The (Honest) Truth About Dishonesty

The lawyers themselves get a hefty cut of every hour we bill, so they don’t mind if we take longer to finish a project. While lawyers do have some incentive to keep costs down to avoid enraging clients, many of the analyses we perform are very difficult to evaluate. Lawyers know this and seem to use it to their advantage. In effect, we are cheating on their behalf; we get to keep our jobs and they get to keep an additional profit.

Here are some specific examples of how cheating is carried out in my company:

• A deadline was fast approaching and we were working extremely long hours. Budget didn’t seem to be an issue and when I asked how much of my day I should bill, my boss (a midlevel project manager) told me to take the total amount of time I was in the office and subtract two hours, one for lunch and one for dinner. I said that I had taken a number of other breaks while the server was running my programs and she said I could count that as a mental health break that would promote higher productivity later.

• A good friend of mine in the office adamantly refused to overbill and consequently had an overall billing rate that was about 20 percent lower than the average. I admire his honesty, but when it was time to lay people off, he was the first to go. What kind of message does that send to the rest of us?

• One person bills every hour he is monitoring his email for a project, whether or not he receives any work to do. He is “on-call,” he says.

• Another guy often works from home and seems to bill a lot, but when he is in the office he never seems to have any work to do.

These kinds of examples go on and on. There is no doubt that I am complicit in this behavior, but seeing it more clearly makes me want to fix the problems. Do you have any advice? What would you do in my situation?

Sincerely yours,

Jonah

Unfortunately, the problems Jonah noted are commonplace, and they are a direct outcome of the way we think about our own morality. Here is another way to think about this issue: One morning I discovered that someone had broken the window of my car and stolen my portable GPS system. Certainly, I was very annoyed, but in terms of its economic impact on my financial future, this crime had a very small effect. On the other hand, think about how much my lawyers, stockbrokers, mutual fund managers, insurance agents, and others probably take from me (and all of us) over the years by slightly overcharging, adding hidden fees, and so on. Each of these actions by itself is probably not very financially significant, but together they add up to much more than a few navigation devices. At the same time, I suspect that unlike the person who took my GPS, those white-collar transgressors think of themselves as highly moral people because their actions are relatively small and, most important, several steps removed from my pocket.