As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Jotham Stein.
Business leader and attorney Jotham Stein has more than twenty years of experience in entrepreneurial and executive America, navigating boardrooms from Silicon Valley to New York. A preeminent practicing expert on employment law, he is principal of the Law Offices of Jotham S. Stein P.C., in California and Illinois, and author of Executive Employment Law and the upcoming Even CEOs Get Fired.
With clients ranging from Fortune 100 C-Suite executives, to entrepreneurs and even delivery drivers, Jotham’s seen it all, and brings ideas to life with stories based on his practice.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’m originally from Long Island, New York. I went to Stanford Law School, and like so many who go to Stanford, I stayed in the San Francisco Bay Area after I graduated. I went to work for a big Palo Alto, Silicon Valley law firm. I did great work there, but my assertive style didn’t endear me to some. And I couldn’t stand taking orders from senior attorneys simply because they had been there longer.
That led me to hang out my own shingle in Palo Alto. I didn’t have enough saved and almost went under that first year. I’ll never forget it. But I had no boss, and no one telling me what to do.
Some great guys from my former law firm knew me as a litigator and started referring litigation work to me. Eventually, people figured out that if I could litigate a contract, I could probably write one to maximize the chances of avoiding litigation. So, they began to refer over entrepreneur and executive clients needing individual representation.
At some point early on, I realized there were all these entrepreneurs and executives out there who had no idea how to protect themselves from getting screwed in their start-ups, in their small and big companies, in employment and equity deals … and many got screwed. So, I decided to run a quarter page add in the Red Herring, then Silicon Valley’s hot tech magazine, which was low-circulation and, most important, concentrated in Silicon Valley. It was expensive for me just starting out to run a magazine ad, but manageable because I think Red Herring’s circulation in those days extended from San Francisco in the north to San Jose in the south.
The ad screamed: “Even CEO’s Get Fired.” One person called to tell me that the grammar was wrong. It should be CEOs, not the possessive CEO’s. I ignored that advice.
And you wouldn’t believe who answered the ad. So many were afraid to tell their friends, their colleagues, their associates, their family, they were in trouble jobwise. I was amazed. Pretty soon, between the referrals and the ad, a significant part of my practice focused on representing and protecting entrepreneurs, executives, and regular employees in their relationships with their employers, investors, and other stakeholders.
Even CEO’s Get Fired turned out to be a great ad. And now it’s the title of my new book which will be released in the fall, sans the ad’s misplaced apostrophe in CEOs.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I was totally naïve to professional reincarnation.
I’m not sure it’s the funniest blunder I’ve made, and certainly it’s only funny how naïve I was in retrospect. At the time, it was a “you gotta be kidding me” moment. My “I’m-on-your-side” mentality put me 100% behind an entrepreneur CEO, so much so, that I would talk regularly about how “bad” the firing Company had been to him.
Lo and behold, a week or so after the CEO signed his separation agreement, I discovered the just-fired CEO was negotiating with a board member of the company who had just fired him to go to work for one of the board member’s portfolio companies.
The lesson is one I re-learn multiple times a year: When you’re fired, forced out, or squeezed out, consider not burning all your bridges. If you do burn your bridges, do so coldly and calculatingly, realizing a burned bridge will very likely not reincarnate nor offer you anything else down the road (like tickets to a sporting event or concert, an invitation to a party, etc.).
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
All the Lonely Planet guidebooks I read while hitchhiking around the world — I’ve been to more than 70 countries. I still travel when I can, though my hitchhiking days are over. I also hike, regularly jog along the beach, ski and spend lots of time outside the office. All of this other stuff, I believe, makes me a much better lawyer and advisor, because I have perspective, because I have critical time away, and I like to think because some of my clients not only realize I know what I’m talking about professionally, but believe I’m sort of interesting to talk to.
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
Brutal honesty. We give the best advice we can give and we are not offended if our clients reject our advice, as long as they’ve heard what we have to say. We’re also not offended if clients don’t like the re-calibration we’ve just delivered.
Sometimes clients call and tell us something like: ‘I didn’t listen to a thing you said, and made a ton of money because I took all those risks you warned me about.’ This does happen. Usually, however, those who reject our advice call back sometime to tell us they should have listened to what we had to say. Often, they take more of our advice the next time(s) around.
But the key is to be happy giving the best advice possible, and not taking offense when others reject the best advice they are offered.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
My “number one principle” looking inward to my law firm is: “There will always be another client and that client is going to be interesting, on the cutting edge, and ethical.” This really helps when we turn down work even though we have capacity, but we just don’t want to represent whoever we are turning down. It also really helps when we have to fire a too needy, not listening, or too difficult client. It also helps when a client doesn’t have the character that I would like to think that I and the attorneys who work in my firm have.
The “number one principle” looking outward when our excellent advice fails to stave off an avoidable disaster: “Sometimes you can’t teach people what they need to learn for themselves.” That’s true in life. And it’s certainly true in a service business like ours.
Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
Sure. My biggest family-related challenge is the isolation and not seeing family and friends in-person. Every year, I fly from my home in Half Moon Bay, California, to New Jersey to spend the first and second Passover Seders with my family. This year I talked with my sister about flying out, but she told me she wouldn’t let me in her house if I made it to Jersey. It was probably the right move, and it certainly abides by the shelter in place rules, but it was not happiness producing.
We had a Zoom family Seder and sometimes I meet with my son on Zoom, but frankly nothing compares to in-person contact. It’s the same with my friends. Sheltering in place, social distancing, it’s just not fun.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
Not being able to meet people and advise our clients to meet people.
Many of our entrepreneur and executives are involved in a negotiation of one type or another, including, among others, hirings, firings, and equity deals. We regularly counsel clients to make their ask, whatever that ask is, face-to-face with the other side’s decisionmaker, even if that decisionmaker just fired our client for supposed incompetence.
Studies show that the in-person ask is more likely to result in a positive response than asks made by videoconference, telephone, or worse, email or text. Multiple times over the years, we’ve advised an executive or entrepreneur to fly across the country to meet the right decisionmaker face-to-face to make his or her ask. Obviously, shelter in place takes away the in-person negotiation, and I believe hurts the negotiation process. Everyone seems to be using Zoom these days, but Zoom isn’t face-to-face.
Also, another problem is not being able to show up in court on behalf of a client because the courts are closed. A modern economy needs an excellent court system to adjudicate disputes when parties cannot do so themselves. Everything is getting pushed back in the California State courts in Silicon Valley these days even though many courtrooms are equipped for telephonic appearances during regular (non-Covid) times.
In terms of our office, we know each other very well, so in-person meetings aren’t critical. But still, it’s often nice to discuss matters in person, and productive to bounce ideas off a colleague face-to-face, and we can’t do that now.
In terms of new clients, in ordinary times a lot of executives and entrepreneurs don’t want to take the time to meet us face-to-face, especially when they’ve been referred to us and figure we know what we are doing. Time is money for so many, and hey, who wants to visit their lawyer anyway unless they really have to. However, we like to have the option to meet all our clients face-to-face, and many want to meet us in person before signing up with us. Obviously, we can’t do that now.
On the client litigation front, we almost never agree to arbitrate or litigate for someone we haven’t met in person. We want the prospective litigant to hear about their case directly from us in an in-person meeting, and we also want to get a feel for how they’ll be as a witness before we take them on. Again, we can’t do that now.
And again, while Zoom or Google Hangouts or something similar are our go-to options, they are, in my opinion, a distant second best as compared to face-to-face meetings.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
First of all, the overwhelming number of people are either asymptomatic or don’t get very sick. While no one wants to get sick, and certainly no one wants to die, the numbers are on your side. And I don’t cite myself when saying this — I refer to experts I know personally who know the data.
Second of all, it’s really only a matter of time — before someone discovers a vaccine that works, and someone else discovers a cure, or at least a way to treat the virus. Again, the comfort comes not from my optimism, but because I am fortunate to know people working day-and-night on a solution. It really helps to know experts, rather than having to listen to some of the uninformed nonsense broadcast as “news” these days.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
Before I answer the question, let’s never forget that hunger is growing in our country. I volunteer in my community at a non-profit that provides food to those in need. The number of people coming for help is growing terribly. So, what I am about to say next must be kept in perspective with the hunger and pain that is everywhere in our country.
I don’t know what the Post-Covid economy will look like, but I assume the Covid economic shock will hurt, maybe even destroy, many businesses. However, as the economy changes, new opportunities will undoubtedly arise. Everyone, from business leaders to regular employees should be ready to reinvent themselves jobwise and business-wise, to look out for their interests, to negotiate for what they want in whatever new opportunities arise. If it’s legal, you can negotiate for it, so any economic shakeup, even a destructive one, can bring new opportunities.
On the stay-the-course front, there are multiple entrepreneurs in well-funded start-ups that are hunkered down and looking to the future. Many are able to work from home during shelter in place, sometimes even more efficiently than in their offices. And they are focused on a time — one, two, three years hence, when our economy returns. So, for these entrepreneurs, the future is very bright, and their concerns now are all about keeping their families and themselves safe, literally to live another hopefully very bright day.
How do you think the COVID pandemic might permanently change the way we behave, act or live?
My biggest hope is that the government, and more importantly, “we the people” learn from this experience, and better prepare for the next pandemic, whether it is next year, next decade or next century.
It’s a disgrace that our country was so ill prepared, ill prepared with testing, ill prepared with medicines, ill prepared with ventilators, and the list goes on and on. The next pandemic could be much worse, kill at a much greater rate. We need to take the lessons learned from this pandemic and be better prepared for the next one.
It doesn’t matter what party you belong to, or no party for that matter, I’m hoping that “we the people” remember this pandemic and insist that our political leaders are in front of the ball, not dropping it, in the future.
On a more personal scale, many entrepreneurs, executives and employees who are fortunate enough to be working, enjoy working from home, and some feel they get more done that way. And I hear from a good many who enjoy skipping the commute in congested/densely populated areas. If employees like working at home and can convince their employers that they are more efficient and provide a strong work product at home, then in the Post-Covid world, we may be seeing more employment agreements, offer letters, and employee handbooks with work-at-home clauses.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
We are going to keep giving the same great brutally honest advice we’ve been giving for more than twenty years. That’s the way we have always expected to grow our business.
And in the Post-Covid economy there are going to be a lot of hard truths to deliver. Negotiation is all about leverage and I strongly suspect that the leverage pendulum will shift in favor of employers and investors in the Post-Covid economy.
What this means for executives and regular employees with any amount of leverage is they will probably need to spend more effort negotiating their offer letters or employment agreements to best protect themselves if things go wrong — protective offer letters and employment agreements are essentially professional prenuptial agreements that guarantee a separation package in the event an employee is fired without cause or has a good reason (e.g. being mistreated) to resign.
If you don’t think investors doing deals with founders and entrepreneurs are going to take advantage of the return of their leverage in the Post-Covid years to negotiate pro-investor, sometimes egregiously pro-investor deals, then I suggest you think again.
On the other side of the negotiating table, founders and entrepreneurs will need to do more diligence than ever before signing the financing documents to ensure they protect themselves against winding up on the outside looking in as someone else runs their baby… or at least go into the deal knowing the risks with their eyes wide open.
Similarly, what would you encourage others to do?
The most important thing is obviously to be able to feed and provide for your family, so realistically, take the job that allows you to do so.
But looking to the future — and the future will be brighter — look to do what makes you happiest, and remember to negotiate for what you want, hopefully face-to-face! Be entrepreneurial. Be flexible. Think outside the box. Negotiate for the type of job you want. Negotiate for the best employment terms, compensation terms, equity terms you want, no matter where you choose to work, whether at a start-up, small private company, large private company, public company.
For entrepreneurs negotiating financings for their start-ups or for founders or management teams negotiating to sell their companies, make doubly sure to protect yourselves because the leverage pendulum may have swung to the investor-side and acquirer-side of the equation.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Do Life!” In the years after college, I hitchhiked around the world. I’ve hitched across Central and South America, Australia, Europe, Africa. I’ve been to Everest Base Camp, Ngorongoro Crater, Iguazu Falls … to Jerusalem, Bujumbura, Bangkok. And all along the way I met wonderful people, people who loved where they lived, loved their communities. There are great people everywhere in this world and those are years I would never give up for anything.
Today, I’m still trying to seize opportunities for experiences … to Porto, Andorra, the Running of the Bulls in Pamplona. In September 2019, I finally made it to Churchill in Northern Manitoba to see the polar bears and beluga whales. At the end of last year, I skied all the mountains in the U.S. I had always wanted to ski, but hadn’t: Mammoth in CA, Sun Valley in ID, and Big Sky in MT.
How is this relevant to my life? It is my life!
How can our readers further follow your work?
Three ways. For your readers who are entrepreneurs, executives, managers or just regular employees trying to get ahead, my new book, “Even CEOs Get Fired,” will be released in the fall. It’s a breezy read that is part non-fiction — how to protect yourself in employment — and part fiction — lots of stories about what happens in the world of entrepreneurial and executive America.
Once the book is out, the website www.evenceosgetfired.com will provide more information and things to consider.
Finally, if your readers want a detailed technical read (with lots of footnotes) about the ins and outs of protecting themselves in employment, the 8th edition of my first book, “Executive Employment Law: Protecting Executives, Entrepreneurs and Employees,” will be released in July.