Wednesday, July 05, 2006

A sad day for corporate America today. When I heard the news this morning that former Enron chairman Kenneth Lay had died, I had my secretary observe a moment of silence while I yelled at her about some office supplies that arrived today in the wrong color. I wanted light blue post-it flags, but these are closer to turquoise. It's not what I wanted. She screwed up. But I didn't fire her. Some days I probably would have, but I was softened a bit by Ken Lay's death. His death should remind us all that people make mistakes, and sometimes we're too harsh on them. We judge when perhaps we should offer some mercy. Clients every day do things just as suspect as Lay's web of fraudulent partnerships and schemes that cost four thousand people their jobs and life savings, and investors billions of dollars. The difference is that they don't get caught.

I spent much of the day on the phone with my clients, reminding them that Lay didn't use this firm, and if he had, he might still be alive today. Or he might have done the smart thing and had the heart attack a few years ago before his reputation, and the reputation of the lawyers he did use, would be destroyed. I've written about this before, when Slobodan Milosevic died. A great hero, saving his lawyers from the embarassment of losing a case. But Lay waited too long. His lawyers already suffered the conviction. By dying now, he merely saved himself the prison term.

But, again, I don't want to judge him too harshly for waiting to have the heart attack until the only person it would benefit was himself. We all make mistakes like his, every day of our lives. We all cause financial ruin to someone. We all fool people into thinking things that aren't true. We all cover up behavior we're not necessarily proud of. We all spend $200,000 on a yacht for our wife's birthday party, despite being a hundred million dollars in debt and in the process of defrauding investors worldwide. Lay told jurors it was difficult to turn off his extravagant lifestyle. Of course it's hard. In a lot of ways, Lay was just like many of the associates at the firm. They don't really want to be here, they don't want to be doing what they're doing, but it's hard to stop. There's uncertainty out there in the real world, and the devil you know may be easier to cope with than risking that the devil you don't know is even worse. For Lay, the devil he knew was defrauding employees and investors out of billions of dollars, much of which he kept for his own personal gain. In his mind, he may have had no choice. It's not like he could have stopped. Once you buy the houses, you have to pay the mortgages. It's not like he could have turned his life around. He was in too deep.

A lot of our clients are in too deep. That's why they need us. I reassured them today that we have defibrillators on every floor, and a paralegal trained to use them. What happened to Ken Lay doesn't have to happen to them. We can stop a massive heart attack, or at least time it for maximum personal gain. It's part of the planning we do. It's part of how we help our clients.

The articles today are unfair, with Kevin Spacey calling Lay the model for megalomaniacal villain Lex Luthor in the new Superman movie. Lay was no villain. If anything, he was more Superman than Lex Luthor. But accounting records were his kryptonite, and unfortunately for Lay, his enemies had a lot of accounting records. One article I read today quotes Houston Astros owner Drayton McLane as saying that "Houston is a better city because of Ken Lay." And I don't think it's just Houston. I think it's also the slums outside of Houston where many Enron employees were forced to move after losing their life savings. Those slums are enriched by the presence of the former employees, and that's a good thing. And it's not just Houston and the Houston slums. New Orleans is a better city because of Ken Lay. Who would argue that New Orleans today isn't a more vibrant city than before the rise of Enron twenty-one years ago?

Since Lay formed Enron after a merger in 1985, the Berlin Wall has fallen, we've seen the rise of the Internet and new information technologies, AIDS has become a manageable illness instead of a death sentence, and the Red Sox have won the World Series. Surely Ken Lay and Enron deserve credit for much of this. But all that gets forgetten because of some fraudulent partnerships and financial schemes. It's unfair. Unfair to the legacy of Ken Lay, and unfair to the lawyers who tried to defend him. It's a sad day for corporate America when a man like Kenneth Lay dies.

Although I have to admit I was a little disappointed to learn that he died while on vacation. There's a certain glory when you die at your desk, hard at work, surrounded by the people who fear you. That's how I want to go. That's how we all want to go. Peacefully, while writing an angry e-mail to an associate telling him he has to work this weekend.

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