Sully squatted when he was a tiny puppy....we got him neutered at 6 months...and now sometimes he squats, and sometimes he lifts his leg. Most of the time he squats, but leans to one side as to lift a leg off of the ground but not quite up in the air. It's kinda funny.
Either way, he always pees outside. Personally I could care less which way he pees, haha. But, it is interesting animal behaviour to figure out why they do the things they do