Monday, May 23, 2016

Benefit Corporation M&A - The (In)Sufficiency of Financial Fairness

Well, given that I just spent several hours constructing a somewhat lengthy post that I apparently lost (aargh!), I will keep this relatively short.

This summer, I am working on a benefit corporation project for the Annual Adolf A. Berle Symposium on Corporation, Law and Society (Berle VIII) to be held in Seattle next month.  In that connection, I have been thinking about litigation risk in public benefit corporations, which has led me to consider the specific litigation risks incident to mergers and acquisitions ("M&A").  I find myself wondering whether anyone has yet done a benefit corporation M&A transaction and, if so, whether a checklist might have been created for the transaction that I could look at.  I am especially interested in understanding the board decision-making aspects of a benefit corporation M&A transaction. (Haskell, maybe you know of something on this . . . ?)

Preliminarily, I note that fairness opinions should not carry as much weight in the benefit corporation M&A approval context, since they only speak about fairness "from a financial point of view." Benefit corporation boards of directors must consider not only the pecuniary interests of shareholders in managing the firm, but also the firm's articulated public benefit or benefits (which is/are set forth in its charter).  Will legal counsel pick up the slack and render an opinion that the board's consideration of the public benefit(s) complies with law?  What diligence would be required to give that opinion?  I assume in the absence of interpretive decisional law, any opinion of that kind would have to be qualified.  I also assume that legal counsel will not readily volunteer to give this kind of opinion.

However, even in the absence of an opinion, legal counsel will have to offer advice on the matter, since the board of a benefit corporation has the legal obligation to manage the firm consistent with its public benefit(s) in any case.  Moreover, M&A agreements typically include representations (on transactional consents, approvals, and governance/legal compliance) affirming that the requisite consents and approvals for the transaction have been obtained and that the agreement and consummation of the transactions contemplated by it do not violate the firm's charter or applicable law.  Legal counsel will be responsible for counseling the client on these contractual provisions.

At first blush, the embedded issues strike me as somewhat complex and fact-dependent.  Important facts in this context include the precise language of the applicable statutory requirements, the nature of the firm's public benefit or benefits, the type of M&A transaction at issue and the structure of the transaction (including which entity survives in a merger), and the identity of the other party or parties to the transaction (especially whether, e.g., a merger partner is organized as a public benefit corporation or another form of entity).  As I continue to ponder these and related matters in the benefit corporation M&A setting, I invite your comments on any of this--or on broader aspects of litigation risk in the public benefit corporation environment. 

May 23, 2016 in Corporate Finance, Corporations, Haskell Murray, Joan Heminway, M&A, Social Enterprise | Permalink | Comments (2)

Monday, May 16, 2016

Title III Crowdfunding is LIVE!

OK.  I count 17 Form C filings (not including a few amended filings, two of which are noted below) on "Day 1" of U.S securities crowdfunding.  Not a bad showing for the first day out, in my view.

First in line? Bloomery Investment Holdings, LLC with an offering of LLC interests on StartEngine Capital LLC.  The firm filed its Form C a bit after 6:30 AM.   Early risers!  Eager beavers!  (Maybe too eager, since an amendment was filed less than two hours later--apparently because the attendant Form C .pdf was rejected in the initial filing.)  The firm's subsidiary is a moonshine-based liqueur producer.  At this writing, $11,700 of the target threshold funding of $300,000 (1000 units at $300 per unit) has been committed--$288,300 to go!  ($600 came in while I was typing this post.)  And it looks like the base of operations is in West Virginia, Josh!  Do you know these folks?  (Slogan: "Take a Shot on Us.")

StarEngine also is hosting another crowdfunded offering filed today.  The issuer on this offering, GameTree PBC (yes, Haskell, a public benefit corporation!), a social network for gamers based in Solana Beach, California.  GameTree is selling common stock at $2 per share and has set a threshold funding target of $100,000.  As of this writing, the firm had raised $8,360--$91,640 to go.  The Form C filing for this offering also was amended.  The reason? "Needed to re-upload campaign screen shots. First upload did not work."  So, it seems there may be some glitches--or at least propensities for operator error.

This is pure spectator sport for me right now.  I am interested to see that issuers are actually fling and that offerings are attracting some financing commitments.  But some of what I am reading is pretty funny stuff.  I don't have time to do a play-by-play on any of these filings (too busy a week this week).  I must admit that I am especially amused by this "financial risk factor" in the GameTree materials:

Management has no experience managing companies with publicly traded securities.

The legal issues related to public securities are Byzantine and myriad. While it is our intention to follow the law as we understand it and seek the advice necessary to follow best practices, we recognize that mistakes with negative financial results to investors can occur. Crowdfunding is a new method for raising capital and laws are quickly changing and evolving. Changes in securities law may void and/or alter equity arrangements with shareholders.

I just had to quote that one here . . . .  I nearly fell off my chair laughing.  And here is the GameTree risk factor on benefit corporation status, so Haskell can have something to look at and consider:

GameTree is a public benefit corporation and thus may engage in activities in pursuit of its public benefit at the expense of financial gain.

Unlike traditional corporations in which operations and business goals are tied exclusively to the pursuit of profit, GameTree may also take actions in alignment with its stated public benefit at the expense of profit maximization. It is still a for­profit corporation in distinction from a charitable non­profit which has a benefit as its sole purpose.

These disclosures are not what I would've drafted in either case.  But neither disclosure is inaccurate, in my view.  And each is relatively simple.  

It will be interesting to continue to look at some of the SEC filings and related online disclosures as time passes.  I hope to be able to devote additional time to that after I have finished grading exams and papers.  In the mean time, I would enjoy reading your reactions here.

May 16, 2016 in Agency, Crowdfunding, Joan Heminway | Permalink | Comments (2)

Tuesday, May 10, 2016

Save the Date - Washington & Lee Symposium Honoring Two of Business Law's Greatest Scholars

This is just to give everyone a "heads up" on a symposium being held this fall (Friday, October 21 and Saturday, October 22) to honor Lyman Johnson and David Millon.  The symposium is being sponsored by the Washington & Lee Law Review (which will publish the papers presented), and I am thrilled to be among the invited speakers.  I will have more news on the symposium and my paper for it as the date draws nearer.  But I wanted everyone to know about this event so that folks could plan accordingly if they want to attend.  I understand Lexington, Virginia is lovely in late October . . . .  Actually, it's always been lovely when I have been up there! And the honorees and contributors are a stellar group (present company notwithstanding).  I hope to see some of you there.

May 10, 2016 in Business Associations, Conferences, Corporate Governance, Corporations, Joan Heminway, Unincorporated Entities | Permalink | Comments (0)

Monday, May 9, 2016

Monday Business Law Fun: Goldilocks, Consumer Protection, and Over-Caffeinating

[Please keep in mind as you read this post that my daughter is a Starbucks partner.  Any pro-Starbucks bias in this post is unintended.  But you should factor in my affiliation accordingly.]

Maybe it's just me, but the publicity around the recent suit against Starbucks for putting too much ice in their iced beverages made me think of Goldilocks and her reactions to that porridge, those chairs, and those beds.  First it was McDonald's, where the coffee was too hot.  Now it's Starbucks, where the coffee is too cold--or, more truthfully, is too watered down from frozen water . . . .  (And apparently I missed a Starbucks suit earlier this year on under-filing lattes . . . .)  

Different types of tort suits, I know.  I always felt bad about the injury to the woman in the McDonald's case, although the fault issue was truly questionable.  The recent Starbucks case just seems wrong in so many ways, however.  This is a consumer dispute that is best addressed by other means.  I admit to believing this most recent suit is actually an abuse of our court system.

How might a customer who is truly concerned about a substandard beverage attempt to remedy the wrong?

Continue reading

May 9, 2016 in Commercial Law, Current Affairs, Joan Heminway, Lawyering, Litigation | Permalink | Comments (0)

Friday, May 6, 2016

Institute for Law Teaching and Learning 2016 Summer Conference: Real-World Readiness

The Institute for Law Teaching and Learning 2016 summer conference is focusing on "the many ways that law schools are preparing students to enter the real world of law practice."  The conference is being held at Washburn University School of Law.  The agenda and registration information are available here.

May 6, 2016 in Conferences, Joan Heminway, Law School, Teaching | Permalink | Comments (0)

Wednesday, May 4, 2016

Keynote Speakers Announced for Emory Law Conference on Transactional Law and Skills

I am looking forward to attending and presenting at Emory University School of Law’s upcoming conference (June 10-11) focused on the art and science of teaching transactional law and skills.  I received word yesterday from Sue Payne, the Executive Director of Emory Law's Center for Transactional Law and Practice, that the keynote speakers for the conference are "the dynamic duo of Martin J. Katz and Phoenix Cai will deliver a keynote address entitled – 'Encouraging this Particular Form of (Very Fun) Madness – Roles for Deans and Faculty Members.'" The notice se sent to me on the keynote speakers offers the following information about Professors Katz and Cai and the conference as a whole:

Marty Katz is Dean and Professor of Law at the University of Denver, Sturm College of Law. Under his leadership, Denver Law developed and implemented a major strategic plan that included initiatives in experiential learning and specialization. He is a founding board member of Educating Tomorrow’s Lawyers, a national consortium of law schools that serve as leaders in the experiential education movement. Dean Katz’s recent publications include “Facilitating Better Law Teaching – Now” (Emory Law Journal) and “Understanding the Costs of Experiential Legal Education” (Journal of Experiential Learning).    

Phoenix Cai is the founding director of the Roche International Business LLM Program and Associate Professor of Law at the University of Denver, Sturm College of Law. The Roche LLM in International Business Transactions is an intensive and experiential graduate program designed to train both U.S. and foreign lawyers in private transactional law. Prior to joining Denver Law, Professor Cai was a corporate lawyer specializing in both domestic and international mergers and acquisitions, banking, finance, and securities law.

Don’t miss this opportunity to hear Dean Katz and Professor Cai share their thoughts about how deans and faculty members can promote excellence in transactional law and skills education.

For more information about the Conference, including a list of the many other esteemed presenters and the topics they will cover, go to our conference website. If you would like to register for the Conference, please go here.

I hope to see many of you there.  My presentation focuses on teaching the drafting of corporate bylaws.  I will say more on it in this space later.

May 4, 2016 in Conferences, Joan Heminway, Teaching | Permalink | Comments (0)

Tuesday, May 3, 2016

Calling All Secondary Securities Market Aficionados! A Little Help?

What factors generate a healthy secondary market in securities?  That is my question for this week.  I have found myself struggling with this question since I was first called by a reporter writing a story for The Wall Street Journal about a work-in-process written by one of our colleagues, Seth Oranburg (a Visiting Assistant Professor at Chicago-Kent College of Law).  The article came out yesterday (and I was quoted in it--glory be!), but the puzzle remains . . . .

Secondary securities markets have been hot topics for a while now. I followed with interest Usha Rodrigues's work on this paper, for example, which came out in 2013.  Yet, that project focused on markets involving only accredited investors.  

Seth's idea, however, is intended to prime a different kind of secondary market in securities: a trading platform for securities bought by the average Joe (or Joan!) non-accredited investor in a crowdfunded offering (specifically, an offering conducted under the CROWDFUND Act, Title III of the JOBS Act).  [Note: I will not bother to unpack the statutory acronyms used in that last parenthetical expression, since I know most of our readers understand them well.  But please comment below or message me if you need help on that.]  Leaving aside one's view of the need for or desirability of a secondary market for securities acquired through crowdfunding  (which depends, at least to some extent, on the type of issuer, investment instrument, and investor involved in the crowdfunding), the idea of fostering a secondary securities market is intriguing.  What, other than willing buyers and sellers and a facilitating (or at least non-hostile) regulatory environment, makes a trading market in securities?

Continue reading

May 3, 2016 in Corporate Finance, Crowdfunding, Joan Heminway, Securities Regulation | Permalink | Comments (4)

Monday, April 25, 2016

Congratulatons to the Newly Appointed Dean of the J. Reuben Clark Law School at Brigham Young University!

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Although other outlets in the blogosphere (including the blog he founded, The Conglomerate) beat us to the punch by a few weeks (see, e.g., here and here), I want to take time out today to congratulate D. Gordon Smith, currently Glen L Farr Professor of Law at BYU Law, on his appointment as Dean of BYU Law commencing May 1.  (That's this coming Sunday!)

I have had the privilege of working with Gordon a number of times over the years (perhaps most notably in the formation and leadership of the AALS Section on Transactional Law and Skills and with The Conglomerate), and he is a consummate professional.  He represents his institution impeccably as a scholar and servant of the academy and the profession.  He has great judgment and is a kind, considerate soul.  I know that he will be a great leader for BYU Law.

My only regret is that Gordon will likely have to step back from the many leading roles he has had in pushing business transactional law scholarship forward.  His service as a symposium sponsor, conference panel organizer, moderator, discussant, and presenter are so appreciated by me.  [sigh]

Nevertheless, I admit it's great to see another strong business law teacher, scholar, and servant in a law deanship.  I am delighted for him.  And I wish him all the best.

April 25, 2016 in Joan Heminway, Law School | Permalink | Comments (0)

Monday, April 18, 2016

2016 Society of American Law Teachers (SALT) Teaching Conference - Call for Panels and Papers

Call for Panels and Papers


Society of American Law Teachers (SALT) Teaching Conference
in partnership with the
LatCrit-SALT Junior Faculty Development Workshop

SALTlogo

www.saltlaw.org
Friday and Saturday, September 30 and October 1, 2016
The John Marshall Law School, Chicago, Illinois

From the Classroom to the Community: Teaching and Advancing Social Justice

In 2015, law school applications hit a fifteen-year low. The drop reflects a radically changed employment market and a prevailing view that law school is no longer a sound investment. To attract qualified applicants and respond to a changing marketplace, many law schools have embraced experiential learning mandates and other “practice-ready” curricular shifts. The plunge in applications has also prompted law schools to lower admissions standards. In turn, the admission of students with below-average LSAT scores and modest college grade point averages has created new concerns about bar passage, job placement, and prospects for longterm professional success.

In this environment, the legal academy is faced with unprecedented challenges. On one hand, pressure exists to ensure that students are adequately prepared to navigate a courtroom, draft legal documents, and exhibit other “practice-ready” skills upon graduation. At the same time, law professors are urged to cover a wide spectrum of theory, rules, and doctrine to increase prospects for bar passage. In the struggle to achieve both goals, the critical need to integrate social justice teaching into the curriculum is often overlooked, rejected as extraneous, or abandoned in light of time constraints.

To the contrary, social justice teaching plays an essential role in improving legal analysis, enhancing practical skills, and cultivating professional development. Moreover, social justice teaching can help instill passion, commitment, and focus into students burdened with debt and facing an uncertain job market. Most important, as the legal marketplace contracts, access to counsel for lower- and middle-income people continues to grow -- creating a pressing need for effective and committed pro bono lawyers.

In response to new educational and professional challenges, law schools and the legal profession must join in a concerted effort to integrate social justice teaching into the classroom and expand social justice throughout the community. This conference will provide opportunities to engage in broad, substantive, and supportive discussions about the role of legal education and the legal profession in teaching students to become effective social justice advocates and the ways faculty can set an example through their own activism.

Suggested topics include, but are not limited to:

1. Innovative methods to incorporate social justice concepts into the law school curriculum.
2. Strategies to encourage students to become more engaged in academic and community activism.
3. Collaborative efforts between law schools and the legal profession to respond to the need for greater
access to legal services.
4. Techniques to help law students and new lawyers develop resilience, stamina, and “grit” to face the
enduring challenges of social justice advocacy.
5. Responses to the ever-increasing cost of legal education and its impact on social justice and access
to justice.

We welcome other related topics and encourage a variety of session formats. You may submit a proposal as an individual speaker, as a panel, or group. Whatever your topic and format, please use the required format as provided below for your proposal.

Please send your proposals to Hugh Mundy (hmundy@jmls.edu) by June 15, 2016.

Other members of the SALT Teaching Conference Committee include Margaret Barry (mbarry@vermontlaw.edu), Emily Benfer (ebenfer@luc.edu), Davida Finger (dfinger@loyno.edu), Allyson Gold (agold@luc.edu), and Aníbal Rosario Lebrón (anibal.rosario.lebron@gmail.com). Please share information about
the Teaching Conference with your colleagues, particularly new and junior faculty, who are not yet members of SALT. Visit www.saltlaw.org for additional details.

Required Format for Proposed Presentations

Please submit all proposals by using the bolded headings set forth below.

1. Title of proposed presentation

2. Presenter name and contact information

Submit contact information for each individual who will participate in the presentation; however, you must identify one person to serve as the primary contact person. The contact person is responsible for receiving and transmitting information about the SALT conference to the other members of the panel.

Contact person:

Presenter’s school (as listed in the AALS Directory) and mailing address
E-mail
Office phone number
Mobile phone number
Fax number

Other panel members (if applicable):

Presenter’s school (as listed in the AALS Directory)
E-mail

3. Summary of the proposed presentation.

The description or narrative portion of the proposal should accurately and succinctly describe the content, format, and anticipated duration of the presentation. The ideal length of the summary is approximately one page of double-spaced text.

4. Related papers or documents (if applicable).

We do not expect all submissions to include related scholarship or documents- especially at this early point in the process; however, if you have any related documents that help to support or illustrate your proposed presentation, feel free to attach them to your submission.

April 18, 2016 in Call for Papers, Conferences, Joan Heminway, Research/Scholarhip, Teaching | Permalink | Comments (0)

SAVE THE DATE: Central States Law Schools Scholarship Conference

The Central States Law Schools Association 2016 Scholarship Conference will be held on Friday, September 23 and Saturday, September 24 at the University of North Dakota School of Law in Grand Forks, ND.  

CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present working papers or finished articles on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend. 

Registration will formally open in July. Hotel rooms are already available, and more information about the CSLSA conference can be found on our website at www.cslsa.us.

April 18, 2016 in Call for Papers, Conferences, Joan Heminway, Research/Scholarhip | Permalink | Comments (0)

Imagine This: First-Semester Second-Year Students in Your Business Associations Class Who Already Have a Sense of Transactional Practice . . .

This is not a pipe dream!  I honestly believe that in the fall of 2017, this will be a reality for me.  (I typically teach Business Associations in the fall semester to a large number of students who understand "cases," not "deals.")

The reason for my good spirits and honest belief in the positive change in my students?  Our new 1L curriculum, which is rolling out this fall.  No doubt, we will find some changes that need to be made as we implement our relatively bold plan.  But I am truly excited that the new first-year curriculum exposes every student to a transactional experience in the first year of law school.  

There are many reasons for implementing this kind of change, of course.  Among other things, this new approach to the first year at UT Law responds to suggestions that we got from our students and represents an effort to better connect the 1L year to our upper division curriculum (on which we have spent a lot of time over the years).  The new 1L transactional offering is part of a larger plan constructed by a College of Law committee, chaired by my colleague (and e-discovery queen) Paula Schaefer, that spent several years looking at our overall curriculum and that of many other schools before fashioning a number of alternative options for the faculty to review.  

The implementation involves a lot of work.  Many colleagues are chipping in to construct new courses and re-fashion existing courses to meet the new curricular requirements.  It takes a village.  I am grateful for all of the work being put in.  I work with a great bunch of folks.

An article in the National Jurist last week describes the new 1L curriculum in general.  Our academic policies, however, add some detail.  I quote from them below, with some reformatting for easier reading in this space.

For students entering in or after Fall 2016, the first-year curriculum is as follows:

First Semester
Civil Procedure I* (3)
Contracts I (3)
Criminal Law (3)
Lawyering & Professionalism (1) Legal Process I (3)
Torts I* (3)

Second Semester
Civil Procedure II (3)
Contracts II (3)
Legal Process II (3)
Property (4)
Torts II (2)
Transactional Lawyering Lab (1)

*First-year students enroll in an experiential section of either Civil Procedure I or Torts I. The experiential sections include three graded, simulation-based assignments. Each simulation places students in the role of lawyer, raises professionalism issues, requires students to perform a lawyering skill, and results in a written and/or oral work product. In addition to a final examination, the course also includes a midterm exam that includes at least one essay question.

We are pretty excited to get this new curricular show on the road.  I look forward to sharing more with you as we see how students react in the short term and long term.  But my UT Law colleagues and I are very hopeful that this new approach to the first year will lay a strong foundation for upper division academic work and for practice.

 

April 18, 2016 in Business Associations, Joan Heminway, Law School, Lawyering, Teaching | Permalink | Comments (4)

Tuesday, April 12, 2016

So Lucky (And Grateful) in So Many Ways . . . .

There are those I-need-to-pinch-myself moments in life that come along every once in a while.  I was lucky enough to have one last week.  I was invited to attend a conference and comment on two interesting draft papers written by two law faculty colleagues whose work I have long admired and who are lovely people.  And the location was Miami Beach.  Does it get any better than that for a law professor who likes the beach?  I think not.

The event was the annual conference for the Institute for Law and Economic Policy (ILEP).  The conference theme was "Vindicating Virtuous Claims."  The papers will be published in the Duke Law Journal, which co-sponsored the program. 

I will save details on the papers for later (when the papers are finalized).  But I will briefly describe each here.  The first paper on which I commented, written by Rutheford B ("Biff") Campbell (University of Kentucky College of Law), argues for federal preemption of state securities regulation governing the offer and sale of securities, since federal preemption would be more efficient.  The second paper, written by James D. ("Jim") Cox (Duke University School of Law, who was honored at the event and received the most amazing tribute from his Dean, David Levi, at the closing dinner), argues for attaching more value to the normative effects of judicial decisions arising out of indeterminate doctrine (using materiality and the business judgment rule as core examples).  I know that last part is a mouthful, but read it again, and I think you'll get it . . . .

Both papers were intellectually stimulating, and both scholars were quite engaging in their presentations.  The other invited commentators were interesting and thought-provoking.  And the day was filled overall with other interesting academic paper panels and a lively keynote lunch speaker.  Together with the panel discussion on the evolution of Rule 23 and dinner the night before, it was an action-packed, invigorating conference!

 . . . And then there was the time I spent after the conference recollecting myself (and writing student bar recommendation letters).  The weather was cooperative (downright sunny and warm), and the surroundings at the hotel (food, accommodations, etc.) were fabulous.  My Facebook friends got tired of my colorful photos and happy posts, especially since many of those folks were in locales further North and to the East in which it was cold and snowing on Saturday or Sunday.

So, I am taking this opportunity to note and celebrate my good fortune on, and to offer thanks for, being invited to the ILEP conference to comment on the forthcoming scholarly work of two great business law colleagues.  I met some fascinating, pleasant new people among the conference constituents (from the bench, bar, and academy).  And I enjoyed time on a chaise lounge.  [sigh]  But now, it's back to the reality of the final few weeks of the semester.  I wish everyone the best in pushing through.

 

April 12, 2016 in Business Associations, Conferences, Delaware, Joan Heminway, Securities Regulation | Permalink | Comments (0)

Monday, April 4, 2016

A Constructive Resolution to [What Otherwise Would Have Been] Another Ugly Law Review Experience . . .

Imagine this: You open an email message late in the evening from a law review managing editor.  The message includes as an attachment the edited version of an article being published by the law review--or, more precisely--reprinted by the law review.  So far, so good.

But also imagine your surprise when you open the attachment and find that the edits are extensive--more extensive than you had expected.  So, you dig right in to see what's amiss.  The first three modifications are changes to footnote citations.  They are incorrect edits.  As you review the edited draft, you find that most of the suggested changes are erroneous or unnecessary.  Some are even undesirable or undesired (e.g., edits to the text of quoted passages that deviate from the source quoted).  In frustration, you wonder whether you should complete your review of the edits or just, based on what you've read to date, throw in the towel and ask the law review to start all over, reminding the law review managing editor that the article already has been published and, in the process, edited by you and the other journal's editors and staff.

I experienced a version of this law scholar nightmare recently. What did I do?  I completed my review of the edits (which took six solid hours) and sent the law review managing editor my responses under cover of an email message that explained (1) my likely-to-be-interpreted-as-curt tone and (2) the nature of the changes or reversals of changes I made.  I tried to educate through these materials.  But I was worried that the managing editor (with whom I had exchanged productive emails on other subjects, including the reprint permission and the publication agreement) might be angered by or otherwise negatively predisposed against my comments.

What happened next was absolutely super, however.  Later that day, I received a message from the managing editor reading as follows, in relevant part:

Hello Professor Heminway,

Thank you so much for such a detailed and quick response! I understand your concerns, and we will work through the comments and suggestions that you have made. . . .

Your explanations and feedback throughout this process have been both educational and humbling. I appreciate your attention to detail as well as your willingness to ensure that you thoroughly explain your basis of thought behind certain suggestions and concerns. There's no doubt that your students have a lot to learn from you. Thank you for everything.

I was blown away.

I offer this correspondence and this entire story not to toot my own horn for having made the right decision to "stick it out" and offer explanations for my dissatisfaction with the draft that was returned to me by the law review.  Rather, having earlier vented here about the law review editorial process and read similar blog critiques written by others (like this one or this one), I want to offer, as Haskell recently did here, a net positive view of the law review editorial experience with a student-edited publication.  Bloggers here and elsewhere have made many suggestions on how the student editorial process may be able to be improved (see, e.g., here, here, and here).  In the mean time, however, I continue to believe that a bit of patience and good communication can extend the learning experience for student editors in meaningful ways.

April 4, 2016 in Crowdfunding, Joan Heminway, Research/Scholarhip | Permalink | Comments (1)

Tuesday, March 29, 2016

Stanford Corporate Governance Fellowship (Hat Tip to Current Fellow Cathy Hwang)

The Rock Center for Corporate Governance at Stanford University seeks to hire a resident academic fellow to begin in September or October 2016 for a 12-month or one-academic-year term, with the possibility of renewal for a second year. The fellow will pursue his or her own independent research, as well as work closely with Stanford Law School faculty on a range of projects related to corporate governance, securities regulation, vehicles for public and private investment, and financial market reform. The ideal candidate has excellent academic credentials and experience in relevant fields of practice. The position is particularly well suited to a practicing attorney, with either a litigation or transactional background, seeking a transition to academia, or a post-doctoral economics or finance student with interests in corporate governance. More information can be found at https://stanfordcareers.stanford.edu/job-search?jobId=70496

March 29, 2016 in Corporate Governance, Joan Heminway, Jobs, Research/Scholarhip, Securities Regulation | Permalink | Comments (0)

Monday, March 28, 2016

Not All Contract Attorneys Are Alike . . . Or Are They?

There's been a lot of bad press lately about contract lawyers.  Between legal actions for overtime pay and articles in bar publications and elsewhere, it's easy to conclude that all of these warriors in the legal workforce are overworked and underpaid in this post-financial-crisis world.

Yet, I just had a corporate general counsel in my Advanced Business Associations class last week who regularly uses contract counsel and, based on his description, those he works with seem to be a relatively contented lot.  He has gone ahead and hired a few of them (although he notes that some prefer independent contractor status for its flexibility).  So, I wonder whether many of us make the same mistake with the press on contract lawyers that we do with the press on law schools: generalizing a description and drawing conclusions from limited, nonscientific data (i.e., one-sided or narrowly drawn press reports). For one thing, most of what I read focuses on contract lawyers performing e-discovery reviews or rote due diligence.  I know that there are more varied assignments out there (even if those two areas represent most of the territory).

I do know former students who, for a variety of reasons, have worked as contract lawyers after graduation or during a career interruption.  In most cases, this has been intended as and has been in fact a temporary position.  But (although I do not stay in touch with everyone after graduation) I am sure that some have ended up staying in contract lawyering longer than they had planned . . . or wanted.  Still, I have not heard about any abusive behavior or unusually long hours.  I have heard complaints about the routine and unstimulating nature of much of the work.

What information do you have about contract lawyers?  Are they a uniformly mistreated lot because employers--especially maybe Big Law and other large firms--take advantage of them and view them only as low-cost, low-quality providers of legal services?  How often do those who use contract lawyer services hire the lawyers in as employees?  How many contract lawyers continue in that role for more than two years?  Let me know what you know.

March 28, 2016 in Joan Heminway, Jobs | Permalink | Comments (0)

Tuesday, March 22, 2016

Microfinance and Crowdfunding

Jet lag prevented me from posting this yesterday.  (Yes, I am scheduled to be the BLPB every-Monday blogger going forward.)  But at least I am awake enough now to post a bit more on the 7th International Conference on Innovative Trends Emerging in Microfinance (ITEM 7 Conference) I attended last week in Shanghai, China.  My initial post on Wednesday provided some information on Chinese microfinance and the initial day of the conference.  This week, my post focuses on definitional questions that I have been pondering relating to my participation in this series of conferences.  Specifically, I have been sorting through the relationship between microfinance and crowdfunding.  My understanding continues to evolve as I become more familiar with the literature on and practice of microfinance internationally.

At the conference, one of the participants noted that while microfinance and crowdfunding appear to be mutually reinforcing, they still do not enjoy comfortable relations in scholarship and practice.  After weighing that statement for a moment, I had to agree.  I actually have been personally struggling with the nature of the relationship between the two for a few years now.  (I often wonder whether folks like co-blogger Haskell Murray who commonly work in the social enterprise space have this issue in talking about the relationship between social enterprise and corporate social responsibility . . . .)

Two years ago at the ITEM 5 Conference, I posited that crowdfunding could be a vehicle for microfinance.  The establishment of this point required defining both microfinance and crowdfunding--in each case, no small task.  To enable the audience to understand my observation, I used a broad definition of microfinance that focuses on financial inclusion (like the one found here).  I believed after my presentation that I had made the point well enough.

Yet, something still niggled at me after the presentation and conference were long gone.  I kept feeling as if I had inserted a square peg into a round hole.  Something was just a bit off.  Part of the issue is, no doubt, the fact that my observation was incomplete.  Microfinance is bigger than crowdfunding, and not all crowdfunding is microfinance, even under a broad definition.  So, picture a venn diagram like the one below.

VennDiagram

The red point of intersection illustrates crowdfunding's place as a means of conducting microfinance.  This leaves part of microfinance to be handled through other types of financing (e.g., microcredit).  It also leaves part of crowdfunding to other capital-raising uses.  This conception of the relatonship between microfinance and crowdfunding is undoubtedly more complete.

The importance to microfinance of the non-microfinance part of crowdfunding was confirmed at our microfinance site visit last week in Shanghai.  Our host for the visit explained, in response to my question about the relationship of microfinance to crowdfunding in China, that crowdfunding typically is seen as an alternative to, rather than a means of, microfinance in China.  He noted that equity crowdfunding is uncommon (although growing) in Chinese small business finance overall because the number of shareholders of Chinese limited liability companies is statutorily capped.    Specifically, Article 20 of the Companies Law of the People's Republic of China provides that "[a] limited liability company shall be jointly invested in and incorporated by not less than two and not more than fifty shareholders."  I made a mental "note to files" that crowdfunding might get crowded out of microfinance or other types of financing--intentionally or unintentionally--by positive regulation.

I invite any readers who are more familiar with world-wide microfinance than I to comment further on its relationship to crowdfunding.  Do I have the principal story right, in your view, based on your experience?  Can you provide examples from your work or life that help me to see new aspects of the relationship between the two?  I invite any related thoughts.

March 22, 2016 in Conferences, Corporate Finance, Crowdfunding, Haskell Murray, Joan Heminway | Permalink | Comments (0)

Wednesday, March 16, 2016

Greetings from Shanghai - Microfinance in China

ITEM7(MFIVisit-1)

Between jet lag and the comprehensive conference proceedings and activities here in Shanghai, it’s all I can do to stay awake to finish this post . . . . But I am not complaining. Shanghai is a wonderful city, and the 7th International Conference on Innovative Trends Emerging in Microfinance (ITEM 7 Conference) has been a super experience so far.

Given my sleep-deprived state, I will just share with you here today a few key outtakes from the presentations we had yesterday (at a pre-conference site visit to the largest microfinance lender in Shanghai) and earlier today (at the conference itself) on microfinance in China.  Here goes.

  • Chinese microfinance is not really microfinance, in major part. It is SME (small and medium enterprise) lending. MSE loans are loans up to  30,000,000 Yuan RMB (about $4,600,000), and the average single loan amount for MSE lending is about  5,000,000 Yuan RMB (just under $770,000).
  • Unlike those in archetypal microfinance and those involved in actual micro-credit lending transactions in many other countries, borrowers in Chinese microfinance lending (such as it is) are largely men rather than women.
  • Despite these and other marked differences between Chinese microfinance and global microfinance, Chinese microfinance data does not affect global studies of microfinance in a statistically significant way. However, Chinese microfinance data does influence study results for the East Asia and Pacific region to a statistically significant degree.

Most of this was “new news” to me, given that Chinese microfinance is not at the center of my work.  I am sure that I will know even more about it by the end of the conference tomorrow. In the mean time, however, I also enjoyed presentations today about:

  • the willingness of rural Ethiopian farmers to pay for insurance to cover the risks of their business (given by an Italian scholar, for which I was an assigned discussant);
  • a rural microfinance program in Nigeria (given by a research fellow affiliated with the Central Bank of Nigeria);
  • gender-based microfinance lending in Canada (given by a faculty member/Ph.D. student at the University of New Brunswick in Canada);
  • the utility of employing joint use of credit scoring and profit scoring in microfinance (given by a Ph.D. student currently serving as the research associate of the Microfinance Chair at the Burgundy School of Business in Dijon, France);
  • the relationship between financial and social objectives of microfinance (given by a Ph.D. student from the Centre for European Research in Microfinance at the Université de Mons in Belgium); and
  • Participants’ perceptions of two separate microlending programs in Australia, one involving no-interest microloans and the other offering matched savings (given by a Ph.D. student from the University of Queensland in Australia).

I speak tomorrow on crowdfunding intermediation and litigation risk and comment on a paper on crowdfunding and corporate governance. Fingers crossed that I can stay awake long enough to give my presentation . . . . :>)

March 16, 2016 in Conferences, Corporate Finance, Joan Heminway | Permalink | Comments (2)

Monday, March 14, 2016

So Long, Steve - A Short Tribute in Verse

There once was a blogger named Steve.
A positive mark he did leave.
His witty, smart style
Kept us reading a while.
The loss of his posts we shall grieve.

So long from the blogosphere, friend.  We know, as you have promised, that you'll never be far away.  But we shall, indeed, miss your byline here at the BLPB.

March 14, 2016 in C. Steven Bradford, Joan Heminway, Weblogs | Permalink | Comments (3)

Wednesday, March 9, 2016

Roots of Scholarly Productivity (Take II)

Last month, I published a post that promised subsequent posts on productive scholarly activity.  Specifically, that initial post focused on joy as a driver of scholarly productivity.  I noted there that the colleague who prompted me to start this series--my muse of sorts--thought readers might be interested in knowing about how I organize my research materials, among other things.  I pick up that idea here.

There is no single or simple answer to this question.  I am in a constant evolution in this part of my work, and the matter is complicated by the fact that research materials can be electronic, hard-copy, or orally conveyed.  I do now have some routines, however, and I have come to a few broadly applicable realizations along the way.  Most are likely obvious.  Nevertheless, I share them here today.

At the outset, it is critical to note that my work habits include mobility as a core value.  I work from wherever I am.  So, I have learned that my important research materials need to be captured in some way on my computer when possible.  

Continue reading

March 9, 2016 in Joan Heminway, Research/Scholarhip | Permalink | Comments (2)

Thursday, March 3, 2016

What I Learned at KCON XI

It's fun when students are interested in your scholarship.  Yesterday, one of my students engaged me to talk about my work on limited liability operating agreements as contracts.  (I have mentioned this work in class, and the student also is a regular reader of this blog, where I have referenced this work a number of times, including most prominently here.)  He began the exchange with something akin to the following question: "Why is it that we take two full semesters of contract law during the first year of law school and then all but ignore the connection of contract law to business entities once we get to Business Associations?"

I think I know what he means.  While the segregation of legal doctrine by subject matter in law schools enables instructors to focus students narrowly on a single--often new--body of law, it also tends to obscure the interconnections between and among applicable bodies of law, including connections between contract law and the law of business entities.  Admittedly (and I pointed this out to the student), the typical Business Associations course does typically address contracts at several points.  These junctures include, among others, the course segment in which sole proprietorships are distinguished from statutory forms of business entity, discussions on the nexus of contracts theory of the corporation, and dialog on the validity of shareholder agreements.

This conversation reminded me that I learned an important thing about the Restatement (Second) of Contracts at the 11th International Conference on Contracts (KCON XI) last weekend at St. Mary's University School of Law in San Antonio, Texas.  (Keep in mind as you read this that I do not teach and have never taught the 1L course on contract law.)  What did I learn?  I learned how to use the Restatement properly in assessing the existence and validity of a contract!

Specifically, I learned that the traditional elements of a legally valid contract, those that I had learned in law school (offer, acceptance, and consideration) are, under the Restatement (Second) of Contracts, non-exclusive means of qualifying an agreement as a valid contract.  Specifically, Section 17 of the Restatement provides as follows:

(1) Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.

(2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated in §§82-94.

The comments to Section 17 cast additional light on types of contract--including several different kinds of formal contract,--that do not need to meet the requirements of mutual assent and consideration.  Moreover, the sections of the Restatement referenced in Section 17(2) include Section 90, which helpfully provides in subsection 1 that

[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

I guess I knew that, but somehow I missed remembering or fully understanding it.

All of this, and much more from KCON XI, will come in handy in my future work on contracts in the business entity context, deepening and enriching points I want to make.  It's sometimes really enlightening--a scholarly "breath of fresh air"--to attend a conference of academics focused on a subject matter or scholarly tradition that is different from one's own.  I may try to do this more often.

Also, my student's point on the need to more often and more integrally show the interdisciplinary of law in the upper division classroom is not lost on me.  That's an area in which I can make immediate changes.  And with the help of my contract law brethren from KCON XI, contract law is sure to be a part of the dialogue.

March 3, 2016 in Business Associations, Conferences, Joan Heminway | Permalink | Comments (0)