- Boston endures
Seventy years ago today, my mother was born.
Thirteen years ago this week, and then again three years later this same week, my daughters were born.
I grew up an hour north of Boston. Some of my earliest memories recall family trips into the city. Frigid December visits to see the Christmas-decorated windows at Filene’s and the lit-up trees on the Common. Muggy August afternoons at Fenway Park to see the Red Sox, the team I worshipped. For 22 years after returning from college, I lived or worked in the place that I will forever consider my hometown.
I’m sharing this personal history because that is what Boston is all about: history. It’s what we’re best at. Maybe it speaks to our metropolitan inferiority complex, living in the shadow of New York and often forgotten as a major American city. Boston is like the nerdy kid with glasses in your fifth-grade class. Not as athletic as New York (and its 27 World Series titles), not as hip as Los Angeles. We trumpet our many world-class universities and hospitals the same way the nerdy kid recites all the presidents in order.
Another reason we celebrate the past is that it reminds us of a time when Boston was more important. It was the first major city in the United States, and the largest until Philadelphia surpassed it in the mid-1700s. The American Revolution began here, of course, 238 years ago this week. It is home to America’s oldest public school, oldest university, oldest subway, and oldest major-league ballpark. Even the city’s only acceptable nickname* — “the Hub” — comes from an 1858 Oliver Wendell Holmes book referring to Boston as the “Hub of the Solar System.” There’s a mix of self-consciousness and wistfulness when we use that sobriquet.
But there’s another reason that history is so important here. More than anything else, Boston endures. It’s a trait we inherited from the Puritans who settled here. Boston endures endless winters of chilly grayness and frustrating seasons of baseball ineptitude. Boston endures indicted House speakers and derided presidential candidates. Aggressive drivers and countless struggles with the eighteenth letter of the alphabet.
And Boston will endure the Patriots’ Day tragedy, an attack on another of its many historical institutions: the world’s oldest annual marathon. Bostonians will forget their differences and roll up their sleeves and work together to clean up and rebuild. Bostonians will pursue the cowardly perpetrators with New England ingenuity and industriousness. And most of all, Bostonians will remember, and will take this new Boston Massacre and weave it into the 400-year-old tapestry of the city’s history.
Because Boston endures.
*You will never hear a Bostonian say “Beantown.”
- Trade Secrets — Chapter One
Many of you know that I’ve just finished writing my first thriller. During my career as a trade-secret litigator, I was always struck by how fiercely corporations would fight to protect their secrets. Some would do almost anything. So I got to wondering: what if a company would do anything—even kill—to protect its secrets?
When investigator (and recovering lawyer) Warren Archer lends his phone to a beautiful stranger, a ruthless corporation marks him for elimination. He must confront the secrets of his past to save himself, the woman, and a city.
- One less grammar post to read
The cool thing about English is that no matter how well you think you know it, there’s always something more you can learn. Every so often, I discover that I had been making a mistake. In this case, it involved the words less and fewer.
I considered myself reasonably well educated when it comes to these words. I knew that fewer dealt with countable nouns, like ducks and cupcakes. (“I have fewer cupcakes, but she has fewer ducks.” Or something.) And I knew that less dealt with uncountable nouns (or mass nouns), like body fat and waterfowl noise. (“Consequently, I have less body fat, but she has less waterfowl noise.” Who writes these examples?) The classic misstep is made by supermarkets everywhere, where the sign for the express checkout reads “ten items or less.” (Except at Whole Foods, who gets it right.)
Of course, some countable nouns still take less because they’re really things you measure instead of count, like money and time. (“Less than ten minutes,” or “less than five bucks.”)
But where I went off the rails was with the phrase one fewer. I figured that if the noun was countable, then fewer was the way to go. (“I have one fewer duck than she has.”) Turns out, I was wrong. The proper phrase is one less. The logical argument is that one thing can’t really be counted. But the real reason is that no one says “one fewer.” Well, almost no one. I did.
Until I looked it up.
The important thing, if you care about writing well, is that you continually try to improve by looking up things instead of just guessing. (I had to double-check that I didn’t mean continuously; I didn’t. I also double-checked the hyphen in double-check. Tough sentence.)
(Image courtesy of The IBD Blog.)
- You made LinkedIn’s top 10 percent. Now, shut up about it
Recently, LinkedIn sent out
spamcongratulatory emails to some of its members, telling them that they ranked in the top one, five, or ten percent of the most viewed profiles. Which sounds great, till you realize that LinkedIn has 200 million members. Now I’m no math whiz, but I’m pretty sure that ten percent of 200 million is 20 million. Even the lofty top one percent loses some of its luster when you realize it’s a distinction shared with 1,999,999 other users.
So if being a member of such a large crowd pleases you, that’s fine. But do you really want to brag about it on Twitter and Facebook? The distinction is dubious and the self-promotional element seems a little tone deaf. It’s kind of like trumpeting your Klout score or how many Google Wave friends you have. There’s nothing wrong with self-promotion, as long as it’s done with authenticity and class. By all means, shout out your accomplishments to your friends — they’ll be proud of you for the stuff you’ve actually done.
By the way, I’ve got nothing against LinkedIn for running this promotion. I give the company credit for getting people to promote the site for free.
- 🔗 How to improve your social-media training ⭕
Really useful article by Sharlyn Lauby of HR Bartender on social-media training. Spoiler alert: Includes a quote where I manage to offend cat-video enthusiasts. Fortunately, there aren’t too many of those out there. Wait … what?
- 🔗 Can your firm be like LEGO? ⭕
I’m not saying that you need to give out action figures. But how can your firm strengthen customer relationships by giving away a little something extra?
- How to calculate your real hourly rate
If you’re a professional and you have an hourly rate, you’re probably used to measuring your time in tenth-of-an-hour increments. You keep track of the work you do on timesheets, and then you multiply those totals by your hourly rate. That calculation gives you a value of the work that you performed for your client.
Or does it?
Let’s say that you’re a CPA with five years of professional experience. Let’s further say that you spend an hour working on the audit of a client. Your rate is, say, $120 an hour. By that calculation, at least in theory, the work you performed during that hour was worth $120. And that’s the amount that the client will be charged.
But an hour is an hour. (Einstein’s Special Theory of Relativity is of course beyond the scope of this post.) So what if I spend the hour doing audit work for that client, instead of you? Isn’t it also worth $120?
“No, you idiot,” you say. “You’re not even an accountant.”
That’s true, I reply. But what if I send away for my very own CPA license from an ad in the back of a magazine? Then suddenly I’m an accountant, too. Now is my hour of work on this client’s audit worth $120?
“Of course not,” you scoff. (I get a lot of scoffing.) “It’s not about the license, you maroon. It’s about the knowledge I accumulated over my five years of working.”
Bingo! You just figured the whole thing out. It isn’t the hour of work that creates the value. It’s the knowledge that you’ve accumulated that creates it. You and I could spend an identical amount of time working on that audit, but because I don’t have any knowledge beyond “debits on the left and credits on the right,” the accounting work I do would be essentially worthless. So the single hour on the timesheet does nothing to measure the value that you and I create with our hour.
This is what Peter Drucker meant when he coined the phrase knowledge worker. The value created by a knowledge worker — an accountant, a lawyer, a designer, a consultant, an architect, or an advertising professional — derives from the knowledge that he or she is transferring or applying.
And where does this knowledge come from? It primarily comes from two places: education and experience. So if you’re going to use the amount of time spent to measure the value you create, then you had better account for all the time spent. (You realize, of course, that I don’t advocate trying to measure the value you create by marking the passage of time. I’m just making the point that if you choose that particular metric, you’d better make sure that you’re measuring everything.)
So let’s now try to figure out what your real hourly rate is. First we’ll look at your education. If you grew up in the United States, you were most likely required to go to school from first grade through twelfth grade, plus kindergarten. Most professionals also attended college, so you need to count those hours. Depending on the profession, you probably also attended some graduate school. During all these years of education, you amassed much of the knowledge that you now transfer to your client in your professional life. So you need to add up all those hours.
(Yes, I appreciate that some of those hours are apt to be more valuable then others. You probably learned more things in your second year of law school than you did in kindergarten. Or did you? I don’t remember much from my second year of law school, but I still know what a silent e does. But based on your current timesheet usage anyway, hours are hours. You know that some of the hours you spend working are more valuable than others. You just figure that it all evens out in the end. Using that same assumption, we can measure your education hours as a single total.)
Once you’ve added up your time spent being educated, we need to turn to your professional experience. Obviously, an accountant who has been practicing twenty years knows a heck of a lot more than an accountant who’s only been practicing for one year. So we add up the hours you’ve spent working, too.
So to calculate your Actual Hourly Amount, we need to add your total education hours plus your total professional-history hours plus the hour that you’re doing the actual work for the client. Then we take your hourly billing rate and divide it by that sum. That gives you your Actual Hourly Amount.
You can use this handy calculator to calculate your figure. Just replace the numbers with your own. The grade-school and high-school hours are built in. (If you are reading this post in an email or an RSS reader and don’t see the calculator after this paragraph, click here to go to the post on jayshep.com.)
Surprised? Now that you include all the time that you spent being able to do the work for that client, you suddenly realize that you’re only earning pennies an hour. And I don’t care how experienced you are or how high your billing rate is. Using this calculator, top lawyer David Boies, who bills at $1,220 an hour, only earns one penny for each of those hours when you account for all his knowledge-gathering time spent (education plus 46 years of practice). (I find it ironic that I earned 1.1 pennies an hour, based on 17 years experience and a phantom rate of $600 an hour. I was a very good lawyer, but I was no David Boies.)
Try the calculator with other rates or different levels of professional experience. See what you can look forward to later in your career. Go ahead; I’ll wait.
The point of calculating your Actual Hourly Amount is to show you once and for all that timekeeping is a ridiculous way to measure the value of a professional’s work. I hope that your AHA moment will lead you to realize that the value of the knowledge you sell is based on what it’s worth to your clients when you use that knowledge to solve their problems.
- What kind of price is it?
We’ve been hearing about so-called alternative billing in earnest for the last five years. But many professionals today find the definitions confusing. That’s why most law firms claim to use “alternative fee arrangements,” and yet the billable hour is showing no sign of shuffling off its mortal coil.
Click it to embiggen. You can also download it as a PDF. Feel free to share it.
- How to price mediocrity
I know this lawyer. Let’s call him “Bob,” because, quite frankly, palindromes are fun (and “Stunt Nuts” doesn’t work as well). He’s not the best lawyer in the world; he’s not the worst. In fact, he’s far from either extreme. He’s right there in the middle.
He’s mediocre. When it comes to mediocrity, he’s the best. I’m not being judgmental here; he’s fine. As in when you go to a restaurant and your steak is overdone and your fries are underdone but you don’t want to sound high maintenance so when the waitress asks how your meal was, you say, “Fine.” That kind of fine.
Now because the work that Bob does is mediocre, the very best way for him to price it is by billing his time on an hourly basis.
You see, there is nothing fundamentally wrong with doing mediocre work. It’s incredibly common. In any profession or industry, if you were to draw a bell curve to show the normal distribution of quality, you would see that most performers end up in the middle. Only a few would be truly poor performers, and only a few excel.
And not every customer needs excellent performance. Sometimes, people just want to get the job done adequately, and they don’t want to pay for a higher level of quality when they don’t need to. So I mean it when I say that I’m not criticizing people who choose to do mediocre work. There is certainly a market for it. There are plenty of times when I have chosen not to pay more to get higher quality. If I’m hiring a lawyer to do a basic real-estate closing, for example, I don’t need David Boies to handle that for me.
Because Bob does mediocre work, there’s no need to differentiate the work that he does. The clients who come to him for that level of service all expect roughly the same from him.
For that reason, when all the work and all the clients are essentially equal, then the best way for Bob to price his work is by merely measuring the time spent and multiplying it by his standard hourly rate (which is, unsurprisingly, average for his market). In other words, Bob is effectively “weighing” time on a scale, rather than assessing the value and quality of the work. When a consumer is buying a commodity like sugar, it makes no sense to do sophisticated lab analysis of each individual crystal. Just weigh it. Five pounds of sugar? That will be five dollars, please.
So if Bob is content doing mediocre work for customers who aren’t looking for more, then by all means he should bill his hours. It’s the most efficient way to track his work when all of it is essentially the same. It’s only when work is differentiated — based on the types of customers and the value that they place on the results — that it makes sense to price.
As I said, Bob is fine (as a pseudonymous, palindromic, mediocre lawyer). If you’re a professional and you want to be like Bob, keep billing your hours. But if you’re not interested in being mediocre (or if you suffer from aibohphobia), then it’s time to learn how to price.
- New York Times “oppresses” workers worse than Apple
Today’s Sunday New York Times used two and a quarter pages of its front section — including the top-left quarter of its vaunted front page — to blast Apple for oppressing its workers. Which is ironic, because the New York Times Group is even worse to its employees, using the paper’s own metrics.
As it often does, the Times launches its attack on the most successful company in the world by focusing on how much revenue it takes in:
Worldwide, its stores sold $16 billion in merchandise.
But most of Apple’s employees enjoyed little of that wealth. While consumers tend to think of Apple’s headquarters in Cupertino, Calif., as the company’s heart and soul, a majority of its workers in the United States are not engineers or executives with hefty salaries and bonuses but rather hourly wage earners selling iPhones and MacBooks.
But the most interesting twist in this particular harangue is the use of a blunt-instrument metric, revenue per employee, to show how unfairly Apple treats its workers. According to the story, Apple took in $473,000 per Apple Store employee. When you consider that Store employees only take in about $25,000 a year, the conclusion is inescapable: oppression. Amirite?
Glass houses, New York Times. Glass frakkin’ houses. Turns out that according to its own reported numbers (from its 2011 Form 10-K), the New York Times Media Group had 3,056
serfsemployees toiling for it in 2011 and made $1.554 billion that year. Yes, with a b. Whipping out my favorite iProduct (note my obvious fanboy bias), that works out to to a revenue-per-employee figure of $508,507.85. Oh, the humanity!
(Curiously, the David Segal article quotes Apple blogger Horace Dediu, who has written about these metrics before. Dediu says that revenue-per-employee ratio is like that of a consulting company. Given how incredibly reasonable and intelligent Dediu’s writing is, I have to think that his quote is taken out of context.) (Update: Read Horace’s excellent piece explaining the job growth at Apple stores.)
The truth is that no one goes to work for the Times or for Apple for the money. (Yes, I realize that Times CEO Janet Robinson got a $23 million severance package late last year, but that’s for leaving her job. Totally different.) People work at these two institutions to be a part of something bigger than themselves. The Times used to be the most respected newspaper in the country. (Sorry. Too soon?) And Apple keeps changing entire industries. Even Segal’s article recognizes that an hourly wage is not what makes people work in Apple Stores:
But Apple’s success, it turns out, rests on a set of intangibles; foremost among them is a built-in fan base that ensures a steady supply of eager applicants and an employee culture that tries to turn every job into an exalted mission.
“When you’re working for Apple you feel like you’re working for this greater good,” says a former salesman who asked for anonymity because he didn’t want to draw attention to himself. “That’s why they don’t have a revolution on their hands.”