Thursday, December 30, 2010

Yep. I was a chump.

See here.  This TaxProf Blog post points out how much creative accounting folderol goes into reporting employment stats of law schools to U.S. News

As I've said before (see here), lying on these questionnaires isn't much different from the "earnings management" that went on at Enron and the other like-minded companies.  Refusing to lie puts schools at a huge disadvantage, but lying just results in a race to the bottom in accuracy while pursuing a race to the top in "100% employed" reports.

Wednesday, December 29, 2010

Yet another good bankruptcy blog.

See here.  It's going on my Google home page, along with those other bankruptcy blogs (here).

Update:  Two more interesting bankruptcy law blogs:  the Charleston Bankruptcy Blog (here) and the Bankruptcy Law Network (here).  

Tuesday, December 28, 2010

A tale of two customer service approaches.

In today's Business Day section of the New York Times, there's one story about how Disney is able to reduce the frustration level of people who are waiting in lines at the parks (here) and another story about how difficult it is for the airlines to cope with all of the headaches about having to cancel flights during bad weather (here).

Disney has incentives to keep its guests happy.  Happy guests buy more souvenirs, come back to the parks, and tell their friends about their experiences there.

Airlines, on the other hand, have that new legislation -- the law that requires them to pay fines for staying on the tarmac for too many hours -- and their thin profit margins, which combine to reduce their ability (or desire?) to figure out how to reroute stranded customers when all flights are already filled to capacity.

Maybe it's a combination of company culture and outside incentives, but the juxtaposition of the two approaches is telling.  Disney wants to make people enjoy their time in its parks; airlines want to keep their costs low.

Thursday, December 23, 2010

Shame on you, Pat Buchanan.

I always hesitate to read Pat Buchanan's columns, because I know that I'll end up with a eye-twitch from his invective.  On the other hand, I skim them because I want to know what people whose views differ from mine are thinking.  (Sometimes, their points can change my mind; sometimes, they can't.  But I like to keep an open mind.)

But today's column, "The Marines: Sacrificed for San Francisco values," took the cake, and not in a good "I-like-cake" way.  You can read this claptrap here.

First off, Mr. Buchanan, don't use my beloved Marines for your own nefarious purposes.  Sure, there were some Marines who opposed "don't ask, don't tell," and sure, people can disagree about DADT.  Other people, though, think that a person's sexuality has no bearing on his or her ability to serve.  Remember the high-profile change of heart that Colin Powell had about DADT (here)?

Here's the line in your op-ed that drove me nuts:  "Can anyone believe that mixing small-town and rural 18-, 19- and 20-year-old Christian kids, aspiring Marines, in with men sexually attracted to them is not going to cause hellish problems?"  Seriously????

If you really believe that homosexuality is a sin, that's your right.  But, then, be consistent.  Condemn all of the other sins that can occur in the military, too.  What about military personnel having affairs?  If adultery is a sin, where's your outrage about that behavior among opposite-sex military personnel?  And if you're upset about the potential sexual harassment, where's your indignation about opposite-sex harassment--or haven't you been paying attention to those reports over the years?  

To me, many of the arguments that people made about DADT smacked of the same logic that opposed integration in the military:  "It's too much."  "The nation's values disagree."  "Soldiers and Marines shouldn't be distracted by having to share quarters with people of other races."  Integration worked out pretty well, didn't it?

Oh, and don't assume that only the liberals rejoiced when DADT was repealed.  I support a strong military.  I think that this nation would be better off if we had some sort of compulsory service (military or public works) after high school--in part because I believe that we owe our country some payback for the benefits that we get and in part because I think that we're better off when we mix together people who might not normally meet each other.  (And I feel ashamed that I didn't serve.)  I think that the military can provide a wonderful career--and I'm delighted that, now, schools should be able to let the military recruit on campus because the recruiters can sign the anti-discrimination pledge.  

And I worry about the deficit.  I like the free-market (although, to be fair, I don't always trust that it works), and I don't think that "more regulation" is necessarily the best answer to our problems.  I don't think that everyone belongs in college.  I worry about too-high taxes.  So, no, I'm not a knee-jerk liberal.

What I am is a person who loves her same-sex friends, who has worked with gay and lesbian colleagues for her entire life, and who fears that the military was irretrievably weakened by jettisoning talented people because of their sexuality.

Shame on you, Mr. Buchanan, for assuming that homosexuals in the military will be some sort of bad influence on those small-town kids.  Some people in the military will be bad influences, but most won't be.  Blind prejudice, on the other hand, doesn't help our country at all.

Beware the unintended consequences of bad incentives.

What do these stories have in common?  From the Wall Street Journal (written by Liz Rappaport and Michael Rapoport--distant relations at best), "Ernst Accused of Lehman Whitewash" (here); from the New York Times and David Streitfeld, "Homes at Risk, and No Help From Lawyers" (here); and from John Stossel, "Uncle Sam Will Help You Buy an Alpaca" (here).

Each of these stories has the same subtext:  people behave according to the incentives that reward them.

If it is true that Ernst facilitated the bad accounting at Lehman (let's wait and see, but I wouldn't be particularly surprised), my guess is that the facilitation was due to the twin incentives of (1) rewards for pleasing clients (remember Enron?) and (2) no rewards for calling shenanigans on accounting tricks that--at the very least--violate the spirit of accounting rules, if not the technical wording of those rules.  (For the basic advice to avoid all actions that can be explained by, "Well, technically, it's ok," see the paper that Colin Marks and I wrote for the Fordham Law Review, "The Corporate Lawyer's Role in a Contemporary Democracy," which you can download here.)

Want to prohibit fraudsters from preying on distressed homeowners?  California tried, by enacting a law that prohibits lawyers from being paid for doing loan modifications until the modifications are approved.  Good for California for trying to squeeze out those businesses that took the modification money and ran, before getting their clients the modifications.  But give California a big "oops" for not exempting legitimate lawyers who just can't afford to float the entire fees for a process that might take years to complete (and which could be discharged in bankruptcy if, after the modification, the client still needs to restructure debt).

And those alpaca subsidies?  Tax credits can be great ways to shape behavior but, well, they shape behavior.  All regulation shapes behavior--again, by providing incentives or disincentives.  Much of regulation is important:  criminal penalties, pollution standards, food and drug standards, etc.  But lawmakers need to understand that regulation can create unintended behavior as well and to think hard about what might go wrong with a poorly written or ill-conceived regulation.  For example, rage at the bizarrely high pay for poor-performing executives and the revolving door for inattentive board members has created a backlash of irritation at all high salaries.  (Well, maybe not the high salaries of athletes, but the high salaries of non-athlete businesspeople.)  Redistribution of wealth from all high-earners to more low-earners wouldn't be the correct response to that rage.  (I still remember enjoying Robert Nozick's Anarchy, State and Utopia, which is actually available--yay!--here.)  Again, cutting too wide a swath will create more off-target incentives.

People are hard-wired to behave in certain ways.  If we're going to create incentives for behavior--and we will always create some incentives--we need to try to think those incentives all the way through.

Monday, December 20, 2010

New bankruptcy blog in Nevada.

See the link here.  I know Brian, and I'm really impressed with his work.  This blog should be great.

And if you want some other good bankruptcy and bankruptcy related blogs, to round out your collection, see:

WSJ:  Bankruptcy Beat (here).
Credit Slips (here).
A Texas Bankruptcy Lawyer's Blog (here).
A Clean Slate: The Bankruptcy Law Blog (here).

Thursday, December 09, 2010

Shout-out to Greg Duhl for some of his latest articles.

Greg Duhl gave me a heads-up about two of his latest articles, Divided Loyalties: The Attorney's Role in Bankruptcy Reaffirmations (available here) and Social Networking and Workers' Compensation: Law at the Crossroads (co-authored with Jaclyn Millner) (available here).

I've been enjoying both of them--although I haven't yet seen The Social Network, the ethics issues surrounding social networking have begun to catch my eye, and based on some pro bono work I've done, the ethics issues in consumer bankruptcy cases are huge.

Thanks, Greg!

Saturday, December 04, 2010

Customer service warning for ballroom dancers: AVOID ""

I ordered three pairs of shoes in mid-November.  On 11/18, the company informed me that one of the three pairs was out of stock, and that my refund would be "coming."  It's 12/4.  No refund yet.

One pair of shoes didn't fit.  It took six emails -- SIX -- to find out that returns went to the shoe manufacturer, not to Dancers' Choice.

The email response is spotty, painfully slow, and woefully incomplete.

No matter the temptation, stay away from this company.  It's got some of the worst customer service I've seen in a long time.