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Deep conversations with underrated lawyers.
This is Horam with Horam's Quoram. My guest today is Hilary Gerjoy. Hilary is a partner at HWG, and she focuses on legal ethics and malpractice issues. Hilary is a frequent speaker on legal ethics, and so that's how I learned about her practice. And I find she has such a thoughtful approach to advising on the intersection of the business of law and the ethical duties of lawyers.
Khurram Naik:And it's also a fascinating niche to occupy, so I'm I was really curious about how she came to this niche as well. So a lot to explore here. Here's Hillary. Hillary, I'm so excited to have you on. Since the first time I saw you speak, you're a dynamite speaker, and so I I didn't think probably the very first time that you should have in the podcast.
Khurram Naik:But the second time I saw you speak, I definitely thought about it. So excited to have you on. And we've been having some conversations about your background. And so one part that is really interesting in your journey, you always knew you wanna be a lawyer from as soon as you learn about what a lawyer is. You said, that is me.
Khurram Naik:That's what I want. And but interestingly, your first job after college was in sales at at Google. And so I'll be interested in hearing about that experience, then how it tied into now your work as a partner. And and as a partner, you had business development to do. And so I'd be curious to hear about what that first foray into sales was like for you, and then the maybe somewhat surprising return to sales in in in your career now.
Hilary Gerzhoy:Yeah. For sure. Well, thank you for having me on. I so as you said, I always knew that I wanted to be a lawyer. I went to UChicago undergrad, which I absolutely loved and met my husband there.
Hilary Gerzhoy:And some of my best friends are from UChicago. And I but it was an intense academic experience. And I knew that I wanted to go to law school, but I wanted to take a year between undergrad and law school so that I could rest a little bit. And so I had been applying to paralegal positions in DC. That's what I thought would be interesting for me.
Hilary Gerzhoy:And Google came to campus, and they were interviewing. And I got an email saying, do you wanna interview? And so it seemed like it was worthwhile to go and interview. And I and so what they were hiring for were college recent college grads to go and sell AdWords, which at the time were on the left hand side of your screen is where where you had the the list of your all your AdWords ads. And so I took the job because it seemed like if I'm gonna do something for a year, this is a really cool thing to do.
Hilary Gerzhoy:Google is a super cool company. This is a unique opportunity to do it. Maybe I wanna stay for more than a year. Maybe I wanna stay for a few years. Living in California is awesome.
Hilary Gerzhoy:So I went and I being at Google was pretty amazing because being at Google and this was in 2010. So being in Google at Google in 2010, Larry and Sergei gay still gave their talks to all the Google employees. And so every Friday, like, you could go and just sit and watch Larry and Sergei talk about what they were doing and what the company was up to. And but I realized that very quickly that I was really not good at this job. The job was to I I was working for financials in the final financial services vertical, and my job was to call potential leads and try to sell them ad space.
Hilary Gerzhoy:And I I wasn't good at it in in multiple ways. I was I found it really hard to get motivated to do it because I didn't find it to be all that interesting. And I think that was sort of the biggest factor. But I also just felt really uncomfortable selling things, like selling something to somebody. It didn't it just didn't, like, sort of speak to an any natural strength that I had.
Hilary Gerzhoy:And I just didn't didn't do a good job and realized I, like, really, really dislike being in sales, which sort of goes to your point sort of initially, which is things have there is a sales element to business development. It feels very, very different to me, though, because selling ad space, for example, or selling a product versus selling your expertise, I feel very confident in my expertise. I did not have that. And so it all feels very genuine because I'm just talking about what I like to do and what I do and what I think is interesting and what I value that I truly believe I can add, which I think in, like, what the best salespeople do in other ways. Right?
Hilary Gerzhoy:Like, they do it in in they don't just do it about selling, you know, hire me to do something. So it doesn't feel that way, and but I it's interesting that you that you've phrased it that way and that you sort of said it that way because it it makes sense. You I mean, business development is sales in some way. I just never sort of thought about it like that.
Khurram Naik:And, Stee, are there any principles you learned in business development? I imagine they had a fairly structured process or or set of principles you used. Do you find yourself drawing any of those? Was any any of the things you learned in Google in that way beneficial to you today?
Hilary Gerzhoy:Yeah. Well, I think, like, being systematic about how you're doing things. So thinking about where do you get where do you get your business from? Where where and where do you get repeat business from? What are some of the maybe unexpected places that you get business?
Hilary Gerzhoy:And really mapping that out and thinking about how to be targeted in that. Like, that is that that's what what the job really was. And so I think that's a nice lens through which to think about business development now is really trying to be targeted in the way that I approach it because doing sort of what's effective. But, also, the things that are effective can surprise you. Right?
Hilary Gerzhoy:And the and the avenues that you think maybe wouldn't be worthwhile are incredibly worthwhile, and some of the avenues that you thought would be really worthwhile are not worthwhile. And try to be objective about that. Because I think a lot of times, lawyers well, you gravitate towards what I think you enjoy doing and what comes naturally. I think those two things often are the same thing, but sometimes they can be different things. But you sort of want to do the thing that comes naturally, the thing that you enjoy doing or speak to the audience that is motivating to in to you in that way, for example.
Hilary Gerzhoy:But some things don't lead to business since other things do. And and I think, like, where when it comes to what I do, there's a bunch of different pieces to this. There's developing sort of industry expertise, which is just useful in general. And so it's that's more marketing. Right?
Hilary Gerzhoy:But having the so doing things like writing articles, which I love to do and I write a lot of. But do they lead directly to business? Not really. It's much more indirect. Right?
Hilary Gerzhoy:It's not There there have been a couple cases I've gotten that people have said, I read I read your stuff. I have an ethics issue. But if I did sort of pure time of writing articles to business leads, that's not the way to spend most of my time, but I really like to do it. So I continue to do it. But I think that's one of the takeaways that I had is being having a systematic approach to it all.
Khurram Naik:And can you say some more about, like, what is systematic about your approach now? Are you is it scheduled? Is it you are thinking about, you know, hey. I like writing. I like giving speeches.
Khurram Naik:Let me make sure I'm doing one of each month. Like, tell me what are the ways in which you're systematic.
Hilary Gerzhoy:So I found that speaking is much, much more effective. And so I still write, but I write a lot less than I used to. And I found that a lot of one on one conversations are really can be very useful and and good as a way to develop business and and keep that going. And so being targeted in communications with people, like, having sort of the people that I speak to regularly and staying in touch with them, that's another piece of it. But if I could sort of purely do just like what I think is interesting and fun to do, I probably would have more of the writing in in terms of the ratio of what I do.
Hilary Gerzhoy:But now it's it's more of the speaking, more of the one on one meetings with people, lunches, coffees, that kind of thing.
Khurram Naik:To what extent are you repurposing the content of the things that you're writing for presentations, etcetera?
Hilary Gerzhoy:Not really that much, which is, I think, a potential to do. I'm trying to do it more. What I have done with speaking is I've been where where I'm asked to speak about things. I haven't done a lot of, like, pitching. Can I speak at this thing?
Hilary Gerzhoy:And so then I speak to whatever the that audience wants. So there it runs the gamut from law firms around the country to companies, industry associations, like, just, you know, all over the place and, like, what they what they care about with respect to ethics and what they need to know. So a lot of times, it's things like, you know, what are my malpractice risks as a law firm? How can I avoid them? How do I use AI effectively, in my practice?
Hilary Gerzhoy:What's available? What are the ethical what are the potential ethics traps there? How do I navigate outside counsel guidelines? So a lot of it is sort of answering those questions, whereas the stuff that I write about is all current events. So something has happened in the news that implicates an ethics issue, and then I write about that because I think it's interesting.
Hilary Gerzhoy:And so a lot of that stuff is sort of not great for them turning into a talk because the audience it it could be interesting for the audience. But when when people want to listen to me talk, it's usually because they want something very practical, which is how do I do this thing consistent with the rules? What is my risk? How do I mitigate risk? Versus when I write, it's it's about sort of here's this thing that's happened in the news, and and why is it relevant?
Hilary Gerzhoy:Why should we care about it? What does it mean for lawyers more broadly?
Khurram Naik:I think that's where in watching you speak, that's where you really shine is in the being able to address questions off a cuff. And, you know, there's any number of fact patterns that seem familiar. Sometimes there's some edge cases like, hey. I'm not really familiar with it, but here's how I think about it. And so I think you do definitely have a good instinct for a concise, thoughtful take on how to mitigate the practicalities of what someone might be dealing with.
Khurram Naik:I've observed you in the context of talking about ethical issues for partners of law firms in lateral moves. And so, yeah, I think that is definitely a competitive advantage you have is be able to translate, here are the rules, and then here's the sources of ambiguity, and then what are some some takeaways that you have? How did you hone that?
Hilary Gerzhoy:I've always loved speaking. I I've always I've loved debate. I always love debate. I was in starting in fifth grade, I was in the middle school debate club, and I and I never stopped. I didn't do any sports in high school because I just did debate as a sport, which I think is a sport, but, you know, most people would beg to differ.
Hilary Gerzhoy:And then in college, I actually coached middle school debate in Chicago to to kids who lived in on the South Side. And I think it's a powerful skill. I think being able to speak in front of a group of people is is very it can be very useful and very powerful, and I enjoy doing it. And I think part of what I liked about debate is I liked the thinking on my feet piece of it. Like, the most fun was the fact that you constantly had to adapt.
Hilary Gerzhoy:It wasn't just sort of giving a speech. It was you have to anticipate what your opponent is gonna say and respond to it in real time. And then that sort of in within being a litigator, that happens in in all kinds of contexts where you have to, in real time, be able to articulate a response. And I found that that just was something that came more naturally to me that wasn't as there there are things that that that was in one of the categories that I felt came more naturally. And and then when it comes, I think, to doing it in the context of of my job and what I do, because what I do all day every day is help lawyers, law firms, companies navigate the ethics rules and all things that go along with that.
Hilary Gerzhoy:I have seen so many permutations of these problems. So, you know, as relevant to the the talks that you've heard me give about partner recruiting and and for and how it how it impacts firms, how it impacts the partners. I've seen this so many times that I've seen where where things fall apart or how you can mitigate risk or how you should think about it. And I think part of and that's I think that's just incredibly useful to responding to folks' questions about how to do it is like, I've seen it. And so this is what I think works, and this is what I think doesn't work.
Hilary Gerzhoy:I also think an important piece of this is what I'm doing with with my clients is giving them a road map and giving them a series of options. So here is what the framework that you need to think about, and here are the potential risks. And here's the ways to mitigate the risk, but here's the way to also think about what that risk is and the risk that you're willing to take. So there's different that people's risk profile is can be dramatically different. So I have clients who are willing to take much, much bigger risks and clients who are willing to take no risk at all.
Hilary Gerzhoy:Right? And so I think also have being able to adapt to what your audience is interested in and giving them sort of the range of options so that they can make an informed decision about what they're gonna do.
Khurram Naik:How did do do you think that clients tend to know what their risk profile is? Do think risk averse I feel like risk averse people tend to know the risk averse. Do you think people who think they're risk seeking it seems to me people who think they're risk seeking are often mistaken about that or can be mistaken about that more than risk averse people are are mistaken about being risk averse.
Hilary Gerzhoy:I think that's definitely true. So risk averse people know they're risk averse. Right? And they will come to you and they will say, I'm risk averse. I don't wanna do anything that's even close to to being risky.
Hilary Gerzhoy:Could get me in trouble. Could get, you know, my current firm angry at me. I could get a an angry email from the GC. Like, I don't wanna do anything like that. People who have risk tolerance, I have almost never seen acknowledge that they have a greater risk tolerance.
Hilary Gerzhoy:They don't I don't think that lawyers ever wanna ever really see themselves as as risk takers. Right? We we follow the law. We're rule followers. Right?
Hilary Gerzhoy:And we help other people follow law. We make creative arguments about what the law is, but, like, our profession is rule based. And so I think when when I see that, it's always it's interesting to me when people have taken huge risks. And I'm like, I just want to make sure that you know that what you did was a huge risk because a lot of times folks come to me after they've done things. Right?
Hilary Gerzhoy:So there's actually a it's not just how what do I do in anticipation of this decision that's gonna implicate a bunch of ethics issues. It's I've done something already. I'm afraid of what the ramifications are. What are the ramifications? How do I get out of it?
Hilary Gerzhoy:How do I navigate it? All of that. And so I'd say, you know, 95% of the time, people will come to me and say that they've done something, and I will be shocked at the way that they perceive what to me is an enormous risk. And sometimes it's it's usually one of two things. It's usually one they don't know.
Hilary Gerzhoy:Like, they don't they don't actually they weren't thinking in real time that this was such a big risk. They were because they don't know the the rules as well, they weren't sort of thinking about what the implications of the rules would be. So I think that's that's a decent category. It's like, made a miss like, I took a risk without really knowing it was a risk. And then I think the other category is I took a risk, but because my reason was for doing it was so good, it doesn't really count as, like, me being a risk taker.
Hilary Gerzhoy:Right? It's that the motivating reason was so so top of mind for me that, like, I could sort of I don't even see the choices that way anymore. Right? It's like, no. I have to do this.
Hilary Gerzhoy:Right? There's a lot of people who I speak to who feel like they have to do things. And the truth is you you don't. Right? You you have lots of choices about how to how to do things, but they sort of have framed it such that when they have taken a risk, it was a necessity.
Khurram Naik:You know, this this came this came up for me recently because I, you know, I practice law. And so, yes, you you know, you're trained in following rules. And so now I'm a business owner. And so in many ways, there's context which you have to do where if you lie comfortable with, you know, using things like, hey. This I'm getting 8% of returns for 20% of the effort in this way.
Khurram Naik:And so, yes, I could run down every single detail, every single comma, but just it's just not a good spend of investment. So there there's some things that I feel very comfortable making that switch where, you know, that was parts the parts of the practice that chased for me was that that what felt like an excessive attention to detail that just didn't really move the needle. Right? So I feel very comfortable there. It's interesting because so I I ran to not a terribly obscure common tax issue that, you know, upon a read of a of an ordinance seemed to create some ambiguity.
Khurram Naik:And so I I talked to a tax lawyer about it recently, who agreed, yes, there is ambiguity, and here's how to, you know and and this lawyer just happened. I'm just running this issue for another similarly situated recruiting agency. And so it just it was very top of mind, and she was able to speak to us in great detail. And it was interesting because I was in a position to make a risk assessment of whether I was comfortable with taking the risk here. And so part of it, some of the training you have to undo as a lawyer in this context, and I'd be curious to what extent you feel that equity partners have to go to this analysis too, where they're both a lawyer and then also a business owner, where you have to say to yourself, okay, yes, I could take a risk here.
Khurram Naik:What I'm finding is that actually the analysis of a risk and taking a low risk option can actually on one hand, I'm trying to train myself to say it's okay to take risk. But actually, another concept I'm finding actually, it's totally fine to take low risk options, because in any of our scenarios, a low risk option in this case, that's my conclusion. The low risk option here will involve the certainty of some small, relatively small payment. And I'm okay with doing that because I don't have to think about that. What's most important to me, what's most scarce is my attention, and so I don't want to distract at all from my focus.
Khurram Naik:But what an instinct that I do have to unlearn is sometimes proving a point like, well, I'm a litigator, and I know how to take a dispute. So that's the instinct to unwind, and then any verifications. But it's interesting, because what I'm starting to discover very, very recently is that sometimes the low risk option is just the best option because, yes, can prove a point make some new law, maybe, or something like that, if you want to take that risk, but it's a distraction. So unless it's core to your business, core to your practice, you know, you don't have to do that. So I I don't know if you've if that something that you've seen or the advice that you've you've given that that that's that's on point.
Hilary Gerzhoy:I've definitely seen it, and I it makes me think of two two primary instances where this comes up. The first is the equity partner category, which you which you mentioned. And then the second, and I can talk about both of them. And the second category is focus just putting people's attention back on, like, the what you said, you don't have to think about this anymore. If you take the riskier option, it's gonna be in the back of your mind constantly.
Hilary Gerzhoy:Right? You're gonna wake up. You're gonna be nervous about it. You're gonna think, oh, no. Like, what if, you know, somebody figures out that I did this thing I wasn't supposed to do?
Hilary Gerzhoy:And so for people that I talk to who are tempted to take the risk because the temptation to take the risk is is usually, from what I've seen, born of two things. One, fear that you're not going to keep business or continue to make money or fear that you won't be equipped to continue to do your work. So, like, some people feel tempted to take proprietary documents with them when they go from one job to another job. Right? Because they're afraid, oh, I've been trained up in in this.
Hilary Gerzhoy:I know these templates. I know all how this all operates. And the reason I'm really good at my job is because I have all of this. I have all this material. Well, it's firm proprietary material.
Hilary Gerzhoy:It's not your material, but there's a huge temptation to take it. Why is that temptation? Usually, what I see is the temptation is not because people are, you know, being greedy or thinking it's mine. It's it's a combination of two things. It's feeling like I worked a lot on it.
Hilary Gerzhoy:Right? There's a piece of it, but a lot of it is fear based. Like, if I get to this other job and I don't have all the things I had at this other firm, I'm I can't be successful. And that but you have to weigh that fear against the do you really wanna be waking up in the middle of the night worried that the firm is going to know that you took documents that you're not allowed to take? Like, does that do you want that to hang over your head because it will continue to hang over your head?
Hilary Gerzhoy:And a lot of folks are like, you know what? That makes sense. Like, it's not worth it. And the other piece that I always say to people, and I'm sure you have a lot of experience with this, is if you're getting recruited to go to another great job, great firm, it's not because you had templates at your old law firm. It's because you're a really good lawyer.
Hilary Gerzhoy:And what makes you a good lawyer is, yes, you had access to these resources, but it's all the skills that you've developed. And so, like, don't sell yourself short in thinking that you need all of these things to do to do your job and to be effective at your job. Respect to the equity and that tends to be a much more junior person thing. Right? So, like, a junior partner, somebody who's counsel, who's sort of just getting started and feels very unsteady in their position at a firm because they don't have a big book of business.
Hilary Gerzhoy:And your power in big law is the size of the book of business that you have. It's your power and it's your autonomy. And if you don't have that, you're on shakier ground. And so that's you see that happen much, much more frequently in the context of folks who are more junior. In the equity partner camp, it's the risk taking that comes up is talking to clients before you told the firm that you're gonna leave, for example.
Hilary Gerzhoy:Right? Which is a breach of your fiduciary duty, and you can't do it. And the reason that people do it is because they're afraid that the clients are not gonna come with them. And that can come in a in a bunch of different ways. Like, they're afraid.
Hilary Gerzhoy:Like, maybe this client hates the law firm I'm potentially going to, and I have no way of knowing that they hate that law firm unless I test the waters and say, how do you feel about that law firm? What about if if I don't sort of set it up in motion, somebody else is gonna swoop in. As soon as I give my notice, they're gonna swoop in and take take that client from me. I need to give assurances to the new firm that I'm bringing this client. How can I possibly bring us give give them assurances?
Hilary Gerzhoy:Right? The target firms put a lot of pressure on candidates to make commitments about how much money they're gonna bring in, honestly, the jump. And so how for a lot of people, they're like, well, how can I truthfully say I have x as my book of business if I haven't talked to these clients and these clients haven't actually told me that this is portable work, that they're coming with me? Right? So I do I have to I lie on my lateral partner questionnaire because I don't know.
Hilary Gerzhoy:I'm sort of guessing. Like, what am I supposed to do there? And so a lot of it is, like, they take a risk because it feels like it's it's a necessity. Right? Like, I can't answer these questions and make a move unless I have violated my ethical and fiduciary obligations.
Hilary Gerzhoy:What I have seen and what I tell people is that I think ninety percent of clients fall into one of two buckets. They are either they identify the lawyer as their lawyer, and that lawyer can go basically anywhere, and they will come with a lawyer. Or they view they have loyalty to the firm. And and it doesn't and and they work with the lawyer and they think the lawyer is great, but the loyalty is really to the firm. I think most clients fall into the first category, but I think 90% of all clients are, like, easily bucketed into one or the other.
Hilary Gerzhoy:And so and it's really it's that 10% in the middle where maybe if you talk to them first, maybe when you the order in which you speak to them, maybe that matters. But 90% of your book is either, like, with you or not with you, and it has nothing to do with the timing of when you say it. Right? And if somebody from from your existing firm talks to the client first, it's not gonna matter. And that's what I've just seen over and over again.
Hilary Gerzhoy:And so for people who sort of try to to take these risks and solicit the clients when they're not allowed to solicit the clients, there's not a lot of upside, and there's a huge amount of downside risk. And I've represented lawyers in, like, arbitrations that ultimately result where firms will sue lawyers for leaving for doing things like violating their solicitation, violating anti solicitation provisions. And it is it's ugly. It is it's not a pleasant thing that anyone any lawyer wants to be in because it's literally your former colleagues coming up against you and, like, as witnesses. Right?
Hilary Gerzhoy:And, like, testifying against you, like somebody that worked down the hall from you for fifteen years. Your professional reputation is impugned. It it it stays with you. It's it takes an emotional it's not just, like, money. It's an emotional tax to do it.
Hilary Gerzhoy:So and that's if, like, if the whole thing ends up ending up in litigation. But, like, there's lots of stages before them that are incredibly anxiety provoking. And so is it is it ultimately worth it? I don't think it is when it's not gonna it doesn't move the needle in my in what I've seen.
Khurram Naik:For that 90% bucket, do you feel like lawyers tend to have this is kinda similar to the question of, like, do you know your own risk profile? Do you think lawyers tend to know gut level? Like, hey. Like, is the client really gonna go with you? My guess is most lawyers know.
Khurram Naik:But, like, what do you think? Yeah.
Hilary Gerzhoy:I think most lawyers know. I think most lawyers I think most lawyers, when they talk to me, can say, like, I can tell you that 90% right now. And then there's this 10%, and I'm not really sure exactly what to do. And then the question is, how important is that 10%? Right?
Hilary Gerzhoy:Is it 10% of your total book of business, or is it 10% of your clients, but they're the most important
Khurram Naik:Right.
Hilary Gerzhoy:Clients? And but I think a lot of it is lawyer there are it there's a wide range of personalities at play, but other I speak to a lot of folks who are like, I don't want to say that this is gonna happen with certainty and that my compensation is tied to an expectation I am going to do x, y, and z unless I feel really confident that I can do x, y, and z. And because I am a risk averse lawyer and because I have to, you know, dot my i's and cross my t's about everything, I can't be sure unless I unless the client tells me. Right? And so I wanna be feel confident that I'm giving a truthful answer and that my and then I'm not setting expectations in a way that is not realistic.
Hilary Gerzhoy:Both because I think people feel uncomfortable, like, if, you know, if your target is to bring in a certain amount of money and you clearly can't do it, that's that's an awkward position to be in. But also to go down in compensation psychologically is very hard for people. So, So, like, you go in with this very, like, competitive compensation package, and then the next year, you make a lot less. And I think people just do a lot better with small incremental gains versus a big jump and then back down even though back down is still better than what you had before. It's hard for folks.
Hilary Gerzhoy:I think that's what when we we talked a little bit about remote work. I think it comes up in remote work. Like, taking away a benefit is a lot harder than if people just sort of like gradually got, okay, you can work from home. If you told lawyers five years ago, you could all work from home one day a week, people would be like, that's amazing. Right?
Hilary Gerzhoy:Like, that was a huge appeal of working in the government was that you could earn days to work at home. And I I we would talk about in private practice all the time that we were like, oh my god. Government lawyers get to work, like, earn a day to work from home. That's so amazing. But then people get used to what they have, and they get used to what they have really, really quickly.
Hilary Gerzhoy:Like, almost instantaneously is how fast it is. So then you cut compensation. You cut benefits. Even if they're better off than they ever had been before, it hurts. And people and I think a lot of people wanna avoid that.
Khurram Naik:I feel like we're really this is such an interesting delve into psychology, professional psychology, because you just touched on this loss aversion principle. And I was about to ask you about, I think, two things you've already identified as emotions or or or emotional beliefs that are recurring are fear. So you identified fear as a big one for the lawyer who's gonna try to take the firm templates or whatever that they worked on. And then you also identified attention. You know, you know, it's something that I was talking about, something you were talking is is the importance of, like, hey.
Khurram Naik:Like, do you really want this as a distraction? So I feel like we're starting to identify some of the the fundamental underlying emotions or beliefs that really govern there's so many different kinds of of ways you can challenge ethical rules or run afoul of of, you know, contractual provision. Or do you think in terms of this this kind of this ontology of of of emotions, like, there other fundamental emotions that you think of that that that recur in the same way that we've already identified a few of?
Hilary Gerzhoy:Absolutely. And I think so much of my job is deals with people's emotions. Like, it's a huge part of of conversations that I have. A disproportionate like, I if I sort of think about other people's practice and their their legal practice, I would imagine I have a really disproportionate number of conversations about how people feel about things. And I think that's honestly one way in which I have an advantage is I think I'm good at talking to people about how they feel.
Hilary Gerzhoy:And I think I can understand how people feel, and I can what I have been told is that I that people feel comfortable talking to me about things that they don't necessarily feel comfortable talking to other people about. And getting to sort of the core of what's motivating you can be hugely helpful in thinking about the problem. Right? Because the problem is framed by what you care about and what is what your drivers are. I think another big driver.
Hilary Gerzhoy:So I think fear is a big one. I think, you know, how you spend your time and energy. I think a sense of equity and justice is huge. And I think that is so when people do things like, for example, you know, solicit clients when they can't solicit clients or when they they know they're making a lateral move and they stop billing their existing work. Like, they stop invoicing clients.
Hilary Gerzhoy:They stop recording their billable time. That's a breach of your fiduciary duty. Right? You're an employee for a law firm. You can't just stop billing the time that you spend, but they feel like they've been mistreated.
Hilary Gerzhoy:And they feel like there has not been equity because other people have gotten paid more than they have, and they deserve to get paid more. Or other people have been treated better, gotten practice group chair, gotten whatever sort of highlight from the firm, and they haven't. And that was unfair and unjust. And therefore, they want to get some sort of revenge to feel like there's there's more equal footing. Right?
Hilary Gerzhoy:Like, I've been treated unfairly. Therefore, I can treat you unfairly. And I think that's a big motivator for for just human beings in general. Right? Like, it's even even if you don't care so much about the thing, the fact that you've been not treated equally irks people at a fundamental level.
Hilary Gerzhoy:And you'd be surprised, like, how how small those things can be. Like, to the to an outsider, they could be like, really? Like, that's you're so upset about that. But it's because, like, people have a visceral reaction to being treated to perceiving themselves to be treated unjustly. And and part of, like, compensation structures, it becomes so hard in that context because most law firm compensation structures are pretty black box.
Hilary Gerzhoy:And so you don't really know. And I think a big reason they are black box is because when when they are more open systems, it lets everyone say, like, wait. But my hours were this. My receivables were this. My you know, all how how is she getting more than I am?
Hilary Gerzhoy:And when it's black box, you sort of take that piece away. But then what you introduce is sort of the sense of suspicion among everyone. Like, this is what I I would talk to lawyers about this all the time is always feeling just a little unsure and a little bit like you you got the raw end of the deal. Basically, every lawyer I talk to, like, thinks that that's prop something like that might be at play. In part because, like, the way that that the private practice of law operates is have you ever heard of the the idea of a greedy profession?
Hilary Gerzhoy:I think there was, like, a New York Times article about this a few years ago, and it listed a few greedy professions. The law was one. Being a consultant was one. Like, a management consultant. You know, you, like, work for Bain or BCG, and you travel five days a week.
Hilary Gerzhoy:Professions where there's people who you get people who have specialized skills. It usually takes a a a lot of expensive education to get them to a position where they can participate in a greedy profession. It is highly, it it is really well compensated, but it takes from you. It it demands from you. It is the profession is greedy in what it demands of the people who work for it.
Hilary Gerzhoy:So you get to have this fancy job where you're doing really intellectual intellectually stimulating work, and you're making a ton of money. But in return, you're gonna give us a huge portion of your life.
Khurram Naik:And I'll I know what you're saying is Yeah. In contrast to, let's say, you were a real estate agent and you sold a thousand homes in a year. There's much more ambiguity about the nature of your work product.
Hilary Gerzhoy:Absolutely. Yeah. I think that's absolutely right. Like, can do because in those professions too, you can you it's a little bit more choose your own adventure than it is in something like consult management consulting. There's a very specific path.
Hilary Gerzhoy:This is what you're supposed to and and the law is that way in a way that, like, very few other like, very few professions are. Right? Like, you started as an associate. You work as an associate for x number of years. Then at most firms, you become counsel.
Hilary Gerzhoy:Then if you become counsel, you can become a non equity partner. After a nonequity partner, you become an equity partner. But even if you go before that, right, you start you do really well in college, then you go to a competitive law school, then you try to get a clerkship. Right? Like, there's this hat that is laid out that is the the front getting in the front door.
Hilary Gerzhoy:Right? And that doesn't mean that people don't get in on the side doors, and there's other ways to achieve that. But there is this sort of, like, here's how you do it to end up at the place that a lot of people wanna end up. But there are sacrifices that are involved in that, right, which is really that you're giving up a huge amount of your time. And so I think all of the the reason I I bring this up is because I think all lawyer not all lawyers.
Hilary Gerzhoy:I think a lot of lawyers who work in big law feel like they've given too much and that they sacrificed too much. And that and so and because of that, that money becomes such a huge piece of the puzzle for them. It's an outsized piece of the puzzle because they feel like they've they've given the firm more than they should have. And I think that's part of the nature of of BigLaw is that's the way it operates. And, I mean, it's not for no reason at all.
Hilary Gerzhoy:Right? It's you have clients that are incredibly demanding. Right? And the market is in is super competitive. Right?
Hilary Gerzhoy:Everybody's competing for a finite amount of work at a really high level. Right? And so you have to be availability becomes incredibly important because if you are not available in that way, the client can find another law firm that is. Right? And so why is it taking from you in that way?
Hilary Gerzhoy:A lot of it is just the practical nature of who the clients are. This is client services. Right? Client services are demanding. Think I that's a piece of it.
Hilary Gerzhoy:And then I think the other piece of it is, you know, mandatory billables. Right? We have you have to bill x amount. That's where I think where people get more frustrated, and have sort of more bad reactions versus I think folks know, like, clients can be demanding. Right?
Hilary Gerzhoy:And I if I have to be available on my vacation, I have to be available on my vacay my vacation, but it's where it feels arbitrary. So, like, the senior partner is insisting that I be available, but nothing's actually happening right now. That's when people start to to be motivated by to do things that maybe they otherwise wouldn't do.
Khurram Naik:There's there's a lot of interesting things you just talked about, and it's there's a few jumping off points. One jumping off point is when you're initially so you mentioned that you have really resonated with the emotional core of this and helping people express and communicate that identify those emotional underpinnings, and then using that to guide action. So one question I have is, was that part of the role apparent to you earlier on, or were you drawn to the work for some other reason?
Hilary Gerzhoy:It was not apparent to me before I started doing the work. I started I had just done general general litigation. Right? Do it and I did sort of probably half appellate stuff, half half district court work, And then some white collar stuff, but mostly in the commercial space. And then I came to the firm I'm at now, and I started working with Tom Mason who had founded our practice group.
Hilary Gerzhoy:And his his pitch was just, you like litigation. This is litigation for lawyers. And I did not appreciate initially how much it involved sort of thinking about the human being and not just the lawyer behind all of it. And and it also became much more apparent to me the more senior I got because now I have my own clients. Right?
Hilary Gerzhoy:And so when it was when you're working with somebody else's clients, there's always sort of there's a level in between. Right? I'm doing the I'm drafting the memos. I'm drafting the briefs. I am sometimes getting relayed what the client cares about and what the client wants, but I'm not the one having those phone calls as a junior person.
Hilary Gerzhoy:But now it's they're my clients. Right? And so I'm talking to them. And so I I sort of see it in a very different way. So it was not something that was obvious to me at the beginning, but it is definitely something that makes me love doing what I do because I find it very motivating and satisfying to try to help people figure out, like, what's the right thing for you to do?
Hilary Gerzhoy:What's gonna make you feel like you came to the right answer? And how do I solve your problem? That's the other piece is like litigation. This is one of the reasons I like the ethics work so much is litigation is adversarial. And so and that's draining for me.
Hilary Gerzhoy:Right? Like, there are some people who just like the fight. I like the things that the the the things that you do to be a litigator, like research, writing, oral advocacy. I hate the fight. So, like, the thing about debate that I loved was I liked thinking on my feet.
Hilary Gerzhoy:I liked that that, like, it pushed me to be creative, but it's not that I liked, like, I'm gonna fight someone. That is just I don't have that. That's not enjoyable to me. And with the ethics work, some of it is litigation. Right?
Hilary Gerzhoy:Like, sometimes we we've gotta fight. We're we're, you know, in a disciplinary proceeding. It's a malpractice suit. Like, that's what we gotta do. But a big chunk of it is I can solve the problem.
Hilary Gerzhoy:And we can come up with a solution, and there's, like, so little in the world of litigation that actually falls within the let me come up with a solution category that there's something really nice about that.
Khurram Naik:Also seems to that what you're helping people do is make decisions that are I think at their core, everyone most people have an ethical compass. And sometimes it gets compromised, but then I think people regret that. And e e they can go pretty far down that route, but then just real of of just make decisions in life that compromise some ethical value they have. But I think at their core, people want to help you guided to ethical action. And so I imagine it's a gratifying part of your process.
Khurram Naik:What what's the principle use? So let's say someone communicated to you, hey. I'm I'm operating out of fear. Hey. I'm operating out of out of feeling unjustice.
Khurram Naik:Like, How do you then say, Hey, I get you're feeling those things. How do you use those as Now I understand that you're framing, how do you get them back on making decisions that are consistent with their ethical compass, and so they have autonomy, agency to that that is the the motivation, not like the fear of the rule and getting, you know, the stick or whatever.
Hilary Gerzhoy:Yeah. I think it's it's understanding what the what the risk is of doing the wrong thing, not in terms of the stick of getting disciplined, but that you are taking on this risk and you don't need to be. Right? And I think it's like so people understanding that the fear is they feel fear that is not proportional to what the actual danger is. And that and and I think that can be relieving for people to sort of understand, to put everything into context.
Hilary Gerzhoy:And I think the other thing is for people to know that every that other people feel that way too. Because I talk to lawyers all day and I talk to lawyers who are similarly situated to one another. And and that means, like, I've talked to lawyers of all, like solo practitioners to working in Amlaw five firms to government lawyers, public interest lawyers, like, but I've talked to enough of them that I can say to people, like, I know you feel this way. You this is not unusual. Right?
Hilary Gerzhoy:A lot of other people in your position feel this way. And I think that is hugely satisfying to people because that's just like human nature, right, when you feel like you're not alone. One of the I had an interesting call with a client the other day where because I've just seen how this works and I see how the market operates, I he he's at his current firm thinking about moving, thinking about all the things that are associated with that. And what I said, like, explained his compensation to me. And I said, like, you your ratio of hours toward hours versus what you take home, your origination, your hours, what you take home is a better deal than I've ever seen anybody get.
Hilary Gerzhoy:And that, like, just fundamentally changed the way he thought about his current job. And nothing else changed. Right? Nothing else he worked for this with the same people, same clients, same type of work, same hours, all of that. But knowing that it was a good deal in comparison to others was satisfying to him and made him feel a lot better.
Hilary Gerzhoy:And I think the other piece of that is knowing that, like, other people feel that they've been treated unjustly in this circumstance or that I honestly think that nobody ever feels like it's completely fair how compensation happens, for example. That is also, I think, very helpful for folks.
Khurram Naik:You know, you spend a lot of time thinking about ethical rules, and I imagine a lot of that what what percentage of the ethical rules you're thinking about are, like, the rules of professional conduct?
Hilary Gerzhoy:So that's that's it. That's what I'm thinking is the rules of professional conduct. So that's the ethical restrictions. Like, it's rare that's the the lens through which I'm seeing things. So, like, when I get hired, it's because lawyers have questions about what they can do.
Hilary Gerzhoy:They've been accused of doing something under the ethics rules that is improper. When with any malpractice suit, ethics stuff comes into play because the central argument in a malpractice suit is that you fell below the standard of care, which is you didn't zealously and diligently represent me, which is implicates all the ethics rules. So it's always thinking it's either litigating with respect to the ethics rules or giving advice with respect to the ethics rules or defending somebody who's in a disciplinary proceeding, for example, which is purely about the ethics rules. There's no monetary sanctions, for example, in a disciplinary proceeding versus a malpractice suit is obviously done for monetary damages.
Khurram Naik:You know, I I haven't given a depth of thought to the rules of professional conduct since, you know, taking the MPRE, and I imagine that's true for any number of lawyers. You especially if you're at a bigger firm, like, hey. We kind of have, like, largely guidelines for how to progress here and how we do our work, and there's guardrails. And and so just there's plenty of ways to not be thinking about those issues. Of course, I think there's plenty of ways to run afoul of them and ways you don't realize, like, hey.
Khurram Naik:I'll just download this material from, you know, from the firm and, you know, what's the difference? But so are there is I'm curious how you think about this. Do you feel that there are I I can imagine someone, let's say, a trial lawyer, may have an opinion that, hey. There's underrated rules of evidence or underrated hearsay exceptions or something like that. That if you're just thinking about them all the time, here's something in your repertoire that you may not really appreciate, do you feel there are underrated or underappreciated rules of professional conduct that affect lawyers more than they realize?
Hilary Gerzhoy:Yeah. I think there's there's different ways to think about that question. One is, like, where do people run into trouble? And if it was top of mind, they wouldn't run into trouble. I think that's one avenue.
Hilary Gerzhoy:And then I think another avenue is what are the rules of professional conduct say about x such that I can do x more and then be better at my job? Right? So not that the risk is that I don't do it and I get in trouble, but I can do it more. With respect to, like, where people get in trouble, the so where people get in trouble in the disciplinary proceed process is extremely different from where where people get in trouble in the malpractice world. So disciplinary proceedings are about anybody can file a bar complaint, and disciplinary counsel can can, institute an investigation on its own based on anything.
Hilary Gerzhoy:Right? Like, they can read an article in the New York Times that talks about a lawyer doing something that seems shady. They institute an investigation. They have subpoenaed that power. It much it really mirrors the sort of criminal justice system a lot more than it does civil litigation.
Hilary Gerzhoy:Not like there's a lot of due process, all of that. But what a lawyer would get in trouble for? I mean, disproportionately, small firms and solos get in trouble. Why? Because client money is a big concern.
Hilary Gerzhoy:Right? It's a big concern of the disciplinary council for a good reason. Right? We don't want lawyers stealing client money. But the trust accounting rules, the rules that govern, like, how you deal with client money, no lawyer at any big firm has any idea.
Hilary Gerzhoy:Right? Like, they don't they do they even know what an iAlta account is? Like, why would you? Because you're not touching client money. You maybe are the one sending out an invoice, but that's it.
Hilary Gerzhoy:And so you sort of have the the freedom to not care about it because there's a whole infrastructure that does care about it that is tasked with doing it as a full time. But if you're a solo or a small firm, you're absolutely dealing with client money, and there are so many opportunities to make mistakes in this process. So I'm not talking about the client who, like, intentionally steals from their the lawyer who intentionally steals from their client. I basically never see that is the truth. It's the lawyer who made a mistake in the process either.
Hilary Gerzhoy:So in in DC, for example, the rule, it's 1.15, is incredibly draconian. If you commingle any client money with your money, with the operating account money, even if the client doesn't lose a dollar, it's a presumptive six month suspension. And that's huge. Right? Like, what does a presumptive six month suspension do?
Hilary Gerzhoy:So you made you truly made a good faith mistake. Right? You used the wrong checkbook, and we are presuming six six month suspension. So that's one aspect. Like if I ever when I talk to small firms and solos about what to do, I always say like, make sure that that is as perfect as possibly can be because that's something that you're gonna run into trouble with.
Hilary Gerzhoy:In terms of an under where people where lawyers, I find, don't don't appreciate what the rules say, a client confidentiality. So rule 1.6 is what governs client confidentiality, and it is much, much broader than attorney client privilege. So lawyers all know attorney client privilege. They all think about attorney client privilege, and they think about work product privilege. Right?
Hilary Gerzhoy:But client confidentiality is any information that's learned in the course of the representation that a client doesn't want you telling people. And it could be and it doesn't have to be learned from the client. Right? It's in the course of the representation. It could be public information.
Hilary Gerzhoy:It could be the fact that you even represent the client. So, like, if somebody could go on Pacer and see that you represent a client, if the client doesn't want the world knowing, that's client confidence. And so a lot of of of sort of ethical issues that happen is because lawyers have revealed information without appreciating that confidentiality is much broader than attorney client privileged information. With respect to, like, sort of tools in one's toolkit that can be used more, because that was your question about sort of, like, you know, evidence, I think so 1.4 is your communication obligation. You basically have an obligation to keep clients reasonably informed about matters.
Hilary Gerzhoy:The key one that everyone always thinks about is, like, if there's a plea if there's a plea offer, you gotta tell the client there's a plea offer. Right? Or, like, if they're if you're in some kind of negotiation and there's a counteroffer, you gotta tell the client. Right? You can't just say no without talking to the client.
Hilary Gerzhoy:But I think so many problems could be avoided for lawyers if they embrace that obligation more consistent with what it actually says, which is keeping clients reasonably informed. When clients get angry, a lot of times they get angry because they don't know what's happening and they don't know what's happening in real time. And so simply just, like, giving them a little bit of information as things go on can actually avoid a whole host of problems down the road. So, like, a two sentence email can avoid a lot of issues. And if that's sort of regularly part of your practice of keeping clients updated and informed.
Hilary Gerzhoy:The other thing is when you make a mistake, and that's the hardest. And that's the hardest, I think, for particularly for lawyers in big law with all of the credentials and all the fancy things. Every person makes mistakes. We are all fallible. We make mistakes every day.
Hilary Gerzhoy:But it when the stakes are really high because there's a lot of money on the line, because you are making a lot of money, because getting to that position took took a lot of money. Right? You had to spend a lot of money to get educated to to get there. Making a mistake and the human desire to make it go away is very, very powerful. To not tell other people that you've made a mistake, to figure out if you can fix it before anybody finds out.
Hilary Gerzhoy:That piece and, like, creating a work atmosphere where people feel comfortable to say they've made a mistake, another area where you can avoid a ton of problems. Because you have if you make a mistake and it's critical to the matter in some way, even if you fix it, you still have to tell the client about it. And clients are can be some clients are unforgiving, but a lot of clients are you know, can under understand that people make mistakes. But I think that's a really hard one, and I've seen it be harder. Sort of the the fancier you are and the more you have the all the fancy things, the harder it is for folks to say, I made a mistake.
Khurram Naik:Are there any instances with Bettany's rules with respect to any of where you feel that people are unnecessarily taking obligations that don't actually exist, where people are making it harder for themselves.
Hilary Gerzhoy:Oh, well, so that's the sort of the the opposite of the the the 1.4 issue is some lawyers feel like they have to tell their clients every they have to be responsive all the time. That's an that's a way in which I think the practice of law becomes super greedy if and lawyer it'll be as greedy as lawyers let it be because there are clients out there that do not respect the time of their lawyers. Right? They think I'm paying you a lot of money, and therefore, you are perpetually available to me at any given time. Nothing actually requires you to do that.
Hilary Gerzhoy:Right? And so nothing requires you to be being responsive to a client does not mean being available all the time. And I think setting boundaries a lot of the time is respected, And you can I think lawyers have more freedom to set more boundaries with their clients than they often think they do, which, again, I think is a lot of the fear motivator because they're afraid? Well, if I'm not responsive all the time, there's somebody you know, there's another law firm down the street, they'll be responsive at at all hours. But if you're good at what you do, like, having confidence in that and saying, like, I'm not you know, I see that you emailed me on a Saturday.
Hilary Gerzhoy:I'm gonna email you back on Monday morning. Unless it's truly urgent and the category of things in the law that are truly urgent is very small. And, like, recognizing that it's actually very small. I think it's much easier said than done in general, but it's also much easier for those who have the direct client relationship. Where it becomes really hard is if you don't have the direct client relationship and you're working for other lawyers, then, like, what your boss says is what your your your boss is really the client that you're thinking about is the person that you work for at the firm.
Hilary Gerzhoy:And if they have unrealistic expectations and demands, setting boundaries can be really hard. But you see the neck you know, the the next generation is is doing that a lot more. But I want I wonder what the but you hear I hear all the time from senior lawyers that they're frustrated with that generation because for them, like, you had to be available all the time. That was just the nature of working in big law. Like, that's what you signed up for.
Hilary Gerzhoy:How come they don't get it? And how come they don't they don't wanna do that? And I think they just have their different values, and there's different priorities that are placed on things. But that is one area in which I feel like lawyers feel like they have to be responsive to to a degree that nothing requires them to be and that they probably could set more guardrails and be happier as a result.
Khurram Naik:Yeah. I love that. What what rule of professional conduct would you change?
Hilary Gerzhoy:Oh, the the trust accounting rules for sure. So I'm, the vice chair of the DC rules committee. So that's the committee that proposes changes to the rules of professional conduct that then go to the DC Court of Appeals. And that was a proposal, And there's been a lot of pushback, on on it, but I think it's incredibly important because I think you do not wanna have penalties. You the penalty has to fit what the crime is and the severity of the crime.
Hilary Gerzhoy:Right? And when somebody makes a mistake and nobody's hurt, having a presumptive six month suspension, that can destroy somebody's career. Like, if you're a litigator, every time you pro hawk into every to any court, you have to say if you've been disciplined before. And there are lots of courts out there that will not let people pro hawk in if they've ever been subject to discipline. It it is public.
Hilary Gerzhoy:It's public record. Like, at the, you know, the Washington Lawyer magazine in every every jurisdiction has their magazine. It has a list of everybody who's gotten disciplined. It's out there. Right?
Hilary Gerzhoy:It's a it's a has huge career ramifications. And if it was really a a mistake that was not because you were being reckless but was just because you were a human being who made a mistake and nobody was hurt, I do not think it is appropriate that we have a presumptive six month suspension.
Khurram Naik:What's rule number two? Rule number two that you changed.
Hilary Gerzhoy:Well, I don't know that I changed it. It's just a it's a really hard one to navigate, which is 8.3, which is your obligation to report when other people do things that violate the rules. That's a really, really tough one for people. And I don't know what the answer is, and I think that the the rules have I I think where we have landed is is sort of the best you can get, but it's not very satisfying because it's when somebody has done something that calls into question their fitness to practice law, what does that mean? That means very different things to be different people.
Hilary Gerzhoy:Right? So, like, I was so I teach legal ethics to professional responsibility at Georgetown. And, yes, my class was yesterday or two days ago. And we were talking about reporting obligations, and and somebody said, well, if you know that a lawyer is, like, consistently unfaithful, right, and cheating on his wife and cheating on his wife with, like, tons of different people, like, doesn't that mean he's, like, not a trustworthy guy? Shouldn't I report him?
Hilary Gerzhoy:Right? And, I mean, that's that's a hard question. Right? I think the answer is no. That doesn't trigger a reporting obligation, but I could see why you might think that.
Hilary Gerzhoy:Or, you know, somebody has a drinking problem, for example. I report somebody who has a drinking problem? What are the ramifications of reporting somebody who has a drinking problem? The thing about 842 is the the reason that it's sort of it it's hard to navigate. It's also really, really hard to discipline people as a result for violating it.
Hilary Gerzhoy:So it becomes a little bit toothless because you see basically no prosecutions for like, oh, you knew that he was forging documents and you didn't report him to the bar. That fact pattern comes up basically never. So that's a hard one for for people to figure out, like, when do I actually have to do this is can become a a very tricky question.
Khurram Naik:I'm curious in, you know, you see partners, successful partners, and you you see an interesting cross section of their circumstances, and and and get really gritty into finances and that kind of stuff. And so you see patterns and commonalities. I'm curious, apart from working hard, being great with relationships, and thinking in terms of business, apart from those qualities that somebody could possess in a in as a as a rainmaker, what are commonalities you've observed among very successful lawyers that and let me qualify and say, not just ones that are successful monetarily, but ones that you think big picture are good lawyers, good ethical compass, just overall good people who are very successful. What are commonalities you're seeing among those people?
Hilary Gerzhoy:Nope. Think of two categories that go to each of those things. But I think that they're they're two different answers. I think for somebody who's successful in being a rainmaker and successful at what they do and has a big book of business and is well regarded, one quality other than the qualities that you mentioned, I think, is confidence and or at least projecting confidence. Because you meet a lot of people who actually are are deeply insecure, but they project confidence.
Hilary Gerzhoy:Because the thing is that clients are hiring they wanna feel like they they've hired somebody who's gonna protect them, right, in whatever way that is. Right? If you're in a transaction, if you're a personal injury lawyer, if you are doing, you know, a private equity deal. Right? You just clients want to feel like their lawyer knows what's knows what's happening, knows what's going on, is gonna see problems before they happen, and is gonna protect them.
Hilary Gerzhoy:And so if you give off that just energy in life, that I've seen that as a very, very consistent thing with the people that I talk to who have very successful law practices is they sort of give off this air of confidence, confidence, like self assuredness, and calm, like a calm energy about because it's sort of like a I got this vibe. Right? I think that's one piece. Now with respect to, like, what sort of sets people up for being ethical and being sort of compliant with the rules and staying on the right side of things, I think thinking about the client is the most important thing. Like, the lawyers who think about the client first.
Hilary Gerzhoy:Because as I said, like, we're a client services profession. And I think sometimes lawyers don't think about that in quite the way that it that is contemplated by the rules of professional conduct, which is all of this is designed to have the public have faith that lawyers are held to a certain standard. And so when a lawyer says something or does something that we can have trust in them. Right? Like, that a lawyer is not gonna get in front of a court and lie.
Hilary Gerzhoy:That a lawyer when they're when you're interacting and negotiating with a lawyer, that they're gonna be truthful in those negotiations. It's sort of there's lots of jokes about lawyers being liars. But the way that the profession actually looks at it is because you occupy a position of power, and therefore, are certain restrictions that are put on you and certain expectations. And I think the lawyers who think about their role as being an advocate for their client first don't fall into so many of these traps. Because if you're focused on what's in the client's best interests, you're not gonna you're not gonna make a mistake.
Hilary Gerzhoy:That's gonna be a mistake that amounts to a violation of the rules. You might make a mistake because we make mistakes as human beings, and you might get sued for malpractice. But, again, lots of folks can get sued for malpractice when they didn't commit malpractice. But you're gonna stay on the right side of things if that's the perspective that you occupy.
Khurram Naik:That's interesting. I I wonder how you'd also consider scenarios where there's any clients who don't have full appreciation for ethical conduct or and then also aren't repeat players in courts or or otherwise in the practice of law where there's scenarios where lawyers have to challenge their clients or or or decline representation as as necessary, where clients are expecting saying, hey. Like, this is kind of than they're expecting, and the lawyer is saying, hey. Like, I know that there's that's a departure from what's right. So I don't know how often you run to observe that as a pattern.
Khurram Naik:Because I totally understand what you're saying with having a client centric focus, and that is a good north star for saying, Hey, am I doing the right thing here? Am I just looking out for myself or looking for my client? It seems to me there's sometimes situations where the inverse is the most ethical path. And so that's also a tool mindset that lawyers have to keep in mind too is their reputation, the firm's reputation, and and the profession's reputation. And so
Hilary Gerzhoy:Absolutely. Yeah. I think I mean, I think it's absolutely true. And I think it can come up in all kinds of contexts. But one way that I'm seeing it happen now is politically and lawyers who are involved in in politics and with this administration and being pressured to do things that they know are unethical.
Hilary Gerzhoy:So I I have a lot of clients that are government lawyers, recent recently departed government lawyers, currently government lawyers that that may not be government lawyers for very long. And a big chunk of the the conversations that I'm having are, first of all, the the general counsels from my agency have been fired. There's no general counsel to to talk to, so I need to hire an outside ethics lawyer. And I am being asked to do something that I don't think is right. What do I do?
Hilary Gerzhoy:And the answer is for every client representation. If you are being asked to do something that violates your ethical obligations, the answer is withdrawal. You have to withdraw from the representation. Now first, you try to persuade your client to not do that thing. Right?
Hilary Gerzhoy:And but if your client insists on a course of action that requires that you violate your ethical obligations, you have to withdraw from the representation. And I think that is easier in certain circumstances and harder in others. But I would imagine that there are plenty of lawyers right now who are working in the administration who feel deeply conflicted. And I think there's probably plenty that don't feel conflicted at all. There are plenty that that were there and just, you know, immediately, you know, resigned.
Hilary Gerzhoy:But I think that there are lawyers who feel deeply conflicted about what to do, who their client is too. Right? When it's the government, that's also like the government when you're when you work for the government, the client is not the president. The client is the head of the is the agency that you work for. Right?
Hilary Gerzhoy:Like the justice department. So what is in the best interest of the justice department? But I think that that is sort of a has come to the forefront because of where we are in history in a way that it sort of never I don't think it has before.
Khurram Naik:Can you give us a breakdown? We haven't talked about the big picture breakdown of your practice to help people understand the context of the mixture of work that you have.
Hilary Gerzhoy:Yeah. So I do a big chunk of my practice is serving as outside general counsel, which means that I get hired by firms of all sizes from solo firms, small firms that don't have a dedicated general counsel to basically be that person for them or get hired by big law firms that have just a dicey, weird ethics question that needs somebody to do a deep dive. A lot of times that goes to things that deal with conflicts of interest because those are that can be really hard to to navigate, and they can get particularly when there's lots of lots of clients with competing interests with where there's overlap. There's subsidiaries, affiliates. There's outside counsel guidelines.
Hilary Gerzhoy:There's lots of things to navigate sort of what the answer is there. So I do a lot of outside general counsel work that that deals with with that and also with just managing clients. Like, looks like there's gonna be a fee dispute. What do we do here? And then I do the litigation aspect of it, which I think of as in two categories, which is the malpractice litigation and then also litigation with respect to the disciplinary conduct.
Hilary Gerzhoy:So representing lawyers and firms that have been accused of violations of the rules of professional conduct in that whole process, which results in if it's an investigation, and then if it if you ultimately don't get it dismissed or have, negotiated discipline, which is sort of like a plea deal, then it goes to a trial. And then it can and then then it goes to an appeal. And so litigating that, those cases. So that's, like, the combination. And then within the sort of general counsel stuff, a lot of it is just, like, one off ethics things that lawyers are dealing with.
Hilary Gerzhoy:So, like, the context in which we met, which is lawyers who are making lateral moves, there's just a lot of ethics issues that come up in that. And so some people wanting guidance about how do I how do I do this? What tell me what I I don't know what I don't know. I I took professional responsibility thirty years ago, or even I didn't ever take professional responsibility because thirty years ago, we even do that. And I basically remember none of it other than don't steal from your clients.
Hilary Gerzhoy:So, like, tell me here what I need to be thinking about.
Khurram Naik:So in your capacity, you see lots of things that work and lots of things that don't work. And I wonder if you think of your work the same way that I do. So, you know, something that I've come to appreciate in my role as a in a recruiting agency is we see recruiting practice in lots of firms. We see how lawyers think in terms of making moves in lots of instances. And so that that helps inform us in a couple tangible ways.
Khurram Naik:So it comes to things like agreements. So things like a recruiting agreement. There's terms in there that I've come to have an appreciation for. There's market terms that you can kind of understand like, hey, here across firms, there's maybe variations in some ways on on some of these terms, but there's a a abstraction away across these firms of the market terms. And so part of what I do is guide firms on, Hey, what is market terms?
Khurram Naik:You may not appreciate what our market even really large law firms may not have an appreciation for market terms. More fundamentally, I think what's really helpful in my capacity, explain why these are market terms. What is it that is beneficial to the firm for using market terms? And and that what benefits a firm is that zero sum to what benefits the recruiter, not zero sum to what benefits the candidate?
Hilary Gerzhoy:What do you mean by market terms?
Khurram Naik:In terms of, say, like, what is how much recruits are compensated, the structure of their compensation, payment terms, things like guarantees for how long that a lawyer is gonna be at a firm. Those are, I think, the three of the most important terms you might find in a recruiting agreement.
Hilary Gerzhoy:And that would be the recruiting agreement between a law firm who's hiring you to be their dedicated recruiter to place a certain like, we need somebody for this role. Go find them.
Khurram Naik:Yes. That's right. Yep.
Hilary Gerzhoy:Okay. And and say your question, what what your question was again?
Khurram Naik:Well, I'm I'm curious. So I'm making the observation that what I what I am finding is that what's the key part of what I think is a lot of the value that I bring is to explain, A, here are market processes. So, apart from the tangible recruiting agreement, generally processes for firms have a goal, bring in the best talent. Okay. Here's what I observed are the best processes for do that.
Khurram Naik:And some of it is reducible to the mechanics of the terms in an agreement and showing, hey. Here's why there's standard process across firms. And here's the benefit to you to comporting to these market terms. And the benefit to you is that zero time to benefit to zero time to the benefit to the recruiter or to the lawyer. Okay.
Khurram Naik:I'm curious if you see an analog in your work where you're able to observe patterns across law firms and and and how they structure things like partnership agreements or in terms of how equity partnership is structured. Is it locks up, modified locks up, etcetera? I'm curious if you have takes on, hey. Like, what are fair market terms in partnership groups? What are fair market terms in in law firms that is most effective for for for structuring partnership?
Hilary Gerzhoy:Yeah. Well, so I I think it's a great question, and I think it runs the gamut. I think the what has changed dramatically in just the last, like, five to eight years is this the new class of non equity partners. Because what it was for so long is that partnership was was partnership, as in you owned part of the law firm. And so that came with a lot of huge benefits, which is like we all when the firm is doing really well, we all do really well.
Hilary Gerzhoy:There's, like, general buy in to the success of the firm. And it makes, I think, makes people feel like they're part of a collective and that they have pride in the institution. Right? And that, like, a win for somebody else is a win for them too. It's not a zero sum game.
Hilary Gerzhoy:It's a we all sort of share in the upside. And then I think now that almost every firm, right, I don't think there's that many Amlaw 100 firms left that don't have a nonequity tier. I think that has really changed the way that that people who join the partnership sort of feel. It it you become a partner. You're sort of a partner in name only because you don't actually own, You don't actually have you know, you don't get a benefit from the upside.
Hilary Gerzhoy:That's a direct benefit of having equity in the firm. And in a lot of ways, it it feels to folks kinda like a trap because you are now the only the only path to becoming an equity partner is to generate a book. But to be sort of viewed as in good standing at the firm, you have to continue to bill at a certain level that makes it really, really hard to generate a book unless you wanna, like, never sleep. Right? Like, doing business development takes a lot of time, and it's not as though, like, you just get this whole chunk of time that everyone's like, okay.
Hilary Gerzhoy:You're fine. You're doing business development. Right? You're at a at a hugely profitable company. Right?
Hilary Gerzhoy:If you think about law firms as companies, you're in a hugely profitable company that expects that everybody's contributing. And so the way out for a lot of people become like, the way to, like, the thing that gives you more freedom, which is being an equity partner, feels kind of impossible in a way that it didn't before. Right? Like, it would be you did your seven or eight years. You did superlative work.
Hilary Gerzhoy:Now you share in the equity. And and that means that you feel differently about like, you don't feel this rush to generate your own business. And if you do, great. But there's plenty of folks out there that don't, that are also equity partners and also feel valued. So I think that's a big change that has made it harder for people who are sort of coming through the ranks to feel valued.
Hilary Gerzhoy:The other piece to like, what I see where there's more harmony among the partnership is more transparency. More, like, more transparency about how compensation works. And every and firms do it all they all do it differently in terms of how things are how factors are weighed in terms of how you get equity. But I think people understanding what the process is and having a process. Right?
Hilary Gerzhoy:Not and making it so that there is transparency, not just about what the outcome is, but what the inputs are. Because then people feel like they can change their priorities. Right? And so I think one way in which people feel unfairly treated is it's a black box compensation structure. The firm says that they care a lot about time that you spend devoted to the firm, devoted to mentoring associates, serving on committees, but nobody ever feels like that's tied into their compensation.
Hilary Gerzhoy:But they feel like they're supposed to do it and it's valuable, but it's not tied into their compensation. And I think that Jimmy down the hall, he I know he doesn't do any of it, and I know he makes more money than me. That so, like, knowing what truly what the inputs are and and the firm articulating what those inputs are and then having transparency around it, I think that's a big driver. I think not having billable hour requirements fundamentally changes a law firm in ways that I ultimately think are so much better for clients too. Because when you have an arbitrary requirement, it makes people feel incentivizes people to do things that we do not wanna incentivize lawyers to do, which is to to maybe one lie.
Hilary Gerzhoy:Right? Say they're they're they're spending time doing something that they're not, or more often just being inefficient. Right? And take because I have to get to this number. And if I have to get to the number, like, alright.
Hilary Gerzhoy:I'll read that deposition transcript again. That's not in the client's best interest. And so it should be that you do the work that's needed to get the result for the client and do the a plus product. Right? But, like, once you get there, stop.
Hilary Gerzhoy:And when you have the billable requirements, it makes people feel like that's not possible because you're always sort of afraid for, like, what next week looks like. Well, maybe everything drops off next week, so I've gotta, like, keep it up. Right? Or in any given moment, like, I've been slow for this week. What does that mean for the future?
Hilary Gerzhoy:And, like, creates a sense of panic and urgency that is makes people feel terrible, one, and ultimately, don't think is good for for lawyers generally. So I think firms I've seen where there really is no requirement. And they but your compensation is tied to your contribution to the firm in a way that that's articulated to you. So your contribution for some firms is just purely what you originate. Right?
Hilary Gerzhoy:And that can actually make people feel quite happy because they know if I'm if I bring in x, I will make y, period. End of story. Right? That can actually just be very satisfying to people. Or there's other factors, but I know what those other factors are, and they feel in my control to some extent.
Hilary Gerzhoy:Versus a billable hour requirement for a lot of people does not feel like it's in their control if they're not generating their own work. And
Khurram Naik:then in terms of the structure of equity partnership, in terms of things like Lockstep or all the variations there are, do do you have any point of view on one one format that that is is more conducive to success holistically of the law firm?
Hilary Gerzhoy:I think Lockstep works really well when everyone feels like they're they're they're sort of bought it. Right? Like, the lockstep doesn't work is when you feel like other you're working harder than everybody else. Right? And you're sort of pulling you you're not and you're not making a differential salary to compensate you for that fact.
Hilary Gerzhoy:But when it is lockstep and everyone is a hard worker and you feel like your peers and those like in lockstep with you are pulling their weight, I think it works incredibly well because what it does is it basically gives people more runway to actually develop their practice in a way that's like more long term successful for them. Right? So like, you know you're gonna this is what the competition's gonna be for these years, and then you can decide how you wanna spend your time in terms of how you wanna develop business, what expertise you want, what relationships with particular clients are gonna be really important for you to be take take the lead on, that kind of thing. So I think it works it works really well until it doesn't work, until somebody feels like they they got the raw end of the deal. But a lot of firms are getting rid of I mean, there's very few firms left now that are really doing true lockstep equity.
Hilary Gerzhoy:Lockstep for I mean, it's for associates. It's the market is the market. Right? And it's there's some deviation, but not very much deviation. And there's actually, like, incredible transparency about that in the way that unlike a lot of professions, there's not.
Hilary Gerzhoy:Like, you could literally look up. Like, what does a seventh year associate make at an Amlaw 100 firm? And, like, you will find out. Like, I couldn't I couldn't look at, like, random Fortune 500 company. What is, like, somebody who's worked there for seven years make there could be, like, an enormous range.
Hilary Gerzhoy:Right? But there's something very strange about going from a place structure a where there's complete transparency and everybody makes the exact same amount of money other than bonuses, which are as a as a percentage, a pretty small percentage of your sort of ultimate compensation in terms of differences, to a system where you have no idea what anybody else is making, and and often what, like, the basis is for what you're making. Because a lot of times with firms too, the bonuses like, if you hit the hours target, then you get the full bonus, and the full bonus is x. But even with the part like, with the equity partner situation, it's not unless it's really you get a percentage of what you bring in, then you sort of have no idea what I worked this amount of hours, this is how much I build. And, like, I don't know what what the compensation committee is gonna tell me I made.
Hilary Gerzhoy:That's where most people live, and I think it's not super pleasant. But there are things with but it's there are reasons why firms do not want transparency because it gives them a lot more power to make decisions.
Khurram Naik:And you mentioned, you know, I've seen previously speak about partnership agreements and some of the somewhat punitive terms that can be in there that don't really come up until they come up, kinda like, you know, what you're saying. And do you think upstream, there's any issues? I mean, like, what does it speak to something else about the firm, the firms that have these kinds of terms? It's probably not these firms that have these other high quality aspects of harmony among partners, even if there's differences in terms of work, product, and compensation. Can you speak to the impact of a fair partnership agreement?
Khurram Naik:What are some of the terms you think should be in a fair partnership agreement?
Hilary Gerzhoy:So the vast majority of partners, I think, don't know what their partnership agreements say. Because when you are offered to join the partnership, the answer is yes. And it's sort of whatever you want me to sign, I'm gonna sign it. And partnership agreements can be hundreds of pages long. So I don't think that they impact the culture in anybody's lived experience at the firm until they wanna leave.
Hilary Gerzhoy:And I don't and in basically any way at all. So, like, a really unfairly drafted partnership agreement that has a lot of punitive terms, I don't think impacts somebody's day to day existence basically at all until the moment that they leave. And so if they never leave, they spend their, you know, entire career at a firm, that the firm has a bunch of provisions in a partnership agreement that that would if they knew about them would be would be unfair. They haven't they don't have any ramifications on their existence. The firms that so and what what are the punitive things that we're talking about?
Hilary Gerzhoy:One of them the the one of the most punitive ones that I've seen is that your capital contribution can be used to count against your accounts receivable. So if clients haven't paid, that the amount that they have not paid can be deducted from your capital contribution. Capital contributions are supposed to be money that you give the firm for a period of time up until the time that you leave so that the firm can stay afloat, and there's not cash flow issues. Right? And almost every partnership agreement has a payback period because partnerships don't wanna be in a position that, say, 50 lawyers leave, and then all of a sudden they can't pay their lease or they can't pay their staff.
Hilary Gerzhoy:But there's a payback period. Right? But the idea is that you get your capital contribution back. It's not money that you are it's not a donation. But with for and what I've seen this, it's not super common, but I've seen it a few times where if your clients don't pay, we're gonna deduct it from your capital contribution.
Hilary Gerzhoy:I think that because, and the reason it's so unfair is because as any practicing lawyer knows, you do not have control over whether or not your client pays. There are some clients that just do not pay. And what's your recourse? Your recourse is to to sue them to try to collect fees. What's the consequence of that?
Hilary Gerzhoy:You will get sued for malpractice. Basically, every time I've so many of the malpractice cases I see are because you tried to collect on unpaid fees. Because what is a client? A client who's not gonna pay you in the first instance, that's obviously not a client who's being fully, you know Fair. Honest about things.
Hilary Gerzhoy:Fair. Right? Like, you performed a service. You need to get paid. And if somebody thinks, oh, they performed a service, but I'm not gonna pay them, they may might also be disproportionately the type of person that says, well, I'm gonna then sue you so that you go away.
Hilary Gerzhoy:And so all of that is to say that we have very little control as lawyers over whether or not our clients pay pay us, and very little power over what to do if they don't. So that's a that's a harsh measure. But I think the answer to your question is that for me in most circumstances, I don't think it really impacts people's day to day existence if they have if there are provisions in their partnership agreement that are that are pretty unfair.
Khurram Naik:And, you know, it's important you know, it's it's tough, right, for lawyers because we want in some of the ways, we have a lot of power in society that that potentially could be unchecked, and we're able to decipher these confusing scripts in ways that, you know, that people aren't typically in. And I think there's just lots of things that we even most real things that you learn as a as a one on your first semester are just so fundamentally changed your perspective in a way that's hard to undo. Like, it's hard hard to uncook the egg. And so it's hard to appreciate the public's lack of understanding for you know, was just having a conversation with with another lawyer about, you know, litigates contract disputes and talking about, hey. Just juries don't really understand how conscious work.
Khurram Naik:They don't understand that you can have unenforceable terms. They don't understand that contracts there can be terms that are that are illegal. They're against the law. And so these are things you learn within weeks of of of being in law school that you just don't forget because they're just so fundamental and change your perspective, but the public has no clue. Going from that's going from zero to one.
Khurram Naik:It's just completely different worldview. And so I understand the importance of accountability for lawyers, and it strikes me that there's any number of scenarios where lawyers are not accountable to each other for for poor behavior or poor performance. And so that, you know, like you're talking before about the rule, is is underused for, maybe in some ways, for for holding lawyers accountable. But in this instance you're describing, there's some collateral consequences to the ease of initiating a malpractice claim. And so do you feel like there's anything do you feel like there's something excessively easy about that?
Khurram Naik:Because it has these other negative consequences of not being able to collect. Think independent of that, whether or not there's malpractice to, there's other consequences suing a client, because then any number of other clients say, What are you gonna sue me now? And so I think there's other reasons why there's a question about whether to do that. But I'm curious whether you think malpractice claims are too easily pled or or if the standard is is the threshold for for misconduct is too easily met.
Hilary Gerzhoy:I definitely don't think it's truthfully met. It is very hard to win a malpractice suit. So what is the standard for allowing people to sue one another? Like, that I mean, that there's a lot of discussion right now about rule rule 11. I think the standard for initiating a lawsuit is is appropriate.
Hilary Gerzhoy:Right? You have to have a good faith basis that that you know that the facts or law support you or for an argument that the that the law should change. That's I think that's the right place for us to be. Right? And you have to do some diligent inquiry before you do it.
Hilary Gerzhoy:So you can't. If you bring a lawsuit and somebody hasn't done anything that justifies it, and you have no reason to believe that they have, then that will be dismissed and you will be sanctioned. That's appropriate, I think. In the context of proving a malpractice claim, though, that the standard for being successful in a malpractice claim is super steep because what you have to show is that but for the lawyer's mistake, you would have done better. And that's a really, really hard counterfactual to establish.
Hilary Gerzhoy:So the things that make for, like, a malpractice suit that end up being successful is, for example, you didn't call my lawyer forgot to call an expert. The judge said, I would have granted I would have you would have won if I had heard an expert on this issue. How often does that happen? Like, never. Right?
Hilary Gerzhoy:That's so I think that that the standard is is the appropriate one because that that is sort of as a logical matter what you should have to prove. Right? You should have to prove that not just that my lawyer made a mistake, but if that Before. They hadn't, I would have done better. So I think that I don't I don't see clients, like, initiating malpractice willy nilly.
Hilary Gerzhoy:Like, that doesn't seem because it is expensive for them too, right, to to do it. But I do think it's sort of the it's the the the response to them being sued to collect fees is is what happens a lot. Because once you've been sued, then, like, your threshold for sue for countersuing in some way is very is very different. I think that's a different you have a very different calculus at that point.
Khurram Naik:Yep. Well, I know that we're we're right up on time here, and, yeah, there's just so much more about, you know, your backstory that we didn't even touch. So we might have to we might have to do a round two here. But I think you've, as always, had lots of food for thought for lawyers. And, yeah, it's just super interesting to hear about your practice.
Khurram Naik:Because as you say, I think, you know, the having ethics practice, you're talking about the emotional core. Like, I think I think about things in a job that probably other lawyers or or litigators don't. And so, yeah, I think you're right about that. So a lot more to mind in that, hopefully, in another conversation.
Hilary Gerzhoy:Yeah. Great. Well, thank you so much for having me on. This was great.
Khurram Naik:Thanks, Laurie.