Credit For Everything- Responsibility For Nothing
Did you see the John Thain interview with Maria Bartiromo a short time ago? Every time Maria asked a troubling question, Thain simply blamed it on circumstances. For example, when she asked why he paid so much to hire new executives, Thain said that that was the market price last year and things were not bad yet! Apparently, he had not realized that the only reason he went to Merrill was that it was in a tenuous fiscal condition due to deterioration in the financial markets
When she asked him why he had said the company and its assets where in good financial shape, and shortly thereafter the assets the company held tanked, he explained that that resulted from circumstances that quickly changed.
In this turbulent time, when the issue of Wall Street bonuses is hitting the headlines, we are beginning to ask whether executive compensation levels were really justified by actual performance. The more we hear the more it appears they were not justified.
When results are good executives do not attribute that to circumstances or luck, but their unique skill and based that on that they demand ever increasing compensation. When things go bad, that is not a reflection of the fact that their skill was really quite mundane. Circumstances are to blame.
We lawyers are just as guilty. As a young lawyer at a large firm I was told by one of the partners that in the event we lose the case we tell the client that his case was just as great as we said, and we did a remarkable job, but the judge or jury was really bad. Those of you who have experience with test juries as I have you know that you can make the same presentation to numerous randomly selected jury panels at the same time and get quite different results.
Similarly, would a rigorous scientific study justify our assumption that the large prestigious firm to which we are paying a premium actually achieves statistically superior results; the existing studies suggest not; the only correlation with legal fees is the size of the firm. You do not necessarily get what you pay for, but you may certainly be paying for what you get!
