4th District Congressional Debate – McClintock and Derlet – 10/4/2016

Auburn Chamber of Commerce hosted a debate between incumbent 4 term Congressman Tom McClintock and challenger emergency medicine doctor Bob Derlet. The candidates were articulate and direct and the debate made clear the differences between the candidates. I hope you will watch the debate, provided on YouTube by Auburn Community Television, and share on your social media outlets to promote informed voting! I was privileged to serve as the moderator for the debate and hope it is useful to you.

Auburn City Council Candidate Debates September 28, 2016

5 candidates, including 2 incumbents, are competing for 2 four year terms on the Auburn City Council. In this 99 minute debate, candidates declare positions on many issues of concerns to Auburn City residents, from road repair to public safety. This debate was sponsored by the Auburn Chamber of Commerce, the League of Women Voters and the American Association of University Women. I was privileged to be a moderator on behalf of Chamber. Watch the entire debate on YouTube courtesy of Auburn Community Television.

Housing Bubble 2.0?

Higher interest rates and higher prices don’t mix, according to this article in First Tuesday Journal.In “Are we in for another housing bust?” Author Jeffrey Marino argues that today’s higher prices can’t, and shouldn’t, remain. Only when employment and wages rise will significant numbers of buyers be able to support mortgages on homes at todays prices.

I have argued for some time that the declining purchasing power of middle class families will continue to suppress the California real estate market in most locals. This effect is being felt now as the anomalies of a manipulated market return to fundamentals. Hang on for a bumpy 2014-2015 as artificial stimulants like buyer incentives and unsustainable low rates are phased out.

A Different Perspective on Minimum Wage Debate

According to a poll by the Small Business Majority, most small business folks favor an increase in the minimum wage. The respondents believe that an increase in the minimum wage will not only stimulate the economy, but also ring their cash registers as cash-strapped consumers spend their increased income in local small businesses. Read the article here and please comment with your thoughts.

How Lawyers Got A Bad Rap

We have all heard the jokes and negative comments surrounding lawyers but have you ever wondered how it all got started. Just as with any profession, there is bad and good. Are there unethical, incompetent attorneys? Of course! Just as there are unethical, incompetent plumbers, physicians, and restaurant workers. However, for some inexplicable reason, it seems lawyers have had more than their fair share of “bad”. The complexity of the law and the demand for legal services from the boardroom to the coat room validate that the profession does have value, so why the bad press?

Well let’s begin with fees. The hourly bill may just have been the beginning of the end for the legal profession. No one is in a good mood when an hourly meter is running, particularly when you can’t control the number of hours that you purchase! Traditionally, Lawyers have relied on the hourly rate, as their standard for billing. With this billing arrangement, the law firm would maintain a record of everything done for you to include phone calls, written letters, court appearances, consultations, etc. You are then billed an agreed upon hourly fee for all of the time that was spent working on your behalf. In addition, you could also incur additional expenses such as transportation, document fees, even phone calls. While this practice is standard in many professions, many consumers believe that attorneys inflate expenses in an effort to make additional profit.

In truth, most service providers use an hourly rate to calculate a fee. In example, an accountant might quote you a fee of $250.00 to review your taxes. The fee is not out of line with your geographic area and the accountant comes highly recommended so you opt to hire him/her at this rate. What you may not realize is that the $250 flat fee may be based on the accountant’s knowledge that the review will take 2.5 hours of time at $100 per hour.

Many attorneys have become a bit more market savvy and offer alternative billing arrangements. Rather than hourly bills and separate expense charges, they may offer case rates, retainer agreements and other solutions. The key is in providing value for the dollar charged, and creating long term relationships.

Another area that has eroded the reputation of lawyers is the unfortunate lapses in ethical behavior. While most attorneys do in fact adhere to the standards of law, the few bad apples have made it difficult for the public to trust lawyers. For example, in the state of South Carolina a young man was on trial for a murder that most believe he never committed. His family sold their home, cars, and gathered all the cash possible to hire a good defense lawyer. Believing their son was in the best hands possible, they discovered that the prosecuting attorney was married to their lawyer’s sister and that pertinent information had been shared, resulting in a mistrial. As you can imagine, this put a black mark against those attorneys, as well as others who were innocent but within the same community.

Personal injury law has been another source of questionable ethics. Billboard and commercial advertisements abound with the promise of high dollar settlements for your case. This marketing tactic only adds to the negative perception of the legal profession, as it makes them appear as ethical as snake oil salesmen.

Additionally, most of us have heard the horror stories about attorneys collaborating back room deals with physicians. In this instance, an attorney wanting to win a case involving a car accident or injury on the job might send his client to a “special” doctor that will validate and even overemphasize the level of injury. The doctor testifies in court in support of the plaintiff, giving the attorney and case strong credibility. Again, these practices are not standard for all personal injury lawyers but unfortunately the actions of a minority have significantly impacted the majority.

The attorneys that engage in unethical practices deserve to be drummed right out of the profession. Sadly, it is unlikely to happen because just as there is a market for competent, ethical law practitioners there is also a market for the legal underbelly. People that desire to bring forward fraudulent lawsuits, illegal adoptions or even illegal immigrations will turn to attorneys who are willing to work around the established rules of law.

Most attorneys are honest, hard-working individuals who take their work very seriously. Because of this, we see a number of law firms working to change public opinion. There are dishonest “professionals” in any field. We can look to education for current examples. There seems to be a spate of sex scandals involving schoolteachers, yet, the four cases that have been highlighted in the news within the past year does not mean all schoolteachers are sex offenders.

The same is true with lawyers. Yes, we have seen cases in which some are not honest and sadly, those are the cases exploited through the media. What you do not hear much of are stories about the reputable attorneys that solve cases and help improve or even change lives. While the public may not be quite ready to elevate lawyers to hero status maybe, just maybe we can start a kinder, gentler trend of being a little nicer.

How Much Does Justice Cost?

Over the years, the public has been fascinated by the legal process. One can hardly remember a time when there was not a spate of television shows that did not feature some aspect of the legal process. With the proliferation of “reality” programming, we now have the opportunity to go behind the scenes and see justice at work. Television programming both fiction and non-fiction would lead one to believe that true justice comes at a very steep price. In the race for justice, the one with the deepest pockets wins, or do they?

The media spotlight on cases that involve the rich and famous have furthered the notion that guilty or not, if you can afford a high profile law firm, you have a better chance of winning your case. O.J. Simpson, Michael Jackson and Robert Blake were all convicted by the public at large but each was found “not guilty” in a court of law. Were they able to escape the justice due them because they had the means to pay for the best defense?

The American Bar Association published a study by noted legal consultant William C. Cobb in which he discussed the value of legal services to the client. Cobb segmented legal work into four classifications – commodity, unique, experiential and brand name.

Unique legal work constitutes a “nuclear event” for the client. These are events in which life or business hangs in the balance and the client is willing to pay whatever it takes. Unique legal work constitutes less than four percent of the work in the market. Would former Enron CEO, Kenneth Lay have searched the yellow pages for an attorney for his case? Of course not, his business and freedom were at stake. Even those who may not have the money to hire the best will often find a way to either raise the funds or gain the interest of these firms. In example, Amber Frey, a witness in the Scott Peterson murder trial retained Gloria Allred as her legal representative. Gloria Allred has established herself as a defender of women’s rights. While it is certain that her firm handles many lower profile cases, she is definitely a recognizable brand. Amber Frey would not have had the financial means to retain such a high priced attorney but the case was high profile and Amber stood to gain from penning her experiences.

Experiential work is legal work that the client deems high impact or high risk. It accounts for 16% of all legal work. In this type of legal work, clients are looking for specific experience and an attorney uniquely qualified who will handle the case personally. In example, a physician that is being sued for malpractice would seek out attorneys with experience in malpractice cases. The physician would have a very narrow list of candidates based on the firm’s experience, success ratio and likely recommendations from colleagues who had successful outcomes.

Brand name legal work accounts for 20% of the market. This type of legal work is routine work but still important to the client. The client chooses a firm that has a reputation in a niche market or has established their brand. In every state there is at least one firm that everyone has heard of and typically can associate with their area of practice. The firm does not necessarily have to be high profile but simply have name or brand recognition. In example, a law firm may have established a reputation as “the firm” for civil litigation.

Finally there is Commodity work. Commodity legal work accounts for 60% of the market. It is legal work that clients feel can be handled by any good attorney. As such it is extremely price sensitive. Of course no one at any price wants to hire a bad attorney! This sector of the market is the largest. Clients are seeking good representation but for matters that are not nuclear events. Commodity work would include things like family law, minor criminal offenses, business incorporation, auto accidents and any non-complex litigation. Although attorneys may have a different view, consumers view this as “routine” legal work.

So, what does justice cost? Well, if we look at the value curve, price is determined by the market and 60% of the market will hire based on price. Consumers are not at the mercy of law firms, rather like all professional services, if prices are too high, consumers will not purchase. There is a segment of the market willing to pay a little more for good service but when there is an abundance of suppliers, most consumers will price shop.

In recent years, as large corporations have faced mounting pressure to control costs, in house legal departments have sought to decrease outside legal expenses. Corporations have instituted bidding processes, legal expense reviews and are becoming more vigilant about their legal spend. General Electric, often a trendsetter undertook a bidding process for their legal work. Microsoft has taken an active role in ensuring efficiency and effectiveness in legal work. Organizations of all sizes are using independent 3rd party bill review to force law firms to become efficient project managers, as they are not willing or able to pay “whatever it takes.”

Individual consumers too have become savvier in how they choose legal services. Many choose to forego attorneys in favor of do-it-yourself techniques. Self-representation or pro se representation in matters such as divorce is on the rise. Interestingly enough people do not simply choose pro se because they cannot afford another option. While cost may be a factor for some who don’t see the value in hiring someone when they can do it themselves, retaining control is often the bigger issue. Many simply want to direct their own legal process. Access to legal information and documents has facilitated self-representation. As such, consumers who hire professionals will also demand service at a reasonable price.

What does justice cost? Well, the answer may very well be it costs what you are willing to pay for it. Obviously, those celebrities who were on trial certainly considered their legal situation to be a “nuclear event.” When your life, livelihood and reputation are at stake and the stakes are high, undoubtedly you will not wrangle over legal costs. You will hire “high powered” attorneys with a reputation for getting the job done. However, if this work only constitutes 4% of the overall legal market, we can theorize that justice is available in all price ranges.

Protecting Your Company’s Privacy

Today more than any other time in history, protecting company privacy is essential. Unfortunately, the number of cases associated with identify theft have not only risen but also moved from personal to business. Over the past few years, a number of large companies and even government agencies have been in the news for having laptop computers and vital information on employees and the organization itself stolen. What makes this so uncomfortable is that usually, the privacy is being threatened from within the very organization that is supposed to secure it.

Keep in mind that while some organizations are at greater risk for thefts, such as credit card companies, banks, or government agencies, even the small mom and pop shops are at risk. Remember, it would only take one instance of information leaking out to put a company completely out of business. The problem is that not only is data being stolen, but often sold to criminals that know exactly how to extract what they want to make a profit – at your expense.

More than ever, it is crucial to do all you can to protect your organization and employees. In today’s flat work force, many employees use laptops rather than desktops. A laptop enables employees to work from any location eliminating downtime for the field employee and increasing the efficiency of communication. However, every time an employee takes the computer out of the office, the potential risk of privacy is increased. Let us say an employee had a laptop with no logon protection. This employee worked in the financial sector of the business and after going to dinner while on a business venture, he returns to the hotel room only to find the laptop gone. Now, without the computer having any type of password protection, anyone can gain access. However, professional criminals can hack anything with or without protection.

In addition to accidents such as this, other situations could arise putting your organization in danger. For instance, if there were a disgruntled employee, perhaps someone passed over for a promotion, or someone who knows his or her job were ending, this individual may feel there is nothing to lose by leaking out or taking vital information. If this person were unstable or just angry, he or she could cause damage to the company through the sharing of trade secrets, personal data or other sensitive information. Then of course, you have people who go to work for companies specifically for the sake of stealing private data. Although this is not as common, it does exist and this practice is growing.

Yet even with Identity Theft and Privacy being spotlighted in the media, companies remain surprisingly vulnerable. Organizations around the globe have no clue to the quantity of sensitive information being leaked out but even worse, no tracking system is in place to find out or to correct the problem. While we often focus on the computer as a source of theft, private data can be taken out of a company in many other ways. For instance, iPods, USB sticks, or any portable device makes downloading information easy and covert. What happens is that in addition to the company and employees being at risk, customer relations could be severely damaged as well due to lack of trust and confidence.

To give you an idea of just how data is being taken out of organizations, 75% is with the use of a portable device, 63% via email attachments, and 59% from content within emails. Sadly, a number of companies were recently surveyed and of those, just 50% stated they had any concern. If you are working hard to build your organization, you need to take this risk seriously. With so many possibilities for privacy to be robbed, it is crucial that you understand the risks and then take appropriate action to correct them. If major data leaks can occur within tightly secured companies such as AT&T, National Audit Office, Veterans Affairs, and Google, then surely you too can potentially be at risk.

Take steps to protect your trade secrets and sensitive private data. This is an area worth making an investment. With the sheer volume of information that is produced daily within a company, it is challenging to ensure security. However, taking time to understand who has access to important data and how to best protect it is well worth the investment of time and money. After all, what would it cost you if your valuable data was lost or stolen?

The Legal Aspect of a Risk Profile and Response

With new and intense challenges seen in Corporate America, more and more companies are turning to the assistance of lawyers to create a risk profile and provide guidance on response. In fact, this issue has become so serious that in the past few years, governmental expectations for better governance have been strongly encouraged, specifically in the area of planning and delivery.

The development of a risk profile is one of the first steps a company should consider, examining both strategy and operational factors. Having a systematic plan in place for managing operational, strategic, and project risk is essential to the success of any business, regardless of size or industry. While using legal support for the creation of a risk profile offers a number of benefits, the primary objectives include achieving corporate objectives, enhancing performance, and reducing risk.

Although company executives could take a stab at creating a risk profile and appropriate response, a legal team can help by establishing definitive and precise action specific to the company and current laws. Federal, local and even industry regulations and laws change frequently making it difficult and cumbersome for a non-legal person to identify all the potential risks. A professional team will have the ability to take a high-level view of the company to identify potential problem areas that might not otherwise be considered.

Typically, if using outside counsel, the firm would start by working with internal personnel to gain a better understanding of the company, as well as its processes, technologies, and techniques. From there, a legal aspect would be considered to define a framework for a comprehensive, risk profile. The focus of the profile would depend on a number of things although areas such as risk management, finances, and legal are at the top of the list. Then, the company would need to have a dedicated team in place internally to implement and manage the risk profile and response.

You could think of a risk profile as a snapshot of the key areas and risks of an organization, coupled with broader areas such as business development, operations, and overall strategic goals. It is critical to understand not only the specific risk factors but the response associated with those risks and how they impact the organization. Using a legal team to help manage risk does not happen in a vacuum without the input of key stakeholders. The executive team and other stakeholders have a responsibility to ensure that the risk response is aligned with the overall objectives of the company. Legal must be kept apprised of the key business objectives to ensure that the risk profile and response reflect what is critical to the organization.

For instance, some companies will get themselves into trouble by missing time-sensitive responses and/or actions, which might include late delivery, tax penalties, going over budget, or a number of things pertaining to the business. Using a risk profile gives management a heads up on the most critical areas to watch for so nothing is missed. In addition, an attorney can assist management in response, teaching them and providing legal advice on the right way to respond should a problem or concern arise.

The legal team should have the capability of working with internal personnel to identify and successfully manage key risks, develop a solid risk profile, and integrate this profile with the overall business plan. Risk management requires comprehensive communication, internal support from the top down and a combined commitment to achieving results. In this way Legal truly becomes a key part of the overall support team that helps your business obtain the desired results.

Keep Your Property through Bankruptcy

Individuals keep almost everything in bankruptcy. In more than 98% of California cases, the Debtor retains all “free and clear” assets. Exemptions (your ability to keep valuable property) provided to qualifying California residents are quite generous and usually cover and protect all assets and equities.

California has completely “opted out” of the federal exemption plan and enacted two alternative plans for its residents. With careful planning, oftentimes assets can be reorganized and transmuted to protect even “vulnerable” assets. You have an obligation to your family and yourself to take maximum advantage of the “fresh start” promised by the Bankruptcy code.

Please seek competent counsel to determine which exemptions best fit your situation and to assure that you fully comply with the Bankruptcy law.