Saturday, October 24, 2020

Favoring the children of prominent people

        A few weeks ago I took a trip to the beach. It was depressing near the Santa Monica pier, which has turned into a homeless enclave. Here’s a man sleeping, here’s another man sleeping, and here’s one folding up his tent. The expressions on their faces were heartbreaking, a mix of bewilderment, anger and worry. It’s a testament to the heartlessness of the city’s privileged leadership. I could just see Mayor Eric Garcetti talking to one of the homeless: 

Sorry dude, you were born to the wrong person. My dad's Gil Garcetti. He was politically connected, so I get to be mayor. Your parents were nobodies, so you’re a bum. You never heard of my dad Gil? How dare you? He rose to prominence by hogging the camera after his office botched the O.J. Simpson murder trial. So I live like a king, and you live like this.

Who am I kidding; Mr. Garcetti would never lower himself to talk to a homeless person. He reportedly wastes $30 million of city funds each year to harass the homeless, and he compared them to horseshit.

       Before getting to the topic of this post, please let me explain why I left the law, because they're loosely connected. I'm still licensed and pay bar dues every year. Not sure why; the bill comes and I pay it. But I haven’t worked on a legal matter in years.  

       After leaving O'Melveny in 2017, I tried government work. I had already worked in plaintiff’s class action, at the Gottesdiener Law firm. I didn’t like opportunistic and unjust cases we filed, and the office was a nightmare. I told him that and my employment ended. I also worked in legal academia, as an adjunct professor of law at Fordham University School of Law. I enjoyed that and my student review score was 4.75/5.00, but I didn’t want to be part of the law school industrial complex, the law school scam. I had anonymously won the Wall Street Journal Lawyer of the Year award for exposing that very scam and I couldn't imagine being a part of it. (I’ll elaborate on the former two later. I think I have to, to add enough detail to avoid a defamation lawsuit.) After Fordham I did defense-side work at O’Melveny, an experience so jarring that led to this website.

       But I didn't leave the law after O'Melveny. I wanted to try one last area -- government. I went to the Los Angeles City Attorney’s Office. Los Angeles is my favorite city in the world and I wanted to serve it. I volunteered to be a pro bono attorney. Not lucrative "pro bono" like O'Melveny's David Lash -- who views pro bono as a corporate marketing job -- and who appears to have sucked so money out of those programs that he lives in a $5 million house in Beverly Hills. This would be real pro bono, working for free. I had gotten into the law for justice and public service. The city is where I’d find decent people. Government -- that's where the good lawyers went. Finally, I would find a home as an attorney.

       The program started with six weeks of training. I expected a welcoming kumbaya vibe, but that's not what happened. The trainers were passive aggressive, belittling and sometimes they overtly mistreated us. One pro bono attorney said it was the standard "hazing" you experience when joining a new group. Maybe. Another revealed odd interactions with the city's attorneys. For example, they told him that merely doing his unpaid job wasn't enough, because they only work with people they drink with. So I guess we had to entertain them at bars too? And there were the belittling comments. One trainer said she likes volunteers, because we’re desperate and will stay up until 2:00 AM. Another trainer repeated this theme, noting that volunteer once stayed up to write an unrequested memo on a topic the trainer mentioned in passing on his way out the door. Another trainer complained that a former volunteer, who this trainer didn't like, had asked him for a letter of recommendation.

       Then there were the cases. We were going to prosecute the homeless for shoplifting food, street prostitutes charging $40 for sustenance (or more likely, because she was human trafficked), people sleeping on the street and other heartbreaking misdemeanors. That wasn't the worst of it. We wouldn’t get the cases until the day before the trial. I expected to handle a case from start to finish, and their approach gave us little time to prepare and avoid the risk of a mistrial or prosecutorial misconduct (something that had befallen former head city attorney Carmen Trutanich.) This lack of preparation time made no sense. A volunteer said it's an internal office rule.  

       As I got to know the other pro bono attorneys, I learned that they weren't really volunteering in the way one normally thinks of volunteers. They were mostly recent law grads, hoping to volunteer their way into a paying job. One person, a bright recent graduate who drove a thirty-year-old car and who was struggling to support himself, described the herculean efforts he made to "volunteer" at various offices in hopes of getting a full-time job. Another repeated a similar story. Another had been volunteering for a year at this exact office hoping to get a job, with no luck. Another was working at night as a bouncer or bartender to help cover his expenses during this program. When we got back from lunch, we discussed the city's new $15/hour minimum wage law, noting how the people who served our sandwiches would be making that soon, making so much more than we did. A female pro bono attorney said she had never made $15 an hour in her life, and that she didn't know what she would do with her excitement when she gets her first real paycheck. 

       In light of this, the lack of pay made no sense. The Los Angeles city attorney's office is one of the highest paying public organizations in the country. Had the city's 500 attorneys taken a mere 2% pay cut, they could have paid this group a much needed small wage. Were they so greedy that they would deprive others of a core human right -- the right to be paid for work -- in order to boost their own salaries by a mere 2%? 

       None of this made sense. What was going on here?

       After some research, I discovered what was going on. The volunteer attorney program was created in 2009. The city's management wanted to take advantage of the glut of lawyers created by the aforementioned law school industrial complex. They didn’t want to pay attorneys for their work, so they created this “volunteer” “pro bono attorney” program. It was opportunism, pure and simple. And it didn’t go smoothly. The city’s paid attorneys filed a grievance, accusing the volunteers of stealing their union jobs. This background is in the grievance's briefs. (After I told the city that I found these briefs, the Los Angeles City Attorneys Association redesigned their website to remove them from public view. Fortunately I still had the set I downloaded from their old website in 2017.) 

       Milton Friedman had warned us about this scenario, and I was seeing it in practice. The city's paid attorneys hated the volunteers so much that they even gloated to the press when a volunteer made an innocent mistake. Yes, your own teammate gloated to the press when you make an inadvertent mistake. It appeared to be a cut-throat office. I overheard one city attorney say they were going to file a bar complaint against another city attorney. One city attorney had filed a restraining order against a human resources manager. It didn’t take long to realize that this place was bad news. I resigned after two weeks and just left the law, giving up any hope of finding a decent place to work in the legal profession. I also did one other thing, I wrote the office’s head Mr. Michael Feuer about all of this. 

       How does that relate to the theme of being born to the right parent, and O’Melveny & Myers? Well, I recently learned that Mike Feuer’s daughter Danielle Feuer works at O’Melveny. She doesn’t work in the office he runs, where you’re either a pro bono attorney treated with hostility, or a union attorney who has to worry about a pro bono attorney taking your job. No, she works at O’Melveny, where she will be treated well because she's the daughter of the city attorney.  

       O'Melveny believes in favoritism. They do not treat all associates equally. For example, in 2017, a fifth year associate -- David Dorey -- was reportedly paid $541,000 by the firm in "salary/bonus," far exceeding what other fifth year associates made. I was surprised when I learned this, because I worked in his practice group and never heard of him doing anything remarkable. I don't know why he had secret clout within the firm. Some might say it's because he's a white male, but a lot of associates are white men, as are many of the homeless. Being a white man can mean little if it's all you have. It was something else; I don't know. Whatever the cause, it happens at O'Melveny; some associates are treated much better than others, and not necessarily for meritocratic reasons.

       So Ms. Feuer will be treated very well. She's not going to have to deal with what this associate went through, or this associate, or this associate, or these three alleged victims of discrimination (case onetwothree), or what others whose stories aren't public went through. They know who she is.

       I wouldn’t have written about this if Ms. Feuer was the only example. She’s not. For example, an attorney once boasted to me that Jaime Quinn, the daughter of the head of Quinn Emanuel, worked at O'Melveny. Do you think O'Melveny is going to mistreat her? 

       They might have gained something through her. Back in 2018, O’Melveny tried to whitewash the USC sexual abuse scandal. Concerned that O'Melveny's sham investigations could harm the victims, I warned the school and the press (and the matter turned out as I had warned – and not the way O'Melveny promised it would.) In researching that matter, I noticed that her dad John Quinn represented USC in the related litigation. Of course I don't know if his daughter’s connection had anything to do with that. But it’s fair to wonder about the coincidence. If someone hires your daughter, you might team up with them against victims.

       Or another person boasted that Caroline Garner, the daughter of influential lexicographer Bryan Garner works at O'Melveny. Or there was the lunch where a partner boasted that the daughter of a really important Los Angeles police official was a summer associate at O'Melveny. It was the first thing he said about her, as she sat with us. Her demeanor suddenly turned from affable to indignant, as if she was wondering, “did you hire me because of my talents or because of my dad?” I forgot her name so I just skimmed the associates in the Los Angeles office to find it, and didn't see her picture. I guess she left. 

       Or there was the story another associate shared. When he started, an associate in his class invited him and others to a cigar bar at some exclusive club. He got the group access, because his father was a member. He went on to complain that O'Melveny treated this person much better than the other associates, probably because of his family connections. You heard these sorts of things. And remember, I didn’t talk to that many people so if I heard this many examples, there must be many more that I'm not aware of.  

       In closing, I'm not sure about this accusation -- but I do wonder if O'Melveny thinks they can gain something by hiring and favoring the children of prominent people. It's consistent with what I've seen elsewhere in the firm. It's the same corrupt "who you know" mentality that goes into O'Melveny's strategy  of "monetizing government positions."   



(from https://www.youtube.com/c/InvisiblePeople/videos)


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Appendix

       The rest of this post is just me adding detail to reduce the risk of being sued for defamation when I use terms like, “scam,” “opportunistic,” or “unjust.” Under defamation law, it’s safest to explain why you use a derogatory term, as opposed to letting the audience imagine a reason.

More on the term, “law school scam,” and my time at Fordham 

       My first exposure to the profession came in law school. I entered with the idealism of all law students, but eventually realized I had walked into one of the biggest scams in existence. Motivated by greed, law schools graduated far more lawyers than society needed, leading to scores of indebted and unemployed graduates. I’ve always been someone who tries to fix things when I discover they’re broken. So I did something to help fix that problem – by letting the public know. And this act of amateur journalism was successful. As undergraduates learned the truth, law school enrollment declined for a decade

       Of course this begs the question, why would law schools choose money over what’s best for students in the first place? I thought educators were idealistic “bleeding heart” "ivory tower" types? What kind of educator would be so low and opportunistic as to trick students into taking out loans and harming their lives -- just so the educator could put a few bucks in their pocket? An educator that was formerly a lawyer that’s who. 

       I saw the same problem when I worked as an adjunct professor of law at Fordham University School of Law. Even at a decent school like Fordham, some indebted students couldn’t find paying work. They would complain to me about it, not realizing I had won a national award a few years prior for trying to fix this problem. Although the life of a legal academic is idyllic -- I couldn’t imagine being part of the law school industrial complex that ripped these poor students off – having to deal with this every semester.

More on my experiences at The Gottesdiener Law Firm

       At the Gottesdiener Law Firm, I worked on cash balance whipsaw cases. I need to get into a little math to explain how opportunistic and unjust these cases were. A cash balance pension plan gives each employee an account balance. This account balance grows over time with contributions and interest. This isn’t unusual; it’s also how your savings account grows. You make contributions and the balance grows with interest. Of course, different employers paid different levels of contributions, and they paid different interest rates -- depending on how generous they were. 

       But there was a hidden issue. The thing about a cash balance plan is that under ERISA law it’s a “defined benefit” pension plan. There was a counter-intuitive rule in the law of defined benefit pension plans: if the employer paid an interest rate that was above a certain threshold, they had to pay an additional windfall. Let me repeat that. If an employer offered no pension plan, they were fine. If an employer offered a cheap cash balance plan with a low interest crediting rate, they only had to pay that amount and they were done. But if an employer was generous and offered a cash balance plan with an interest rate that exceeded the threshold -- they had to pay the employee an additional windfall. The rule punished generosity. 

       The problem is that this surprising rule wasn’t stated clearly. It required mental gymnastics to put two and together and figure it out. I learned of it back when I worked at Mercer Consulting as an actuary, when I had to help design a cash balance pension plan. But a few naively generous employers missed it. Unaware of this windfall, they gave their employees a high interest crediting rate without paying that additional windfall. So a decade or two later, Mr. Gottesdiener went through government filings, found the plans that had made this mistake, and filed class actions lawsuits against them to collect the windfall – taking a huge 30%+ or so cut of each deca-million dollar settlement. Even the preeminent law firm of Skadden Arps missed it in their own plan, and had to pay Mr. Gottesdiener millions after one such lawsuit. He became a very wealthy man from these lawsuits. 

       How did uber-wealthy Mr. Gottesdiener treat his own employees? He was a notoriously cheap and abusive employer. I saw it with my own eyes. In his office, the room for the paralegals didn’t even have its own air conditioning. There was one air conditioner in the room for lawyers and the paralegals would get the runoff of cool air. One of the paralegals sat by the screen door and she complained that she would get bitten by some kind of insects, I think mosquitos. Forget other benefits, like medical. Mr. Gottesdiener wasn’t going to give his employees the kind of generous benefits the companies he sued gave their employees. What kind of a profession would let a person who treats his employees this way sue good American companies who treat their employees well, because they were naively generous and missed an irrational rule? The legal profession that’s who. (And don’t bother bringing any of the above up in a legal brief challenging cash balance whipsaw cases. You will get sanctioned as the points above are legally irrelevant.)