Vet Your Lawyer

Perhaps by now you’ve heard all about Marc S. Dreier and the many problems surrounding his law firm as a result of his recent arrest. If not, you can start by reading about it here at the New York Times. The short version is that he’s been accused of trying to sell fraudulent promissory notes, among other things. And as so often happens in matters such as this, it appears he has left all those people who worked with him and for him naked and exposed by failing to keep up the payments on their malpractice insurance. Now that the fraud has come out, lawsuits in the millions of dollars are a near certainty, and all those lawyers are unprotected.

But I’m a long-distance observer of these events. My thought is simply this: reputation is meaningless. Don’t get me wrong, it’s certainly nice to have, it could be very useful, but if you’re relying, or making a choice about working with someone based solely on a reputation you may very well be headed to disappointment. It’s very easy for someone who has achieved a modicum of success to start coasting, allowing good word-of-mouth and reputation to carry him forward. In this mind set, there is a sense of entitlement. It says ‘I’ve already paid my dues, I’m going to work smarter not harder’.

Too often when we bow down before the altar of reputation, what we’re really doing is looking at financial success and letting that bring us to a conclusion without doing any of the work or thinking or research to verify that this person is worth doing business with. Psychologists call it the halo effect, where we attribute all manner of good attributes to someone because of his status.

The reverse is also true. The fact that someone has done badly in the past doesn’t mean he can’t get his act together and do good work in the present and into the future.

There is no magic to make these determinations easier. But you can do due diligence and if there are red flags, inquire. There may be a perfectly reasonable explanation, and since it is impossible to do without risk completely, you might chose to go forward, but at least then you are doing so with your eyes wide open.