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Ray Dalio knows China well and likes it a lot. Perhaps this is why he’s been so persistently and consistently wrong about how bad things were going to get between what are probably his two favorite countries. And, he ruefully admitted yesterday, “the war with China is spreading.” But, he added in a video chat with Bridgewater senior portfolio strategist Jim Haskel, it won’t spread too far.
“I don’t think we’re going to go to classic war — I do think there is going to be a restructuring of the world order in terms of changes in supply chains, changes in who is making what technologies, important changes in some of those things,” Dalio said.
Given the track record, this is not reassuring at all. But, sure, let’s humor the Wizard of Westport. Assuming that Donald Trump and Xi Jinping don’t begin lobbing thermonuclear weapons at each other in the near future, which side should a person take? As you can imagine, there’s a fantastically Dalio-esque answer to the question.
“Would you have not wanted to invest with the Dutch in the Dutch empire? Would you have not wanted to invest in the industrial revolution and the British empire? Would you not want to invest in the United States and the United States empire? I think it’s comparable,” Dalio said….
“I believe China is a competitor of the United States or Chinese businesses are competitors of American businesses or other business around the world,” he said, “and that therefore you want to be, if you’re diversified, having bets on both horses in the race….”
With China increasingly opening its markets to foreign investors, Dalio cautioned that “it is better to be early than it is to be late.”
He also dismissed the notion that China is any more risky than the U.S., Europe or emerging markets since each has its own sources of risk.
And if Dalio is wrong about the whole “classic war” thing? Well, if you don’t have a gold-lined bunker on the Connecticut coast, it doesn’t matter.
If there’s no big war, I’m bullish on China and if there’s a big war, I’m bearish on both the U.S. and China.
We eagerly await Peter Thiel’s op-ed calling out Dalio’s treachery and duplicity before the bombs wipe out the West Coast.
Bridgewater’s Ray Dalio Discusses the Impact of China’s Growth on the World Economy [YouTube]
Bridgewater’s Ray Dalio backs China despite trade war escalation [CNBC]
According to data collected by the Internet Legal Research Group, which law school has the highest acceptance rate?
Hint: This law school granted acceptance to 86.1 percent of applicants as full-time students for the class beginning in the fall of 2018.
See the answer on the next page.
What technology tools rank most important to lawyers in driving efficiency? Given all the hype these days around artificial intelligence, it must be at or near the top of the list, right?
Actually no. In a survey being released today, AI and another much-ballyhooed technology, blockchain, rank at the bottom of the list.
Out today is the 2019 Aderant Business of Law and Legal Technology Survey, published by Aderant, a global provider of business management software for law firms.
As with last year’s survey, which I wrote about here, the 2019 survey covers a range of business and technology topics, including the business health of firms, their challenges and competition, billing processes, and change management.
But I, predictably, went right to the section on technology tools and cloud adoption, where the survey asked lawyers about the technology tools that have the greatest impact on their ability to work efficiently and manage their work effectively.
And here is what stood out there: Out of 18 categories of tools, the two lowest ranked were AI and blockchain.
So which tools did lawyers rank as having the greatest impact on their efficiency? Turns out they are the tools lawyers use day in and day out, the bread-and-butter tools of a modern law practice:
The survey also asked law firms about their adoption of cloud technologies. Three-quarters say their firm is “somewhat” or “slightly” in the cloud. But only 2% say their firm is completely cloud based and just 12% are mostly cloud based. Another 12% do not use the cloud at all. These numbers were generally consistent across firms of all sizes, the survey reported.
When asked the follow-up question about their plans to move to the cloud in the future:
On the topic of ebilling, the survey found that 29% of law firms process half or more of their invoices through client spend-management or ebilling systems. That is up 9 percent from the prior year.
Another area of inquiry in the survey involved the challenges and benefits of change management. One question asked whether it is a challenge to obtain leadership support or partner buy-in for new business initiatives or technology projects. Here is how they answer:
Interestingly, the firms that answered no to that question were also 24% more likely to say that their business this year was better than last.
Other topics covered in the survey included:
The survey questioned 147 business-of-law and legal professionals from law firms all over the world, with 87% of responses from North America. Most respondents (87%) were from larger firms in the U.S.
The “screamer” was a creature that existed in law firm lore to terrorize new associates and staff. There was always some partner — or partners — within the firm structure whose book of business shielded them from common workplace courtesy. Screamers didn’t have to actually scream at anyone. Sure, there were tales of partners hurling objects out the window — or at other attorneys — but more often than not the abuse manifests in the sort of passive-aggressive dress downs that systematically undermine a person’s basic sense of self-worth.
While mental health initiatives are getting some press these days, but these programs almost always focus on providing wellness services to those facing stress, without directly confronting those in management positions about treating employees better, and by extension, keeping stress down.
A series of tips received here at Above the Law — hodgepodged together into one cohesive narrative below — tell a story that, if true, would be a stark reminder that in Biglaw circles, management maintains a stigma when it comes to mental health and a significant blindspot when it comes to the possibility that a partner might be contributing to a hostile environment:
An associate left the office in an ambulance. An abusive partner had pushed the associate hard for years and it apparently became too much on the latest matter. The group is dismissing it and trying to sweep it under the rug as the associate’s shortcomings because it was mental health related.
We’ve only heard from people sympathetic to the associate in this instance so we’re not going to speculate on the truth of the matter, but the fact that associates feel that the firm would not only downplay an abusive relationship, but would see mental health as an excuse to shift blame entirely upon the victim, speaks to the fractured sense of trust in the work environment. If mental health enters the vocabulary of the legal profession, it can’t come in only as a means to whitewash bad management.
In another story, a legal secretary has filed suit over a pair of Venable partners who “yelled, humiliated and demeaned her to such an extent that their conduct constituted sex discrimination under California’s fair employment law.”
“The days when an attorney can make enough money to excuse the verbal abuse and humiliation of the women that work for him are over,” the suit says. “Legal staff is not required to tolerate and even babysit lawyers through tantrums supposedly caused by ‘stress’ or ‘pressure.’ Verbal abuse and humiliation alter the terms and conditions of employment. When this conduct is directed at women, it is sex discrimination.”
While there are certainly scenarios where this sort of abuse comes from a place of gender dynamics and only targets women, this abuse is not always a matter of sex discrimination and it’s unfortunate that this rubric is one of the only effective means of addressing it. Too many instances can slip through the cracks when sex isn’t the clear impetus behind the abuse.
But more important than finding the right legal redress, firm leadership across the industry needs to get its act together and start holding peers accountable. There’s no amount of rainmaking that justifies keeping a hurricane in a corner office. We often point out that a law degree doesn’t necessarily provide business acumen, but it also fails to train management skills. Biglaw firms should start taking this seriously too.
Legal secretary’s suit claims partners’ tirades constituted sex bias, caused panic attack [ABA Journal]
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
Officials in Sacramento have been critical of the State Bar of California for not maximizing revenue from leasing space in its San Francisco headquarters, as I recently reported.
Apparently, the Howard Street Coffee Roastery was a victim of the State Bar altering its approach to real estate management.
The coffee shop long housed on State Bar property permanently closed its doors at the end of July.
Owner Jane Heng said the shop was told months ago its lease would not be renewed, which she suspected was because the bar wanted to raise its lease rates. She said the news the coffee shop would have to leave left her in tears.
“All of the small businesses are being kicked out, and the giants are coming in,” Heng said, speaking about broader trends in the city. “It is so sad.”
State Bar spokeswoman Teresa Ruano said the bar’s goal “is to maximize the profitability of its assets.”
“As leases expire, new leases are negotiated at current market rates,” Ruano wrote in an email. “The Coffee Roastery did not communicate a desire to continue leasing the space at current market rates. The State Bar is currently negotiating a lease for this space with another food operator.”
Attorneys who defend practitioners facing State Bar Court charges are among those disappointed to see the coffee shop go.
Samuel C. Bellicini, an ethics lawyer based in San Rafael, said he would visit the Coffee Roastery every time he visited the State Bar.
“I saw Jane, bought a cup of coffee and tipped her,” Bellicini said. “We loved and adored her.”
He questioned the bar’s priorities, amid all that is on the agency’s plate.
“Don’t we have bigger fish to fry than to kick out a coffee shop everybody loved?” Bellicini said.
Jonathan I. Arons, a San Francisco ethics lawyer, is another fan of the Coffee Roastery who bemoaned its closing.
“I’ve been a devotee almost since they opened,” he said. “When I had trial at the State Bar, I would go in every morning.”
“I’m a fan of the smaller places rather than the Starbucks-type places,” Arons added.
Heng said there are no plans for the Coffee Roastery to open in another location.
The news about the coffee shop’s closure comes in the aftermath of the state auditor reporting that the California bar is leasing spaces in its headquarters at below-market rates.
“In 2018 and 2019, [the] State Bar entered into four leases for its San Francisco building with below-market rates that range from $12 to $28 per square foot less than those of comparable properties,” the audit said. “Even if [the] State Bar had leased its space at the lowest of the appraiser’s market rates, it would have earned $777,000 in additional revenue in just the first year of the four leases.”
Meanwhile, the California Assembly recently amended the bar’s annual funding bill to express the Legislature’s intent that “all leases entered into by the State Bar for lease of State Bar property on and after January 1, 2020, be at or above market rate in order to reduce licensing fees.”
Lyle Moran is a freelance writer in San Diego who handles both journalism and content writing projects. He previously reported for the Los Angeles Daily Journal, San Diego Daily Transcript, Associated Press, and Lowell Sun. He can be reached at lmoransun@gmail.com and found on Twitter @lylemoran.
The Bankers Association of Zimbabwe, which represents the nation’s 21 lenders, “would defend the action,” the organization’s legal representatives said in the court documents, filed last week. The association had been served with a summons on July 24 giving them 10 days to respond to claims from Cambria’s Paynet and Payserv units in Zimbabwe.
The battle between London-based Cambria and the association reached boiling point in June when Paynet, one of the country’s largest providers of bulk payments such as salaries, suspended services to banks, citing unpaid bills. It forced the lenders to switch to smaller providers or resort to manually managing payments, hindering the flow of money in the cash-starved $31 billion economy, already grappling with rampant inflation and mass unemployment.
Cambria on Tuesday said banks had closed their Paynet gateway, preventing compliant lenders from transacting with them and hindering the orderly flow of payments. The company is betting a partnership with Ecocash, the mobile-money unit of Econet Wireless Ltd., will help it recover some of the lost revenue from the dispute with the banks.
“If not successful, Cambria will need to significantly downsize its operations in Zimbabwe, as it continues to pursue legal recourse through the courts of Zimbabwe,” the company said, adding it may also approach courts in neighboring South Africa, or the U.K..
After convicted sex offender and alleged financier Jeffrey Epstein was arrested on federal sex trafficking charges a few weeks back, we started to get some reminders of all the people who had given him their money over the years.
Being named as an associate of Epstein’s while he is being unmasked [again] as an irredeemable sex criminal has put some very comfortable people in some very uncomfortable positions. Take Leon Black, for instance, who seemed forced to let Apollo Global know that his financial dealings were totally personal and involved only the money that Leon made from Apollo as opposed to his money that was in Apollo…which must have been comforting.
But the name that has been most associated with Epstein forever was Lex Wexner, the billionaire founder of L Brands who seems to have essentially created Epstein’s fortune by giving him part of his own. The most everyone looks into Epstein’s wealth, it becomes harder and harder to see where Wexner’s money ends and Epstein’s begins, and all we heard from Wexner was silence.
In a letter from Wexner to members of his charitable foundation obtained by CNBC, he explains what went down between him and Epstein, and it’s a pretty tremendous document that invites a metric tonnage of epistolary analysis:
In recent weeks, there has been considerable media attention on my past connection to Jeffrey Epstein. To be clear, I never would have imagined that a person I employed more than a decade ago could have caused so much pain. I condemn his abhorrent behavior in the strongest possible terms and am sickened by the revelations I have read over the past weeks. I sincerely value your trust, and that is why it is important you hear details and context from me directly.
This is what we in the biz call “a lede”:
I first met Mr. Epstein in the mid-1980s, through friends who vouched for and recommended him as a knowledgeable financial professional. Mr. Epstein represented that he had various well-known and respected individuals both as his financial clients and in his inner circle. Based on positive reports from several friends, and on my initial dealings with him, I believed I could trust him.
Okay, this is a description of how most wealthy people select money managers…
Eventually, he took over managing my personal finances.He was given power of attorney as is common in that context, and he had wide latitude to act on my behalf with respect to my personal finances while I focused on building my company and undertaking philanthropic efforts.
“In that context” is doing some real work here. Giving limited power of attorney to your money manager to move a nice chunk of change around without having to clear every decision with you is not an uncommon practice, but the “wide latitude” part is not common in almost any context. And if Wexner is implying that he gave wide latitude over all of his personal finances to one money manager via a non-limited power of attorney agreement, that’s…pretty uncommon to us.
In the early 1990s Mr. Epstein became a trustee of The Wexner Foundation, but he had no executive responsibilities in the running of the Foundation. He did not work directly with Foundation staff, and he did not engage with leadership initiatives in any way.
So, in other words: “Many of you also remember when I gave Jeffrey a no-show title gig at the foundation? Cool. Let’s move on.”
As the allegations against Mr. Epstein in Florida were emerging, he vehemently denied them. But by early fall 2007, it was agreed that he should step back from the management of our personal finances. In that process, we discovered that he had misappropriated vast sums of money from me and my family. This was, frankly, a tremendous shock, even though it clearly pales in comparison to the unthinkable allegations against him now.
What a terrible double whammy for poor Les. First, he finds out that the guy he trusted with all his money [and to whom he gave a mansion, a fortune, and shared a massive luxury yacht with] had been systematically raping dozens of underage girls, and then he finds out that he was also a victim. Can you not see hard this was on Les, Wexner Foundation members?
This man is in pain! So much pain that it took him Epstein being arrested and convicted of soliciting underage prostitutes, almost a decade of shame, a federal sex trafficking charge and Epstein’s arrest, and then a month of waiting to stand up and share the agonizing tale of being cheated out of like $150 million by someone he trusted…
With his credibility and our trust in him destroyed, we immediately severed ties with him. We were able to recover some of the funds. The widely reported payments Mr. Epstein made to the charitable fund represented a portion of the returned monies. All of that money — every dollar of it — was originally Wexner family money.
Sure, Les got most of it back, but like Epstein’s other victims, the psychological scars are the last to heal…
I am embarrassed that, like so many others, I was deceived by Mr. Epstein. I know now that my trust in him was grossly misplaced and I deeply regret having ever crossed his path.
As the story has unfolded further, and the extent of the pain caused by Mr. Epstein continues to grow, I have spent time reflecting and searching for answers as to how this could have happened. My heart goes out to each person who has suffered unthinkable pain and I pray for their healing.
Yeah, but that was a lot of time reflecting. Wexner has been named in like 80% of the stories about Epstein for more than a month now, meaning that he’s been letting his name become virally synonymous with “Sex trafficking” “Rape” and “Sexual assault of 13-year-old girl” for weeks while keeping quiet about his truth that he cut ties in 2007 after Epstein embezzled from him? That’s…some masochistic reflecting.
Here at Dealbreaker, we’re something of a connoisseur when it comes to billionaire mea culpas about being involved in very dark shit, and we have to give Les Wexner a grade of C+ on this one. It’s a vague and quasi-tone deaf explanation of an objectively strange private business relationship, and it’s coming out more than a decade after his embezzler was first convicted of a sex crime. Essentially, this letter feels like a case of almost too little and way too late.
Wexner will not be the last wealthy old man to write one of these letters, but the tone and timing of his should be a lesson to the next few that it’s probably better to write one faster and clearer than his.
Wearing a MAGA hat or any other conservative paraphernalia does not make me a white supremacist, anti-Semite, bigot or any other stereotype that may be misapplied. The purpose of wearing a MAGA hat is to identify as a supporter of Donald Trump and as a believer in conservative values. …
Freedom of speech is also what allows a student to wear a MAGA hat or a #BuildTheWall T-shirt. Freedom of speech allows me to tell [Professor] Omari that he is wrong, and that his interpretation of a MAGA hat is nothing but a grotesque attack on the politics of a student. …
This is my struggle and the struggle of the conservative law student. With an overwhelming majority of faculty falling left on the political spectrum, some will inevitably take strides to not only push their ideology on students, but to also ensure that conservative voices are not heard in the conversation. This happens through contrived dress codes and insinuating, or even enforcing, the mandatory removal of MAGA hats in the classroom.
— Austin Phelps, a third-year student at Gonzaga University School of Law, in response to Professor Jeffrey Omari’s commentary piece in the ABA Journal where he said he believed that Phelps, who was then unnamed, was attempting to “intimidate and/or racially antagonize” him by wearing a MAGA hat. Phelps, who was once reprimanded for wearing a T-shirt which read “#BuildTheWall” to his internship, goes on to note that conservative law students are hesitant to identify with their politics out loud because they want “untainted employment references,” “do not want a target on our back[s],” and “simply want to finish law school without any major incidents.”
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
I came across this article from Fast Company about the 50 Best Workplaces for Innovators. Unfortunately, the article simply lists the companies rather than describing what characteristics make them innovative. And so I got to thinking: when it comes to law, can innovation truly come from within? Or do you have to own it to change it?
I’ve written about innovation in the legal profession over the past decade. Predictably – but earnestly – I’ve always taken the position that solo and small firms are the drivers behind innovation – from SCOTUS lawyer Tom Goldstein’s business model of ambulance chasing Supreme Court cases to Greg Siskind, a once small immigration law firm owner who pioneered use of the Internet for biz development to family law firm owner Erin Levine with her company, who has built Hello Divorce, that offers tech-powered divorce lite legal services. But all of these lawyers and the others who innovate did so on their own, far from the demands and cost constraints and bureaucracy that is big law.
Moreover, solos and smalls innovate best because they’re hungry. As I wrote here solos innovate to get paid while biglaw attorneys are paid to innovate. Hard to hustle when innovation is just another task at your job. Indeed because of internal constraints on innovation within an organization, I wrote over a decade ago – that biglaw should outsource innovation to solo and small law firms.
But outsourcing innovation doesn’t have to stop there. Law schools and bar associations can also look to solo and small firms for ideas on how to produce graduates with skills needed to hit the ground running or how to future proof law practices – or law schools, for that matter.
Of course, constant innovation within solo and small firm practice can also be a challenge. Because over time, you get lazy and set in your ways. You start to take on the attitude that you never had before – if it ain’t broke, don’t fix it – instead of constantly embracing the lightness of new beginnings. In short, keeping it fresh is always a challenge, but less so at solo and small firms where it doesn’t take much to pivot once the urge does strike.
But the bottom line is this: can we expect innovation in law to trickle down if it comes from institutions? Or does it need to come from independents on the outside? That’s yet another reason why it’s so important, in this time of transition, to ensure that solo and small firm practice remains sustainable.
Image courtesy of Shutterstock