What language has no words for “democracy,” “science,” or “religion?”
While you’re mulling that one over, with apologies to one of the great English language rhetoricians and bromide-busters of the 20th Century, George Orwell (1903–1950), we have often marveled at how LawLand twists perfectly sound English words to its own purposes and often perverts or entirely strips away their core meaning.
This is more, we think, than a persnickety point. If you believe as we do in the power of law and of language–essays, story-telling, classical -style oration–and most fundamentally if you believe that words matter, then how we use standard English words in LawLand in rather impressively perverse ways should be a topic you care about. We do.
So a few examples of our own industry’s practicing the neat and unforgettable Alice in Wonderland trick:
“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less. ‘ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things. ‘ ‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”
- As used across the rest of the economy, “equity” means an ownership interest that, one way or another, has market value which the equity holder can realize, typically by selling all or part of it. It’s tradeable, fungible with any other piece of the same type of equity issued by the same firm, and almost always changes in value over time. But for our purposes, the key characteristic is that of having market value the owner can realize on disposal.
- In how many ways is that not remotely like the basket of rights, obligations, and privileges a law firm associate receives on ascent to “equity partner?” What our quondam associate receives is quite different, but there’s not an iota of realizable market value in sight:
- Their equity cannot be bought, sold, or traded; has no market value and no terminal value; and cannot be said to represent any specific percentage of ownership interest in, well, anything.
- It may or may not come with voting rights, which may or may not be equally apportioned among all others at the firm with the title “equity;” and the subjects on which those voting rights can be exercised is not within any individual’s control. (Voting in that sense is not “as of right;” it obviously depends on the partnership agreement, which will and must be subject to amendment.)
- “But it comes with compensation!,” you say. Yes, but only in an ill-defined and elastic sense: In almost all firms, a largely unenforceable expectation of a some payment reflecting the firm’s and the individual’s performance, but in an amount set with a high degree of subjectivity and with almost complete discretion.
- In labor economics (lawyers, even partners, have to perform labor), “productivity” is output per unit input. In our world, “productivity” is purely input–billable hours. If this isn’t perfectly upside-down, I await your nominating a stronger candidate.
- Law firm profits are reported before the partners are paid. In no recognizable sense of GAAP or even responsible, non-fraudulent, accounting could a C or S corporation report its profits before paying perhaps 20% to 50% of its workers. Indeed, a corporation attempting such a stunt would be guilty of open-and-shut securities fraud. But it’s our industry “standard.” Are we proud of that?
- OK, so how, you may fairly ask, should we calculate profits? Aren’t the equity ranks entitled to be paid the profits out of the successful operations of the enterprise? Yes, they surely are. But as a matter of how labor markets function and GAAP would dictate, a great share of equity partners’ compensation is payment for the work they do: They are, after all, among other things “day laborers,” as a droll friend of ours likes to say.
- Labor market economics’ role is simply to put forward the observation (which is brutally enforceable) that if you don’t pay equity partners for the work they do, they have a multitude of options in the unfettered lateral market that’s front and center these days. And GAAP simply requires that you recognize payroll and compensation as an ordinary and necessary expense of doing business which must be subtracted from gross revenue before one reaches the bottom line.
- So how would one calculate or at least estimate what the value of their work-for-pay is? Let’s make the simplifying assumption that equity partners (a) perform legal work; and (b) take at least a small role in managing the firm. Their pay for (a) is, I submit, what you’d have to pay a nonequity partner of comparable experience and seniority to do the same work. And for (b) the benchmark would be a business professional exercising the same managerial functions.
- Then and only then have you boiled down your firm’s gross revenue to true economic profit, which is available for distribution to the owners.
- The only answr we have to this question is, frankly, “How much is the associated revenue?” I grant you that demand generates revenue, at least in for-profit land, but they are completely distinct concepts. Offering up “revenue” in response to “measure demand” changes the subject so violently that perhaps we have become inured to it.
- If you doubt me on this point, put BigLaw to one side and think about PeopleLaw. The tragedy and sin of the legal system for The 99% is that while they might have enormous and urgent demand for legal services, there’s no market in this country to which they can turn. Yes, the revenue (to lawyers) is zero resulting from landlord evictions’ not challenged, divorces and bankruptcies botched by desperate pro se citizens, criminal charges left undefended, child custody disputes forfeited by default—and on and on–but that does not remotely mean that the demand for those services is also zero.
So those are our nominees for Greatest Offenders to plain English in our always-delightful industry.
We also have the odds and ends which are merely abuses of English and not outright affronts to it. I have in mind, first, “non-equity [partner].” This is marginally excusable as a necessary way to distinguish [this other category of kinda sorta not-really but it’s expedient to affix this label] partner from the other kind, who actually are at the top of the pecking order. But it’s a lazy and thoughtless formulation which points to nothing that the category actually is, only what it is not.
Then we have the dramatically more offensive “non-lawyer.” Using this is unforgivable and even thinking it is inexcusable. As my partner Janet Stanton has pointed out, hospitals have no “non-doctors” and design firms no “non-architects.”
Both our “non-” words also reveal a fair bit about how lawyers think: They tend, compared to other professions, to be Manichean. The world is black/white, ideas are right/wrong, and people are lawyers or “non-.” I’ve often marveled at why this might be so, and my working hypothesis until I am granted the insight to come up with something better revolves around their training and education.
Specifically, law school tends to drill into one that questions have one and only one right answer. “What is the holding of the case?,” Professor Kingsfield indelibly stamped on all our memories–and woe s/he who offered the wrong answer. Trials are won or lost, associates make partner or leave, etc. And lawyers’ comfort zone is squarely in operating autonomously, not collaboratively in teams.
Business school, by contrast, presents open-ended cases where there is no solitary “holding.” Rather, the problem the case poses may logically be amenable to a very wide and heterogeneous array of solutions: Killing a product, launching a product, spinning off a division, acquiring a firm that provides additional capability, withdrawing from or entering markets, optimizing governance, redesigning the product or reimagining the service, and on and on. The world is complex and no single answer is “right.” Plus, people (students first and executives later) work together across disciplines without giving it a second thought—finance, marketing, operations, design, sales, manufacturing, distribution, and so on.
Let me repeat: Words matter. They clarify or obfuscate analysis, reveal or hide whether there’s any real thinking behind the assertion, and can (should!) wire the speaker to a form of virtual lie detector. Writers often observe that they don’t know what they think until they have to start writing. (I share that conviction, often.)
The affront to clear thinking committed by those who use words in ways that a moment’s reflection would expose as nonsense should constitute a loud warning to we lawyer/professions. Perhaps some day intellectual integrity might triumph over custom and conventional usage.
And: The answer to our pop quiz?
George Orwell’s famous/notorious “Newspeak.”
The enduring power of Orwell’s metaphorical dystopian language arose from its revealing a human truth: As you speak, so shall you think.
If we claim to be capable of incisive analysis, we need to start by respecting English.