have to act on it and own it. Resist the temptation to make explanations and excuses that (you hope) will get you or your company off the hook.

In the Attorneygate case, who is to say whether firing the AUSAs was fair? Doesn't matter (except to the AUSAs, their families, and the decisionmakers who pulled the trigger). The law says that they are subject to removal by the President. Period. They are — like most American workers — employees at will.

After-the-fact explanations for why you fired someone rarely tell the whole story. The real answers are usually incredibly complicated, and don't sound as clean as a better-manufactured reason. But the manufactured reason isn't the truth. And people will generally learn the truth, eventually. And when people start to see the holes in your just-right story, they're going to think you're covering up something more nefarious, like discrimination, or politics, or favoritism.

The Attorney General could have said this: "We fired these prosecutors because we wanted to make a change and put some other people in those spots. And the law says we can." It might not make for a pretty story, but it was probably the truth. The story would have died in a few days, and Alberto Gonzales might still be running the Justice Department and waiting for Justice Stevens to retire. Instead, it's Monster.com for him.

Don't fire stupidly. Fire smartly, quickly, and honestly. And then shut up.

So you want to be a barista ...

So it's Sunday and it's hot and I'm taking the family to the local pool. But I need my caffeine fix, and I'm trying to figure out the mechanics of sneaking a triple venti latte into the pool area without getting caught. I decide it's worth the risk, so we stop at the nearby Starbucks en route to the pool.

While I'm waiting for the barista to make my order, I notice a small table with a little sign and a pad of employment applications. As an employment lawyer, I'm always interested to see how businesses go about hiring new employees. I'm curious, especially with national employers, to see how many violations of state law (in my case, Massachusetts) the application has. I counted just two.

Now don't get me wrong. My purpose here is not to call out Starbucks, which is by all accounts a first-rate employer. Every state has slightly different employment laws, and a company that operates in multiple states has to pay attention to all of them. It's an enormous pain to have a different application for every state a company does business in. Many multistate employers try to synthesize the laws of their different states, and often include footnotes with state-required language. (Starbucks included language for California, Maryland, and — yes — Massachusetts. Just not all of it.)

But here's what the application does right. More than right. Better than just about every other application form I've ever read.

After asking all the usual job-application questions, it asks the following:

• Have you ever visited a Starbucks Coffee location? Where? Describe your experience.
• What do you like about coffee?
• Why would you like to work for Starbucks Coffee Company?
• Describe a specific situation where you have provided excellent customer service in your most recent position. Why was this effective?

Now the first and third questions are pretty basic. They probably get a lot of lame answers, which help weed out the barista pretenders.

But the second question and the fourth question are brilliant, and should be emulated by all employers.

Starbucks is all about two things: coffee and customer service. To attract the best employees, Starbucks looks to hire people who get coffee and get customer service. Judging from the top-quality service I get every day at the Starbucks near my office (the School Street store in Boston) — where Gregg, Meg, Theresa, Roger, and the other "partners" (as the company calls all its employees) make an extra effort to remember my name and my order — it seems to be working.

What questions can your company put on its job applications to make sure you attract employees who get what your company is all about?

(As for the minor Massachusetts statutory problems: give me a call, Starbucks, and I'll tell you what they are. On the house.)

Cheaper than A-Rod: Some lawyers getting $1,000 an hour

Just as the debate on hourly billing is heating up (see "Hourly billing: Presumed Unethical"), here come some cream-of-the-crop New York lawyers jacking their fees up to $1,000 an hour. These grand attorneys have crossed a previously unthinkable threshold, kind of like the sound barrier used to be. Nathan Koppel writes a terrific article in yesterday's Wall Street Journal, "Lawyers Gear Up Grand New Fees." (Subscription may be required.) As is common in Journal stories, the article's lede showcases Nathan's top-notch writing:

The hourly rates of the country's top lawyers are increasingly coming with something new — a comma.

The article has a great quote from an unnamed New York partner (whose own rate isn't disclosed): "We have viewed $1,000 an hour as a possible vomit point for clients." (Call it the client's "emetic rate.") Even David Boies, arguably the nation's top litigator, has misgivings: "Frankly, it's a little hard to think about anyone who doesn't save lives being worth this much money." (Boies charges $880 an hour.)

Some of the Grover-getters sniff that they're not overcharging at all:

Still, some lawyers are confident they're worth $1,000 per hour, and that now's the time to break the barrier. "I haven't personally experienced resistance to my billing rates," [Simpson Thacher litigator Barry] Ostrager says. "The legal marketplace is very sophisticated."

According to the article, law firms blame the rate increases on rising costs, such as $160,000-a-year salaries for first-year associates. Ironically, when interviewed about associate-salary increases, these law firms often say that they don't intend to pass it along to clients by raising rates. See Delaware Law Weekly, Apr. 21, 2006; Law.com, Mar. 20, 2006; ABA Journal Report, Feb. 2, 2007. Is the legal marketplace so "sophisticated" that it will overlook these earlier protestations?

My favorite quote in Nathan's article comes not from a law firm but from a potential customer of these high-priced services:

Considering a major-league baseball player can make the equivalent of $15,000 per hour, "$1,000 for very seasoned lawyers who can solve complex problems doesn't seem to be inappropriate," says Mike Dillon, the general counsel of Sun Microsystems Inc.

Compared to Alex Rodriguez's $25-million-a-year deal, these lawyers are a bargain.

For more reactions, see The Journal's "Law Blog Thousand-Dollar Bar"; Law.com — Legal Blog Watch's "Billing Rates Hit the $1,000 Mark"; Legal Profession Blog's "$1,000/hour? Nero has become managing partner and is fiddling away...." and "$1,000 per hour"; and Blawgletter's "The Hourly Fee Must Die."

Hourly billing: Presumed Unethical

Lawyer Scott Turow, acclaimed author of Presumed Innocent and other legal thrillers, has fired a warning shot at hourly billing. His provocative article "The Billable Hour Must Die" is the cover story of this month's ABA Journal. It's a well-written, well-argued piece that catalogs the problems that hourly billing creates for lawyers and the legal-services industry.

But the key passage in the piece is this one, where Turow argues that hourly billing is actually unethical:

But at the end of the day, my greatest concern is not merely that dollars times hours is bad for the lives of lawyers—even though it demonstrably is—but that it’s worse for clients, bad for the attorney-client relationship, and bad for the image of our profession. Simply put, I have never been at ease with the ethical dilemmas that the dollars-times-hours regime poses, especially for litigators....

But from the time I entered private practice to today, I have been unable to figure out how our accepted concepts of conflict of interest can possibly accommodate a system in which the lawyer’s economic interests and the client’s are so diametrically opposed.

Looking again to the Model Rules [of Professional Conduct], Rule 1.7 provides in part that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest,” which the rule defines as occurring when “there is a significant risk that the representation of one or more clients will be materially limited by ... a personal interest of the lawyer.”

I ask you to ponder for just a few minutes whether that rule can really be fulfilled by hourly based fees.

As Gruntled readers know well, I agree with this argument. If I bill by the hour, and a task takes me longer to complete, that's good for me (more money) and bad for my client (more time before satisfaction). That's why my firm has completely abandoned hourly billing — we've billed exactly 0.0 hours in 2007. Once a law firm has done the analysis and has learned how hourly billing is bad for its clients, how can it not be unethical to continue the practice?

Here are some other voices on the topic:

• Luke Gilman, Blawgraphy: "More on the Billable Hour, Charting Your Own Course." Key quote: "The overriding incentive of the billable hour regime is to bill as many hours as you can get away with. When you have a fiduciary duty to your client and a minimum billable hour requirement from your firm, the conflict is inevitable."
• Daniel J. Solove, Concurring Opinions: "Bye Bye to the Billable Hour?" Key quote: "The billable hour does little to measure and reward quality of work. It simply measures how long it took an attorney to complete a particular task."
• David Giacalone, f/k/a: "Broadening the hourly-billing debate — consider yourself, your clients and your ethics." This is a thorough and comprehensive post on the different sides of the argument from an ardent defender of hourly billing. (David's a Harvard Law guy, which I guess explains the poetry at the end of his posts. Hope he's following the Harvard Law blog policy — see here.)

Please lend your own voice to the debate.