ABA Section of Business Law
Business Law Today
May/June 1999
Snap Judgments
Health care to come
As a kid, allowance was the route to financial independence and decadent bubble gum indulgences. But if some public policy experts are right, allowance will take on a whole new meaning for adults as traditional health insurance plans turn into "medical allowances."
Cornell University researchers say that within 10 years employers will opt to give employees a medical allowance at the beginning of each year that workers can use as they see fit to cover medical expenses. Any surplus will roll over to the next year and once it reaches a certain amount be transferred into a retirement plan. According to the researchers, the so-called medical savings accounts would be a more effective way of cutting health-care costs by putting the decision in the hands of the consumer.
"They are inherently more popular with workers, and they provide a more effective instrument for curbing health spending because of the built-in incentives for individuals to become more prudent health-care purchasers," one of the researchers said.
Hopefully it won’t be as hard to get an advance on the medical allowance for emergency care as it was to get an extra dollar out of Dad.
Bill too high? Cut it
Just because you’re a lawyer now doesn’t mean you have to give up on those ’60s-style egalitarian ideals you once held so dear. In fact, you can dig out your red scarf and have another go at the revolution as part of the Summit Law Group in — where else? — Seattle.
This firm-for-the-people formed by 16 self-proclaimed "big firm expatriates" has no partner-associate structure — everyone is on equal footing and apparently in same-size offices. (We imagine incense burning in the lobby and hanging beads in place of doors.) And to ensure that members of Seattle’s proletariat always have enough money for basic latte needs, Summit allows customers the option of reducing their bills if they feel the fees are greater than the value of service they received.
"Most traditional law-firm practices benefit the lawyers, not their customers," says Ralph Palumbo of Summit when explaining the impetus behind the firm’s creation.
Of course, there are still plenty of benefits coming to the lawyers at the firm, who expect to rake in $6.5 million in their first year. Not too shabby. Perhaps Nordstrom should anticipate a run on red Chanel scarves next year.
Flexible fuzzies?
In their never-ending quest for billable hours, a large majority of law firms are adopting flex-time plans to help employees make the most of their time and of course help firms make the most money.
According to a recent survey by The Affiliates, a legal staffing service, 72 percent of the nation’s firms offered formal or informal flexible hours plans for their employees.
Through telecommuting and job sharing, many in today’s law firms keep their productivity level high while juggling the demands of their personal lives. Even senior members of firms are making use of new technology to get work done outside the office.
But not to worry that the cold-hearted firm is suddenly becoming family friendly. The head honchos still have their eye on the bottom line and are looking at such programs more to "attract and retain top candidates" than to dish out warm fuzzies to their overworked staff.
Privacy? What privacy?
While someone out there must be buying telemarketers’ products (we assume they wouldn’t keep calling if they weren’t making a profit), most Americans are concerned that their personal information is being routinely exploited for marketing purposes, a recent study found.
Many now feel that Orwellian predictions of Big Brother pale in comparison to the intrusive dinner-time phone calls and relentless direct-mail solicitations for which their personal information is now used.
In fact, the Privacy & American Business/Louis Harris survey found that 88 percent of consumers worry about threats to their privacy and 82 percent say they feel they have lost control of how businesses use that information. In an age of bar codes and niche demographics, American consumers still feel it is OK for companies to collect personal information for marketing purposes but only if the consumer gives permission.
More and more consumers are starting to take action to that end, the study found, with 78 percent of respondents having refused to give personal information to businesses. That’s nearly twice the number of people who withheld information in 1990.
We wonder what the number was in 1984.
No more gold watches
Doesn’t anybody stay together any more? The economy may be thriving, but companies striving to make the most of the boom times have found themselves in a soap opera of hiring and firing that has employees keeping one eye on the door and one hand on their resume.
Company loyalty may not be dead entirely, but according to a recent USA Today article, a lot of the love has gone out of the relationship. Pre-holiday layoffs and benefits cuts are among grievances listed by disheartened workers who feel their bosses don’t pay enough attention to their needs, the article said.
But some businesses are working to improve strained employee relations with such things as "buffer zones" of temporary workers that can be taken off the payroll in hard times, protecting long-term employees.
Further, experts now feel that a lifetime commitment to one company and a gold watch at 65 is not best for either the employee or the business. Eastman Kodak, for example, until recently adhered to a hierarchy of internal promotions and lifetime job security, says Senior Vice President Mike Morley. That system, however, "was entitlement based," Morley says, and created an environment in which "results were not important."
Eye in the sky
Despite the best efforts of Suzanne Somers and the gang at Candid Camera, not everyone likes being caught on tape when they least expect it.
With the use of satellite photographs to monitor such things as farming and real estate development increasing, the Arizona Republic reports that some folks are getting a little uncomfortable with the orbiting cameras.
The ABA, in fact, has appointed a task force to set up legal guidelines for potential civil liberties concerns stemming from the use of satellite monitoring. Already snapshots from outerspace are being used to curb illegal logging and improper irrigation. As technology develops, so too will the ability to monitor citizens’ activities.
But the satellite gurus say not to worry. "The uses of satellites for regular law enforcement are more fantasy than reality," University of Florida-Gainsville Professor Christopher Slobogin told the Republic. He adds, however, that soon police may begin incorporating satellite technology to search for drug farms or track vehicles.
About that specialty
If you’re hunting for the best salary, your concern should not so much be location, location, location as specialty, specialty, specialty.
According to the American Corporate Counsel Association and Altman Weil Publications’ 1999 Law Department Compensation Benchmarking Survey, it’s not so much where you work but what you do that will bring in the big bucks.
While top legal officers in New York City did make as much as 25 percent more in base salary than their counterparts in other regions, salaries in the rest of the country on average hovered around the $200,000 mark. Staff-level lawyers in the Big Apple also got more take-home pay, but across the country the average was roughly $80,000, the survey found.
Specialty, it turns out, is what determines who buys the Mercedes and who can only afford a BMW. The study found that in the 322 companies surveyed, chief legal officers in the chemical/petroleum industry brought home the fattest checks — $237,625 in annual base pay. People in the same positions at depository institutions, however, had to make ends meet with $167,604 in base pay in 1998.
Even in bonuses, the chemical/petroleum industry legal officials topped the list with bonuses averaging $144,712. After all, those foreign car repairs can cost a bundle.
— Heather Brewer
