Friday, April 24, 2015
These types of social impact funds seem to becoming more and more common. Social impact funds, however, vary greatly. Some social impact funds appear to be primarily focused on profits (while simply avoiding some "sin stocks"), others focus on serious social enterprises, and others fall somewhere in-between.
I recently finished my law review submission season, placing two articles: The Social Enterprise Law Market at Maryland Law Review (on jurisdictional competition and social enterprise entity forms) and An Early Report on Benefit Reports at West Virginia Law Review (on data collected last summer on statutory reporting compliance by benefit corporations).
Below, I share a few words of advice for my new law review editors and any law review editor readers. I share this advice acknowledging that I disregarded much of it when I was an editor on my school’s law review. Also, as mentioned below, I fully recognize and appreciate the work law review editors put into our articles.
Consider Blind Review. I still haven’t heard a good argument against law reviews moving to blind review of articles. A very few, maybe two, of the top-ranked journals appear to have made the move, but the vast majority have not.
Consider Peer Review. I understand, a bit better, the pushback against a traditional peer-review system, but consider involving your faculty in the process more heavily and consider obtaining outside faculty reviewers (as some of the elite journals are already doing).
Consider Exclusive Submission Windows. A few journals are doing this, and it seems to be a smart move for many journals and authors. The editors have many fewer articles to review -- from authors who are serious about their journal -- and the authors get the assurance that their articles are receiving more attention in the review.
Respond. Typically, 40-50% of the journals I submit to never respond. Some of those journals are starting to get reputations for never responding. While we realize that law students have plenty on their plate, divide and conquer with your editorial team and try to respond (at least to the expedites). Even a form response, saying that the journal is full or expects a certain delay reviewing articles, is appreciated.
Express Excitement. When extending an offer, show that you appreciated and are excited about the article. Both Maryland and West Virginia did this with my articles, and I chose them over some similarly ranked journals that sent boilerplate acceptance e-mails.
Call. Extending an offer to publish over the phone is often much more personal and effective than an e-mail offer.
Provide an Editing Schedule. Providing an editing schedule early in the process can be helpful.
Edit Lightly, if at All, on Style. I violated this rule repeatedly when I was an editor, but I now see that edits that appear to be style-based can often change the very precise message that the author is trying to communicate. If a sentence is unclear or poorly written, simply note this in a comment – perhaps with a suggested revision in the comment – rather than rewriting the sentence in the text.
Edit Heavily on Bluebook and Typos/Clear Errors. Editors typically know the Bluebook better than authors, so do not be afraid to edit heavily on Bluebook issues. Also, attempt to catch any typos or other clear errors. Some editors who claim to “respect the author’s voice” do too light of an editing job on Bluebook issues and clear errors.
Not Every Sentence Needs a Footnote. Be reasonable on whether a sentence actually needs a citation or not.
Provide Redlines. In the past, a few editors have not provided redlines, which makes it incredibly difficult to check what has been changed. Also, on occasion, editors have not provided complete redlines – They provide redlines, but I found changes that did not show up on the redline, which reduces confidence and slows the process.
Stick to the Editing Schedule. As much as possible, stick to the editing schedule. Authors need to honor the schedule as well. Of course there are emergencies and those are understandable, but editors might want to build in some additional time in the schedule for these unpredictable occurrences.
Communicate. Much can be forgiven if editors communicate clearly, promptly, and respectfully with the authors.
Twitter. Post-publication, Twitter can be a great tool to promote the journal’s articles. Many, but definitely not all, journals now have Twitter accounts.
All of that said, I vividly remember the hard work and long hours of editing – on top of classes and interviews and internships and other responsibilities. We professors appreciate all that law review editors do, and we probably should express our thanks more often.
My co-bloggers and readers likely have additional thoughts – as many are more experienced than I. All are encouraged to share in the comments.
Wednesday, April 22, 2015
Some business schools are still hiring for this coming August. Here is a recent legal studies professor posting by University of Louisiana-Lafayette. University of Louisiana-Lafayette is a special school to me because they made my first tenure track offer, which was quickly followed by an offer from another school that was in a better geographic location for my family. While my decision was definitely the right one for our family, I have only good things to say about University of Louisiana-Lafayette. They ran a professional search process and have a collegial, bright faculty. Also, Lafayette seemed to have a wonderful, unique culture and excellent food.
I have updated my legal studies professor openings list here.
Friday, April 17, 2015
At the end of next week, I will be at the University of Connecticut School of Business and the Thomas J. Dodd Research Center for their Social Enterprise and Entrepreneurship Conference.
Further information about the conference is available here, a portion of which is reproduced below:
In October 2014, Connecticut joined a growing number of states that empower for-profit corporations to expand their core missions to expressly include human rights, environmental sustainability, and other social objectives. As a new legal class of businesses, these benefit corporations join a growing range of social entrepreneurship and enterprise models that have the potential to have positive social impacts on communities in Connecticut and around the world. Designed to evaluate and enhance this potential, SE2 will feature a critical examination of the various aspects of social entrepreneurship, as well as practical guidance on the challenges and opportunities presented by the newly adopted Connecticut Benefit Corporation Act and other forms of social enterprise.
Presenters at the academic symposium on April 23 are:
- Mystica Alexander, Bentley University
- Norman Bishara, University of Michigan
- Kate Cooney, Yale University
- Lucien Dhooge, Georgia Institute of Technology
- Gwendolyn Gordon, University of Pennsylvania
- Gil Lan, Ryerson University
- Diana Leyden, University of Connecticut
- Haskell Murray, Belmont University
- Inara Scott, Oregon State University
Presenters at the practitioner conference on April 24 are:
- Gregg Haddad, State Representative, Connecticut General Assembly (D-Mansfield)
- Spencer Curry & Kieran Foran, FRESH Farm Aquaponics
- Sophie Faris, Community Development, B-Lab
- James W. McLaughlin, Associate, Murtha Cullina LLP
- Michelle Cote, Managing Director, Connecticut Center for Entrepreneurship and Innovation
- Mike Brady, CEO, Greyston Bakery
- Jeff Brown, Executive Vice President, Newman’s Own Foundation
- Justin Nash, President, Veterans Construction Services, and Founder, Til Duty is Done
- Vishal Patel, CEO & Founder, Happy Life Coffee
- Anselm Doering, President & CEO, EcoLogic Solutions
- Dafna Alsheh, Production Operations Director, Ice Stone
- Tamara Brown, Director of Sustainable Development and Community Engagement, Praxair
On April 3, Delaware Governor Jack Markell signed the Delaware Rapid Arbitration Act (DRAA) into law. The DRAA becomes effective on May 4, 2015. The DRAA is a different take on the attempted Chancery Arbitration that the Third Circuit ruled unconstitutional in 2013.
Under the DRAA, all parties in the dispute must agree to the arbitration. The DRAA does not use sitting judges to arbitrate, as the Chancery Arbitration attempted to do, but the Delaware Court of Chancery will be “facilitating” the process under the DRAA. Among other things, the Delaware Court of Chancery can assist in appointing an arbitrator for the process, enter final judgments, and determine an arbitrator’s fees. The Delaware Supreme Court can hear appeals of awards.
The DRAA appears to be encouraging a relatively fast and cost effective dispute resolution process. The process is limited to 180 days – final award to be issued within 120 days of the arbitrator’s appointment and allowable extensions up to an additional 60 days.
Given the privacy and the apparent time and cost-savings, this may be an attractive alternative dispute resolution process for various businesses.
For more analysis see:
Wednesday, April 15, 2015
"Laws, like sausages, cease to inspire respect in proportion as we know how they are made." -- John Godfrey Saxe
This is a brief legislative update on the progress of Tennessee's current bills, introduced in the house (HB0767--amendment not yet filed) and senate (SB0972), to institute the benefit corporation as a distinct for-profit business corporation in the State of Tennessee. The links provided are to the current versions of the bill, which reflect a significant amendment, as described below.
As you may know from my prior posts (including here and here), I am a benefit corporation skeptic. Please read those posts for details. And within the Tennessee Bar Association (TBA) Business Law Section Executive Council and Business Entity Study Committee (our state bar committee that vets changes to Tennessee business associations and other business laws), I am not alone. We have rejected bills of this kind several times over the past few years when the matter has been put to us for review by the TBA. This year was no different. We opposed the benefit corporation bills that were introduced in Tennessee this year, too.
What was different this time around, was that the folks at B Lab had gotten the attention of the Chamber of Commerce and Industry in Tennessee, who appear(ed) to have some misunderstandings about the current state of Tennessee corporate governance law and came to push for adoption of the bill in committee in both houses of the legislature. Given that we were late to the party and that the members of our TBA Council and Committee are very busy lawyers, our efforts to re-educate members of the relevant committees were not as effective as we would have liked. But we ultimately were afforded two weeks to attempt to write an amended bill--one that better reflected Tennessee law and norms.
Now, any of you who have worked on a project like this before know that two weeks is not enough time to do a professionally responsible job in spotting and tracking down all of the issues that the introduction of a new business form routinely and naturally raises. Heck. We couldn't even get all the constituents around the table that we would want around the table to debate and review the legislation in two weeks! [It seems hardest to find a plaintiff's bar lawyer to sit in with us, but we found a great one for our recent work on the Tennessee Business Corporation Act (TBCA).] Our requests for more time to work on the proposed legislation were, however, rejected.
So, we set out to make a better sausage . . . .
Friday, April 10, 2015
From the Faculty Lounge:
This just in:
The Penn State Law Review is conducting an exclusive spring-cycle article review. Any article submitted to this exclusive review between now and April 19th will be evaluated by April 27th. If you have submitted an article to the Penn State Law Review previously, you must resubmit your article for consideration in the exclusive article review.
By submitting your article, you agree to accept an offer for publication, should one be extended. Any articles accepted will be published in Volume 120: Issue 1 or Issue 2 of this review—both of which are slated for publication in summer of 2015.
If you have an article that you would like to submit, please e-mail an attached copy of the article, along with your cv and cover letter, to email@example.com . Please include “Exclusive Spring 2015 Article Review” in the subject line.
As I have previously mentioned, unlike law schools, business schools appear to hire virtually year-round. While most of the business schools have filled their open positions by this late date, there have been some recently posted positions.
Monday, April 6, 2015
Recently, I received the following conference announcement via e-mail:
Understanding the Modern Company
Organised by the Department of Law, Queen Mary University of London,
in cooperation with University College London
Saturday 9 May 2015, 09.00 to 17.00
Centre for Commercial Law Studies
Queen Mary University of London
67-69 Lincoln’s Inn Fields
London WC2A 3JB
From their origin in medieval times to their modern incarnation as transnational bodies that traverse nations, the company remains an important, yet highly misunderstood entity. It is perhaps not surprising then that understanding what a company is and to whom it is accountable remains a persistent and enduring debate across the globe.
Today, the company is viewed in a variety, and often contradictory, ways. Some see it as a public body; others view it as a system of private ordering, while still others see it as a hybrid between these two views. Companies have also been characterized as the property of their shareholders, a network, a team, and even akin to a natural person. Yet the precise nature of the company and its role in society remain a modern mystery.
This conference brings together a wealth of scholars from around the world to explore the nature and function of companies. By drawing from different backgrounds and perspectives, the aim of this conference is to develop a normative approach to understanding the modern company.
Professor William Bratton, University of Pennsylvania
Professor Christopher Bruner, Washington & Lee University
Professor Karin Buhmann, Roskilde University
Dr Barnali Choudhury, Queen Mary University of London
Professor Janet Dine, Queen Mary University of London
Professor Luca Enriques, University of Oxford
Professor Brandon Garrett, University of Virginia
Professor Martin Gelter, Fordham Law School
Professor Paddy Ireland, University of Bristol
Dr Dionysia Katelouzou, King’s College London
Professor Andrew Keay, University of Leeds
Professor Ian Lee, University of Toronto
Dr Marc Moore, University of Cambridge
Dr Martin Petrin, University College London
Professor Beate Sjåfjell, University of Oslo
Professor Lynn Stout, Cornell University
To register, please visit: www.bit.ly/QM-Modern-Company
Friday, April 3, 2015
If you pay attention to college sports news, you know that Shaka Smart is leaving VCU to coach men's basketball at the University of Texas.
As a professor, my interest, of course, is in the coaching contract.
Like most coaching contracts, Shaka Smart's contract with VCU includes a buy-out provision, which is currently $500,000. (The buy-out was set at $600,000, with a $100,000 reduction per year. This is the second year of this VCU-Smart contract, hence the $500,000 amount).
More interestingly, the contract includes a provision that requires a home-and-home series with VCU and Smart's new team or payment of an additional $250,000 to VCU. Smart took VCU to the Final Four in 2011, so in 2013 when this new contract between Smart and VCU was signed, VCU knew that Smart was one of the most sought after coaches in the country. As such, this seems like an excellent (and creative) clause to include; if Smart left VCU, he would likely be headed to a top-program and games with that top-progam could be quite valuable.
All of the above has been reported in other outlets. What I haven't seen reported (though I obviously haven't read all the reports) is the required timing of the home-and-home series. The VCU-Smart contract states that the series is "to commence at [VCU's] venue within one year of the resignation." I am not an expert on college basketball, but I believe the schedules are usually finalized well in advance. To comply with the contract and avoid the additional $250,000 buyout, it appears that Texas would have to agree to play VCU this coming season. If VCU prefers the $250,000 payout to the home-and-home series, then maybe this tight time table makes sense. If VCU prefers the home-and-home series, then this seems like it might be an impractically tight deadline. Perhaps VCU will attempt to negotiate with Texas and give Texas another year to comply if they need it.
Also of possible interest, it appears that if Texas had waited from March 29 until April 1 to fire their former coach (Rick Barnes...who we are welcoming to Tennessee) they could have possibly saved $250,000. If Smart would have waited until May 1 to resign from VCU, Texas could have saved $100,000 on Smart's buyout. But perhaps time was of the essence in this case. If Texas would have waited, maybe Smart would not have been available, or maybe the time is needed for other things like recruiting, media promotion, and fundraising.
In related news, football coach John Chavis, LSU, and Texas A&M are litigating over the date that Chavis "resigned," which impacts his buyout. Like the VCU-Smart-Texas situation, careful attention to the wording of contracts is quite important.
*Creative Commons photograph
Amanda Rose (Vanderbilt) was one of the many distinguished speakers at the law and business conference I attended last week. She spoke about her forthcoming article in the Northwestern University Law Review, which focuses on the SEC’s new whistleblower program in relation to Fraud- on-the-Market class action lawsuits. I have added her article to my reading list and the abstract is reproduced below for interested readers.
The SEC’s new whistleblower bounty program has provoked significant controversy. That controversy has centered on the failure of the implementing rules to make internal reporting through corporate compliance departments a prerequisite to recovery. This Article approaches the new program with a broader lens, examining its impact on the longstanding debate over fraud-on-the-market (FOTM) class actions. The Article demonstrates how the bounty program, if successful, will replicate the fraud deterrence benefits of FOTM class actions while simultaneously increasing the costs of such suits — rendering them a pointless yet expensive redundancy. If instead the SEC proves incapable of effectively administering the bounty program, the Article shows how amending it to include a qui tam provision for Rule 10b-5 violations would offer several advantages over retaining FOTM class actions. Either way, the bounty program has important and previously unrecognized implications that policymakers should not ignore.
Thursday, April 2, 2015
In connection with the current legislative debate on benefit corporations in Tennessee (which has been gathering momentum since I last wrote on the topic), I have repeatedly asked about the impetus for the bill. Of course, there is the obvious "push" for benefit corporation legislation by the B Lab folks, who have gotten the ear of folks at the Chamber, convincing them that the legislation is needed in Tennessee to protect social enterprise entities from the application of a narrow version of the shareholder wealth maximization norm (a conclusion that I dispute in my earlier post). But what else? What real parties in interest in Tennessee, if any, have expressed a desire that Tennessee adopt this form of business entity?
There is anecdotal information from one venture attorney that some Tennessee entrepreneurs have indicated a preference for the benefit corporation form and have specifically requested that their business be organized as a Delaware benefit corporation. Leaving aside the Delaware versus Tennessee question, why are these entrepreneurs looking to organize their businesses as benefit corporations? Where does this idea come from?
Friday, March 27, 2015
Plenty of valuable information was shared today at Vanderbilt's 17th annual law & business conference, including remarks from Elisse Walter (former-SEC Chairman), Jim Cox (Duke), Bob Thompson (Georgetown), Amanda Rose (Vanderbilt), and others.
The most immediately useful information, however, might be the fact that SEC Commissioner Dan Gallagher, our luncheon speaker, is on Twitter. In academic and other circles, Commissioner Gallagher garnered a great deal of attention due to his controversial article co-authored with Joseph Grundfest (Stanford) entitled "Did Harvard Violate Federal Securities Law? The Campaign Against Classified Boards of Directors."
Below is a recent Tweet from Commissioner Gallagher for those who would like to follow him.
My statement from this a.m.'s open mtg re Reg A+. I'm very excited about what this rule will do for small biz. http://t.co/C51EGq9oRR— Dan Gallagher SEC (@DanGallagherSEC) March 25, 2015
After teaching my early morning classes, I will spend the rest of the day at Vanderbilt Law School for their Developing Areas of Capital Market and Federal Securities Regulation Conference.
This is Vanderbilt's 17th Annual Law and Business Conference and they have quite the impressive lineup, including Commissioner Daniel Gallagher, Jr. of the U.S. Securities and Exchange Commission.
I am grateful to the Vanderbilt faculty members who invited me to this event and others like it. Vanderbilt is only about 1 mile from Belmont and I have truly enjoyed getting to know some of the Vanderbilt faculty members and their guest speakers.
Wednesday, March 25, 2015
Over at the Faculty Lounge, Kim Krawiec (Duke) is hosting an interesting mini-symposium on board diversity entitled “What’s The Return On Equality?”
The posts to date are linked to at the bottom of this recent post.
Friday, March 20, 2015
Last week, I wrote sports and the problems that could arise from a myopic focus on winning.
I promised to attempt to tie that post to business this week, but because I am running to a lunch meeting and then to the Belmont v. Virginia NCAA tournament basketball game viewing party, I am going to keep this short.
(Also, please indulge a little more bragging about my school. Before the game even begins, I am already incredibly proud of our basketball team. Belmont won the academic bracket for the NCAA tournament teams this year, which is based on academic measures like Academic Progress Rate (APR) and Graduation Success Rate (GSR)).
Anyway, I think there are a number of parallels between sports and business. Sports, done the right way, can teach many valuable lessons, such as the importance of teamwork, diligence, unselfishness, strategy, preparation, etc. In fact, team sport participation was one of the things I looked for when interviewing for law students when I was in practice and it is something I look for now when interviewing research assistants.
As mentioned in last week's post, sports can lead participants off-track if there is a myopic focus on winning that trumps certain overriding principles. Similarly, a myopic focus on profits in business, without adherence to certain legal rules and ethical principles, can lead individuals and companies astray. What the overriding principles should be, and the appropriate level of focus on profits, are two difficult questions that all businesses should attempt to address.
The biggest recent news in the social enterprise world is that certified B corporation Etsy is going public.
Despite confusing press releases, Etsy is not legally formed as a benefit corporation, they are only certified by B Lab. (In one of the coolest comments I have received blogging, an Etsy representative admitted that they confused the "benefit corporation" and "certified B corporation" terms and corrected their public statements). If you are new to social enterprise, the differences between a "certified B corporation" and a "benefit corporation" are explained here.
Etsy, however, will face a dilemma as noted in this article sent to me by Alicia Plerhoples (Georgetown). The B Lab terms for certified B corporations require Etsy to convert to a public benefit corporation (Delaware's version of the benefit corporation) within four years of the Delaware law becoming effective. Delaware's public benefit corporation law went effective August 1, 2013.
So, unless B Lab changes its terms, Etsy will lose its certified B corporation status if it does not convert to a public benefit corporation on or before August 1, 2017.
Given that converting to a public benefit corporation while publicly-traded would be extremely difficult--obtaining the necessary vote (currently 90% in Delaware, with a proposal being considered to move it back to the more typical 2/3), paying dissenters' rights, etc.--I imagine Etsy will need to make this decision before it goes public. Perhaps, Etsy will postpone the decision, and hope that they can just quietly lose their certification in 2017 or that B Lab will make an exception for them. Etsy's CEO is on record promising social responsibility, but we will see whether that promise includes maintaining B Lab certification and making a legal entity change.
Many interesting issues would stem from a publicly-traded benefit corporation; I have added a number of items to my article ideas list this morning.
This Etsy story is one I hope to follow, so stay tuned.
Friday, March 13, 2015
If you keep up with higher education news, you have already read about the decision to close Sweet Briar College. This story hit close to home, in part because I am a professor and in part because I graduated from a small liberal arts college.
My biggest question is why the administration took so long to tell the students and faculty. By making the announcement in the spring semester, the administration seems to have harmed students who will be looking to transfer and faculty members who will be looking for new jobs. More reading on the faculty members' situation is available in The Atlantic.
Given the general demand for students, I assume the students will be able to find new college homes, though their options might be be somewhat more limited than if the announcement were made in the fall. Most of the Sweet Briar College faculty members, however, will be in an incredibly tough bind. Most academic hiring happens during the fall semester.
With a nearly $100 million endowment (some of which is supposedly restricted), one wonders whether the administration could have kept the school open for one more school year, for the benefit of the faculty and students looking for a place to land. Alternatively, what prevented an announcement this past fall? Perhaps administration worried about students and faculty leaving en masse if given longer lead time, but if the school is closing anyway, I do not see why that would be a problem. Perhaps creditors played a role?
Also, I wonder why the school did not make a more desperate and direct plea to their alums. Instead of abruptly announcing that the school would close, why didn't the administration say that the school would close unless they raise X dollars in Y time period?
As outsiders, we obviously do not know all the facts, but, in any event, it appears to be a sad situation.
At Belmont, we have been basking in the glow of a dramatic win in the men’s basketball OVC championship game.
While I could not be prouder of all the members of our team, many of whom are majoring in business, I am most proud of the way they played and conducted themselves – with heart, effort, intelligence, humility, confidence, and class. Murray State, holder of a 25-game win-streak and ranked #25 in the country coming into the game, played just as hard and conducted themselves with class as well.
The OVC championship game was the best basketball game I have ever seen and it was a shame that either team had to lose. In the unlikely event that any selection committee members are reading this, I think Murray State deserves a spot in the NCAA tournament as well; how do you justify dropping a team from #25 to outside the top-68 teams after a well-played 1-point loss to another strong team?
Since that basketball game, I have been thinking a lot about “winning” as compared to “how you play the game.” Growing up, I was insanely competitive and was obsessed with winning. I loved the quote attributed to Vince Lombardi: “winning isn’t everything, it is the only thing” and I despised the claim that “it isn’t whether you win or lose, it is how you play the game.” (Interestingly, some argue that Lombardi never said those words, claiming instead that he said “[w]inning is not everything, but making the effort to win is,” which is much closer to the statement I despised.)
Perhaps, I am getting softer as I age or maybe it is being a father that is changing me, but I now believe that how you play the game is much more important than whether you win or lose. Results of games, like Belmont’s recent one, could turn on a fraction of an inch, but conduct during the entire game (and before and after the game) tells you a great deal more about the character of the competitors.
I am still not in the “everyone gets a trophy” camp and I still think winning and losing are important parts of competition, but I do think that “winning” should be subordinated to certain overriding principles. When the overriding principles govern, you get things like Bobby Bowden sharing his playbook with the Marshall University team that lost most of its members in a plane crash OR the carrying of an injured opponent around the bases OR the helping of a fallen runner. When winning is seen as “the only thing,” teams and individuals skirt rules to gain an advantage (doping in baseball, cycling, and track; recruiting violations; spygate; deflategate; etc.)
Next week I will apply some of these concepts to business.
Monday, March 9, 2015
Western Carolina University has posted an opening for an assistant professor of legal studies. More information is available here. The position is fixed-term and non-tenure-track, though it comes with the title "assistant professor."
Last year, I greatly enjoyed my time presenting at Western Carolina University. WCU is in a beautiful part of the country, about an hour from Ashville, NC. WCU has a strong group of legal studies professors and has one of the nation's few Business Administration and Law degrees at the undergraduate level.
I've updated my list of legal studies professor positions in business schools. Many of the positions have now been filled, but I placed the newer postings in bold font.