At the beginning of the new academic year, it seems like a good time to review certain fundamental lessons which keep recurring in our legal practice involving executive employment agreements for the leaders of universities, colleges and independent schools:
1. Don’t Resign!
The difficulties of being a top academic executive these days are manifold. Not a week goes by without reading press reports on the sudden departure of one or more school leaders.
Nothing makes our hearts sink so fast as when we receive an inquiry about our legal services from a prospective client who starts by saying, “I was the President of X University or Y Independent School and I have just resigned. I couldn’t take it anymore!”
Sorrow tomorrow, as someone once said.
Once an executive resigns, it dramatically lessens, and sometimes completely destroys, any leverage to negotiate a good termination package for that executive. It is painful to have to tell the person that by resigning, they may have ended their chances for severance or an otherwise financially meaningful exit, as well as having opened themselves up to additional reputational damage which might have been prevented if they had reached out to us at the first sign of trouble. We are keenly aware that academic executives usually have families and other persons depending on their livelihoods, so a precipitous and reactive emotional departure puts others at risk as well.
The repeated lesson is: Don’t resign before taking legal advice!
2. Don’t Be Afraid of Using an Attorney.
No serious business executive would consider entering into an employment contract (or, at the other end, negotiating his or her departure package) without the assistance of an experienced executive employment attorney, so we are constantly surprised at how many academics accept senior leadership positions without the advice and assistance of an attorney, or with nothing more than “I had the contract they offered me reviewed by the attorney who did my house closing or wrote my will, and he said it looked fine”. Whether this failure to use an attorney experienced in this area is the result of naivete, idealism, hesitation at looking “too aggressive”, lack of experience with attorneys and their different areas of expertise, or some general fear of legal fees, it often results in contracts which are inadequate at best and disastrous at worst.
As the man in the insurance ad says, “We know a thing or two because we have seen a thing or two,” and we have seen too many mediocre contracts signed by academic executives who failed to consult the right attorney. Having such a contract can prove far more costly than any legal fee involved in using a knowledgeable attorney to negotiate a good executive agreement. Don’t be “penny-wise and pound foolish”!
3. Do Build Your Legal Relationship.
We try to create on-going relationships with our academic executive clients, and our most successful clients plainly value these relationships. If we have negotiated an initial contract for a college or university president or head of school, we already have a head start on any renewal contract, as well as with respect to counseling our client if and when problems arise in the course of his or her employment. Not only does this lead to a greater depth of understanding, it is far more efficient both in terms of time and cost.
4. The Early Bird Catches a Good Deal More Than the Proverbial Worm.
The primary value of an existing legal relationship is that we are able to “hit the ground running” in the event of a client’s future legal needs. This cannot be overstated. Our on-going clients, when confronted with the possibility of a new employment opportunity, a possible contract extension or renewal, or some type of mid-stream employment issue, do not have to worry about scrambling around to find an appropriate attorney. At the first hint of a problem or an opportunity, our clients can get us on the telephone knowing that we already have the background knowledge and personal context from which to advise them. This has proven to be key to good results in many different situations.
5. It’s Not Just the Money.
Executive employment contracts in academia contain many important clauses to protect school leaders which touch only obliquely, if at all, on compensation issues: the definition of “Cause” for termination; severance; notice and confidentiality; supplemental disability insurance, and a dozen more. This fact is important for any dean, vice president or provost to remember when they wonder whether they should hire an attorney to review a first CEO contract even though they are already getting a meaningful “bump up” in base salary.
Here is the bottom line: Hire a knowledgeable attorney. Get a good contract. You will never regret it. Now back to school!
Warm regards from Lisa and myself at the beginning of Autumn,