A Buck A Year

January 16, 2006 | Filed Under Governance, In the News 

That’s the salary of Kinder Morgan CEO Richard Kinder.

The New York Times noted yesterday that:

Morningstar praised Mr. Kinder’s compensation. His salary is just $1 a year. His reward for a job well done? Dividends on his 24 million shares in the company; the payout was 75 cents each in the third quarter, or about $18 million. He recently bought another $1 million worth of shares; he has never sold a single one.

Joseph Nocera of the Times expanded the discussion on executive compensation this weekend (on Select $$) to the point of embarrassment:

Or take the last time the S.E.C. pushed through executive pay disclosure rules. “I was a consultant to Richard Breeden when the S.E.C. did its disclosure rules in the early 1990’s,” recalled Graef Crystal, the grand old man of executive compensation critics, referring to the S.E.C. chairman at the time. “I absolutely thought it would cause comp to go down because the disclosures would be so embarrassing. But it turned out that when somebody is hauling in $200 million, he’s not embarrassable.”

Mr. Kinder is clearly not in this camp. While his stock holdings are bolstered by the fact he is a founder, his compensation is well-aligned with the interests of other shareholders.

Mr. Kinder is also notable in that he is a lawyer, proving that smarter is also an admirable attribute for today’s CEO.

Tom Kirkendall described Kinder Morgan’s large investment in the Canadian energy sector last year.

Staying Flush When A Rainmaker Dries Up

January 13, 2006 | Filed Under Managing, Selling the GC 

Canadian newspaper the Globe and Mail gives a rare view into what happens to a law firm when a key rainmaker departs.

The more publicized case is when a lawyer leaves with a “book of business” and goes to hopefully greener pastures with another firm. Gnashing of teeth (and sometimes litigation) results. Clients are often caught in the middle of a tug-of-war, which doesn’t do much to foster long-term loyalty.

Recently for leading Canadian firm Osler Hoskin & Harcourt, things were different. Late last year, longtime partner Peter Dey departed to become chairman of Paradigm Capital Inc., an institutional investment dealer.

As the paper notes:

So when it came time last year to wrap up business with his law firm clients once again, Mr. Dey had the drill all worked out. Namely, he started bringing in other partners to transfer work within the firm.

It’s what he did with the Royal Canadian Mint, for example, which last year retained him to offer advice on executive compensation matters. While the government agency was content to deal with Mr. Dey, despite his impending departure, the corporate governance expert took the added initiative to bring a younger Osler colleague, Robert Yalden in the firm’s Montreal office, to shadow him on the file.

Then this caught my attention as it is something many people don’t consider at the time:

Relationships between law firms and clients are fragile at the best of times, and when a lawyer retires, the loss can trigger wandering eyes.

If retirement can cause “wandering eyes,” what does “bolting for a bigger draw” cause?

The pressures to hit billing targets can cause some law firm partners to zealously control access to clients. But if a firm is truly a firm–and not a confederacy of rainmakers and assorted hangers-on–it is essential to treat clients like the relationship matters. In this case, Osler and Mr. Dey appear to have brought the clients to the table.

Which makes it more likely that they will stay for dessert and pick up the check.

Suze the Solo

January 12, 2006 | Filed Under Tactics, Organization 

When you find out that a major public figure is really an army of one–you sit up and take notice.

The currrent issue of TIME magazine (with Jack Abramoff on the cover–finally without a hat!) has an interesting group of articles about health and medicine.

One article profiles financial guru Suze Orman, and describes how she ruthlessly gets things done. This article is more of a sidebar to another one that notes some of the perils of multitasking.

This excerpt first caught my eye:

Sure, Orman has the usual battery of electronic devices–in fact, she runs a paperless office but has strict rules for using her gadgets. “When I am writing, I don’t answer phones. I don’t care what else is going on,” she says. She has a cell phone but never leaves it on. “You can’t call me. I only call you. I think you have to stop thinking you are at everyone else’s beck and call.” Silence, she adds, is critical. “You cannot complete your thoughts with everything ringing.”

Then my jaw dropped when Ms. Orman let the staffing model of her growing empire slip out:

The remarkable thing is that Orman is a one-woman show. She has no assistant, no permanent employees. “I’m the one who answers every one of my e-mails,” she says. (Usually with a terse yes, no or “done.”) When she hires people to work on a project, she insists they clear their schedules of other jobs: “I’m not saying they can’t multitask, just not on my time,” she explains. “The people who multitask, I think, do everything to mediocrity at best. While they are getting a lot done, they are getting it done in such an inefficient way that they usually have to do it again.” Orman says she never misses a deadline or needs a do-over. “Once I’ve written an article, it is done.”

Any lawyer reading this would quickly see the obstacles to adopting these tactics in the practice of law. Elsewhere in the article, she mentions that she generally does not respond to email or voicemail messages while on the road. Our clients might not like this–on the other hand, if things were being handled properly, they might be impressed. After all, they’d know we weren’t billing portal-to-portal.

But I really admire two things. One is Ms. Orman’s single-minded focus on the current task at hand. I need to carve out some time every day to do this. The only way I have done this recently is to duck into an unused office in a remote corner of my building for a few minutes once a week and scan my project list before I am discovered.

The other thing I admire is the way Ms. Orman responds to emails. Who among us wouldn’t appreciate that sort of response? It would stand out in a world of “reply all” messages that don’t merely transmit or request information. Rather, they are ongoing chronicles of a peron’s work “life story.”

If Suze Orman can find a way to focus despite constant distractions–do I really have an excuse?

I think her response might be:

no.

What Will Brown Do With You?

January 11, 2006 | Filed Under Legal Resources, Selling the GC 

Send you to the junkyard if you’re not on your toes.

Tom Collins reports on an interesting decision allegedly made by UPS to terminate the services of a long-time outside firm. He quotes a remark attributed to Teri P. McClure, vice president and manager of the legal department, who recently told an audience in Atlanta:

…that she recently fired a firm that had worked for UPS for 40 years. Even after 40 years, they had not taken the time to understand the nature of UPS. Their attorneys keep calling the company’s brown delivery vehicles “trucks”. “They’re not called trucks,” she said. “They’re called package cars. If you call them trucks, you don’t understand the nature of our business.”

This exchange was originally recounted in the Fulton County Daily Report, found on law.com here.

Yup, a search of the UPS site reveals 71 hits for the phrase “package cars.”

But a similar search for “brown trucks” yields 24 hits.

And a link to this page, which contains a reference to 64,000 examples of a certain UPS service mark: “Big Brown Trucks.” According to a search of that phrase using the USPTO engine, “Big Brown Truck” was registered by UPS effective May 17, 2005. Perhaps the attorney of record doesn’t understand the business.

Maybe if UPS had sent a model of one of these to each of their engagement partners to reinforce the “car” mindset, things would have been different:

My car can beat your truck...

I like the name of Mr. Collins’ weblog: morepartnerincome.com. Nice and direct. Rare–but not that there’s anything wrong with that.

Update (13 Jan 06): An alert reader points to this page on the UPS website. The tagline at the top of the page “We’re Going To Race the Truck. People Love The Truck” is a mark UPS filed with the USPTO on May 10, 2005 (serial no. 78626526). Perhaps the fired firm was staffed with NASCAR fans. By the way, my company uses UPS exclusively and I love the truck.

RIM’s Real BlackBerry Problem

January 10, 2006 | Filed Under In the News, General 

Sometimes you can’t win for losing.

Late last year, I was looking at trading up from my beloved “Zoolander” Samsung a530. I went to a local Verizon store to examine the current offerings. As I looked at the new Research in Motion BlackBerry 7130e, two customers in the space of five minutes walked up to me and told me not to get a BlackBerry. The first conversation went something like this:

“Don’t get one of those,” my new special friend sneered.

“Why not?” I asked, “Did you have a bad experience?”

“No, they’re fantastic–work great for email.”

“You didn’t like the phone itself?” I asked.

“It’s a little big for a call; great for sending messages.”

“So what’s the problem?”

“BlackBerry is going out of business next week,” the person said.

“Uh, I don’t think so,” I offered gently. “They are still fighting in court. I hear they even have a workaround if things go bad.”

“No, they’re gone. I’m getting the new Windows Treo when it’s released.”

With that, the person walked away and out of the store.

Sometimes lawyers can fall into the trap of looking at business issues solely in legal terms. We read the latest updates on a dispute, and note with precision how a matter could go on appeal or a retrial. In the BlackBerry imbroglio, we can discern how NTP seems to be gaining the upper hand in court, and yet observe that RIM seems to have the USPTO on its side.

But most current or future BlackBerry customers don’t live in our legal world. They live in a different place. It’s called reality. And there the message that’s being pushed out is that the BlackBerry network is in real danger of being shut down. Maybe soon.

Now I’m a JD, not an MBA, but I have a hunch that this perception can’t be good for BlackBerry.

NTP knows this, and that’s why they are putting the screws to RIM. And RIM’s senior management is very smart, and at some point have to view a distasteful settlement as potentially better than a drawn-out “victory” that results in a consistent drumbeat of IP (and thus network) vulnerability. (See The Economist for an excellent viewpoint).

A GC who has been through a bet-the-company dispute will likely tell you that it’s invigorating for awhile–who doesn’t want to be on the legal cutting edge for months or years on end, and see your every move recounted in the news? (One side benefit is that your outside counsel will probably send you a holiday fruitcake).

But what that same GC sees after a while is that they are counsel to a business that exists to serve customers. And the longer customers hear news of a major legal problem, they may start to look elsewhere before spending serious dollars. And let’s not dismiss the Mystery Shopper’s comments as consumer drivel about what is really an enterprise product–even the higher-end markets are starting to get jumpy.

Give RIM credit, though, their third quarter results still showed market strength. Competitors aren’t standing still, however.

I’d buy a BlackBerry today, even without a settlement (which I expect in the next few months). But I’m not a normal person. I’m a lawyer.

Update (12 Jan 06): The WSJ reports ($) on RIM’s troubles with a story entitled “Bye-Bye BlackBerrys?” Ouch. Mentioned therein is that law firm Dechert LLP is doing a demo using handhelds from HP, that use software from Good Technology via Cingular.

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