November 5 is National Love a Lawyer Day-Really?

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Did you know that November 5 is National Love a Lawyer Day? Well, neither did I until recently while looking at a calendar of “national” something-or-other days.  Love a Lawyer Day sure has not caught on so far. I think I know why.

In 2014, Princeton social scientists Fiskel and Dupree published a report showing the results of their poll measuring the perceived competence and warmth (friendliness and trustworthiness) of a number of occupations. Lawyers fell into the group of perceived high-competence, low-warmth professionals which also included chief executive officers, engineers, accountants, scientists, and researchers. Sadly, when you look at this grouping of these less-than-warm folks, lawyers were at the bottom.

A Gallup poll conducted in December 2015, asked participants to rate the honesty and ethics of a number of occupations. Lawyers finished in the bottom half, right below building contractors and bankers and just above real estate agents, labor union leaders and business executives.  In this poll nurses finished at the top followed by pharmacists. At the bottom were lobbyists just below members of Congress, telemarketers and car salespeople.

So, when you consider that part of the warmth component in the Princeton study was also trustworthiness, it appears that the legal profession has a way to go until it is well trusted by the public.  That’s troubling to me.

While some of the participants in the Princeton study and the Gallup poll may have been responding based on their experience with their own lawyers, I suspect that many people’s view of lawyers is influenced by TV shows featuring sleazy lawyers because it makes for better drama.

But let’s dig a little deeper into what leads someone to trust (or not) a lawyer. In a legal text titled, Psychology for Lawyers, authors Robbennolt and Stearnlight explain it this way, “Clients experience trust in their attorneys when they rely on the attorneys to act in ways that are consistent with the clients’ well-being; that is, acting with fidelity to their interests and acting competently in doing so.” Maintaining client confidentiality is an important way that lawyers act in their clients’ best interests.  In addition lawyers are obligated to advocate for their clients by presenting facts and legal arguments in the light most favorable to their clients.

It is important to remember that hundreds of years of legal cases have shown that people often perceive facts or the “truth” very differently. The legal ethics of confidentiality and advocacy which guide attorneys likely have the effect of causing people on the other side of a dispute or negotiation to perceive the other lawyer as less trustworthy because the lawyer is advocating for the “other side.”

Lawyers are ethically forbidden from lying or urging their clients to lie. But, a lawyer’s role is not that of a journalist who is telling both sides of a story. A lawyer’s role is to make sure her client’s well-being is protected within the bounds of the law.

So, maybe if we celebrate lawyers at all we should change November 5th, to “Love Your Own Lawyer Day – the Other’s Guy’s Lawyer Not So Much.”

How Does the Consumer Financial Protection Bureau Help People?

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People have the right to be treated fairly and honestly by banks and other financial institutions. Rules for bank accounts and borrowing terms should be easy to understand. When customers have questions or concerns banks should respond to them in a reasonable time and try to resolve issues.  When banks and other lenders don’t follow these simple rules who can we turn to?

Congress enacteed The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2010.  Part of Dodd-Frank created the Consumer Financial Protection Bureau (CFPB) to protect consumers from illegal and misleading banking and lending practices. The CFPB website explains its goals this way: “We aim to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information and stepstools that they need to make smart financial decisions.”

Many big banks, lenders, debt collection companies and their advocates in Congress want to dismantle the CFPB. But, are consumers being helped? Let’s look at the numbers. On July 21, 2016, the CFPB celebrated its fifth anniversary and published its report card.

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Since it was founded, the CFPB has:

Provided $11.7 billion in relief to more than 27 million consumers. The CFPB made banks, credit card companies, payday lenders, for-profit colleges and debt collectors pay back to exploited consumers.

Handled nearly one million consumer complaints. Consumers have the right to be heard when they have a problem with a financial product or service. A consumer can submit a complaint to the CFPB about a financial company and it contacts the company for a response. In five years over 3600 companies have responded to the complaints filed by consumers with the CFPB. Not only does the CFPB contact the company and get a response, it publishes all complaints on its website. Having an advocate to get answers and a public forum to air complaints empowers consumers.

Assessed $440 million in civil penalties. When the CFPB finds that abuses have occurred, the wrong doers are made to pay up. Part of these assessments funds the CFPB. It is not funded by taxpayer money.

Clarified and simplified loan disclosure forms. Consumers have the right to clear, reliable information about financial products and services so they can make informed decisions. The CFPB simplified and reduced loan disclosure forms for mortgages, student loans, auto loans, and other financial products and services to help consumers. Believe me, they are much better.

The CFPB is attacking abusive debt collection tactics. On July 28, 2016, the CFPB proposed new rules that would curb abusive debt collection practices. The CFPB reports abusive practices generated some 85,000 consumer complaints last year alone, more than any other issue. Many consumers report being harassed repeatedly to pay debts they don’t owe or have already paid. Older adults file more complaints about abusive debt collectors than any other issue.

Consumers now have an advocate with enough clout to make a difference. People can rely less on private attorneys to address disputes with lenders and debt collectors. The CFPB saves people money, opens the door for many who otherwise could not get help and gives people the power to stand up for their rights against big companies.

One Good Thing Emerged from the 2008 Financial Crisis…

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financial-crisis-544944_640…the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted.

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What Happened?  In 2008, financial markets crashed due to a number of causes. Millions of people lost their jobs. Real Estate values plummeted. Homeowners went “under water” with their mortgages. Many financial companies who were deemed “too big to fail” were given a taxpayer-funded bailout to prop them up. As is always true, the average person got hurt the worst. People wanted changes because no one was bailing them out of their financial troubles.

What Changed?  It was in this bleak atmosphere that Congress responded by enacting The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2010 to help prevent this type of financial crisis from happening again.  It was the most comprehensive financial reform since the 1930’s.

How Does Dodd-Frank Help? Here are a few of the key ways Dodd-Frank protects consumers, taxpayers and small investors.

  1.  Looking for Early Signs of Financial Institution Failure. Dodd-Frank created The Financial Stability Oversight Council as a central monitor looking for excessive risks in the entire financial industry.
  2. Limiting Banks’ Investments with Depositors’ Money. Dodd-Frank contains the Volcker Rule which prohibits banks from owning, investing in, or sponsoring hedge funds, private equity funds, or proprietary trading operations for their own profit. These now-prohibited investment operations were the kind that put depositors’ money at risk in 2008 and a big reason why some of the institutions on the brink of failure were bailed out with taxpayers’ money.
  3. Protecting Consumers from Unfair, Abusive Financial Practices. Consumers could not fully understand the loan terms being offered because of confusing disclosure forms. There was no way to clearly compare loan terms from one lender to the next. Some lenders, including some mortgage lenders, credit card companies, payday lenders and others broke laws, lied to and took advantage of people any way they could. Dodd-Frank created an independent agency, The Consumer Financial Protection Bureau (CFPB), to set and enforce clear and consistent rules for the financial marketplace to assure that lenders followed the law and treat borrowers honestly and fairly.
  4. Keeping an Eye on Wall Street. Dodd-Frank also:
  • Regulates Risky Derivatives: Dodd-Frank requires that the riskiest derivatives, like credit default swaps, be regulated by the Securities Exchange Commission or the Commodity Futures Trading Commission. In this way, excessive risk-taking can be identified and brought to policy-makers’ attention before a major crisis occurs.
  • Brings Hedge Funds’ Trades Into the Light: One of the causes of the 2008 financial crisis was that hedge funds and other privately held investment funds weren’t regulated so no one knew what they were investing in or how much was at stake.
  • Oversees Credit Rating Agencies: Dodd-Frank created an Office of Credit Ratings at the SEC to regulate credit ratings agencies like Moody’s and Standard & Poor’s. Many blame the agencies for over-rating some bundles of very risky and complex investments contributing to the financial crises.

If you would like to learn more about what happened in the 1990’s that helped set the stage for the financial crisis, read about the repeal of the Glass-Steagel Act. If you would like to read a summary of how the CFPB helps consumers, you ‘ll  find it here. .

 

 

 

 

 

 

 

It’s summer.Kick back.Unplug. Think slow.

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It’s summer and a great time to kick back, unplug and think slow. Life moves a little slower in the summer. We all need our mental batteries recharged from time to time. Summer is a good time to give our minds and bodies relief from work stress.

When you take time off what do you do?  Do you stay plugged into the office because the place can’t run without you?  Does your boss think that you don’t need or deserve to get away and unplug from work for a week or two? If this is your life then this reflection may not be for you.

If, on the other hand, getting away and unplugging is something that you control, that you enjoy, then you might find this interesting.

In his book, Thinking, Fast and Slow, Nobel Prize winning economist, Daniel Kahneman, lays out his work and theory about how the human mind works. He explains that the mind has two systems.

System 1 (thinking fast) operates automatically and quickly, with little or no effort and no sense of voluntary control. The vast majority of things we do and decisions we make each day utilize fast thinking. Our brains have adapted to make quick, efficient decisions about routine situations.

Business cartoon showing a man at his desk with a large stack of recommendations.  He throws them into a 'yes' or 'no' trashcan and says to peer, 'All my decisions are well thought out'.

System 2 (thinking slow) allocates attention to the effortful mental activities that demand it. This is focused concentration; blocking out distractions to tackle a challenging issue or idea.

Kahneman determined that the automatic operations of fast thinking generate surprisingly complex patterns of ideas, but only the slower circumstances in which slow thinking operates can construct thoughts in an orderly series of steps. Solid analysis and planning require slow thinking.

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Slow thinking burns loads of mental energy. It is tiring. Getting away for a few days from the decisions that fill our usual work hours conserves energy. It is the perfect opportunity to think about significant life issues and plan for the future. When you get away and unplug, you set the stage to slow think your way to some answers.

As of this month I’ve logged 39 years as a lawyer.  This summer I am using my slow thinking time to work on our firm’s succession plan. Who will take over when I and the other older partners phase out of the law firm? How will things change? It’s challenging. It’s important. When I have it figured out, I am looking forward to the same sense of accomplishment I experienced when we hiked to the peak of a 14,000 foot mountain in Colorado.

So, what do you need to do some slow thinking about?  A big life issue? The wonder of the universe around us?  You’ve got an amazing brain. Give it a workout.

Let’s Celebrate Diversity and Tolerance on July 4, 2016

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Today, I sit here having recently returned from a trip to Germany and Austria. Over 10 days I tried to absorb as much history of those countries as possible. Both have had volatile histories of over a thousand years of wars, alliances, revolutions and ever changing borders. Like our country, both were shaped by migrations and immigrations of people from every direction of the globe.

Next week our country will celebrate its Declaration of Independence written 240 years ago and our American Revolution. Having just learned of the contributions of so many diverse people to the history of Germany and Austria, I was curious about the diversity of those who helped our country gain its independence from Great Britain. What I learned is that our revolution was a messy affair involving politics, economics and religion.  People lined up on both sides of the issue of independence.

We hear a good deal about our founding fathers who were the political leaders of the revolution. Most of these leaders were white men whose ancestors came from Great Britain, Ireland, Germany, France, Belgium, the Netherlands and the Nordic countries. But our country was already a more diverse melting pot of not only western and northern Europeans but also eastern and southern Europeans, Native Americans and Africans.
Those who came here freely came because this was a land of greater religious and political freedom than the lands they left.

The people who took a stand for independence and served the cause in many ways, including giving their lives, included men and women of all colors, native Americans, Europeans, Africans, Catholics, Lutherans, Methodists, Presbyterians, Free Quakers, Reformers, Episcopalians, Baptists, Jews, Deists and Atheists.

Ethnic and religious groups have often struggled to get along. We have a shameful history of enslaving African Americans and annihilating Native Americans in the name of manifest destiny. These human failures must never be forgotten so they are not repeated. Despite our failures, tolerance of diversity of race, ethnicity and religion was the ideal this nation was founded upon and has remained the ideal we cherish. People who promote hate, exclusion and bigotry do not speak of American ideals.

What a great history of diversity we have. Let’s celebrate our freedom to live in a diverse and tolerant county this July 4.

Bucking the Trend of Giving Good Legal Advice

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chimpanzee checks out the chin of another chimpI am a lawyer. It is important that my clients and I communicate effectively. If we do not fully understand one another, then giving good advice  may have little value to my client.

Two essential skills I need to facilitate effective communication are careful listening and clear presentation of information.  The law is often complicated. Results vary depending on specific facts. Grey is the official color of the law and it comes in many shades.  Explaining how it applies to each client’s situation without using legal jargon requires that I consider my words and methods of communication carefully. It is also important for me to see things from each client’s perspective.

If my client and I talk face to face, we can enjoy the benefit of a rich conversation, complete with ample opportunity to listen, observe non-verbal clues, ask questions and repeat this process until we both feel satisfied that we have each been heard and understood. On the importance of a lawyer really listening, Jack Welch, (former) CEO of General Electric, praised corporate counsel Steven Volk by stating, “He is a really great advisor. He listens better than anybody else.”

One enemy of effective communication is the expectation that answers can and should be provided instantaneously in any situation. To make matters worse, we are rapidly losing our ability to pay close attention to anything. We expect information fast, lightning fast. We want fast at the expense of accuracy backed by reputation and investigation.

Some clients want email responses from me to complex legal questions. I make judgments dozens of times a day about whether I can properly respond to email inquiries. Many would demand information via texts if I was willing to give out my cell number freely. But the fabric of legal opinion is too rich to be spun into a thin text message strand.

I find myself moving in the opposite direction; swimming against the current. I want my clients to fully understand the information and advice I offer them. And I want to know that they understand. More and more I am relying on illustrations and short publications I have created to help clients understand, learn and remember. A significant number of scientific studies have shown the value of providing information so it engages multiple senses as a good way to help others learn and remember.

One successful example of this is my illustration of three boxes which I use regularly for estate planning discussions. It has been so well accepted, I hear my clients refer to box 1, box 2 or box 3 assets as shorthand for their assets we have symbolically placed in them. This visual aid helps my clients understand how laws of distribution, contracts and wills must all work together to make an effective estate plan.

I want my information and advice to be fully understood by my clients. I want it to be better than “good advice” falling on confused ears. So, I have coined for myself the term “best advice” meaning advice which is fully understood by my clients. And it is best served in the old-fashioned setting of face to face.

 

 

Negotiate Creatively Like A Two Year Old

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The other day as my two year old grandson and I were leaving a neighborhood park, he started to run down the sidewalk. I quickly caught him and told him that he cannot run on the sidewalk because it is too close to the street and too dangerous. I doubt the warning was effective but just to be sure he didn’t run again I said, “You can either hold my hand and walk with me or I’ll push you in the stroller.” I was pretty proud of myself. I offered him a choice, both of which seemed reasonable and would satisfy my safety concerns. Well, he didn’t find that choice satisfactory so he said, “I want to push the stroller.” OK, a different solution to our negotiated settlement was now on the bargaining table. At age two he is now as good a negotiator as I was after 15 years of law practice. I considered his proposal for a moment and realized that it was a very good way to settle this. If I let him push the stroller I could keep a hand on it so he could not run. From his perspective he would have the control he wanted, no hand-holding and no stroller-riding. I accepted and off we went.

Too often negotiations stalemate or break off completely because the parties are treating them like a zero sum game. I want to pay less so you must accept less. I want to win so you must lose. The parties focus on dividing a pie that they have arbitrarily made too small.  When you and your negotiations counterpart get stuck, ask each other why the result each of you wants is important. Understanding why the other person feels they need a certain result can open the door to creative ideas to get both parties what they want.

Consider this example. I am asking $900 a month for an apartment I have for rent. A well-qualified applicant says she can only pay $850. One or both of us will not budge from our number. When I ask the applicant why she will not pay more than $850, she tells me about her car payments, student loan payments and expenses. I explain that I need $900 to cover my expenses which include  her share of cleaning the hallways and common areas outside.  She now offers to do that cleaning for free if I reduce the rent to $850. Since I am paying more than $50 per month for the cleaning, that is a good deal for me. We reach an agreement because we found a creative solution to our stalemate. This is a very simple explanation of principled negotiation.

Remaining open to creative ways to come to a deal and encouraging your counterpart to do the same can be very effective. My two-year old grandson does not yet purposefully think in these terms but I am happy he came up with a creative solution to our dilemma. The key to  using creative solutions to solve difficult negotiations is to do it intentionally whenever a situation arises.Don’t wait until a good idea pops into your mind. Rather, ask “why” and  then think creatively to help reach an agreement.

Reaching agreement with my grandson is usually easy. But I am mindful that he bargains from a strong position. Like any two-year-old, the nuclear option, the tantrum, is always on the table.

An Interesting Week of Life and Law

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I had very interesting encounters with clients and others this week. I talked with a successful business client who clearly liked people more than money. I listened to a medical profesional tell me about her challenges with her parent in failing health. I was able to assist two sets of parents who were financially helping […]

via An Interesting Week of Life and Law — Learning through Life and Law