The Book Is Here!

February 28, 2010

The New Book Is Here. “How to Get and Keep Your Fist Job. (Hint: You Can Begin in High School). The  book may be ordered directly from Amazon.com: http://www.amazon.com/How-Get-Keep-Your-First/dp/0984164006/ref=sr_1_2?ie=UTF8&s=books&qid=1267388303&sr=1-2

The Book Is Here!

February 28, 2010

You Can Find the Book at Amazon.com:

http://www.amazon.com/How-Get-Keep-Your-First/dp/0984164006/ref=sr_1_2?ie=UTF8&s=books&qid=1267388303&sr=1-2

The Cost of Saving Money

February 19, 2010

Representation is considered a necessary evil regardless the issue or venue. Why? It is not because it is not nice to have an advocate but no one–and I mean NO ONE likes to pay for the representation. If you could offer companies or individuals free representation I dare say no one would turn down the help of an advocate.Trade associations offer representation as part of the dues.  The other services are good to have but being a member of a trade association provides representation without having to put your name or company logo on the letterhead. You are provided cover at a generally affordable price. If the other services are key to your membership, them the representation is a bonus.

What if you do not belong to an association or you are too small to be heard or to move the issue your liking? You are left to fend for yourself or to pay someone to take up your cause.  What if you do not want to hire an advocate? Can you do the work yourself? Do you have the time? Do you want your name or company logo attached directly to the effort?

 Tough choices have to be made, especially in a slow economy. But, there is real danger in “saving money” on representation. During a down economy  pressures to increase regulation and taxation tend to increase. Thus, the need to interact with policymakers increases. The only way to avoid problems is to get ahead of any effort to make a harmful change. Even a longstanding relationship with a policymaker or their staff members may not be enough.

A number of years ago, I was working on Capitol Hill and visited the legislative aide of a U.S. Senator to discuss an regressive anti-business amendment to the  National Bank Act. I was accompanied by a constituent who had a longstanding realtionship with the Senator’s office. The constituent was admonished by the aid who told him she should have come to see her before the session began.  He was truly shocked that she would treat him so gruffly. However, she told him he was too late. He was caught short by the situation but he did not take the time to get ahead of the issue. In this case, he did not feel the need to spend the time and money to visit before there was a problem.

The bottom line is that companies that do not feel the need to stay in front of policymakers run the same risk as my nephews who are physicians face when new patients come to see them long after they should and ask the age-old question, “Doctor, does this look infected?” If you wait, you may receive a prescription for a pill or a salve, if you are lucky.

You have to ask yourself, “Is it really worth the risk?”

UNDERSTANDING THE RULES

August 24, 2009

As children, we are told to follow the rules because they were created for a reason. Many times, we do not understand the reason for the rules until we have broken them. The same can be said for government relations and lobbying.

For instance, there are industries that simply do not want to discuss certain issues because it opens the door to discuss other issues which could create a problem. A basic rule is never to discuss these issues because you do not want to have the door opened to your area of weakness. This rule was put in place because someone in the past tried to open the door that led to another door that led to a law that hurt the cause the original lobbyist was fighting to protect.

Today, there are numerous instances where a lobbyist breaks this unwritten rule because they feel that their cause is “just.” This is very dangerous thinking. Recently, one industry decided to break the unwritten rule by discussing a unique provision that allows that industry to avoid taxes. The reason this was done was to fight another industry by raising the possibility that the advantage was jeopardized by the very existence of the second industry. However, the issue was raised as a red hearing. The first industry decided that the second industry was so “unjust” that a legislator must ignore the advantage and all of the liabilities that come with it because the cause was “just.” Of course, the second industry now seeks to exploit the advantage of the first industry and will use it in defense, as the best defense is always a good offense.

The use of this issue is fairly fresh and it has not yet begun to find its roots. However, this is a very dangerous game. By exposing your unique competitive advantage which, if removed, could lead to, for instance, taxation at a time when the Nation is hungry for money to dig out of the deficit and fund wars while expanding the economy, is not only dangerous, it is reckless. This is the problem created when zealots takeover as lobbyists.

The legislative process is a marathon, not a sprint. Therefore, should you choose to break the rules to advance your cause, even though no one has exposed your weakness yet, there are no guarantees that, even if the legislators agree that what you are fighting for is “just,” it does not mean that you will be immune from exposure on your issue. It does not matter if the issue is a tax advantage, another competitive advantage or any other type of thing which you enjoy anothers do not, do not expose this issue in order to fight your battle.

The last thing anyone wants to do is find out that breaking the unwritten rule causes more damage to their cause than could possibly be gained by bringing up the issue.

Therefore, follow the rules because they were created for a reason!

How NOT to Succeed in Business

July 24, 2009

The easiest way to not succeed in business is to keep your head down and let others do your job.

Representation in a competitive forum of any type requires involvement. In the legislative or regulatory arena, if you let others do your fighting; no one will fight for you. There are countless instances in which an industry decided not to spend the time and effort as well as money to be represented either on Capitol Hill or in the states on an issue that was of key concern to them.

Recently, the life insurance premium finance industry decided that it would let the issues play out in the legislatures and before the regulators without proper funding for government relations. The end result was bad legislation and bad regulations which targeted that industry and demonized it as the sole cause for the problems in the secondary market with which it was only tangentially related.

There is also the story of the large computer software manufactured that was not represented on Capitol Hill and whose smaller competitors were represented very well. Ultimately, the story ended badly for the large software manufacturer. The same can be said for the tire company which had no representation on Capitol Hill and was ultimately blamed for the numerous crashes that occurred in vehicles which they did not manufacture but for which they did provide tires.

The focus of the government relations work is to create synergy between the role of government relations, legal and marketing. The role is to find a solution to allow the profit center to operate within the constraints of current regulatory and legislative restrictions while simultaneously working to change those restrictions.

These cases should serve as a warning for any company or industry that feels the government relations is merely a cost center. It is the role of government relations to allow the profit center to thrive and to protect the ability of an industry to continue to make a profit without overly burdensome regulation and legislation.

The real cost is not utilizing government relations.

Do You Know Someone in High School, College or Grad School or Just Starting in a New Career and is Facing So Many Decisions and Does Not Know What to Do Next? Send Them My Book.

I have written a Book entitled, “How to Get and Keep Your First Job. Hint: You Can Start in High School.” The book is in the publishing process. You can also refer them to my Blog: http://getyourfirstjob.wordpress.com/

READ MY NEW BOOK!

July 24, 2009

Do You Know Someone in High School, College or Grad School or Just Starting in a New Career and is Facing So Many Decisions and Does Not Know What to Do Next? Send Them My Book.

I have written a Book entitled, “How to Get and Keep Your First Job. Hint: You Can Start in High School.” The book is in the publishing process. You can also refer them to my Blog: http://getyourfirstjob.wordpress.com/

MOVE CAUTIOUSLY WHEN LOBBYING IN UNFAMILIAR TERRITORY

June 5, 2009

When working in government relations and lobbying in general, it is important to understand that what you understand may not be understandable at first blush by your target audience. The area may be difficult to understand because it is highly technical. It may be difficult to open the door because of what it is called. Let me give you a real life case to consider.

A number of years ago a turf war broke out in the life insurance industry. A number of companies decided that they needed to change the way life insurance companies set their reserves and created a regulation known as “Triple X” or “XXX.”  As a rule insurance regulators and legislators tend to stay out of turf wars. However, they were convinced at the time that changes were necessary to require additional reserves for solvency purposes. At the time, only non-mutual companies were impacted by this change as the target of the change was term life insurance and certain forms of universal life written with low premiums to be comparable to term insurance.  Those companies were able to make the sale despite the highly technical subject and even the name by simply discussing the word that the target audience was concerned about, “solvency” and claiming that term insurance was underpriced for solvency purposes. The argument made regulators and legislators uncomfortable about the solvency of the companies writing these products.

However, over time it became clear that despite the arguments that were raised by me in a number of other people, that the change was going to happen so we must simply make the change created by the regulation less onerous. Some states required that a law be passed even though the change was supposed to be a regulation. Therefore, we began discussing this issue with legislators and regulators. This is a rather technical issue that deals with numbers, reserving, life insurance an even tax issues. These are highly technical issues that primarily have been created by and dealt with by actuaries. Most legislators and regulators are not actuaries. Therefore, we began discussing an esoteric concept that also was characterized by most corporate and government Internet search engines detectors as pornography. Therefore, most of the information that the decision-makers would have in their possession would have to come from lobbyists and other government relations professionals.

The world has now come to understand what we were talking about when we opposed the original regulation XXX. This bad idea created larger insurance reserves than were necessary and had been hurting life insurance companies since the creation of this bad regulation. So, let’s fast-forward to today. It is clear that a fix is required.

Today we are working with a number of parties to create relief for the use excess life insurance reserves. This is called surplus relief through securitization. However, given the current solvency issues in connection with life insurance companies, we find ourselves discussing an issue which no longer can be couched as simply a solvency issue. In fact, the issue of solvency and the fear of insurance company solvency may work against us in trying to allow for these changes to life insurance Company reserves. We are asking that insurance companies receive relief from requirements of these inflated reserves. The discussions that we are having with regulators and legislators regarding the implementation of the concept of XXX is difficult because of the concept, the name and the unrelated solvency issues concerning insurance companies.

So, the concept is to sell people on an idea that is difficult to understand, uncomfortable to talk about due to unrelated solvency issues and rather esoteric. As stated at the beginning, such ground must be tread very softly. Your initial contact must be such that it does not turn off the audience because it is far too technical or that doesn’t make the audience uncomfortable because unrelated issues. This is more than just a marketing concept and more than a marketing problem.

Sell the good news. In this case, the good news securitization is a fantastic remedy to this very difficult problem for life insurance companies. It creates tax revenues, a secure class of investments and jobs where none existed before. The bad news is it is difficult to have an entrée for very reasons stated above.

Therefore, the best idea is to have an alternate route or approach. Approach the discussions with issues that are more common and understandable to your audience. Remember, a legislator and even some regulators will not have the background and information that she will present to them. It is important for you to make them understand the broad general concepts and talk with either them or their designees about the specifics later. The general broad concept must be way for you to open the door. There are certain general concepts which are important in any discussion concerning any area of legislation or regulation. It is incumbent for you to start discussion with the basic concepts.

Sometimes bills or regulations are passed against all odds because information that is given to the policymakers makes sense even when at first blush the change that you are requesting may make no sense at all it presented the wrong way. Some people may be cynical and tell you that you should only tell a legislator or regulate or what they want to hear. Please understand that you will only have one opportunity to misrepresent your position to any policymaker. The most important thing you can do is to present your case honestly. What is it that your constituency needs? How is it that the public would benefit from this change?

In the case of the creation of a vehicle to provide insurance reserve relief under Regulation XXX, the truth is that the assistance given to an insurance company will enhance solvency and create jobs and ultimately benefit the state in which the securitization of these excess reserves will take place. That is good news for any policymaker and for the constituencies that they represent. From there, you can discuss specifics and technical issues as well as implementation.

So, tread lightly in areas that are unfamiliar to your audience and please always make sure that no matter what if you do not know the answer, bring a friend who does. Do not misrepresent your position. It will make all the difference in the world. 

When working in government relations and lobbying in general, it is important to understand that what you understand may not be understandable at first blush by your target audience. The area may be difficult to understand because it is highly technical. It may be difficult to open the door because of what it is called. Let me give you a real life case to consider.

A number of years ago a turf war broke out in the life insurance industry. A number of companies decided that they needed to change the way life insurance companies set their reserves and created a regulation known as “Triple X” or “XXX.”  As a rule insurance regulators and legislators tend to stay out of turf wars. However, they were convinced at the time that changes were necessary to require additional reserves for solvency purposes. At the time, only non-mutual companies were impacted by this change as the target of the change was term life insurance and certain forms of universal life written with low premiums to be comparable to term insurance.  Those companies were able to make the sale despite the highly technical subject and even the name by simply discussing the word that the target audience was concerned about, “solvency” and claiming that term insurance was underpriced for solvency purposes. The argument made regulators and legislators uncomfortable about the solvency of the companies writing these products.

However, over time it became clear that despite the arguments that were raised by me in a number of other people, that the change was going to happen so we must simply make the change created by the regulation less onerous. Some states required that a law be passed even though the change was supposed to be a regulation. Therefore, we began discussing this issue with legislators and regulators. This is a rather technical issue that deals with numbers, reserving, life insurance an even tax issues. These are highly technical issues that primarily have been created by and dealt with by actuaries. Most legislators and regulators are not actuaries. Therefore, we began discussing an esoteric concept that also was characterized by most corporate and government Internet search engines detectors as pornography. Therefore, most of the information that the decision-makers would have in their possession would have to come from lobbyists and other government relations professionals.

The world has now come to understand what we were talking about when we opposed the original regulation XXX. This bad idea created larger insurance reserves than were necessary and had been hurting life insurance companies since the creation of this bad regulation. So, let’s fast-forward to today. It is clear that a fix is required.

Today we are working with a number of parties to create relief for the use excess life insurance reserves. This is called surplus relief through securitization. However, given the current solvency issues in connection with life insurance companies, we find ourselves discussing an issue which no longer can be couched as simply a solvency issue. In fact, the issue of solvency and the fear of insurance company solvency may work against us in trying to allow for these changes to life insurance Company reserves. We are asking that insurance companies receive relief from requirements of these inflated reserves. The discussions that we are having with regulators and legislators regarding the implementation of the concept of XXX is difficult because of the concept, the name and the unrelated solvency issues concerning insurance companies.

So, the concept is to sell people on an idea that is difficult to understand, uncomfortable to talk about due to unrelated solvency issues and rather esoteric. As stated at the beginning, such ground must be tread very softly. Your initial contact must be such that it does not turn off the audience because it is far too technical or that doesn’t make the audience uncomfortable because unrelated issues. This is more than just a marketing concept and more than a marketing problem.

Sell the good news. In this case, the good news securitization is a fantastic remedy to this very difficult problem for life insurance companies. It creates tax revenues, a secure class of investments and jobs where none existed before. The bad news is it is difficult to have an entrée for very reasons stated above.

Therefore, the best idea is to have an alternate route or approach. Approach the discussions with issues that are more common and understandable to your audience. Remember, a legislator and even some regulators will not have the background and information that she will present to them. It is important for you to make them understand the broad general concepts and talk with either them or their designees about the specifics later. The general broad concept must be way for you to open the door. There are certain general concepts which are important in any discussion concerning any area of legislation or regulation. It is incumbent for you to start discussion with the basic concepts.

Sometimes bills or regulations are passed against all odds because information that is given to the policymakers makes sense even when at first blush the change that you are requesting may make no sense at all it presented the wrong way. Some people may be cynical and tell you that you should only tell a legislator or regulate or what they want to hear. Please understand that you will only have one opportunity to misrepresent your position to any policymaker. The most important thing you can do is to present your case honestly. What is it that your constituency needs? How is it that the public would benefit from this change?

In the case of the creation of a vehicle to provide insurance reserve relief under Regulation XXX, the truth is that the assistance given to an insurance company will enhance solvency and create jobs and ultimately benefit the state in which the securitization of these excess reserves will take place. That is good news for any policymaker and for the constituencies that they represent. From there, you can discuss specifics and technical issues as well as implementation.

So, tread lightly in areas that are unfamiliar to your audience and please always make sure that no matter what if you do not know the answer, bring a friend who does. Do not misrepresent your position. It will make all the difference in the world.

SEEING THE GREEN IN GOVERNMENT RELATION$

May 15, 2009

Regardless of political party, it is not a stretch to make the statement that working as a professional in government relations is looked down upon by many people in our society, including attorneys. Others immediately brand you a “lobbyist.” The “L” word (lobbying) is often attached to those of us who do not even deal with fund raising or Political Action Committees (PACs). Those who do not look down on government relations professionals because of what we do often complain that what we do is just too expensive.  They complain that we are nothing but a cost center and a drain on a profit center. However, government relations done right will actually allow for more profits and fewer fines or lawsuits. The true role of government relations is to augment the profit center of any company.

 

First, let’s deal with the concept of the dreaded government relations reputation. During my formative years, I held a variety of part-time jobs. These jobs were not glamorous jobs and may even be considered some of the most boring jobs on Earth. Even in those jobs, I would often discuss the fact that I was eventually going to go to law school and become an attorney. Even people I worked with in those jobs counseled against doing so because they did not hold attorneys in the highest esteem. Later, when practicing I told my friends I had decided to represent companies by entering into the field of government relations.  I was again told that this was not the noblest profession.

 

My curiosity had been piqued. So I searched for the definition of a government relations attorney. I searched online, in other dictionaries and the encyclopedia and found that there was no such definition. Certainly, you could find the definition of a lobbyist, the history of lobbying and how it all began allegedly in Washington, D.C. during the Grant Administration; although the British (like Baseball) also claim to have invented the term.

 

Still, the concept of government relations seemed evasive at best. Some government relations attorneys have the aid of Political Action Committees (PACs). However, the bottom line is that many of us simply try to stop regulators and legislators from putting our companies out of business.

 

Spend, Spend, Spend

 

If you listen to people who run companies, they seem to believe that the only thing a lobbyist does is spend money.  Of course, they believe the same to be true of a government relations attorney or specialist. It is important to note at the outset that some of the finest government relations specialists never went to law school. In fact, my mentor was not a lawyer, but was one of the finest government relations people I ever met. It is also a common complaint that government relations specialists generate no new money for the client or the company, or at least that’s what the bottom line appears to say. But are these statements really true? Why is it that a company needs a government relations program?

 

The issue of whether a company should employ in-house talent or hire consultants may simply be a matter of head count or the number of hours required to perform the job. If you do not need a full time staff, you can outsource. There is also a concern that the company may have to wait in line, while other clients may be served. Still, the decision may be strictly budgetary. Many companies cannot afford to add professional members to the staff unless they will actually be generating income. Another choice is to work through a trade association, which operates for the betterment of the industry in general and not for a particular company. However, some companies feel strongly that the person must be dedicated strictly to the agenda set by the company. The challenge with a trade association is that your company is only one member and chances are your agenda will not necessarily be followed.

 

The Best Defense

 

The role of any advocate is to first be a great defender. As in any contest or sport, defense wins most games. The adage in baseball is that “great pitching beats great hitting every time.” This may not necessarily be true. However, it does prevail most of the time and is a good rule of thumb to follow. Defense certainly wins in basketball, hockey, football and, arguably, in soccer. But in the game of government relations, the numbers may be astronomical. What is the cost of a government relations program? What is the cost of not having a government relations program? What is the difference between a company that gets sued and prevails and a company that gets sued and does not prevail? Further, what is the difference between those companies and a company that never gets sued at all?

 

What is the cost of not having an advocate on the ground?  There are certainly tales of winners and losers in Washington. There certainly is the story of an automobile manufacturer that was forced to respond to claims of numerous accidents involving passenger vehicles and certain tires that were chosen by the manufacturer for those vehicles. The problem allegedly occurred as a result of an unusually high number of tire blow-outs. The tire company was singled out for failure in the area of safety and production. Congress started a feeding frenzy and the plaintiff’s bar gladly joined in the feeding frenzy. If someone wrote a script and stated that the reason that the automobile company was not found to have been at fault for all of the problems and the tire company was singled out for blame simply because the automobile manufacturer had approximately 90 lobbyists on the ground on Capitol Hill and the tire company did not even have an office working the Hill, no one would believe the story.  However, that is exactly what happened. The automobile manufacturer was scolded but the tire company was not so lucky.

 

A very large software company was accused by the United States government of anti-trust violations. These violations were first brought to the attention of Members of Congress by constituents who had lobbyists on Capitol Hill. As a result, millions of dollars were spent defending the action.  However, no money had been spent by that company in government relations in Washington, DC prior to the action as the company did not believe in government relations.

 

It is very easy to look at these situations and simply state that no one paid anybody off and therefore there were problems for the companies. The simple truth is that policymakers only know what they know.  Given the vast amount of information that state and federal legislators and regulators must deal with from all sectors of the business and consumer communities, it is impossible for them to know exactly what to do, unless, they understand all the facts.  These facts can only be provided by people who understand them and are willing to tell those facts to the decision makers. Both companies now have government relations people on the ground in Washington, DC.

 

It seems like a cliché and perhaps it is but the best defense is a good offense. Government relations personnel, or lobbyists, spend their time attempting to explain to decision makers how a company or industry works. For instance, in the insurance industry, we find ourselves year after year trying to explain the concept of spreading the risk among insurers. Due to term limits and natural selection, the same issues return to the legislatures every two years when new faces arrive. It is important to have people on the ground to explain issues to policymakers. It could mean the difference between a bad law, a lawsuit or a simple inquiry.

 

Profit

 

In the insurance arena, before a policy can be sold in a state, it must first be filed for approval or at least for information with the insurance commissioner of the state in which it will be sold.  A number of years ago we had a conversation with a company that was competing in a particular niche market. One of its competitors was growing very fast while selling almost the same product within the same market place. The difference was that the company that was growing faster had a number of government relations people on the ground in the states. The company with the government relations staff made sure that whatever new product was introduced or anything it to be explained to the regulator, that the staff would be available to discuss and answer any questions.  The company that had no government relations staff simply “saved money” by mailing whatever information they needed approved including new forms to the regulator.  They did not understand why the approval time for each new product was much longer than the competitor that had the relations staff.

 

A simple conversation may open a door that could lead to thorough discussions concerning a new product that would be introduced in the state. Such an initial conversation will ensure that, should any questions arise, there is a face at the company that can answer questions quickly rather than a situation in the case of a company that does not expend that effort.  For those companies questions most likely will be sent by snail mail by a policy analyst at the Department of Insurance to a department in the company. From the standpoint of policy form approval, the difference in time for approval of a policy with any problems that is mailed to the department versus brought directly to the attention of the commissioner and or senior staff may be months or even years. Even if your representative does not walk the policy up to the commissioner’s office, if that policy form, with a cover memo, is handed directly to the staff person with an offer to sit down for a few minutes to discuss any questions up front, the difference in policy form approval time could be greatly reduced. It is also important to note that by paying such attention to the simple task like filing a new product for approval with a regulator, it shows that your company cares enough to spend the time and money to bring someone into that office and field any questions that may be asked.

 

This also means that while there are no guarantees, should any questions come up, the policy analyst or other regulator will have the opportunity to look at your issue and call you directly because they remember that you are the person that brought the policy form in last time and, if you do not know who can handle it in the company, you will find out for them. It is much more likely that you will get that phone call, rather than have the policy form put at the bottom of the pile.

 

We discussed the value given as opposed to the cost of government relations and the company that had no government relations professionals determined that the government relations effort was simply a cost center and declined to reconsider the idea of government relations.

 

Ironically, years later the two competitor companies merged and the company with the government relations staff prevailed and now both companies, functioning as one, have a government relations staff that does exactly what was the company with the government relations staff did years ago. The market for the combined company is expanding.

 

A good government relations attorney or representative will look at a policy, product, or proposal and review it with an eye toward making changes so that the proposal will work. The whole concept of the “the contract stops here” is old fashioned and outdated. Today, lawyers and government relations specialists in general need to find a way to make proposals work. Government relations staff may be a very good resource and the first place to thoroughly vet any proposals before they go to the policymakers. They can evaluate what may be approved and find away to make changes so that a rejection is less likely.

 

If utilized properly, this initial step will absolutely save time and money by allowing that person to review the proposal and possibly even call on the regulator or legislator and ask their opinion concerning what the company is considering doing. More often than not, the policymaker will be happy to answer a question in a hypothetical manner prior to submission of the proposal.

 

When utilizing outside counsel or consultants, a company has the additional layer of protection or anonymity for the company to ask the question without actually revealing the client’s name, thereby, saving time and money for the client.

 

The role of the government relations professional, therefore, is one of facilitator, defender, and the person to advance the ball with new policies. Done right, the government relations person will actually allow for more profits and fewer fines, thus showing that the bottom line figures may not necessarily reveal the true picture.

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May 14, 2009

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