You are a lawyer. You represent a hot start up that is venture backed. One day the CEO comes to you – out of the blue – and says “you’re fired.” (Cue Donald Trump frown).
You’ve stuck it out through the lean times with the company even when they weren’t funded and now you are on the outside looking in. What gives? It must be the evil venture capitalist (me). He must want one of “his guys” at the legal helm.
Not so fast. Even ex-lawyers like me who believe we can evaluate the best of legal talent don’t take this action lightly. And I never like to have a heavy hand with my CEOs. It’s their company to run and I work for them.
I, however, have seen some unbelievably stupid things that company counsel lawyers have pulled that has ruined their credibility with the VC (me) and thus found their way out the door, either by my strong urging, or by agreement of the entire company.
So, today is the list of “quick ways to get fired.” Before you laugh or go “duh” EACH of these are real events that I’ve dealt with personally. And all of these have happened in the last 3 or 4 years, so these are not “back in the day” events. Furthermore, there is no monopoly on stupidity. The mess ups below happened at small, medium and large firms all over the country.
I’ve divided them into three categories: 1. Screw ups that get you immediately fired. 2. Actions that get you fired sooner than later. 3. Things that probably get you fired over time. Without further delay (and in order of egregiousness)…
Screw ups that get you fired immediately
1. Screw around with redlines. You and my counsel are negotiating the Series A financing. As normal, there are several revisions of the documents. My counsel notices that paragraphs are reverting back to previously rejected ones, but are NOT showing up as redlines. They assume it is a mistake, but when the junior associate is asked “what’s up” he says that you told him to make the changes. You’re fired (and you probably get reported to the state bar and the head of your law firm).
2. Endorse the chief competitor. We find a quote made by you on the primary competitor’s website extolling the wonders of the competitor. First, it would have been nice to know that you represented our competitor. Secondly, you providing the quote shows amazingly poor judgment. You should never pick sides. (And in hindsight, we kicked the other company’s butt, so you chose wrong). You’re fired.
3. You provide little leadership and wait for someone else to come up with the answer. The company is in a sticky situation. It’s unique and it’s dire. There are many phone calls with lots of other partners and associates on the phone billing away. You and your team provide absolutely no thought leadership on how to “fix” the problem. Instead, the CEO, another executive or I come up with the solution, but you (probably in order to save face) tell us that we are idiots and that it will never work. We have to hire another law firm to vet our idea and they say “great idea – it works.” Company survives. You don’t. You’re fired.
4. You provide advice to the CEO adverse to the company’s interest. Things aren’t going well at the company. The board is mulling around thinking about replacing the CEO. In contentious discussions to remove the CEO, it becomes apparent that you and the CEO have been having side discussions. Specifically you have advised him regarding his leverage that he has against the company in order to either keep his job or extort a larger settlement agreement. Guess what? You’re Fired. (But not by the CEO, the board makes it a “two-fer” and you and the CEO are out).
Actions that get you fired sooner than later
1. Be lax in your advice and get it wrong. Yeah, we all make mistakes, but being lazy and riffing off the cuff about legal issues and then being proved wrong is something that can doom your relationship. If you come to the board meetings, sit back and offer opinions that later turn out wrong, you will have a short stay as company counsel. Specifically what annoys me the most is when lawyers riff about subject areas that they aren’t experts (e.g. corporate guy guessing about litigation issues) and don’t bother to check their own advice with their own firm after the board meeting. Let’s call this: “You’re fired over time”
2. Being inefficient, getting lost in the woods, billing for small stuff that doesn’t matter. You are the epitome of Why Startup Lawyers Frustrate Me. Despite how stupid it is to negotiate crap like registration rights, you waste your time, my time, my counsel’s time and your client’s bank account doing so. Again, you’re fired (over time).
3. Bait and switch. You bring in the client, but you never show for board meetings, phone calls, etc. and send junior folks in your stead. Or worse yet, the company hires you to run an important litigation matter and you don’t show for court, rather your less skilled colleague does. You’re fired (over time).
4. Not knowing who your client is. You have trouble figuring out that you represent the company, not the CEO. Nothing as heinous as the above example, but you seem to have a “what’s good for the CEO filter” on all of our advice. You’re fired (over time).
5. Letting summer associates run wild on the account. You let a dozen different summer associates bill out (at first year rates, no less) to the client during a 3 month stint. You’re fired (over time).
Things that probably get you fired over time
1. Being annoying. There are a ton of them, but some that come to immediate mind are talking too much at board meetings and trying to prove how smart you are, spending the entire board meeting on your blackberry or constantly complaining about my counsel choice during a financing. (Don’t you understand that you are just insulting me and that I probably use these guys all the time?). Additionally, you make grand promises of VC intros or other introductions into your “vast network” and you never come through. You probably don’t get fired for any of these, but if the CEO decides that they want to make a switch, I’m certainly not going to stick up for you.
All of these actions seem to suggest that you don’t realize that as soon as the financing is done that you are representing me as a board member, or that you don’t understand that I have many different investments and have a long memory.
Then again, if these aren’t obvious to you, then you are probably one of the folks who committed one (or more) of these acts. To the rest of you, hopefully you got a sick chuckle out of these real-life events.
This will be quickly added to the 09-10 Colorado Entrepreneurial Law Clinic syllabus. I may retroactively add it to the 08-09 syllabus and force our recent graduates to read. Great post.
Comment by Brad — May 11, 2009 @ 5:11 pm
Well said Jason…a few of the "screw up " examples above I would probably throw into the "malpractice" hoop from three point rane….and the big game fisherman that I am, I would have to call the "bait and switch" (ill tell you over a beer..) a termination event a LOT sooner than later….nothing like paying top rates for less senior FTEs….reminds me of a not too distant Deloitte gig (nothing against Deloitte guys:) I ran as a gun for hire on the client site, whose project total cost of ownership was north of $100M, and after the first few monthly steering committee meetings, the Senior Partner (who is worth his $900 per hour billable rate) is swapped out for the floating Senior Manager who apparently is the "SME" for all things project related….at the same (inflated) hourly rate…..things that make you go hmmm.
Comment by Frank Greces — May 11, 2009 @ 6:50 pm
Great post Jason. If they taught this material in ethics class, this post might not be (as) necessary.
Comment by Julie — May 12, 2009 @ 12:04 am
This needs to be required reading for corporate attorneys.
Comment by Yokum — May 12, 2009 @ 3:27 am
Agree with Julie and Yokum. This should be taught in law school, and again to first year associates, and then a refresher course for new partners.
Comment by karynsf — May 12, 2009 @ 4:57 am
Thank you. You’d think it would be obvious….
Comment by Jason Mendelson — May 12, 2009 @ 5:01 am
You can include it in your summer associate readings. J
Comment by Jason Mendelson — May 12, 2009 @ 5:02 am
how about:
seeing a client (who has provided you with years of billables) go on the block, and taking your pound of flesh by dragging out the auction, running down blind alleys, and doing whatever you can to get your number close to that which the bankers looks to make upon a successful conclusion.
Comment by mark slater — May 12, 2009 @ 1:33 pm
I had a pretty good professional ethics class as a law student, but reading through these made me realize how much that was focused on individual/small practice issues (not that those aren't applicable in other circumstances too), like not mixing your money with client money, etc.
This list would be an excellent addition to that, from more of a corporate/business perspective–although another part of me thinks that any lawyer so stupid as to pull this stuff probably shouldn't be in practice anyway!
Comment by krisnelson — May 12, 2009 @ 5:42 pm
Excellent Post. Thanks for putting all of this out there. I am happy to see that playing by the rules and working hard for the client is not ignored.
Comment by chacon — May 12, 2009 @ 6:07 pm
Excellent post Jason. In particular, the "you don't represent the CEO"–or for that matter the VC's–seems to be an often overlooked part of startup company practice. Knowing the difference between trying to broker a deal/compromise between the CEO and Board/investors, and giving inappropriate advice to the CEO is critical. A lawyer must remember there are times where the correct path is to suggest the CEO should get his or her own counsel, because you don't represent the CEO. And then keep saying it until the CEO listens.
Comment by Dave — May 13, 2009 @ 3:09 am
Agree completely and also love your email address….
Comment by Jason Mendelson — May 13, 2009 @ 6:35 am
I've generally seen poor redlining practices as an example of extremely poor organization by a lawyer, less as a way of being sleazy and more just poorly organized and lazy…someone who saves 10 drafts internally, loses track of which one was the original they were marking against, doesn't open the redline to make sure it looks like the right document, forget to train associates on what good practices are, "accept" a comment in track changes that makes text disappear without generating a new redline, etc.
A personal pet peave is that somewhere in the last five years many firms seem to have forgotten to tell associates that the cover email should always say what the redline shows changes from. The logical thought is that it would show changes from the last draft received from the other side, but that is not always the case for reasons that are legit–multiple sets of comments from investors, comments from specialists came in separately, etc.– and sometimes annoying, such as showing against your last draft to show fewer changes where you rejected all the other side's comments.
Comment by Dave — May 13, 2009 @ 4:13 pm
This wasn’t sloppiness. This was purposeful, but your point is well taken.
Comment by Jason Mendelson — May 13, 2009 @ 4:27 pm
Re #3, leadership: I think the value of an "expertise" professional – attorney, accountant, realtor – is inversely proportional to the number of good ideas *I* have to come up with. If they make me do all the thinking, they're not advisers – they're gatekeepers.
Oddly, I have yet to find someone who'll make that their basis for compensation.
Comment by Jay Levitt — May 14, 2009 @ 10:00 pm
What I generally find offensive is the practice of billing for internal discussions within the firm. In other words, the senior partner has a meeting with the associates to discuss my account and I get billed for everyone's time. And that brings me to the firms that provide no detail to their billing. And finally, the worst of the worst: the attorney who does work that you didn't ask him to do and then won't do work you want him to do unless you pay for the work you didn't ask for. I see this more in personal representation than corporate but I had an M&A firm recently do this and I specifically told them in advance we were not interested in them doing the specific work that they ended up billing us for.
Comment by Mattj — May 15, 2009 @ 3:13 pm
Love this list Jason. You probably don't remember me but I was a summer associate in Hanover back in the day.
Comment by Jeff A. — May 26, 2009 @ 4:53 pm
Thanks for the support Jeff and your name is very familiar, but missing the face. Nice to see that you have your own firm now.
Comment by Jason Mendelson — May 26, 2009 @ 4:56 pm
I think the main way that lawyers get in trouble is taking the redlines out.
Comment by Love Poems & Quotes — January 30, 2010 @ 10:50 pm