GC's Eye View

When he was CEO of Goldman Sachs, Hank Paulson reportedly had a notice sitting on his desk that read "If you aren't in on Saturday, don't bother showing up on Sunday". Very droll. The message was intended, no doubt, to make the point that it would take 24/7 commitment to keep up with his legendary work rate. If you'd been one of his team, maybe you'd have signed the Faustian pact. By that point, Paulson had amassed a personal fortune estimated at $600M. If you'd already made it onto his staff, presumably you'd be sitting on a paltry $100M. If you worked hard and got lucky, you too could hope to get the top job. For those who aren't familiar with it, "tournament theory" makes predictions about what happens when there is very sharp differentiation in reward inside an organization. The best writing on this is by Tim Harford, the FT's Undercover Economist ( http://bit.ly/nGfNq ). In a nutshell, the theory says that businesses find it ve...

Imagine yourself back in the Spring of 2007. Everyone was feeling pleased with themselves. The problems with our system of capitalism had been solved. We'd outsmarted all the generations that preceded us, even the brainy ones who thought they understood the dismal science of Economics.  The cycle of boom and bust had been abolished, through the wonders of excellent economic management. Ed Balls had been appointed City Minister the previous year. In his first speech, he promised that "nothing should be done to put at risk a light-touch, risk-based regulatory regime". The public was frolicking about in a bath of cheap debt. Two rather different documents had just been published. The first was from the UK's Financial Services Authority. In April 2007, they produced a treatise explaining the benefits of PBR, which you can find here ( FSA on PBR ).   According to the FSA: "Past experience suggests to us that prescriptive standards have been unable to prevent...

When the UK's satirical magazine Private Eye wants to refer my profession, they often use the phrase "a proven lawyer". And nothing proves a lawyer more convincingly than the desire to ensure all the loose ends are nicely tied up. It's almost a professional requirement to be a little OCD. Asking yourself "did I remember to lock the front door?" ten times on the bus to work is not really all that different from asking "did I cross reference sections 17.2(a), 9.1(b) and 4.3 with the Statement of Work in Schedule D?" This mentality in every lawyer is the product of thousands of hours of painful training at the hands of what seem (at the time) like sadistic pedants. It takes an ocean of red ink scrawled across their work to get each lawyer to the point where attention to detail is second nature. By the time that humiliation is over, they're usually able to be rigorous in writing like nobody else, although it can leave them awfully unforgiving. My...

As a junior in-house lawyer, I worked for a company that lost its way a little. Part of the recovery plan was the appointment of a new COO, a well known hatchet man who specialized in removing costs. Our GC was desperately keen that this new COO should meet the Legal team, so he summoned us from around the world to a meeting  at global HQ, just outside Boston . For some reason known only to the GC, all 80 of us we were made to line up, like wedding guests, in order to shake the COO's hand as we entered the conference room. By the time I reached the front, about 40 people had already passed. I heard him say "Gee, there sure are a lot of you guys". Several of us winced. I couldn't help responding "We're very cheap" and grinning at him. It was the best I could do at the time, but it's hardly a sales pitch.    More recently, one of our business leaders wandered up to one of my team and asked "How does your work improve the experience of our cust...