Lawyer Advertising September 1, 2004 Regular News In an August 1 story you stated that the lawyers’ ad “1-800-PIT-BULL” is an example of what many see as ads that “provoke public hostility toward the profession and legal system.” This is like saying that displaying red lights in the prostitution district is destroying the reputation of the neighborhood.The problem with the legal profession is not a problem of public perception, but rather the deterioration of the profession’s own standards and the unwillingness of the Bar to govern itself in a manner that would instill public trust. Relaxation of rules on referral fees and excessive fee awards in contingent fee litigation are examples of the cause of the problem.We must ask ourselves whether we want to clean up our neighborhood or simply dim the red lights and hope for a better public perception.James D. Francis JacksonvilleGay Adoptions September 1, 2004 Letters I am writing to point out a simple, though to some readers a significant, misstatement in the August 1 article “ABA Model Rules, gay adoptions on board’s agenda.” The article states that, under current Florida law, “gay couples can be foster parents but are prohibited by state law from adopting[.]” While the statement is technically true, F.S.. §63.042(3) prevents any homosexual ( i.e. individuals) from adopting as well. A simple oversight on the News’ part, I am certain, but one which unwittingly glosses over the situation of many Floridians.Matthew P. Tabakman OrlandoI read with disbelief that the Family Law Section voted to support homosexual adoptions. Why am I forced to support this action? If The Florida Bar cares to go into highly controversial social issues like the ABA, then I suggest membership should be like the ABA—elective, not mandatory.John P. Joseph St. Petersburg (Editor’s note: Bar sections use their voluntary annual dues to advocate legislative positions and no mandatory Bar fees would be expended if the section’s request for permission to lobby the issue is approved.) Treatment of Prisoners The American Bar Association stood up recently for our soldiers posted around the world now and in the future.We urged our government to treat our prisoners the way we want other governments to treat our people who fall captive to them, reminding our leaders that what we visit upon our prisoners can be visited upon us.Al Qaeda and other terrorists pose a real threat to the United States. That threat creates tension between our need to interrogate prisoners for potentially life-saving information, and our legal standards that ban torture and cruel, inhuman, or degrading treatment.But we are a nation pledged to the law, because it is the law that shields us — from ourselves, from each other, from would-be tyrants, or from fiery mobs. We demand that other countries adhere to internationally accepted standards, expressed in the laws we have joined with them to adopt. And when they don’t, we cry foul and take them to task.Now Americans are faced with an unfolding drama of tragic dimension.Photographs, videotape, and witnesses lend credence to allegations of torture and cruel, inhumane, or degrading treatment of prisoners held in Abu Ghraib and elsewhere. Official documents appear to have fostered a climate in which pressure to obtain information overcame the restraint of the law.The ABA stood up for the law when it condemned those who committed abuses and government lawyers and officials who authorized torture. We urged prosecution of those responsible, compliance with our treaty obligations, refusal to turn prisoners we hold over to governments that torture, clarifying our law to assure that torture is not an interrogation tool. And we called for an independent, bipartisan investigation into exactly what happened and why, so that we can be assured that it will not happen again.These are not partisan issues. The sons and daughters of America now stationed around the world and all of us who pray for their safe return are both Republican and Democrat.And those who would defeat terror but who cherish our national heritage are all Americans.As parents, family, and friends of the men and women in uniform fighting to preserve our freedom, we owe it to them not to add to their risk by cheapening the world’s response to torture by failing to respond ourselves.Neal Sonnett Miami, chair, ABA Task Force On Treatment of Enemy Combatants (Editor’s note: The ABA has appointed Sonnett to be its observer in Guantanamo Bay for the hearings to be held before military tribunals for detainees held in the war on terrorism.)
Carlo Svaluto Moreolo explores a paper published by 300 Club founder Saker Nusseibeh arguing that investment managers need to re-assess the very foundations of their economic thinkingIn a broad sense, investment has always existed, perhaps even before the growing of crops was man’s main preoccupation. The concept of investing is mainly linked to deferred gratification, making it an essential psychological tool for survival.To some, it appears the original science behind investment is fundamentally flawed. The 300 Club, set up to challenge the foundations of the investment industry, is part of that group. In a recent paper, its founder, Saker Nusseibeh, highlights one of these flaws. He argues that investors evaluate the costs and benefits of investments as if they were cut off from the very system that is shaped by the results of their evaluation. This, says Nusseibeh, is simply wrong.In this vein, the industry needs to realise it is part of the financial system and act accordingly. It needs to adopt a more holistic approach to investment because clients bear the brunt of decisions – both as beneficiaries of investment returns and as citizens of the world shaped by those decisions. It is paramount the industry accept that it is part of an integrated system, which it shapes through beliefs and actions. However, I would go further and suggest it is ridiculous for any firm to assess investments using self-styled ‘scientific’ models that consider the firm a price-taker but not a price-setter as well. What use is a company deciding what the fair price of an asset class should be, when the price itself is largely affected by the outcome of its decisions, in a classic example of a feedback loop?The 2008 crisis offered compelling evidence this would be the case. It also showed – and Nusseibeh clearly states this – when “markets” get prices wrong, and destroy the perceived value of assets, losses are transferred to individuals through public debt. To re-start working in an “efficient” manner, markets need to write off worthless assets, and only public institutions can do this because they can absorb the cost of those losses by reducing public services. Yet asset prices are increasingly detached from the real economic value. The post-crisis years show that – financial markets have got very much back on their feet, but the global economy is far from healthy.How long will equities go up, unsupported by an acceleration of global growth, before they crash and once again stifle the “recovery” of the economy? How long can this recovery be delayed as large parts of the population get poorer and a very small part gets richer? If it is true the global asset management industry holds the world’s wealth, then managing it is not going to plan.Originally, stock markets were simply a means to spread entrepreneurial risk. Shareholders were able to take some entrepreneurial risk and share it with the entrepreneurs themselves, which may have been the main owners. But the model of joint ownership has simply broken down. Instead, markets resemble a bloated mass of fictitious money.And this leads to Nusseibeh’s key argument. We know that the social cost of having large firms with absentee owners is very high. And in that sense, it seems the 300 Club, through its paper, is talking the talk. Tying this together, Nusseibeh says economic theory in investments needs improvement. However, he says, while consensus around its flaws grows, a consensus around an alternative method does not.“We need to rethink the purpose of investment from the perspective of the individual savers whose capital we hold in trust, and move away from concentrating solely on nominal financial returns,” he writes. This means being less concerned with meeting nominal liabilities or benchmarks and thinking of long-term outcomes for the asset owners, or members.Nusseibeh’s approach means the very foundations change, starting from the understanding of economics, financial theory and the role of investment. But changing the industry in this way might involve forgoing some profit.So what will it take before someone actually walks the walk? Think of all the investment managers advocating ESG because of the evidence that it makes their clients more money. As a consequence of more ESG investments, they would also make more money.Nusseibeh should be prepared to reject this approach. To improve the functioning of the financial markets, they need to be made more efficient – not in the sense that they price assets more fairly and rapidly but in the sense that they are capable of financing the growth of a more equitable social economy.This entails more patience by investors and shareholders of companies, and requires more regulation as well as an aptitude for trial and error. Which, by definition, may entail less money in the industry’s pocket.