Bernie Gets the Max

While it will not bring an extra penny back to the thousands of victims of Bernard Madoff’s $65 billion Ponzi scheme, US District Judge Denny Chin has sentenced him to 150 years in prison, the maximum requested by the prosecution. His lawyer, Ike Sorkin, had suggested 12 years, which is apparently Madoff’s current life expectancy. The 71-year old Queens native got the max because the judge cited the “extraordinary evil” it took to do this, according to Yahoo News.

As mentioned in previous entries, this closes only but one chapter in this saga which has much more to play out. Bernie’s wife Ruth issued a statement expressing her sadness for her husband’s victims. It is not clear what she did or did not know, and Madoff’s secretary had indicated that Ruth was very sharp and ran all their personal finances.

So where will it go next? More “funnelers” of investor money? Any insiders? It seems crazy not to think that other people had to be involved, as we can’t imagine Bernie sitting at a computer printing up phony account statements all by himself. And maybe that will help get more money for the victims.

Some of the victims are my friends, some are incredible talents like Elie Weisel and his foundation, and some previously comfortable retirees are taking jobs waiting tables to keep a roof over their heads. So yes, I guess it made sense to make clear that Bernie will not be getting out of prison.

More than 5 Million Electric Vehicle Charging Stations to be Installed by 2015

As plug-in hybrid and other electric vehicles begin shipping in volume starting in 2010, a robust new infrastructure will be required for charging access at home, at work, and around town. By 2015, the global installed base of charge points will surpass 5 million with cumulative equipment revenues of $6.5 billion, according to a new report from Pike Research.

“While electric vehicles will be primarily charged at home, a strong funding push by governments will mean that more than half of all charge points will be public charging stations by 2015,” says industry analyst John Gartner. “Retailers will also install public access stations primarily as a marketing tool, and many companies will also offer workplace charging stations for their employees.”

Pike Research forecasts that China will be the world leader in charging stations, representing nearly half the total market, due to a strong government mandate to encourage adoption of electric vehicles. The United States will be the second-largest market with more than one million charge points installed by 2015. Other hotbeds for EV charging infrastructure will include Israel and Denmark.

The added demand for electricity will have little overall impact on grid reliability, but could diminish performance and accelerate capacity upgrades in neighborhoods with the highest EV concentrations, including faster utility adoption of smart grid technologies.

Pike Research’s report, “Electric Vehicles on the Grid”, examines the many open questions surrounding business models and technology issues for electric vehicle charging infrastructure. It analyzes and forecasts the market for residential, public, private, and workplace charging stations through 2015 as well as examining impacts of EVs on grid infrastructure. The report includes analysis of market drivers and barriers, along with profiles of key industry players. An Executive Summary of the report is available for free download on the firm’s website.

China in 2009…Hot!

I am in Guangzhou, China for business meetings. Summer here is quite hot indeed. A good metaphor, as things in China in general remain hot business wise. While some here decry the reduced growth rate to roughly 7% annually from 12% annually (and no question that has caused some economic hardship and layoffs), the environment is very positive, as I reported during my last visit to China in March.

The swine flu, combined with the difficult economy in the rest of the world, has hurt the local tourist industry for sure. Some hotels are really struggling. We had no problem with the flu issue, although a full plane temperature check took place before we deplaned here. We assume that will change once the flu recedes.

A number of simple things here could be good lessons for us in the US. We did not have to remove shoes to go through airport security. Free wifi throughout Hong Kong airport was very nice. The valet stationed 24/7 on my hotel floor adds a very nice touch. My blackberry world edition popped right on when we got here. I have always felt most welcome here, and their focus on service and attention to detail are indeed extraordinary.

No question the trip is long and the 12-hour time difference a real challenge at times. But I remain bullish on China and its growing business relationship with the US, especially in helping Chinese companies go public in the US through reverse mergers and similar alternatives to traditional IPOs.

Is Legal Education Broken?

Some serious writers are finally beginning to speak about whether it is time to think about some fairly radical changes to how we train lawyers. Very little has changed in many, many decades. Virtually nothing has changed since the famous film The Paper Chase in which students are thought of more as scholars, trained in how to think, how to argue and some stuff about the law. All of that is very important. But it is not the only thing, but unfortunately it has been the overwhelming focus of the three years of law school that kids currently endure.

Well-known law blogger Paul Lippe has now begun talking about something I have been saying for quite some time. Upon graduation students should also be more ready in terms of actual legal skills, since law school teaches none. After three years of law school, new lawyers, licensed to practice, have not been shown how to draft a contract, write a will, or even file a lawsuit. They depend on those for whom they work, and that training may or may not be good. Plus some end up teaching themselves, which is also a bit scary. More and more schools offer clinical programs, but they are not required. Also, many students eschew the clinics because the credit given for the work rarely matches the amount of time the kids spend doing it. Some schools give school credit for outside externships (Brooklyn Law School does this). But again not mandatory.

Medical training has it right. Two years in the classroom, two years in mandatory clinical training, then you graduate. When they become residents, even though they are still in training, they are very much capable of handling a patient on their own, and they know when they need to ask for help.

In times of economic hardship, law firm clients are beginning to pressure law firms about the bills that include huge numbers of hours from first year lawyers who are being trained on their dime. With few exceptions, I have worked hard when I hire a first year lawyer to bring in someone already with some meaningful experience. A current law student intern was a paralegal for two years. A current first year lawyer worked for our firm not only throughout law school but for several years in college before that.

Blogger Lippe suggests a rather radical approach, which I’m not sure even I think is totally doable currently. He says there should be one year of classroom study, one year of school based clinical training and then one year of externship. Personally, I think it would be huge enough just to have the third year of school be replaced by clinic or externship. Lippe also suggests that classroom training should include more practical aspects, and that technology should be better integrated.

I truly enjoyed my law school years. Returning to academia after college is a true luxury, a gift. While so many friends were cramming themselves into subways at the crack of dawn with tight knots around their necks, I continued to enjoy rolling out of bed for my 10:00 class one block away. But more importantly, I treasured the opportunity to learn, and even more more importantly, think about things. But like so many others I really had no clue how to actually practice law when I got out. I was very lucky to start at firms that gave great training. But it’s s true roll of the dice.

So how do we get this discussion going? If the inhouse lawyers of the big companies, many of whom are probably solid donors to their law schools, start whispering in the ears of their favorite deans, who knows? Fictional Harvard Law School professor Kingsfield from The Paper Chase has his place for sure, musing about transforming incoming students’ “minds full of mush.” But three years of that is unnecessary and wasteful of an opportunity to give the next leaders of society more useful experience. Let’s see who has the guts to do this first.

Two Megastars Leave Us

We all got to take an evening off of hearing about Iran, health care, the arguments about what letter will best represent the recovery (personally I have started calling it a “soup ladle recovery”…think about it)  because two huge figures in entertainment both died yesterday. And no this has not become the entertainment channel, in these cases there are implications for our business and economic world.

It’s sadly ironic as we turn to the passing of Michael Jackson that just the other day after the death of Ed McMahon I wrote about the challenge of making fame and fortune match. The man whose music everyone I know grew up with (he was just a year older than I am), it appears, was not the greatest money manager. His maintenance costs apparently exceeded his income, especially during periods between albums and tours. Many expect that when things are unraveled he will be sadly deeply in debt, something many were hoping he would reverse with his upcoming tour, which some estimated could have brought him as much as $400 million. Even more serious were the multiple accusations of child abuse against him. While he was never convicted of any, there are many who still  believe he was probably  guilty. But there is literally no one of my era who didn’t love or at least enjoy the man’s music and style, even if it did morph to the eccentric over time. He sold 750 million records in his short life. Maybe he will now find the peace that seems to have so eluded him in life. It is, unfortunately, still unclear exactly how he died. Let the lawyers start fighting. Even my daughter’s alternative music station was playing Fall Out Boy’s cover version of “Beat It” last night.

Another star of my childhood was Farrah Fawcett. Her pinup poster from 1976, originally printed in Life magazine, is still the best-selling ever, with over 12 million sold. Her contribution to society, besides helping start what is now the Charlie’s Angels franchise, is being at the forefront of a genre of television then known as “T&A” shows. The stars defended the show as showing strong women possibly for the first time, and that was true. But they still answered to Charlie, and managed to find bathing suits or slow running scenes in mostly every episode. But the image of strong and yet still attractive women had until that point somewhat eluded the women’s liberation movement. She made more headlines recently when her bout with cancer became a reality TV show.

Promise: back to other stuff next!

$68 Billion Strong: Natural Products Industry Still on the Grow

New Hope Natural Media recently released its Natural Foods Merchandiser 2008 Market Overview, revealing a nearly 10 percent overall growth of the natural products industry. The movers and shakers of this resilient industry are looking forward to the next big event, Natural Products Expo East/Organic Products Expo-BioFach America, Sept. 23-26, 2009, a trade event held in Boston, Mass., at the Boston Convention & Exhibition Center (BCEC).

According to the NFM 2008 Market Overview, the northeast continues to lead the nation in natural product sales, boasting 19.7 percent of all natural product retailer sales in 2008. Natural product retailers account for 47 percent of the $68 billion industry in the U.S. Retailers continue to lead the charge with plans to open new stores in 2009, ensuring further growth. “With continued growth in the northeast, coupled with the projected expansion of natural food retailers, Expo East will continue to provide the trade platform for building upon positive momentum,” said Erica Stone, show manager, Natural Products Expo East.

Newsworthy additions at Expo East 2009:

• World Tea East: The new regional conference and pavilion will be co-located at Expo East and will host the World Tea Championship Winners Tasting on the evening of Sept. 23^rd
• Urban Farm Tour: This year’s new farm tour visits Garden Girl Farms, a sustainable urban farm in the heart of Boston, Wednesday, Sept. 23, 10:30 a.m. – 3:30 p.m.
• The FDA honors New Hope Natural Media Standards Department: Awarded for their diligence of strict standards followed in screening exhibitors at Natural Products Expo East and ensuring that information presented in all their publications and events is compliant with FDA, USDA and the FTC guidelines

Where’s Your Disney World?

I am headed to China next week on business as much of my family heads to Disney World in Orlando for several weeks. Often places are referred to as “Disney World for…” For example, people talk about Las Vegas as Disney World for adults. The annual NY boat show is Disney World for boaters. And so on. But there is nothing like the real thing.

I must admit that as an adult, Disney World is not really for me. Disney is a surreal world that is totally for the kids. Sure they have tried to add attractions to draw in young adults (and even older ones) and some do come. But let’s face it, Disney is for kids as much as Las Vegas is not.

I do believe our kids are overprogrammed, overcoddled, and too much disrespect is tolerated than when I was a kid. I remember spending time with friends laying on the grass, looking into the sky and just wondering about things. Kids today do not have a single minute free. Those that try to cut back feel pressure because all the other kids are doing it.

Then there is the frustrating political correctness these days. In my day (gosh I really sound old) there was the “smart” class in elementary school and then the “regular” classes. You had to actually try out to be in little league, and you found out if you won or lost your league, shockingly.

I am no expert on parenting certainly. But somewhere between the parents who live 100% for the kids (and I’m including parents who still do this when their kids become adults) and the parents whose kids are expected to abide by their convenience is probably the right way. And it’s OK for your kids to understand what their strengths are, and even what they may not be so great at.

And don’t forget to take the time to find your Disney World, where you can decompress and get extra enjoyment out of our fragile earthly existence.

RIP Mr. McMahon

We learned Tuesday morning that legendary Tonight Show sidekick Ed McMahon died at the age of 86, having been sick for a number of months. He is most remembered for being Johnny Carson’s announcer for over 30 years on the venerable show. But he also had a successful run hosting Star Search, and of course those classic Publisher’s Clearinghouse $10 million door knocks, and he helped host Jerry Lewis’ Muscular Dystrophy Telethon for many years.

I have so many memories of watching Carson and McMahon night after night. While some felt Carson was mean and vindictive, on the air he was just downright funny. It was truly the end of an era, and maybe of a time in our nation’s life that was simpler, when Johnny retired in the early 1990s.

Ed also spawned one of the great spoofs when character Hank Kingsley (played by Jeffrey Tambor) on Garry Shandling’s great HBO series It’s Garry Shandling’s Show copied Ed’s famous “Hi-ooo” with his own “Hey now” catch phrase. Radio legend Howard Stern still greets almost all the callers to his show with “hey now.”

He is also unfortunately known for publicly announcing in 2008 that his Beverly Hills house was going into mortgage foreclosure. Donald Trump came forward and helped saved the house for him.

Starting as a circus clown in 1951, he first joined Carson in the late 1950s’ Who Do You Trust? That team continued until Carson left Tonight in the early 1990s. He had married his third wife in 1992. He had four children of his own from his first marriage.

What’s the business angle of this? The fact that fame and fortune do not always go together. Very, very few entertainers or sports figures (who are also entertainers) manage to rise to the level of earning sufficient money to ensure a comfortable retirement, and many have to continue to work, get help from old friends, or rely on pension money from their union.

In other cases, millions are frittered away with the expectation that more are to come. At my alma mater, the Wharton School, the executive education program has offered a program for a number of years that brings National Football League players to campus for a week-long training in money management. The players’ working lives are limited, and they cannot be assured of gainful employment thereafter. Therefore, they have to ensure that they save at least some of the millions they earn for the future. Too often greedy managers and agents simply do not offer this kind of advice.

So rest in peace Ed. Super-talented straight man.

State of Digital Advertising

Eyeblaster has released The Digital Horizon: A Chasm between Expectation & Execution. Eyeblaster partnered with TNS to provide a non-bias, global view of the digital market looking at the current climate and conditions inside agencies.  The current market conditions show a large chasm existing between the appreciation of cross channel campaigns and true cross channel integration as nearly 67% of respondents cite that they already are running cross channel campaigns; yet only 12% are actually integrating cross channel performance data. Results also confirm that marketers are comfortable to support branding objectives through online advertising channels.

“This study proves interest in cross channel and confirms that cross channel integration is a high priority for marketers – digital or otherwise,” said Gal Trifon, CEO and Co-founder at Eyeblaster. “There is a gap in today’s advertising infrastructure and Eyeblaster is committed to close it with more effective cross channel campaign management.”

Marketers note the following as the barriers to cross channel adoption:

• 44% blame lack of suitable metrics to measure impact and ROI
• 37% note lack of case studies to prove cross channel effectiveness
• 34% cite lack of technology

Marketers expect total market spending to grow by 30% over the next two years with a third of the market experiencing growth over 50%. When respondents were asked, ‘once enabled to accept digital advertising, which channel will have the greatest impact?’ both TV and mobile were most widely considered across brand and response:

• 68% of marketers cite mobile as the top channel to drive response, followed by TV at 40%
• 76% of marketers cite TV as the top channel for brand building, following by mobile at 49%
• 68% of marketers are interested in comparing TV and Mobile compared to outdoor and mobile, TV and computer-based advertising and mobile and computer-based advertising at 62%.

“Marketers identify the relationship between offline and online channels and the dual role of brand and response,” said Don Ryan, VP of technology and media at TNS. “The days of distinguishing one channel against another for brand or response are behind us, and the next step is to fill the gap that sits between implementing cross channel campaigns and measuring cross channel effectiveness.”

Madoff Sentencing Postponed; Stanford Indicted

While I was away in Vegas at a conference last week, two important events for several of the most notorious scammers (in one case still alleged). First, we were all awaiting the moment when $50 billion+ thief and Far Rockaway High School grad Bernie Madoff was to be sentenced on June 16. According to Reuters, it has now been postponed to next Monday, June 29 (of course I am scheduled to be out of the country then). There was no particular reason given for the postponement by U.S. District Judge Denny Chin, though it is not unusual for this to happen. Hey the guy’s in jail so no big rush. The judge also announced that the sentencing would be held in a much larger courtroom than Chin’s regular one. Get ready to camp out for seats! After that, the Madoff news will continue to flow as we wonder what will happen to wife Ruth, kids, brother and niece (and whether more money is found, and whether more advisors who funneled him money will be nabbed).

Meantime, Texas billionaire (not for long?) R. Allen Stanford surrendered to the FBI on June 18. He was indicted the next day in a 57-page 21-count indictment along with a former Antiguan regulator (actually the CEO of their financial services regulatory commission!)  and also Stanford’s chief accounting and investment officers in an alleged $7 billion scheme. Stanford will be in court in Texas tomorrow for a bail hearing, according to Bloomberg News. The prosecutors want bail denied as they are concerned that Stanford’s alleged history of paying bribes will encourage him to find a way to flee. The group is accused of selling phony certificates of deposit to tens of thousands of unwitting investors. Among other things, Stanford is accused of taking close to $2 billion in undisclosed personal loans. We think James Davis, the former CFO of Stanford, is cooperating and may bring the Feds a lot of damning information. Stanford still denies wrongdoing, having told Bloomberg News in April, “I’m not a damn swindler.” Based on that, this one may not be a simple guilty plea as we saw in the Madoff case. Law students, sharpen your pencils, there’s probably going to be some learning on this one.

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