Clout Trumps – So Use It to Market
This article, Unusual Ally Came to Jain’s Rescue: SEC, Seattle Times (3/10/05) – about a former SEC counsel-turned-private lawyer who finagled a deal for a client found guilty of violating insider-trading rules whereby the SEC wound up filing an amicus brief on the client’s behalf – isn’t about solos per se. Rather, it’s about the indispensibility of clout and contacts – and a reminder of how powerful clout, as a marketing tool, can be.
According to the article, a federal judge rules that Naveen Jain, founder of InfoSpace had engaged in insider trading and required him to pay $247 million to company stockholders. According to the article, Jain had “deceived the public” about his companies success and sold millions in stock while investors lost billions. But the SEC never investigated. Eventually, a federal judge found that he had violated insider trading rules and at that point, Jain hired Peter Romeo, a former SEC lawyer and expert on the practices that Jain had engaged in. (according to Martindale-Hubbell, Romeo now practices with Hogan & Hartson) Romeo persuaded the SEC that the judge’s ruling was unfair and confusing and managed to convince the SEC to file an amicus brief in support of Jain’s appeal. As a result of the SEC’s intervention, the case settled for $65 million, a quarter of the original award.
Did Romeo’s former tenure at the SEC make the difference? According to the article, Romeo insists otherwise:
despite his 15-year tenure with the SEC, [Romeo] has no undue influence there. “They would never concur with my views if they don’t agree with me,” he said in an interview. “If anything, they’d go out of their way to appear not to be playing favorites.”
I’m not accusing Romeo of any wrongdoing. I’d imagine he’s a highly intelligent and skilled attorney who garnered the respect of his colleagues at the SEC. As a result, Romeo’s arguments most likely commanded more attention and respect than if they’d come from a less connected attorney. Maybe in a perfect world, our system wouldn’t operate this way, but the fact is that it does. You can rage against using clout by pulling out of the practice area where you have it, but what good does that serve? It only means that less experienced attorneys will step in to the void, to the detriment of clients. Or other clout-carrying lawyers at large firms will sell their influence at a price that’s out of range for the little guys whom we solos often serve.
As I said at the outset, the article isn’t about solos – Romeo works at a large firm. But there’s no reason that a solo couldn’t have similar clout in his or her respective field – perhaps as a former prosecutor or a former agency lawyer. If you can use your clout to get results that other firms can’t, it can be a powerful marketing tool – and one that can get you chosen over a large firm competitor.
Of course, you don’t want to oversell clout to clients – or overuse it with the agencies or other governmental bodies. To clients, you certainly don’t want to guarantee a result. But what you can reasonably say is that if all else fails, at a minimum, you can assure that you’ll get the ear of a decision maker who will at least hear the client’s case. Doesn’t mean they’ll decide in the client’s favor and you need to point that out, but at least it will optimize the client’s chances.
At the same time, you don’t want to squander your clout by making a pest of yourself, calling former colleagues about routine matters. Save clout as your “get out of jail free” card, to be used sparingly and only if absolutely necessary. And when you do finally pull out your clout to make your case, do the work for your former colleagues: extensively research and document as persuasive a position as possible to save them time in review. If the agency ultimately goes with your position, you want the agency to be able to defend its action on the merits, as the SEC did in Romeo’s case.
Now for those who have clout, get out there and flaunt it!