Billable Hours, In-House Counsel, Legal Ethics, Practice Pointers

House Rules: Conflicted Out

In-house columnist David Mowry on the year-end ethics behind padding billables and closing deals.

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It’s the most wonderful time of the year. Bull and S***. If you’re not slaving away trying to get last minute billing hours, you’re slaving away trying to support a crazed population of folks trying to meet year-end sales numbers. It has been a difficult year, at best, for business. Heck, even Apple was downgraded to neutral yesterday. So, here comes the push.

The push is to close every deal possible, no matter the amount, no matter the risk, by 11:59 p.m. on December 31. But our job is to stanch the flow of craziness, is it not? Stay with me here — I am not allowed to collect commission due to a conflict of interest, yet every dollar that boosts our revenue, and thus our numbers for Q4, goes toward the bonus pool from which I directly benefit. If our end of year numbers are strong enough, the analysts punch our ticket into the new year and my options’ value rises. I may be dense (just ask my wife), but I fail to understand the difference from a commission-based return, and a bonus- or option-based return. The end result is the same, is it not? A benefit is conferred upon me based in part on my participation in the process of my sales-side corporation. But I am expected to “push” back.

I cannot, for real reasons, as well as flippancy, express some of the nuttiness that goes on at this time of year. Risks are taken akin to jumping from the high dive toward a half-empty deep end in the hopes that the water will be there in time. And it always ends happily with a splash. But, the troubling aspect to me is this incongruent fallacy of ethics. I am ethically bound to zealously represent my corporation, and at the same time, I am representing people whose very careers are at stake. I am well aware of the order of precedence there, but practically speaking, that line becomes blurred at this time of year, and frankly, I find it to be unsettling to be forced to live a legal fiction….

Please don’t misapprehend; I try my damndest to do the correct (read: “right”) thing in my legal choices and decisions. As I have stated ad nauseum, integrity is one thing that no one but you can take from you. The high road is always, to me, the best road to choose, and it is oftentimes in business the road less taken. However, this is not a polemic on moral business. I am expressing the struggle between right and “right”.

I may have mentioned before the anecdote about my first son being born two weeks premature, concurrent with an end of year billing cycle. I hit 2037 legit billables that year, 13 shy of a bonus. Despite my best efforts at appeals, etc. the firm would not budge. The Republican in me says. “Too bad so sad, you didn’t hit the target, try again next year.” The Dem in me says, “Sheesh, the guy had a baby for gosh sakes, have a little compassion.” And let me tell you, that bonus would have gone far toward assisting with the costs of a newborn. The tie to this column is this: I had several partners take me aside and say, “Why didn’t you just pad those extra hours?” Wha wha what?! Pad? Hours? And don’t tell me there aren’t thousands of you running up .1s as you read this. Or re-reading a brief that has been edited three to four times. See, the thing is, I may have been a patsy in a ridiculous pyramid scheme, but I couldn’t let go of my integrity. I billed what I billed. I was on track to exceed the target, but my kid was born when he was born.

Now, I am faced with a similar dilemma each year’s end. Why not just fudge some risk from moderate to high territory, what’s the harm? Is big corporation A really going to call in its chips on a ridiculous limitation of liability that I approved just to close a deal? Probably not. But, what if they did? Or more to the point, what if I give away what I otherwise would not have to think twice about? If I do it now, why not do it year round? I’ll tell you why, because while it is a truism that everything exists on a slippery slope, once you start down that slope in-house, the SEC can come calling at your door. Truth. You can look it up.

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First world problems discussed above, I know. But, as a father of three little ones, I cannot discuss Newtown the week before Christmas. Enough people are doing that already, and I have cried tears aplenty for those babies who, well, I am choking up again. Let me just say that we don’t need clips or assault weaponry to shoot deer or targets. We have a right to guns, but just like the limitations on the right to free speech, the right to bear arms should not remain unfettered as it is today. I pray that those families and loved ones who remain behind can get through this holiday season intact — it is going to be the toughest row to hoe for them. And I sincerely wish you, the reader, a good holiday season. Many bonuses to all, and to all a good night.

After two federal clerkships and several years as a litigator in law firms, David Mowry is happily ensconced as an in-house lawyer at a major technology company. He specializes in commercial leasing transactions, only sometimes misses litigation, and never regrets leaving firm life. You can reach him by email at dmowry00@gmail.com.

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