Friday, August 26, 2016
During the past few days, I have participated in a lot of meetings.
This has led to some thinking on what makes a good meeting.
To me, a useful meeting is one that accomplishes things that could not be handled appropriately by an e-mail. Some meetings are held, I am convinced, because those calling the meetings are not sure that participants read and pay attention to e-mails. This worry could be best addressed, in my opinion, by making expectations regarding e-mail management clear, perhaps coupled with consequences for those who ignore the contents.
That said, e-mail is not appropriate in all cases and here are four categories where in-person meetings can work better than e-mail:
- Inspire. Perhaps some can be inspired over e-mail, but it seems much easier to inspire in person. As such, I think some good meetings can be used to inspire participants to achieve organizational goals. But inspiring others, especially sometimes cynical professors, can be difficult to do.
- Build Relationships. Sometimes the only times you see certain colleagues are at faculty meetings, so meetings can be a good way to build relationships, especially if folks hang around before and after meetings or if significant time is given for small group discussion.
- Engage in Group Discussions. E-mail is pretty good for one-way communication, but as anyone who has been on a group e-mail with hundreds of replies knows, e-mail isn’t great for dynamic group conversation. As such, it may make sense to have meetings when a group needs to converse about working through an issue. That said, preparation for the meeting can often be done alone, and the lion-share of the conversation can be done in small groups.
- Engage in Difficult Conversations. When tone is important, e-mail is often inadequate. Thus, in-person meetings may be important for communication of sensitive or controversial information.
When meetings focus on things that cannot be done remotely, I think meetings can be quite useful. Similarly, when teaching, we should think – what is it that students cannot get through an e-mail, the internet, or an online class? We should focus on those things. As such, I am trying to do even more interactive projects and small group discussions in class this semester.
Friday, August 19, 2016
Belmont University starts classes on Wednesday. Below I share a few tips for new students. Josh posted a good list earlier this week, but my list is a bit different, perhaps because I teach primarily undergraduate and graduate business students. None of these is new or earthshattering, but, like many simple things, they remain difficult to put into action.
- Be Professional. As I often tell my students, you start building your reputation in school. I have declined business opportunities from former classmates because I remembered how they conducted themselves in school. Be on time, be prepared, be thoughtful, and be honest. We should recognize that people change over time and be open to giving second chances, but, unfortunately, not everyone will be quick to change an opinion they form of you while you are in school.
- Get to Know Your Classmates and Your Professors. Building relationships is an important aspect of personal and professional life. It is tempting to just put your head down in school and not spend time trying to form strong bonds. An incredible number of students never meet with their professors or only meet with them right before a project or an exam. Professors and classmates are worth getting to know as an end in and of itself, but can also have tangible benefits like better recommendation letters and client referrals.
- Use Laptops Carefully, If At All. There is a growing body of research that shows taking handwritten notes is better for learning the information than typing. For law students, I understand that it can be helpful to have your notes typed to jumpstart your outlines, but, at the very least, disable your internet connection while in class. We are not as good at multitasking as we think.
- Outline Early and Do Practice Tests. Staying on top of your outlining will give you a bit of time later in the semester to do practice tests. In graduate school, most students can memorize the course materials, but practice applying the material properly is often what propels students into the "excellent" category.
- Work Hard, but Schedule Breaks and Take Care of Yourself. It took me a while to learn this, but you actually perform better when you work hard and take care of yourself. For me, this means at least 7 hours of consistently placed sleep, nutritious meals (including breakfast), exercise at least 4x a week, and one day a week detached from work. Even during law school, I consistently put my books down for one 24-hour period during the week (with an exception for the exam period). Some students need to be reminded to work harder; law school should require the work of a full-time job in my opinion. Other students, however, get caught up in the competition and the rigor, and forget the importance of taking care of themselves.
Hope the fall semester is good to all our readers.
Thursday, August 18, 2016
There has been a lot of debate online about Ryan Lochte (#LochteGate or #LochMess) and whether he and his swimming friends were actually robbed in Rio after their Olympic events had finished. See here, here, and here for some of the commentary.
While I agree that jail time is unlikely based on the facts available at this time, Lochte's endorsements could be at risk. Earlier this year, I blogged about morals clauses in endorsement contracts. If Lochte's contracts include morals clauses (as many do), and if he lied about the robbery, it is possible that he may lose some lucrative endorsements deals. It is still not clear what the motive for lying was (if they did lie). I assume we will learn more in the next few days.
Update: Speedo and Ralph Lauren dropped (or are not renewing) sponsorship of Ryan Lochte. Spokespeople for both companies cited Lochte's statements about the occurrence in Rio. My wife let me know that some are now calling Lochte "Swim Shaddy."
Friday, August 12, 2016
In the spring of 2012, around the time that Facebook purchased Instagram for roughly $1 billion, I was teaching an M&A class.
At the time, I had difficulty explaining why Facebook would pay that amount of money for a company that was not only not profitable, but also had no revenue. I spoke as someone trained to use multiples EBITDA and as someone who did not (and still does not) have an Instagram account.
Now, over four years later, Forbes estimates Instagram's value at $25billion to $50billion. That valuation still requires some creativity, as Instagram had sales of "only" $630 million in 2015. Instagram, however, has added roughly 100 million new users in the last 9 months and is projected to have revenue of $1.5billion this year. While there is reason to be wary of projections, the projected sales for Instagram in 2018 is an impressive $5billion.
This drives home that valuation is as much art as science, and the conventional valuation methods will not work well for every company. In that deal, I imagine Instagram's technology, brand, and the user base were all large value drivers. With the benefit of hindsight, Instagram is looking like a good acquisition for Facebook, even if the current projections end up being a bit optimistic.
Wednesday, August 10, 2016
From an e-mail I received:
The University of Richmond School of Law seeks to fill two entry-level tenure-track positions for the 2017-2018 academic year, including one in corporate/transactional law. Candidates should have outstanding academic credentials and show superb promise for top-notch scholarship and teaching. The University of Richmond, an equal opportunity employer, is committed to developing a diverse workforce and student body and to supporting an inclusive campus community. Applications from candidates who will contribute to these goals are strongly encouraged.
Inquiries and requests for additional information may be directed to Professor Jessica Erickson, Chair of Faculty Appointments, at firstname.lastname@example.org.
Monday, August 1, 2016
The University of Nebraska College of Law is hiring, and business law is one of their areas of interest. See the ad below:
The UNIVERSITY OF NEBRASKA COLLEGE OF LAW invites applications for entry-level and lateral
candidates for one or more tenure-track or tenured faculty positions. Our needs include courses related
• Business Law (e.g., Business Associations; Corporate Finance, Corporate Governance, Insurance Law,
Bankruptcy, Corporate Restructuring, Nonprofit Organizations, Risk Management / Compliance, or White
• Criminal Law (e.g., Federal Criminal Law or White Collar Crime, Criminal Procedure 2, Post-Conviction
Remedies, or Criminal Sentencing);
• Health Care (e.g., Federal Regulation of Health Care Providers, Health Care Finance, Torts,
Administrative Law, Medical Malpractice, Privacy Law, Law and Medicine, Public Health Law, Bioethics
and the Law, and the Law of Provider and Patient);
• Litigation Skills and Related Courses (e.g., Trial Advocacy, Civil Rights Litigation, Pretrial Litigation or
other litigation skills courses, Conflicts of Laws);
• Family Law;
• Education Law; and
• Election Law.
Minimum Required Qualifications: J.D Degree or Equivalent, Superior Academic Record, Demonstrated
Interest in Relevant Substantive Areas. Title of Asst/Assoc/or Full Professor will be based on
qualifications of applicant. Please fill out the University application, which can be found at
http://employment.unl.edu/postings/50660, and upload a CV, a cover letter, and a list of references.
General information about the Law College is available at http://law.unl.edu/. The University of Nebraska-
Lincoln is committed to a pluralistic campus community through affirmative action, equal opportunity,
work-life balance, and dual careers. See http://www.unl.edu/equity/notice-nondiscrimination Review of
applications will begin on August 25, 2016 and will continue until the position is filled. If you have
questions, please contact Associate Dean Eric Berger, Chair, Faculty Appointments Committee,
University of Nebraska College of Law, Lincoln, NE 68583-0902, or send an email to
Friday, July 29, 2016
As in past years, I will maintain lists of law professor openings in the business areas (excluding commercial law-only posts) and legal studies professor openings outside of law schools. If your school has an opening that you would like posted, feel free to contact me.
The law professor openings list uses the PrawfsBlawg spreadsheet, if an alternate link is not provided. Positions added after today will include the date added.
Law School Professor Positions (Business Law Areas)
- Boston University
- California Western (8/10/16)
- Pace University
- Suffolk University (IP & Entrepreneurship Clinic) (8/18/16)
- University of Alabama (8/18/16)
- University of California, Berkeley (8/10/16)
- University of California, Hastings
- University of Georgia
- University of Nebraska
- University of Nevada, Las Vegas
- University of Richmond
- University of Tennessee
- Washington University, St. Louis (Law & Economics)
- William & Mary (8/18/16)
Legal Studies Professor Positions (Outside of Law Schools, Mostly in Business Schools)
- Bentley University
- Bryant University
- Duquense University (VAP or instructor)
- Georgia Southern University (8/18/16)
- Indiana University, Kelley School of Business
- Ithaca College
- Marist College
- Pepperdine University
- Texas State University (8/10/16)
- University of Pennsylvania, The Wharton School (Business Ethics)
- University of Wisconsin, Whitewater (lecturer)
- Western Michigan University
Friday, July 22, 2016
While the Olympics is sure to be heavily watched, the Games are not that lucrative for many of the participants. The average Olympian supposedly only makes around $20,000 a year from sponsorships and has significant travel, medical, and coaching costs.
For those who will be attending the SEALS Conference and are interested in crowdfunding, my co-blogger Joan Heminway is moderating a discussion group on "The Legal Aspects of Small Business Finance in the Crowdfunding Era" on Tuesday, August 9 from 9am-12pm, which promises to be interesting. Most of the Olympic athletes appear to be using gift-based crowdfunding, but in the SEALS discussion group, I will present on a proposal for firms to use equity crowdfunding in connection with building athletic communities that could include Olympic athletes.
Following on Joan's excellent post about networking letters, I wanted to share a few words about thank you letters.
- Level 1 — Email saying thanks for the time and insight.
- Level 2 — Level 1 + this is how your insight impacted my life.
- Level 3 — Handwritten thank you note.
- Level 4 — Level 3 + a small gift.
This seems right, and Kyle's entire post is well worth reading at the link above.
A mere thank you e-mail usually isn't worth much, but it is better than nothing (unless the thank you is typo-riddled, and then it might be worse than nothing). The e-mail is worth more if the author recounts meaningful specifics from your conversation or picks up on a way that he/she might be of assistance.
The handwritten note has made a comeback after interviews, but I don't think it has had the same resurgence after networking/advice meetings. This is a shame because generally the interviewer is just doing his or her job, while the person who is honoring your networking/advice request is usually the one bestowing a true gift. Due to the relative rarity, I think handwritten notes are even more appreciated after a networking/advice meeting than after an interview. For handwritten notes, I think it is worth investing in personalized stationery and trying to remember to send the notes right away so that the delay is not elongated.
As to small gifts, those obviously would not be appropriate after an interview, but might be a really nice touch after a networking/advice meeting. If any readers have good thoughts on appropriate small gifts, please share in the comments or over email. I have always had a hard time thinking of these kinds of gifts. Wine seems like a common choice, but it could be risky unless you know the person drinks alcohol.
Finally, this recent article in the Harvard Business Review entitled Stop Making Gratitude All About You struck a chord. The author suggests praising the recipient rather than just describing how the recipient benefited you or made you felt. Of course, praise should be sincere and can be overdone, but I think the author is onto something.
Thursday, July 21, 2016
My contribution is based on my 2015 West Virginia Law Review article, An Early Report on Benefit Reports, which showed under 10% compliance with benefit corporation reporting, noted problems with the statutory framework, and suggested statutory amendments.
Tuesday, July 19, 2016
David Zaring, who is a professor at Wharton, has the details over at the Conglomerate.
Wharton is open to JD-only, PHD-only, or JD/PHD candidates for this position.
Applications can be submitted here and the application deadline is November 1, 2016.
Friday, July 15, 2016
Robert Esposito (Drinker Biddle) passed along his firm's interesting report on early crowdfunding offerings. The report is available here. Be sure to download the firm level detail spreadsheet available via the data download on the top right of the page.
The report shows that social enterprise and breweries/distilleries account for outsized portions of the early offerings. A group of us (including co-blogger Joan Heminway) predicted, at the University of Colorado's business school in July 2013, that social entrepreneurs would gravitate to equity crowdfunding. Separately, in my social enterprise law seminar, I was surprised by how many students presented on breweries that were social enterprises, and looking at this list it appears that there is at least one company (Hawaiian Ola Brewing Corporation - a Certified B Corporation) that falls into both the social enterprise and brewery categories highlighted below. It may be that both areas appeal to younger entrepreneurs who may also be eager to try this new form of capital raising.
Go read the entire report, but I provide a teaser quote below the dotted line with some emphasis added.
In general. As of June 30, 2016, 50 companies have filed a Form C with the SEC to offer securities under the Regulation Crowdfunding exemption. Minimum target offering amounts range from $20,000 to $500,000 per offering, with a median of $55,000. All but one of these issuers, however, have disclosed that they will accept offers in excess of the target amount, including 27 issuers that say they will accept investments at or near the maximum permitted offering amount of $1,000,000. In contrast, 18 of the first 50 issuers elected to cap their offering at just $100,000, with the remainder setting an offering cap of between $200,000 and $500,000. In the aggregate, if this first wave of retail crowdfundings is successful, 50 small companies will raise an aggregate of $6 to $30 million in new capital to fund their businesses.
While announced offering durations range from 21 days to one year, the median period that issuers say they will keep their offerings open is just under six months, with about half electing an offering duration between 166 and 182 days.
Eighteen different jurisdictions of incorporation are represented among the first 50 issuers; however, nearly half of the initial filers (24) are Delaware entities. Early data shows that issuers tend to be early-stage startups, with a median issuer age of just 354 days. Nevertheless, nine of the issuers were more than five years old, and the oldest was incorporated in 2003. . . .
While a total of 12 funding portals have registered with FINRA to date, the early mover Wefunder portal hosts more than half (26) of the first 50 offerings. The StartEngine portal has secured eight offerings, with the remainder split among other portals, including SeedInvest, Next Seed, Flashfunders, and Venture.co.
- Social Enterprises. According to the Global Entrepreneurship Monitor’s Special Topic Report on Social Entrepreneurship, social enterprises account for only 5.7 percent of entrepreneurial activity in the United States. However, early crowdfunding data shows that social enterprises are strongly represented among crowdfunding issuers. Seven issuers, representing 14 percent of the first 50 offerings, are either registered as benefit corporations or benefit LLCs, or are certified by B Lab as B Corps, and at least an additional nine issuers operate within traditional corporate forms with strong social and/or environmental missions. Combined, these issuers represent 32 percent of the first 50 offerings.
- Raise a Glass. Craft breweries, distilleries, and licensed establishments are also disproportionately represented among the first 50 issuers. Eight issuers, representing 16 percent of the first 50 offerings, fall into this category, including 2 distilleries, 2 craft breweries, 2 bars, as well as a frozen alcohol producer and a producer of ginger liqueur.
Saturday, July 9, 2016
I am stealing Haskell's thunder on this one (at his suggestion) to promote this position at Marist College. Little known facts (other than for folks, like Haskell, who know my family well): my daughter is a Marist Red Fox (that's the school's mascot) having graduated from there with a degree in Media Studies. It's a lovely small liberal arts college in Poughkeepsie, NY. And its new President is David N. Yellen, the former Dean and Professor of Law (criminal law expert) at Loyola University Chicago School of Law. Here are key points from the position announcement (linked to from the first sentence below):
Duties and Responsibilities:
This tenure track position will involve teaching both undergraduate and graduate courses (including online courses) and maintaining a high level of professional activity through research and service in the candidate’s area of emphasis
Candidates must have a commitment to excellence in teaching and research and should have a JD degree and previous experience teaching legal related and business law courses in a School of Management and/or Business. Professional experience as a practitioner is also desirable.
Required Applicant Documents:
Resume, Cover Letter, References
Position Open Date:
Friday, July 8, 2016
Like Anne and Joan, I enjoyed the Berle Symposium and found it incredibly valuable. As they have mentioned, former Chancellor Chandler's presentation was definitely a highlight, and it was affirming to hear Delaware law described as I understand it, if much more eloquently expressed than I have managed. Former Chancellor Chandler appeared to make clear that directors of Delaware firms could be at risk if they admit to taking an action that is not aimed at (eventually) meeting the short or long-term financial interests of shareholders.
Former Chancellor Chandler's description of Delaware law, both in the symposium and in his eBay case, coupled with the law review writings of Delaware Supreme Court Chief Justice Leo Strine, confirm, in my mind, that benefit corporations could be useful, at least in Delaware, for entrepreneurs who want to admit pursing strategies that are not aimed at benefiting shareholders in the short or long run. For example, I think some companies, like Patagonia, make decisions that benefit the environment, even though the directors may honestly believe that financial costs will far exceed financial benefits, even in the long-term.
Interestingly, however, much of what I heard from the B Lab representatives at the symposium was about how benefit corporations can do just as well, if not better, than traditional corporations from a financial perspective. This obviously poses an empirical question that we may get better answers to in the coming years. But if you can "do well by doing good" then then entrepreneurs, even under Delaware law, seem likely to avoid legal problems given the protection of the business judgment rule and the argument that financial benefits will eventually follow from their society-focused actions.
The benefitcorp.net website has a list of reasons to become a benefit corporation, which are:
Reduced Director Liability
Expanded Stockholder Rights
A Reputation For Leadership
An Advantage in Attracting Talent
Increased Access to Private Investment Capital
Increased Attractiveness to Retail Investors and Mission Protection as a Publicly Traded Company
I am a bit surprised that more of these reasons are not focused on societal and environmental benefit (and am not sure why mission protection is limited to publicly traded companies, especially when there are no stand-alone publicly traded benefit corporations today -- though there will likely soon be some soon.) I question whether all of these benefits are true. For example, I have heard mixed things about benefit corporations from investors, and the liability issue is completely untested. But if all of these things are true, and social entrepreneurs do get better access to capital and an advantage attracting employees, etc., then I think the benefit corporation form is less necessary as a legal matter. Maybe the thought is that benefit corporations have expressive value or that they provide an extra layer of protection. But, as a legal matter, if you can justify your social actions by pointing to potential long-term financial benefits, you do not really need a new form, even in Delaware (and, of course, many other states are even more permissive with social actions). Maybe benefit corporation proponents see the real value in the M&A context when facing Unocal/Revlon, but Page & Katz showed ways around those issues, especially if focused on long-term value. Entrepreneurs could also incorporate outside of Delaware, in a state that has expressly rejected Revlon.
Personally, while it is possible for some firms to do well by doing good, I think social entrepreneurs will often be openly sacrificing financial returns---they will be doing good through purposeful financial sacrifice. As such, an benefit corporation option, at least in states like Delaware.
There was quite a lot of good discussion at the Berle Symposium, and I may have more to write about it in later posts.
Tuesday, July 5, 2016
Today, the following business law professor position at Pepperdine University's Seaver College was brought to my attention. Further information is available here and below.
Assistant Professor of Business Law
The business administration division of Pepperdine University seeks a candidate with a terminal degree in law for a tenure-track position in business law. Candidates are expected to complete all requirements for the JD before the date of appointment, which is August 1, 2017. A documented research interest in law is required and teaching experience is preferred. The expected courses taught would be undergraduate classes in business law and international business. The flexibility to teach occasionally in another field is preferred.
The business program at Seaver College, is accredited by The Association to Advance Collegiate Schools of Business (AACSB). USA Today ranked Seaver's business program as the 7th best undergraduate business program in the country. We have approximately 775 undergraduate students in the Business Administration Division. Despite the large number of majors, our classes are small (rarely more than 25 students) and our faculty is collegial and collaborative. The division offers Bachelor of Science degree programs in accounting, business administration, and international business, and a contract major in finance. Degree programs are offered on a full-time, residential basis at the campus in Malibu, California. Seaver College has an enrollment of approximately 3,200 students. Please visit our website for more information.
Pepperdine University was established in 1937 by Mr. George Pepperdine, a Christian businessman, who stressed the desirability of a complete education built on a Christian value system. The institution is committed to the ideals of the founder. Successful candidates also must demonstrate an active commitment to Pepperdine's Christian mission and tradition. Located near Los Angeles in Southern California, Pepperdine University is especially interested in candidates who can contribute through their teaching, research and service to the diversity and excellence of the University and our surrounding community.
Applicants should apply at apply.interfolio.com/35896. A background check will be required as a condition of employment.
For more information, please contact the chair of the search committee:
Keith Whitney (email@example.com )
Chair, Recruiting Committee
Business Administration Division
Seaver College, Pepperdine University
24255 Pacific Coast Highway
Malibu, CA 90263
Friday, July 1, 2016
Today a number of athletes will compete in various track & field events in the Olympic Trials.
One of those events is the qualifying round of the 800m, and one of the 800m runners, Boris Berian, was recently caught in a legal dispute with his old shoe sponsor (Nike) because of his attempt to sign with a new shoe sponsor (New Balance). The story of the dispute even made The Wall Street Journal.
As I understand the timeline from the reporting and legal filings:
- After the 2012 season, Boris dropped out of his division II college (Adams State) to pursue pro-running.
- For a couple of years, Boris struggled to find world class success, and he worked at McDonald's.
- Boris didn't have a real breakthrough until mid-2015, when he ran the fastest time for an American that year.
- On June 17, 2015, shortly after his breakthrough race, Boris signed a short-term exclusive sponsorship deal with Nike (chosen from among many suitors).
- On December 31, 2015, the Nike-Boris contract expired, though the contract gave Nike the right to match any competitor's bona fide offer within 180 days of 12/31/15.
- On January 20, 2016, Boris' agent notified Nike than New Balance had made Boris a 3 year, $375,000 offer ($125,000 per year guaranteed).
- Nike's response to New Balance offer is disputed and at the center of a breach of contract lawsuit that Nike filed on April 29.
- Nike supposedly served Boris with notice of the lawsuit at a track meet.
- In short, Boris claimed that New Balance's $375,000 offer was guaranteed, while Nike's "match" was full of potential reductions. Nike claims that the contract they sent was simply a standard form. Nike claimed that guaranteed money is unusual in track contracts and Boris' agent had not shown proof of the lack of reductions in New Balance's offer, and that if the lack of reductions was proven, Nike would have matched those terms within the deadline.
- On June 7, a judge granted Nike's TRO, restraining Boris from competing in non-Nike gear until June 21.
- On June 22, a judge declined to extend the TRO and stated that he would rule on June 29.
- On June 23, Nike dropped its lawsuit (without prejudice), claiming that they wanted to "eliminate this distraction for Boris" given the upcoming Olympic Trials.
- On June 30, Boris Berian signed with New Balance.
In the fall of 2014, Robert Bird (UConn) and David Orozco (Florida State) published a nice short article in the MIT Sloan Management Review entitled Finding the Right Corporate Legal Strategy. This has been a key article in the growing Law & Strategy area. The article notes five main legal strategies; "The five, in order of least to greatest strategic impact, are: (1) avoidance, (2) compliance, (3) prevention, (4) value and (5) transformation."
This Nike v. Boris Berian situation, in my opinion, is an interesting example of the use of corporate legal strategy. In particular, Nike appears to be using litigation as a move for firm-wide value (#4 on the Bird & Orozco list).
Why did Nike sue? In my opinion, Nike likely sued not just because they believed Boris breached the contract, but also to send a message to its other athletes that Nike "plays hardball." This message may have been especially important given Kara Goucher's doping allegation against the Nike Oregon Project and its coach; a number of prized Nike athletes may have been watching Boris' situation and may have defected (right before the Olympics!) if Boris was treated with a light touch. Also, especially given that Boris claimed that he would rather sit out that run for Nike, perhaps Nike was simply trying to distract what could soon be a potential star for its competitor New Balance. While Nike has a number of track athletes with the star power of Boris, New Balance has a shallow bench of star track athletes and a good bit would ride on Boris' performance for NB. If Boris medals, especially with his McDonald's to track star story, that could be a huge deal for New Balance. Nike, on the other hand, has a absurd number of track stars with good stories and a high likelihood of medaling.
Why did Nike drop its lawsuit? I think the press was getting worse for Nike than Nike originally imagined. Also, perhaps the case was not resolving as quickly as Nike had guessed, and if Nike pursued the lawsuit into the Olympic Trials, the negative coverage may have exploded. That said, Nike must have known the coverage was going to be negative, so I imagine that factored into their original calculation, to some degree. Their lawyers might have gotten the impression that the judge was not going to rule in their favor when he decided against extending the TRO, so maybe Nike decided to try to win back some fans by dropping the lawsuit voluntarily. I agree with this author, eliminating the distraction for Boris was likely not Nike's main motivation, if so, they would have not sued him during the Olympic Trials build-up. As any runner knows, the months before a meet are much more important than the week before (at least as a physical matter). More likely, and perhaps unanticipated at the filing of the lawsuit, 19-year old Donavan Brazier of Texas A&M announced that he was turning pro just a few days before Nike dropped its lawsuit. Brazier, who had recently won the NCAA championships in the 800m in record time, was probably even a bigger signing target for Nike than Boris. By dropping the lawsuit, Nike may have been able to come off as altruistic to Brazier (saying something like - we had legal grounds to pursue the Boris lawsuit, but we want to do what is best for our current and former athletes). A few days after Nike dropped the lawsuit, Brazier signed with Nike. In addition, around the same time, Nike also signed another 800m star, Clayton Murphy. Both Braizer and Murphy were underclassmen and it was uncertain, until recently, whether they would turn pro. Not only did dropping the lawsuit against Boris likely help Nike in pursuing these two young athletes, but the recent strength of these athletes in the 800m made it possible that Boris would not even make the team, much less medal in Rio.
Personally, I think Boris is going to race well today (we will know in a few hours) and over the next few days, but maybe the stress of the legal battle took a toll. Brazier and Murphy and the entire field will both be tough, but the field will be a bit more open given that two-time Olympian Nick Symmonds scratched from the 800m Olympic Trials field with an injured ankle. Boris has the best qualifying time (1:43:34 v. 1:43:55), but Brazier has the best time this season (1:43:55 v. 1:44.20). Should be exciting to watch and now you know the legal background.
Finally, perhaps of interest to some readers, Boris Berian was using crowdfunding to pay for his legal defense. Boris even got this shout-out from Malcolm Gladwell on Twitter: "Nike earned 30 billion in 2015. Berian was flipping burgers at McDonalds two years ago. Isn't one bully in American public life enough?"
Update #1: In one of the biggest surprises of the Trials, Donavan Brazier was knocked out in the first round of the 800m, running roughly 5 big seconds slower than he did in the NCAA Championships. Boris Berian won his heat. Nike was diversified with Clayton Murphy who won his heat, and Nike also had four others who qualified for the next round in the 800.
Update #2: Boris Berian led his 800m semi-final from start to finish. Looked strong. Clayton Murphy won the second semi-final race, in a bit slower race, but he also looked strong. Finals are Monday.
Update #3: In the finals, Boris Berian grabbed the lead around 400m and held on until the final 10m or so. He placed second to Clayton Murphy (Nike) who out-kicked him. Charles Jock (Nike OTC) finished third. Those top three finishers will represent the US in Rio in the 800m.
Update #4: After getting 4th in one of his heats and needing to qualify on time rather than automatically, Clayton Murphy won the U.S.A.'s first medal in the 800m in 24 years. Murphy grabbed third place over the last 50m, and Boris Berian faded to 8th after going out fast. Berian looked strong in his heats, qualifying automatically for the final, but perhaps he did not have the necessary endurance. Clayton Murphy's specialty was the 1500m prior to the Olympics, so he likely had a stronger base. Looks like Nike hedged well and got quite the payoff from signing Murphy. All of that said, Dave Wottle (former Dean of Admissions at my alma mater, Rhodes College) still ran the most exciting 800m race ever. Watch Dave Wottle come from last place to win gold in the 1972 Olympics.
Monday, June 27, 2016
I am still at Berle VIII with Haskell Murray and Anne Tucker. One more day of my June Scholarship and Teaching Tour to go--and I have a final presentation to do. Then, back to Knoxville to stay until late in July. Whew!
As you may recall or know, my Berle appearance this week follows closely on the heels of a talk on the same work (on corporate purpose and litigation risk in publicly held U.S. benefit corporations) that I made at last week's 2016 National Business Law Scholars conference. While I am thinking about this conference, please join me in saving the date for the next one: the 2017 National Business Law Scholars conference. Next year's conference will be held June 8-9 at The University of Utah S. J. Quinney College of Law, with Jeff Schwartz hosting. I will post more information and the call for papers, etc. once I have it.
June 27, 2016 in Anne Tucker, Business Associations, Conferences, Corporate Finance, Corporate Governance, Corporate Personality, Corporations, CSR, Haskell Murray, Joan Heminway, Research/Scholarhip, Teaching | Permalink | Comments (0)
Friday, June 24, 2016
Recently, I came across this discussion on Poverty Inc. by Bill Easterly (NYU Economics) and the film's creators (Michael Matheson Miller and Mark Weber). I posted on one of Bill Easterly's books here.
In the discussion at NYU, I especially liked this quote from Michael Matheson Miller: "We tend to treat poor people as objects--as objects of our charity, objects of our pity, objects of our compassion.--instead of subjects...Poor people are not objects; they are subjects and they should be the protagonists in their own stories of development." The personal story Mark Weber tells of his trip while he was studying at Notre Dame was moving, but you will have to watch the discussion to hear it, as it would be tough to summarize. Some of the audience questions are a bit long-winded, but I think the panel does a nice job deciphering and answering.
The film's trailer, the discussion, and the Q&A with the audience are all worth watching.
Monday, June 20, 2016
Having helped a few Tennessee bar applicants get straight on their knowledge of agency, unincorporated business associations, and personal property law last Friday at my BARBRI lecture (such a nice group present at the taping to keep me company!), it's now time for me to wrap up my June Scholarship and Teaching Tour with a twofer--a week of travel to two of my favorite U.S. cities: Chicago, for the National Business Law Scholars Conference and Seattle for Berle VIII. At both events, I will present my draft paper (still in process today, unfortunately) on publicly held benefit corporations, Corporate Purpose and Litigation Risk in Publicly Held U.S. Benefit Corporations. Here's the bird's-eye view from the introduction:
Benefit corporations—corporations organized for the express purpose of realizing both financial wealth for shareholders and articulated social or environmental benefits—have taken the United States by storm. With Maryland passing the first benefit corporation statute in 2010, legislative growth of the form has been rapid. Currently, 31 states have passed benefit corporation statutes.
The proliferation of benefit corporation statutes and B Corp certifications can largely be attributed to the active promotional work of B Lab Company, a nonprofit corporation organized in 2006 under Pennsylvania law that supports social enterprise (“B Lab”). B Lab works with individuals and interest groups to generate attention to social enterprise generally and awareness of and support for the benefit corporation form and B Corp certification (a social enterprise seal of approval, of sorts) specifically. B Lab also supplies model benefit corporation legislation, social enterprise standards that may meet the requirements of benefit corporation statutes in various states, and other services to social enterprises.
Benefit corporation statutes have not, by and large, been the entity law Field of Dreams. Despite the legislative popularity of the benefit corporation form, there have not been as many benefit corporation incorporations as one might expect. In the first four years of benefit corporation authority, for example, Maryland reported the existence of fewer than 40 benefit corporations in total. Tennessee’s benefit corporation statute came into effect in January 2016, and as of May 2, 2016, Secretary of State filings evidence the organization of 26 for-profit benefit corporations. However, a review of these filings suggests that well more than half were erroneously organized as benefit corporations. Colorado, another recent adopter of the benefit corporation, does appear to have a large number of filings (90 in total as of June 12, 2016 based on the list of Colorado benefit corporations on the B Lab website). However, as with Tennessee, a number of these listed corporations appear to be erroneously classified. These anecdotal offerings indicate that published lists of benefit corporations—even those constructed from state filings—over-count the number of benefit corporations significantly.
Research for this article identified no publicly held U.S. benefit corporations. For these purposes (and as referenced throughout this article), the term “publicly held” in reference to a corporation is defined to mean a corporation (a) with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (“1934 Act”), or (b) otherwise required to file periodic reports with the Securities and Exchange Commission under Section 13 of the 1934 Act. Yet, benefit corporations may be subsidiaries of publicly held corporations (as Ben & Jerry's Homemade Inc., New Chapter Inc., and Plum, PBC have demonstrated), and corporations certified as B Corps have begun to enter the ranks of publicly held corporations (perhaps Etsy, Inc. being the most well known to date). It likely is only a matter of time before we will see the advent of publicly held U.S. benefit corporations.
With the likely prospect of publicly held U.S. benefit corporations in mind, this article engages in a thought experiment. Specifically, this article views the publicly held U.S. benefit corporation from the perspective of litigation risk. It first situates, in Part I, the U.S. benefit corporation in its structural and governance context as an incorporated business association. Corporate purpose and the attendant managerial authority and fiduciary duties are the key points of reference. Then, in Part II, the article seeks to identify the unique litigation risks associated with publicly held corporations with the structural and governance attributes of a benefit corporation. These include both state and federal causes of action. The reflections in Part III draw conclusions from the synthesis of the observations made in Parts I and II. The closing thoughts in Part III are intended to be of use to policy makers, academic observers, and advisers of corporations, among others.
As Haskell mentioned in an earlier post, he and Anne and I will be together at the Berle VIII event. What a great way to end my June tour--with my friends and colleagues from the Business Law Prof Blog! I look forward to it.