Friday, May 22, 2015
Each summer, I try to read a few books related to work and a few books not related to work.
This summer, I have tagged Tamar Frankel's Trust and Honesty: America's Business Culture at a Crossroad and Flannery O'Connor's Everything That Rises Must Converge.
Open to other reading suggestions in the comments. I have a pretty deep "want to read" list, but am always looking for more additions.
I am also listening to a Yale online course called Philosophy and the Science of Human Nature, taught by Tamar Gendler. I am already more than halfway finished with the course - mostly listening in the car or while doing various chores. While I did not take any Philosophy courses in college, much of the material is more familiar than I would have thought. These open courses have been fun, and I am open to suggestions of other good courses.
Thursday, May 21, 2015
My former research assistant Sam Moultrie and his colleague Andrea Schoch Brooks have authored a short article entitled "Defining a Proper Purpose for Books and Records Actions in Delaware."
The article unpacks two recent Delaware books and records cases: AbbVie and Citigroup. Worthwhile reading for those who wish to stay current on this area of the law.
Friday, May 15, 2015
Low pay, however, is only one of many problems facing low-wage earners.
After hearing Charlotte Alexander (Georgia State) present on this co-authored paper - Stabilizing Low-Wage Work: Legal Remedies for Unpredictable Work Hours and Income Instability – I have become convinced that unpredictable work hours is a significant issue. The article is well worth reading.
Unpredictable work hours can be problematic for many people – attorneys in BigLaw for example – but low-wage earners do not have disposable income to throw at the problem. Childcare and transportation, for example, become even more of a challenge when work hours are not stable and not set in advance. Unpredictable, inconsistent work hours also hamper economic mobility by making it difficult or impossible to take classes or get a second job.
For more on this issue, listen to MIT Operations Management Professor Zeynep Ton’s talk at the Aspen Institute. Her discussion of Mercadona, a low-cost supermarket based in Spain (discussion starts at 14:50), and QuickTrip, a convenience store with gas stations (discussion starts at 17:30) was quite interesting. Corporate social responsibility often seems dominated by high-end companies like Patagonia and Whole Foods. It is easier to be socially responsible when you are charging $700 for a jacket or 39% more on certain food items (according to one study in Boston). Mercadona, however, offers some of the lowest prices in Spain. Mercadona employees receive their schedules one month in advance and have stable schedules. Mercadona also pays almost double the minimum wage (plus a bonus). As a result, Mercadona’s turnover is an extremely low 3.4%. Likewise, QuickTrip seems to compete well on price, but also appears to take relatively good care of its employees.
Individual firms could and should address this issue of unpredictable work hours voluntarily, but the market may prove ineffective in this area and legislative action may be needed.
Friday, May 8, 2015
On May 12, 2015, I will present at a breakout session of the Center for Nonprofit Management's 8th Annual Bridge to Excellence Nonprofit Conference. My talk will focus on the legal issues facing entities with multiple bottom lines.
If interested, you can register here.
As you can tell from the conference description, this conference is designed for nonprofit and community leaders. From the conference schedule, it appears that I will be the only professor presenter. While I enjoy academic conferences, and find them useful, I also think it is important for professors to engage with practitioners. Professors should share the knowledge they have uncovered and should also listen to the current, practical concerns.
Thursday, May 7, 2015
This coming Monday, I will be presenting – virtually – at the above titled conference. My piece of the presentation will cover my recent research on benefit corporation reporting.
Further information is available here and reproduced below. Personally, I am looking forward to hearing from the many impressive speakers, including Sara Burgess, the Regulator of Community Interest Companies in the UK.
May 11, 2015
08:00 AM - 06:00 PM ET
Morgan Lewis, in conjunction with the Impact Investing Legal Working Group, invites you to join us for an exclusive all-day conference featuring panels of leading lawyers who work in the area of impact investing—in business, academia, government, multilateral development institutions, and nonprofit organizations and foundations.
Topics will include:
How are investors aggregating capital for impact investing?
What are the newest social finance innovations in impact investing?
How can we build a robust legal community of practice in impact investing?
How can we advance the development of regulatory regimes and government policies that promote impact investing?
8:00 - 8:30 AM | Registration
8:30 - 6:00 PM | Program
6:00 PM | Networking reception
CLE credit in CA (1.25 hours), FL, IL, MA, NY, NJ, PA, VA, and TX is currently pending approval.
For more information/registration
Please contact Gail Sobha Lynes at +1.617.951.8607 or email@example.com.
Wednesday, May 6, 2015
This article builds on Ben's previous, extensive and well-regarded research on family businesses. Ben's analysis of the relationship between family businesses and wealth inequality is carefully done and thought-provoking. The abstract is posted below, and I recommend reading the entire article.
Wealth inequality endangers democratic values and calls for a public response. This Article contends that family businesses merit special scrutiny because they control vast amounts of private wealth and combine two of society’s most important economic institutions: family and business. Accordingly, family businesses implicate concerns regarding both inherited wealth and the concentration of economic power made possible by the corporate form.
Despite their economic significance, little has been done to investigate whether family businesses contribute to wealth inequality. This Article offers the first legal, and one of the only academic, treatments of the topic and shows that family businesses play a double role. On the one hand, family businesses reinforce existing disparities in wealth and opportunity. Heirs, after all, stand to benefit from the hard work of previous generations. On the other hand, family businesses can be a powerful antidote to inequality, disrupting entrenched class hierarchies and creating opportunities for individuals, families, and ethnic communities.
This Article concludes that whether family businesses produce net social costs or benefits depends crucially on two principal factors. First, to the extent there is a lack of public investment in social mobility, family businesses can increase the distribution of wealth by providing needed investments in human capital. Second, to the extent the rewards of capitalism are not widely shared, family businesses can offer a source of opportunity, not just for family members, but also for employees and the communities in which family businesses operate. Thus, family businesses should not be viewed in isolation; a comprehensive response to the problem of wealth inequality must involve the state, the family, and the market.
Friday, May 1, 2015
- welcoming new hires into the academy (or to their new positions) and
- providing a summary of the state of the legal academic hiring market
As a curious law firm associate, with hopes of an academic career, lists of this type were especially valuable in shining light on the qualifications of new academic hires.
While the lists of law professor hires seem well-covered elsewhere, I have not seen similar hiring lists for legal studies professor hires in business schools. For this first edition, I am simply pasting the material sent to me via e-mail or in the comments. I will cover full-time entry level or lateral hires in this list, but may split them into separate posts in future years. I will continue to update this list periodically until the new hires start in August, as some business schools may still be hiring.
Details below the page break.
Professor Todd Haugh (Indiana University - Kelley School of Business) will be joining us as a guest blogger for the month of May. Todd is an assistant professor of business law & ethics and has focused his research on white collar crime and sentencing. His most recent work deals with "the financial crisis and how white collar offenders rationalize their conduct." We welcome Todd to the Business Law Prof Blog and look forward to his posts.
Almost three years ago, I helped organize a conference on social enterprise law. (The law review members, especially Rachel Bauer and Sam Moultrie, were responsible for most of the organizing and did an excellent job).
My co-bloggers Joan Heminway and Marcia Narine were among the speakers.
Also joining us was Michael Pirron of Impact Makers, one of the first certified B corporations in Virginia. While Impact Makers was a certified B corporation at the time of the conference, it was organized as a Virginia nonstock corporation; now Impact Makers is organized as a benefit corporation. Michael did an excellent job serving as a panelist and the keynote speaker.
Recently, I saw Michael back in the news. He transferred ownership of his company (valued at approximately $11.5 million) to two foundations. As Michael mentioned to me over e-mail, this was not a radical departure from his previous business model for Impact Makers. Previously, Impact Makers donated 100% of its profits to area charities, so this move just formalized their previous commitment. Impact Makers has given away approximately $1 million to date.
At the University of Connecticut social enterprise and entrepreneurship conference I attended and presented at last week, Mike Brady (Greyston Bakery) and Jeff Brown (Newman's Own) presented. Jeff called Newman's Own a "grandfather of social enterprise" Both companies started business in 1982, well before heavy use of the term "social enterprise."
Also, both Greyston Bakery and Newman's Own appear to have adopted a structure where a foundation owns the stock of their for-profit company. You can learn a bit more about the structure of Newman's Own here. Greyston Bakery's annual reports are here and you can view a video about Greyston Bakery (and their client Ben & Jerry's).
From a legal perspective, Greyston Bakery and Impact Makers are benefit corporations, under New York and Virginia law respectively (in addition to being certified B corporations.) Newman's Own, however, is a traditional c-corporation. With foundations owning 100% of the stock, the benefits of using the benefit corporation form are likely limited. There still may be some branding value and most benefit corporation statutes require consideration of a broad group of stakeholders, which might prevent the foundation from focusing on a smaller subset of stakeholders. That said, shareholders are the one expected to bring lawsuits to enforce this consideration requirement in the benefit corporation statutes, so as a practical matter, the benefit corporation and c-corporation forms may operate similarly when wholly-owned by one or more foundations.
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 firstname.lastname@example.org . 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.