Tuesday, September 11, 2012

Krasny Forum 01 - Corporate Lawyers

Krasny Forum 01 (New Series) -
The Chamber of Commerce Corporate Lawyer Survey
as discussed today on KQED - Michael Krasny's Forum

Today on the KQED radio show Forum, Michael Krasny's first segment was devoted to a US Chamber of Commerce survey of in-house lawyers at big US corporations. The lawyers were asked what states have the best legal climate for their employers. California ranked 47th.

1. What Does This Survey Tell Us?
2. A Balanced Discussion?
3. Be Careful What You Wish For?
4. What Else Should We Know about the Survey Responders?

1. What Does This Survey Tell Us?

Mr. Krasny, after the presentation of the survey results, said that they "obviously" would affect job creation and corporate moves. (This is from memory. I will add a comment later if I can find his exact words. "Obviously" was one of them, though, of that I'm sure.)

Why was it obvious? The survey did not include any data about actual corporate moves or layoffs or job creation.

The presenter had compared the survey to the consumer confidence surveys by the University of Michigan. He pointed out that, like his survey, that one is about how people feel, and it is trusted to reflect ... well, I don't think he explained what it reflects. But let's pause and think about the Michigan survey. Michigan is a well-respected research institution. (And one at which I worked for many happy years, I admit.) I believe that Michigan's researchers have actually done retrospective analysis to see whether what people SAY they plan to do about purchasing major appliances, for example, is what they actually do, absent any major widespread changes in conditions). I doubt that the presenter would have omitted any data that validated his survey, so I conclude that there has been no retrospective analysis.

What evidence would such an analysis consider? Corporate moves? The reasons companies relocate are many. I agree that if a company's decision makers management *think* that costs will be lower and profits higher somewhere else, it does not matter whether they actually are once the company decides to move. That's the trouble with life: we never get to run the experiment both ways. But the fact of the move would validate ... what?

The decision to move would be influenced by many factors. Most states with a litigation climate that - in the corporate lawyers' view - is pro-corporation or pro-business may also have low tax rates, low wages, easy zoning, and so forth. It would be difficult to assess the importance of the *litigation* climate in this mix of law, economics and tradition.

2. A Balanced Discussion?

The first guests was Bryan Quigley, senior vice president at the U.S. Chamber Institute for Legal Reform, who presented the survey results. Then Krasny welcomed two guests, one who attacked the survey and one who applauded it. Why was the second person needed? The presenter was in favor of the survey 100%. Since when is 2 against 1 equal time?

3. Be Careful What You Wish For?

The in-house corporate lawyers who dislike states like California because of tort law, class action rules, etc. are, well, are they stupid, altruistic, or do they know something the survey's proponents would rather keep a secret?

I ask that because if California and the other states that looked bad in this survey all changed their laws, those lawyers would be out of a job, wouldn't they? Hence the possibility that these attorneys are either stupid or altruistic. But the third possibility is most likely, isn't it: that the laws and regulations have a very small impact on the number of lawyers the corporations need on staff? Their large impact is on natural persons, not corporate persons. And I guess the people who chose, or were chosen, to respond to the survey identify themselves as people more of the corporate kind than humankind.

4. What Else Should We Know about the Survey Responders?

To understand the results better, the survey creators might have asked - maybe they did, but I doubt it - for the responders' party affiliation or political donations, whether to parties, candidates or those corporate entities who do not have to disclose donor names under _Citizens United_. Even just asking for the responders' primary residence zip codes might have provided some insights into ideological bias. Working for a big company, being a lawyer, or both are not necessarily correlated with philsophical outlook on how society should care for its citizens. It would have been interesting to know whether the lawyers' politics affected their perception of the legal climate, however the survey chose to evaluate it.

pub. 9/11/12 11:02 am; links added, minor revissions, 5:35 pm

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