Live an Untethered Life

You load sixteen tera-tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don’t you call me ’cause I can’t go
I owe my soul to the electrical store.

As you already know, Bitcoin is all the rage.  The specter of government regulation has knocked this enthusiasm down somewhat.

Notwithstanding the price volatility, the benefits of mining Bitcoin remains attractive for those that know where to look. And by look, I mean looking for cheap electricity.

Back in the heyday, you could use a simple laptop to attempt to mine Bitcoin. Now for any chance of success, you have to run a server farm. Perhaps we can change the metaphor from mining, which suggests gold, to farming, which suggests easily washable boots.

Countless computers across the globe attempt to mine Bitcoin by solving an algorithm. This proves and validates the correctness of a new transaction. Every 10 mins or so, some lucky miner solves the algorithm and receives a reward of 12.5 Bitcoins. All the other computers verify this and then stop what they are doing and start at the beginning again.

If the entire process sounds wasteful, then you would be correct. The Bitcoin mining process now takes up more electricity than the majority of countries. Current estimated consumption is 61 TWh. Mining requires the equivalent of the yearly electrical requirement of Switzerland, and just a bit more than Columbia. This power could sustain over 5 million households. Just a short while ago, some pundits were claiming that mining Bitcoin would the major user of power by 2020. And like anything, projecting exponential growth from the past into the future never really pans out.

Mining produces revenues of $6.3 billion and costs of $3 billion, providing a substantial margin of 48% plus other costs.  Needless to say the carbon footprint of this type of mining is quite extensive since a number of countries rely on coal. China plans to limit the amount of electricity to miners which are estimated to be using up to 4 gigawatts of electricity, or about three nuclear reactors worth of energy. Plattsburg in the United States placed an 18 month moratorium on crypto mining owing to the extensive electrical use.

There is a lot of debate as to the actual electrical usage, but no one really knows what is happening in the black box. Suffice to say that a lot of energy is being wasted on chasing an algorithm that someone else will likely solve.

There are only a limited number of Bitcoins and more people are chasing them with increasing levels of computing power. The electrical requirements today are quite substantial since everyone has to obtain this ‘proof of work’ standard to qualify their Bitcoins. Think along the lines of will the sun rise tomorrow probability?  A lower standard such a ‘proof of stake’ may qualify but the security standard would be lacking. Think along the lines of will I rise tomorrow probability? Usually pretty good, but I might be wrong someday.

A single Bitcoin transaction takes the energy equivalent of thousands of credit card transactions. So actually the cost of a bitcoin transaction is more akin to ‘priceless’.

The security of Bitcoins do come into question since there has been substantial hacking in some countries. Bitcoin can be like the canary in the crypto-currency mining process. But instead of the canary dying, we are talking about the crypto canary disappearing completely. And instantly.

The disappearance of all remaining Bitcoin to be mined would be the signal that someone successfully created a quantum computer. The first use of such a computer would likely not be to solve the mysteries of the universe, but rather to solve the algorithm to grab the balance of the Bitcoins to be mined.

This may take ten years, or perhaps less. As Yogi Berra opines, it’s tough to make predictions, especially about the future.

If your job is to eat a live frog, then best to do it first thing in the morning. If your job is to eat two frogs, then start with the biggest one. This is the wise collective wisdom of productivity managers and of course Mark Twain.

This provides a great example of why people procrastinate and perhaps a way to cope with it. This leads into why people procrastinate at all. You can understand why people might dread eating a cold frog in the morning as opposed to a warmed-up frog in the afternoon.

The New Yorker gave an interesting analysis of time. It’s only during the 3 seconds that you can sing “Hey Jude” that you can really perceive what is happening. Everything after that window is simply the past, and everything before it is simply the future. The New Yorker analyzes some thinkers on the subject that suggest you weigh the past, present and future time equally.

Why dread eating that future frog when you likely no longer dread eating that past frog. Neither are in the moment. So, you are better off living in the moment and perhaps only dreading that next bite of frog in front of you and leaving the dread of tomorrow’s frog in the future instead.

Long live the necktie

Now that the pandemic existential crisis is coming to an end, and the climate existential crisis never left and is picking up speed, the next crisis will be what to wear to work. Now that employers might have this expectation you actually have to return to a place of employment.

If you picked up the COVID 15 pounds, then what is left in your closet that still fits might be thin. Even if you aren’t any more. But the old standard necktie can still fit so long as it eventually reaches the top of your belt buckle. Although some politicians see fit to wear it longer.

If there was a time to cast aside old customs, then it is time to end the necktie. Shoelaces help keep your shoes on. Belts keep your pants up. Suspenders help you imagine you are Michael Douglas in Wall Street. But ties just seem to hide your shirt buttons and make it awkward to undo that top button. Even if loosening your tie makes you look like you are truly working hard.

The next step will be to rid ourselves of shirts that have collars to hold the tie. This is the first in a series of steps to finally get back to the tee-shirts you have been wearing for the past 18 months.

We live in interesting times.

Will the times ever become less interesting in the future? Doesn’t seem likely.

1. We have learned how to zoom and Microsoft teams. All those meetings that could have been an email have been revealed for what they truly are. Little black holes where not even the truest wisdom could possibly escape.
2. Housing prices went through roof. The fear of missing out drove so many into purchasing something they may not live long enough to pay off the mortgage and regret. As Thoreau said, it wasn’t so much that they got the house as the house got them.
3. All the introverts became ecstatic at being forced to binge watch to their hearts content. They are now dreading having to socialize once again. I’m just saying this because a friend told me.
4. A lot of people went out and got Covid support pets. We already had two golden retrievers before all this happened. I did splurge and got one more koi for the pond outback. The little guy has taken refuge in the pond filter for the last couple of months. Also binge watching I suspect. He will not be happy come fall when everyone comes back in the aquarium to overwinter.
5. Time will tell if we see a lot of Covid children. If anything, there might be a pullback since few people are entering into new relationships. There may be less tension in the air since people have a reason not to keep entering the dating scene. Few people really regret binge watching. It’s more of a humble brag when they do mention it.

Keep living the Covida Loca!

This father’s day, let’s talk about safety and the dangers of wine. I actually mean wine bottle opening.

My favorite bottle opener has the traditional worm gear that drives the screw into the cork. The second part is the rack and pinion operated by the levers.

After 45 years of opening wine bottles, I finally managed to catch the tip of my thumb in between the steel rack and the steel and equally unforgiving pinion.

Anyway…

Be careful this father’s day. Let your adult children take care of things tonight. They are far more nimble and heal much faster.

#safety#love#fathersday2021#wine#health

“That it’s too late to apologize, it’s too late

I said it’s too late to apologize, it’s too late

Too late,”

OneRepublic

Apologizing fixes many things, except the past. The past remains well crystalized. We see a fine example of apologizing not fixing the repudiation of an employment contract.

Ms. Perretta started work at Rand as a customer advocate on September 29, 2014, pursuant to a written employment agreement dated September 11, 2014. Rand promoted Ms. Perretta to the position of sales representative effective November 1, 2018, pursuant to a new employment contract dated October 23, 2018. The 2018 contract stated Rand could terminate Ms. Perretta’s employment without cause by providing two weeks notice or pay in lieu of notice plus the minimum notice or pay in lieu of notice, benefits and severance pay required by the Ontario Employment Standards Act.

Rand terminated Ms. Perretta’s employment on March 31st, 2020. However instead of providing her two weeks pay in lieu of notice, Rand provided her with a letter demanding a release prior to payment of the two weeks severance.

Ms. Perretta’s termination letter included an “Enhanced Severance” offer whereby Ms. Perretta would receive the two weeks’ salary only upon within 7 days signing a detailed three page release, returning all company property, continuing to be bound by the Confidentiality and Non-Competition and Non-Solicitation provisions of the 2018 Employment Contract, modifying her LinkedIn profile and repaying Rand in case she breached any of these terms. Her employment contract did not include any such requirements.

Ms. Perretta pointed this out to Rand, but instead Rand reiterated its demand for a full release prior to payment. Rand then proceeded to ask not once, but twice to have the release signed before advancing the severance. Mr. Perretta’s lawyer pointed out the error to Rand that the employment contract did not include such requirements, and it is only after this that Rand proceeded to pay out the severance. Of course, this did not end the matter.

Ms. Perretta’s lawyer (dare I say cleverly) took the position that Rand repudiated the employment contract by acting as if it was no longer bound to the terms of the contract.  Ms. Perretta then became entitled to payment in lieu of notice pursuant to the common law.

Justice Sanfilippo in the Ontario Supreme Court held that Rand attempted to deny the entire bargain of the contract. By refusing to pay the two weeks severance, Rand deprived her of the entire monetary benefit of the termination provision. Even if the oversite was an innocent lack of understanding of the employment agreement that Rand had drafted, this innocence did not override the serious nature of the repudiation.

The court applied the test considering the surrounding circumstances whether one party acted as if the contract would no longer apply looking at the matter objectively. This includes looking at what the impact would be upon the innocent party and whether they would be substantially deprived of the benefit of the contract.

With respect, the termination payment seems a small component of the overall total compensation package of five and a half years of salary and benefits. The termination benefit was only .7% of the entire total compensation package over the term of employment. However, at the end of any employment relationship, the termination provisions do loom large. And this is when the employee is at their most vulnerable.

The court took particular notice that Rand’s lawyer did apologize a few days later after the termination. Sometimes apologies can help, particularly in medical malpractice. A sincere apology is an act of humility. This requires that the person recognizes that they have done something wrong and needs to acknowledge this mistake. But this makes the apologizing person vulnerable, and the last thing lawyers want to do is show weakness since this acts as a drop of blood in the water, not withstanding the sincerity.

This recalls George Burns’ quote of “Sincerity – if you can fake that, you’ve got it made.” This is not recommended since one’s sincerity, or lack thereof will always come to light.

Being sincere of course is not sufficient. You should also express regret and be specific about the harm. And of course, you mitigate the harm you have caused.

However, in drafting releases, employers normally try to squeak in as many provisions to their benefit at the end of any employment relationship. Here Rand attempted to include that Ms. Perretta had no other claims or action, consented to an injunctive relief in case she breached the release and agreed to a nondisparagement clause (which at this point every employer wants) and agreed to keep the terms of her employment termination confidential.

The last clause is particularly ironic since this court decision has been discussed in the media and is free on CANLii. And just so you also know, as Ms. Perretta was 5.5-year employee in a non-mangement role, she received 6 months wages.

This raises the question as to where to put these otherwise nice to have clauses. The only other location would be right into the employment contract right at the beginning of the employment relationship. As the employer and employee attempt to forge a positive initial relationship including these termination terms may seem somewhat hard, but as we should remember words of the great jurist Elton John, who sang that in actual fact “sorry seems the hardest word”.

“That it’s too late to apologize, it’s too late
I said it’s too late to apologize, it’s too late
Too late, oh…”

OneRepublic

Apologizing fixes many things, except the past. The past remains well crystalized. We see a fine example of apologizing not fixing the repudiation of an employment contract.

Ms. Perretta started work at Rand as a customer advocate on September 29, 2014, pursuant to a written employment agreement dated September 11, 2014. Rand promoted Ms. Perretta to the position of sales representative effective November 1, 2018, pursuant to a new employment contract dated October 23, 2018. The 2018 contract stated Rand could terminate Ms. Perretta’s employment without cause by providing two weeks notice or pay in lieu of notice plus the minimum notice or pay in lieu of notice, benefits and severance pay required by the Ontario Employment Standards Act.

Rand terminated Ms. Perretta’s employment on March 31st, 2020. However instead of providing her two weeks pay in lieu of notice, Rand provided her with a letter demanding a release prior to payment of the two weeks severance.

Ms. Perretta’s termination letter included an “Enhanced Severance” offer whereby Ms. Perretta would receive the two weeks’ salary only upon within 7 days signing a detailed three page release, returning all company property, continuing to be bound by the Confidentiality and Non-Competition and Non-Solicitation provisions of the 2018 Employment Contract, modifying her LinkedIn profile and repaying Rand in case she breached any of these terms. Her employment contract did not include any such requirements.

Ms. Perretta pointed this out to Rand, but instead Rand reiterated its demand for a full release prior to payment. Rand then proceeded to ask not once, but twice to have the release signed before advancing the severance. Mr. Perretta’s lawyer pointed out the error to Rand that the employment contract did not include such requirements, and it is only after this that Rand proceeded to pay out the severance. Of course, this did not end the matter.

Ms. Perretta’s lawyer (dare I say cleverly) took the position that Rand repudiated the employment contract by acting as if it was no longer bound to the terms of the contract.  Ms. Perretta then became entitled to payment in lieu of notice pursuant to the common law.

Justice Sanfilippo in the Ontario Supreme Court held that Rand attempted to deny the entire bargain of the contract. By refusing to pay the two weeks severance, Rand deprived her of the entire monetary benefit of the termination provision. Even if the oversite was an innocent lack of understanding of the employment agreement that Rand had drafted, this innocence did not override the serious nature of the repudiation.

The court applied the test considering the surrounding circumstances whether one party acted as if the contract would no longer apply looking at the matter objectively. This includes looking at what the impact would be upon the innocent party and whether they would be substantially deprived of the benefit of the contract.

With respect, the termination payment seems a small component of the overall total compensation package of five and a half years of salary and benefits. The termination benefit was only .7% of the entire total compensation package over the term of employment. However, at the end of any employment relationship, the termination provisions do loom large. And this is when the employee is at their most vulnerable.

The court took particular notice that Rand’s lawyer did apologize a few days later after the termination. Sometimes apologies can help, particularly in medical malpractice. A sincere apology is an act of humility. This requires that the person recognizes that they have done something wrong and needs to acknowledge this mistake. But this makes the apologizing person vulnerable, and the last thing lawyers want to do is show weakness since this acts as a drop of blood in the water, not withstanding the sincerity.

This recalls George Burns’ quote of “Sincerity – if you can fake that, you’ve got it made.” This is not recommended since one’s sincerity, or lack thereof will always come to light.

Being sincere of course is not sufficient. You should also express regret and be specific about the harm. And of course, you mitigate the harm you have caused.

However, in drafting releases, employers normally try to squeak in as many provisions to their benefit at the end of any employment relationship. Here Rand attempted to include that Ms. Perretta had no other claims or action, consented to an injunctive relief in case she breached the release and agreed to a nondisparagement clause (which at this point every employer wants) and agreed to keep the terms of her employment termination confidential.

The last clause is particularly ironic since this court decision has been discussed in the media and is free on CANLii. And just so you also know, as Ms. Perretta was 5.5-year employee in a non-mangement role, she received 6 months wages.

This raises the question as to where to put these otherwise nice to have clauses. The only other location would be right into the employment contract right at the beginning of the employment relationship. As the employer and employee attempt to forge a positive initial relationship including these termination terms may seem somewhat hard, but as we should remember words of the great jurist Elton John, who sang that in actual fact “sorry seems the hardest word”.

Imagine you outline to your client the possibilities of two court actions where he is the plaintiff in one case and the defendant in another. Legal fees are no longer a cost consideration. In the first case, you advise that he could settle and receive $70,000 or have a 90% chance of the court awarding him $80,000. In the second case, you advise that he could settle and pay $70,000 or have a 90% chance of the court deciding he should pay $80,000.  If he was like most people, in the first case he would settle for the $70,000. In second case he would likely go to court and risk paying $80,000. People prefer sure things when it comes to gains, and take risks when it comes to avoiding losses.

This simple example captures a substantial portion of Kahneman’s book Thinking: Fast and Slow in addition to Thaler’s book, Nudge. Kahneman and Thaler separately won the Nobel Prize for work in their respective fields. The Obama administration successfully incorporated the concept of ‘nudges’ into their policy work. These theories on behavioral economics can contribute substantially towards the practice of law and the attraction and retention of clients.

Kahneman separates our thought process into a simple dichotomy of System 1 thinking, fast, and System 2 thinking, slow.

System 1 thinking explains why people feel losses twice as much as they feel comparable gains. Fast thinking comes into play when you stand up to object to a line of questioning without knowing why, when you sense a brief misses something, or when you believe that there really is a tiger outlined in the grass just ahead. Regardless of your personal circumstances, fast thinking comes in handy to avoid being eaten. Figuratively or literally.

Fast thinking includes intuition. Although, thinking with your gut can be dismissed as superficial, Kahneman recognizes that experts glancing at a situation can reach a correct conclusion simply based on continuous experience.

Intuitive thinking guides the halo effect. Someone’s reputation, and ego, could proceed them. Or exceed them. This may give this person an aura of invincibility in that they have won so often they will likely win again. If you, or a court, provides that person the benefit of doubt, a halo so to speak, then you should dissuade yourself of this notion. Rest assured, the rest of the day has not yet been written. Anything can and will likely happen.

Information immediately available primes system 1 thinking and feeds into the ‘anchoring’ concept. Kahneman provides the example of a panel of German judges asked to roll a weighted die that came up with three or nine. The judges were then asked to provide a ruling on a certain fact situation. Although it should not have mattered, judges rolling a nine more often gave higher sentences that the judges that rolled a three.

System 2, slow thinking represents the traditional lawyer mind; collecting facts, analyzing those facts, and providing a researched opinion.  Relative to fast thinking, slow thinking generally has to be dragged into the thought process if the mind feels that fast thinking ‘has got this covered’. Slow thinking eats Doritos while watching TV. I prefer the term ‘critical thinking’ as slow thinking suggests something negative.

Understanding how prospective clients think can impact how you market anything. Imagine yourself a prospective client landing on your firm’s website. The website asks if you want to allow cookies in order to enhance your website experience. Being like most people, you sort of realize that cookies attach to your browser benignly. But you read something about them somewhere and your overall impression leans towards not allowing cookies. You congratulate yourself on being prudent, but your web experience becomes muted. The firm suffers an opportunity cost.

Continuing your search, you land on another site that clearly, but not alarmingly, states that a small piece of code, a cookie shall be added to your web browser. Once again, you don’t know anything more about cookies than you did five minutes ago, but you proceed regardless. Your web experience becomes far more customized, and the law firm discovers substantial information on future clients’ interests.

Most clients intuitively refuse to accept cookies given the choice. The critical part of the mind would not examine the situation since there did not appear to be an immediate need. A client merely advised of cookie use would likely proceed, confident in the notion that someone vetted the cookie usage for them. The concept of providing a default cookie option nudges the client into a better result.

One would think that providing a range of options provides greater satisfaction than fewer options. However, Thaler says that having too many options leads to greater stress and reduced satisfaction. Therefore, providing a default option increases the probability that a correct choice is being made.

Thaler euphemistically refers to this as libertarian paternalism. People make better decisions by the correct arrangement of choices. The person in charge of this arrangement becomes the choice architect.

A business owner becomes a choice architect in numerous ways. In speaking with a client and laying out their options, the phrasing of options definitely impacts the client’s choice. Although business owners may feel that they want to leave the choice of options strictly to the client, one should determine what level of guidance the client requires. Normally they would want your best recommendation.

Thaler parses apart the various tools that a choice architect has into five main aspects: Incentives, mapping, defaults, feedback, expect errors and structuring complex choices. For example data visualization and mnemonics of legal information can illustrate the difference between complex choices. In retaining clients, understanding the process behind making decision choices increases your value proposition defined as the benefits relative to the costs. By making the correct choice easier, you have channeled your client to the correct choice. You have reduced not so much the monetary cost to the client, but the stress cost of making that decision.

In making an intuitive choice, clients want to know what other people did in similar situations. Thaler found that a need to conform easily influences peoples’ choices. Clients could operate on this basis to decide how to proceed on a case for example. They would rely more on what friends and other people have done in a similar situation. Therein lies the importance of stories. Relating other individual’s stories can add additional comfort to clients and make the decision easier. Adding stories to your advice makes a client’s choice easier.

To demonstrate this, Thaler identifies greater compliance in hotels where people are advised the guests before them selected the economical option of not insisting upon having towels replaced daily. People like to be part of the crowd as this makes their decision making easier. Your firm stories should reflect how generally others have proceeded.

These innovative concepts require greater examination and incorporation into today’s business practice particularly in cases where they might operate to your client’s detriment.

Did you feel the nudge?