Friday, January 20, 2017

Signing Kate Grace

If you were at the SEALS Conference panel on crowdfunding last summer, you heard me talk a bit about women’s athletic apparel company Oiselle and the interesting running team part of their business.

In addition to building a team of amateur runners, Oiselle sponsors a number of professional athletes. Kate Grace was the first of the sponsored athletes, signing with Oiselle in 2012. Last year Kate won the U.S. Olympic Trials in the 800m, and she made the Olympic finals in the same distance.

Kate Grace’s sponsorship contract with Oiselle expired at the end of 2016, and Oiselle recently posted a classy goodbye.

A 2011 Yale University graduate, and now an Olympian, Kate Grace is talented, promising, and instantly likeable. She has already accomplished a great deal in the running world, but she is likely to accomplish even more. Kate Grace is on record as praising Oiselle as incredibly supportive of her and full of people with whom she has strong relationships.

So why didn’t Kate Grace and Oiselle sign a sponsorship contract for 2017 and beyond? This is a question I may pose to my negotiation classes.

To be clear, everything below is pure speculation. I have no inside knowledge. I do not know anyone at Oiselle or Kate Grace personally.

Assuming no personal fallouts, the most obvious reason for Kate Grace to move on is financial. Oiselle is still a niche brand and now that Kate is an Olympian, she is likely receiving much more lucrative offers. 

But if I were on the Oiselle management team, and I wanted to keep Kate Grace as a sponsored athlete, I would be creative with the contract offer terms. Oiselle may not be able to match the cash offers of the larger companies, but Oiselle could do something like offer significant equity in the company, which larger companies are highly unlikely to do. Oiselle could also offer Kate Grace a longer-term contract than some of the big companies that will probably only want to sponsor her at her peak. Finally, Oiselle could offer her a spot on their board of directors and/or employment in another role, which may last past her running days. All of those options would be creative ways to negotiate a contract to keep top talent.

If not Oiselle, then who will sponsor Kate Grace? It is risky to predict, but I think New Balance is the best fit, based on brand and values. That said, New Balance already sponsors quite a number of strong female distance and mid-distance runners. ASICS or Adidas probably need to sponsor someone like Kate Grace the most, so they will probably throw a lot of money at her. Nike seems to have the deepest pockets, but I would be surprised if Kate Grace signed with them after how they, allegedly, treated Boris Berian, and what her fellow Oiselle athlete Kara Goucher had to say about the Nike Oregon Project

Update, 1/28/17: Well, this is somewhat surprising. Kate Grace recently signed with Nike. While Nike has gotten some bad press over the past year and is seen by some as the anti-Oiselle, Nike does have a rich track & field history, is an official sponsor of the U.S. Olympic team, has amazing facilities (including a tree-lined track), and was founded by a middle distance runner and his track coach. I am willing to wager that Kate Grace entertained multiple offers. I wish I could see the terms and analyze what influenced her. As mentioned in the original post, Nike probably has the deepest pockets and they could have blown the other offers out of the water from a financial perspective. Also, Nike has focused on track & field more intensely, for a longer period of time than most, if not all, of its competitors. Regardless of the terms and the sponsor, I do wish Kate Grace the very best running going forward.   

January 20, 2017 in Business Associations, Compensation, Haskell Murray, Negotiation | Permalink | Comments (0)

Friday, October 14, 2016

DiMatteo on Strategic Contracting

As a professor who moved from a law school to a business school, I remain amazed how little the two legal scholarly worlds overlap. I do, however, think the overlap is increasing somewhat, as more professors move between the two types of schools and the conferences and journals becoming a bit less segregated. That said, I imagine that many of our law professor readers may have missed legal studies professor Larry DiMatteo's (University of Florida, Warrington College of Business) 2010 American Business Law Journal article on strategic contracting. I had not read it until I moved to a business school and met Larry at a legal studies conference. Larry's article is proving useful in my current work, so I thought I would share it here with our readers. Abstract reproduced below:

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This paper uses sources taken from the legal literature, as well as literature from strategy and human resource management. It explores Professor Gilson’s noted remark in the Yale Law Journal that “business lawyers serve as transaction cost engineers and this function has the potential for creating value.” This exploration focuses on the strategic use of contract law in gaining a competitive advantage and to create value. It begins by differentiating two frames of the contract paradigm. One is the internal frame in which contract law’s inherent flexibility allows for its use as a source of competitive advantage. The second frame is external since it focuses on the use of the contract paradigm in non-contractual contexts.

The paper examines the use of contract to create value and uses for examples, the commodification of information, licensing and IT outsourcing, and franchising. From there, the paper explores the use of contracts to sustain a competitive advantage (strategic contracting) and to create shared competitive advantages (strategic collaboration). It uses the creation and use of patent pools to illustrate both strategic uses of contract law. The next part focuses on the use of contracts to mitigate uncertainty in business transactions. It explores the strategic use of existing contract doctrines, the use contracts to insure performance and to deter opportunistic behavior, and the use of contracts to develop a preventive legal strategy. This is followed by the examination of contracting for innovation and contracts’ role in creating private governance structures, such as strategic joint venturing.

The final parts explore the use of contract as metaphor in nexus of contact theory in corporate law, psychological contract theory in employment law, and the potential abuse of the freedom of contract paradigm in limited liability company law. The paper then examines strategic responses to regulation by asking whether strategic avoidance or non-compliance to regulations has a place in a company’s legal strategy? The paper concludes by asking how does strategic contracting impact contract law? It answers the question by arguing that contract law change is inevitable due to a feedback loop.

October 14, 2016 in Business Associations, Haskell Murray, Lawyering, Management, Negotiation, Research/Scholarhip | Permalink | Comments (1)

Saturday, September 10, 2016

Harvard Negotiation & Mediation Clinical Program Positions

HLS

Harvard Negotiation & Mediation Clinical Program is looking to fill two clinical instructor positions (one with a focus on facilitation and political dialogue) for July 2017.

Details about the positions are available here

September 10, 2016 in ADR, Clinical Education, Haskell Murray, Jobs, Negotiation | Permalink | Comments (0)

Tuesday, September 6, 2016

Private Ordering in the Uncorporation: Modified and Eliminated Fiduciary Duties Are Often the Same Thing

What does it mean to opt out of fiduciary duties?  In follow-up to my co-blogger Joan Heminway's post, Limited Partnership Law: Should Tennessee Follow Delaware's Lead On Fiduciary Duty Private Ordering?, I will go a step further and say all states should follow Delaware's lead on private ordering for non-publicly traded unincorporated business associations. 

Here's why:  At formation, I think all duties between promoters of an unincorporated business association (i.e., not a corporation) are always, to some degree, defined at formation. This is different than the majority of other agency relationships where the expectations of the relationship are more ingrained and less negotiated (think employee-employer relationship).  

As such, I'd make fiduciary duties a fundamental right by statute that can be dropped (expressly) by those forming the entity.  I'd put an additional limit on the ability to drop fiduciary duties: the duties can only be dropped after formation if expressly stated in formation documents (or agreed unanimously later). That is, if you didn't opt out at formation, tell all those who could potentially join the entity how you can change fiduciary duties later. This helps limit some (though not all) freeze-out options, and I think it would encourage investors to check the entity documents closely (as they should).

At formation, the concerns we might have of, for example, an employee without fiduciary duties, are not the same as they are for co-venturers. Those starting an entity have long negotiated what is a breach of the duty of loyalty, for example.  In contrast, I think fiduciary duties in most employer-employee (and similar) relationships reflect the majoritarian default and they facilitate the relationship existing at all. For LLCs and partnership entities, I think that's less clear. Entity formation is relatively rare compared to how often we enter other agency relationships, and they almost always involve significant negotiation (if not planning).  And if they don't, the rules we expect traditionally should be the default. But where the parties talk about it, and they usually do, allowing a more robust sense of freedom of contract has value.  

Even in Delaware, where one can negotiate out of fiduciary duties, there remains the duty of good faith and fair dealing. I think of that as meaning that the parties still have a right to the essence of the contract.  That is, the contract has to mean something.  It has to have had a purpose and potential value at formation, and no party can eliminate that.  But, the parties only have a right to what was bargained for.  As such, what we might traditionally consider a breach of the duty of loyalty could also breach the duty of good faith and fair dealing, but a traditional breach of the duty of loyalty might not be sufficient to find liability where there is expressly no duty of loyalty. Instead, the act must so contradict the purpose of the contract that it rises to the level of a breach the duty of good faith and fair dealing. 

Part of the reason I support this option is that I think case law has already validated it, but in such an inartful manner that it confuses existing doctrine. See, e.g.McConnell v. Hunt Sports Enterprises132 Ohio App. 3d 657, 725 N.E.2d 1193 (Ct. App. 1999) (“An LLC, like a partnership, involves a fiduciary relationship. Normally, the presence of such a relationship would preclude direct competition between members of the company. However, here we have an operating agreement that by its very terms allows members to compete with the business of the company.”).

In closing, I will note that I am all for express provisions that require investors to pay attention at the outset. I don't believe in helping cheaters hide the ball. I just think law that encourages investors and others joining new ventures to pay attention is useful and will provide long-term value to entities.  I don't think that eliminated fiduciary duties at formation raise any more of a risk than we already have with limited or modified fiduciary duties at formation. With the more limited protections described above, freedom of contract should reign. 

September 6, 2016 in Corporations, Delaware, Joan Heminway, Joshua P. Fershee, Legislation, LLCs, Negotiation, Partnership, Unincorporated Entities | Permalink | Comments (1)

Friday, April 8, 2016

Negotiation and Law Jobs

Recently, I have been talking to a few of our law students about jobs, and I have also discussed job negotiations in my MBA negotiations course. 

Here are a few thoughts for law students negotiating their first job. First, take the time to sit and think about what you want in a job. I know this seems simple, but far too many students simply follow their classmates in chasing the most prestigious firms without fully understanding why; those firms may or may not be a good fit, depending on your goals. Talk to a number of people who have worked in jobs you are considering, and interview them about positives and negatives. Second, you have to understand your BATNA (your best alternative to a negotiated agreement). If you only have one offer, and thus no good alternatives to that job, you will be in a very weak negotiating position. As such, it is best to uncover a good, or at least decent, second option, even if it is a job outside law, before negotiating . Third, try to find out, from faculty members or recent graduates, what items may be negotiable at the organization. At larger firms and many government agencies, it seems that salary and benefits are almost always unmovable for entry level lawyers. That said, there are still some items - like practice group and start date - which might be negotiable. Start date can actually be really important. An early start date, if it is allowed (some organizations start all their first years at once), can give you a head start and more individualized senior associate/partner attention before the rest of the class arrives. At smaller firms, salary and benefits may be negotiable. Fourth, and perhaps more important, in all your discussions be respectful. You don't want to get a reputation of being entitled before you even start with the firm, and again, you need to be realistic about your other options; this is still a buyers' market. If you fortunate enough to have multiple good offers, you can, respectfully, ask for offer improvement, but if it is your only legitimate offer, asking may not be worth the risk of them pulling the offer. Fifth, once you are in the job, I would focus on making yourself valuable, to the senior associates, partners, and eventually the clients, so that you will be in a powerful negotiating position down the road.

For more general thoughts, watch Deepak Malholtra's (Harvard Business School) talk on negotiating your job offer.

April 8, 2016 in Haskell Murray, Law School, Negotiation | Permalink | Comments (3)

Friday, January 15, 2016

Mnookin on Bargaining with the Devil

Mnookin

Perhaps the most common question I receive from the MBA students in my Decision Making & Negotiation Skill class is - what do I do when the other side is completely unreasonable or evil?

Robert Mnookin (Harvard) explores this question in his book Bargaining with the Devil: When to Negotiate and when to Fight

I won't attempt to summarize the entire book, but I share a few representative quotes below. (Page numbers correspond to the 2010 hardback edition).

"By 'Devil' I mean an enemy who has intentionally harmed you in the past or appears willing to harm you in the future. Someone you don't trust. An adversary whose behavior you may even see as evil." (pg. 1)

"An act is evil when it involves the intentional infliction of grievous harm on another human being in the circumstances where there is no adequate justification." (pg. 15)

Consider "Interests [of both sides]...Alternatives [of both sides]...Potential negotiated outcomes...Costs...Implementation...What issues of recognition and legitimacy are implicated in my decision" (pgs. 27-34).

"I believe there is reason to be deeply concerned whenever an agent or representative allows personal morality to override a rational analysis favoring negotiation - even with a devil." (pg. 49)

"If you bargain with the Devil, develop alternatives. You will need them if the deal doesn't work out." (pg. 81)

Using "empathy and assertiveness....A good negotiator has to do a lot of both." (pg. 134)

Remember to "listen first, talk second." (pg. 177)

"A common occupational hazard for mediators is getting hooked into taking responsibility for finding a solution....[The mediator's] responsibility is to help the parties better understand each other and their predicament, and then fashion their own solution." (pg. 237)

"'Should you bargain with the Devil?' If I were pressed to provide a one-sentence answer to this question, it would be: 'Not always, but more often than you feel like it.'" (pg. 261)

This is a difficult topic and doesn't fit neatly into bullet pointed format, but Robert Mnookin uses case studies throughout the book to explain his methods. The case studies come from political, business, and family disputes. The wise solutions are fact-dependant, but after reading the case studies you get a better sense of how to deal with difficult negotiations. 

January 15, 2016 in Business School, Ethics, Haskell Murray, Negotiation | Permalink | Comments (0)

Tuesday, March 10, 2015

Practical Lessons in the Business World: You Don't Have to Use Their Draft

Today in my Energy Law Seminar, I sprung an exercise on my class.  I gave each member of the class a confidentiality and non-disclosure agreement (NDA).  Half the class works for a venture fund and the other half works for a technology inventor who was seeking investment. (I give them some more details about the proposed deal the NDA would help facilitate. (The exercise is based on an issue I worked on some years ago.)

I instruct them to read the  NDA, then they can meet with others assigned the same side. They can come up with their negotiating points, then I turn them loose with the other side.  

I always enjoy watching students work like this.  They are forced to react, and it lets them be a little creative.  I also like this exercise, because it has multiple layers. They get to ask me me what they need to know for the business points, and I later get to talk to them about the options they may not have considered.  

I have done this a few times, and the students always negotiate what they see as the key issues. Their issue spotting is usually good, but they often miss a big option (a couple students do often have an idea what's up).  Here's the twist: the NDA I give them is absurdly one-sided and in fact reserves the secret information for the venture fund (who is only providing money), and not the inventor (who has the technology and information they want kept secret).    

They can, of course, negotiate with this document and try to get a workable NDA based on the deal points, but the better answer for the investor representatives is to decline the entire document. The NDA is so one sided, there is no fixing it.  The better answer is to ask for a more balanced version or to offer to draft one for the potential counterparty  to consider.  

Sometimes, of course, you have no room for negotiations, such as when you rent a car.  You can mark up the contract, but with Avis, it's take it or leave it.  The same can be true for certain clients who need funding or a supply contract, but often, there is room to talk.  The real life version of the negotiation provides a perfect example:  I told the venture fund the NDA was too one-sided and that it couldn't work for us. I suggested that we could try a draft or that we'd be happy to look at a different option.  The venture fund's reply: "Oh sure, we have one that is far more balanced that doesn't have the provisions that seem to concern you most. You'll have an email in a few minutes."  

When we talk about deal points and key issues, sometimes it's easy to forget to teach students some other big keys to business law.  The takeaways: 

(1) If at all possible, only use draft documents that reflect a sense of mutuality (e.g., reciprocal indemnification clauses). "Fixing" one-sided documents is fraught with risk.  

(2) Don't be afraid to ask. Often, though I don't care for it, people like to start with offers to "see what I can get." (I see this as counterproductive, at least where a long-term relationship could be built.)

(3) Negotiate in proportion to the issue before you. The NDA is often so you can negotiate the deal. If you make that initial part too antagonistic, you may never even get to negotiating the actual deal, which can mean everyone loses. 

March 10, 2015 in Entrepreneurship, Joshua P. Fershee, Law School, Negotiation, Teaching | Permalink | Comments (1)

Thursday, February 12, 2015

“We Just Can’t Get Enough of Business Associations”

My seventy business associations students work in law firms on group projects. Law students, unlike business students, don’t particularly like group work at first, even though it requires them to use the skills they will need most as lawyers—the abilities to negotiate, influence, listen, and compromise. Today, as they were doing their group work on buy-sell agreements for an LLC, I started drafting today’s blog post in which I intended to comment on co-blogger Joan Heminway’s post earlier this week about our presentation at Emory on teaching transactional law.

While I was drafting the post, I saw, ironically, an article featuring Professor Michelle Harner, the author of the very exercise that my students were working on. The article discussed various law school programs that were attempting to instill business skills in today’s law students. Most of the schools were training “practice ready” lawyers for big law firms and corporations. I have a different goal. My students will be like most US law school graduates and will work in firms of ten lawyers or less. If they do transactional work, it will likely be for small businesses.  Accordingly, despite my BigLaw and in-house background, I try to focus a lot of the class discussion and group work on what they will see in their real world.

I realized midway through the time allotted in today’s class that the students were spending so much time parsing through the Delaware LLC statute and arguing about proposed changes to the operating agreement in the exercise that they would never finish in time. I announced to the class that they could leave 10 minutes early because they would need to spend at least another hour over the next day finishing their work. Instead most of the class stayed well past the end of class time arguing about provisions, thinking about negotiation tactics with the various members of the LLC, and figuring out which rules were mandatory and which were default. When I told them that they actually needed to vacate the room so another class could enter, a student said, “we just can’t get enough of business associations.” While this comment was meant to be a joke, I couldn’t help but be gratified by the passion that the students displayed while doing this in-class project.  I have always believed that students learn best by doing something related to the statutes rather than reading the dry words crafted by legislators.  My civil procedure students have told me that they feel “advanced” now that they have drafted complaints, answers, and client memos about Rule 15 amendments.

I am certainly no expert on how to engage law students, but I do recommend reading the article that Joan posted, and indeed the whole journal (15 Transactions: Tenn. J. Bus. L. 547 (2014). Finally, please share any ideas you have on keeping students interested in the classroom and prepared for the clients that await them. 

 

February 12, 2015 in Business Associations, Business School, Conferences, Corporations, Delaware, Joan Heminway, Law School, LLCs, Marcia Narine Weldon, Negotiation, Teaching, Unincorporated Entities | Permalink | Comments (1)

Friday, November 7, 2014

A Few Law Listservs

 I subscribe to a few helpful law-related listservs:

All of these listservs provide useful information, through the helpful e-mails from the participants. Especially for those of us at business schools, where we do not have many legally trained colleagues, access to the collective wisdom of those on the listserv is invaluable. Occasionally, however, the listservs produce an avalanche of uninteresting e-mails. The LLC listserv allows the option of getting a single weekly digest of the discussion, which I prefer, though the Yahoo! formatting of the digest is unattractive and cumbersome.

What law-related listservs do you enjoy? Any thoughts on the best (free) platform for listservs?

November 7, 2014 in Business School, Haskell Murray, Law School, LLCs, Negotiation | Permalink | Comments (0)

Thursday, July 10, 2014

What can lawyers, professors and students learn from a corporate idealist?

In last week’s post about the business of the World Cup, I indicated that I would review Christine Bader’s book, The Evolution of a Corporate Idealist: When Girl Meets Oil. I have changed my mind, largely because I don’t have much to add to the great reviews the book has already received. Instead I would like to talk about how lawyers, professors and students can use the advice, even if they have no desire to do corporate social responsibility work as Bader did, or worse, they think CSR and signing on to voluntary UN initiatives is really a form of "bluewashing."

Bader earned an MBA and worked around the world on BP’s behalf on human rights initiatives. This role required her to work with indigenous peoples, government officials and her peers within BP convincing them of the merits of considering the human rights, social, and environmental impacts. She then worked with the UN and John Ruggie helping to develop the UN Guiding Principles on Business and Human Rights, a set of guidelines which outline the state duty to protect human rights, the corporate duty to respect human rights, and both the state and corporations' duty to provide judicial and non-judicial remedies to aggrieved parties. She now works as a lecturer at Columbia University, where she teaches human rights and business and she also advises BSR, which focuses on making businesses more sustainable. Her book tells her story but also quotes a number of other CSR professionals and how they have navigated through some of the world’s largest multinationals.

 Bader’s book has some important takeaways for all of us.

1)   In order to have influence, we have to learn to speak the language that our audience understands and appreciates- I tell my students that when they write exams for me, it’s all about me. Other professors want their exams written with certain catchphrases using the IRAC method, and I may want something different. One size does not fit all. Attorneys learn (or get replaced) that some clients want long memos, others want executive summaries and bullet points and all want plain English. Talking to a venture capitalist is different than talking to a circuit court judge. Similarly, many law professors are behind the curve. If we only talk to each other in the jargon of the academy and insulate ourselves, the rest of the world won’t have the benefit of our research because they won’t understand or want to read it. Academics have a lot to contribute, but we need to adapt to our audience whether it’s policymakers, judges, our peers or law students.

 2)   Sometimes we have to be less passionate in making our arguments and appeal to what’s important to our audience- This point relates to Point 1. Bader regularly met with a number of constituencies and was understandably zealous in trying to convince others, internally and externally, about her positions. She and other “corporate idealists” from other firms often learned the importance of language- making a business case to certain internal stakeholders meant talking in terms of the bottom line rather than using the maxim “it’s the right thing to do” or “doing well by doing good.” Good attorneys know how to represent their clients without taking things personally because sometimes the passion can actually dilute effectiveness. As law professors, we need to teach our students to be more effective so that they know how and when to modulate their tone, and how to pivot and change the way they frame their arguments when they can’t convince the recipient of their message.

3)   Almost everything comes down to risk management- Bader often had to focus on risk management and mitigation when her moral arguments fell on deaf ears. Those who teach business should make sure that students have a basic understanding of the pressure points that business people face. For some it may be tax liability. For others it may be the appropriate exit strategy. In essence, it all comes down to understanding the client’s risk profile and being able to advise accordingly. Litigators should also understand risk profiles so that they can develop an appropriate settlement strategy and help their client’s work their way through some of the unexpected pitfalls that may arise over the course of the case.

4)   Building relationships is a critical skill- Bader learned that social interactions with her peers at BP and the external stakeholders after hours greatly increased her effectiveness in dealing with thorny issues that arose during business hours. Lawyers often believe that if they have the substantive knowledge, they are the smartest people in the room. Law firms don’t teach young associates about the importance of emotional intelligence and building relationships with peers, opposing counsel, and clients. In fact, many law students and lawyers believe that having the reputation as a “shark” is the best way to represent clients. We need to teach our students that it’s better to be respected than feared or hated, and that they can disagree without being disagreeable. Those of us in the academy should model that behavior more often.

5) We must learn to compromise and recognize that incremental changes are important too- Bader and other corporate idealists often want to change the world but quickly learn that internal and external stakeholders aren’t ready to move that fast. She discussed “nudging” her client toward the right direction. Law school and law-related television shows lead students to believe that the end game is to win and to win big. In the business world, sometimes there are no big wins. Lawyers and business advisors often take two steps forward and one step back, and that’s ok. Students and attorneys who take classes in alternative dispute resolution learn this valuable skill. Bader and other corporate idealists also realized that you have to work with people on the opposite side who feel just as strongly that their position is on the side of the angels. Lawyers who know how to build relationships and refocus their messaging can influence those on the other side if they are willing to listen, and when necessary compromise and accept small victories.

6)   We can compromise but shouldn’t compromise our values- When Bader felt that her work was no longer fulfilling, she looked for other positions that aligned with her world view. With rising student debt and many lawyers living beyond their means, it’s difficult for lawyers to walk away from a job or client that they don’t like. That’s understandable. It’s more problematic to stay in a situation where there is criminal or ethical misconduct without speaking up or leaving because of the financial handcuffs.  It’s also unacceptable to remain in a culture that stifles a lawyer’s ability to raise issues. In some cases, as alleged with some of the GM lawyers, failure to speak up could literally be a matter of life and death.

I enjoyed this quick read because it reminded me so much of my years in corporate life. Bader’s story can teach all of us, even the non corporate-idealists, valuable lessons about coping and thriving in the business world.

 

July 10, 2014 in Books, Business Associations, Corporate Governance, Corporations, Current Affairs, Ethics, Law School, Marcia Narine Weldon, Negotiation, Teaching | Permalink | Comments (0)

Thursday, April 17, 2014

Banks, Legal Costs, and ADR

Back in August, Bloomberg reported that the legal costs for the six largest U.S. banks since 2008 totaled over $100 billion. (Yes, billion with a "B.")  Bloomberg included settlement amounts in that huge number, as well as fees to lawyers.

The financial and emotional costs of litigation, not to mention the tremendous amount of time required, amazes me.  Litigation has its place, but the vast majority of disputes eventually settle and many times all parties would have been better off settling earlier using some form of alternative dispute resolution (ADR). 

A former colleague recently pointed me to the University of Missouri School of Law's listserv for ADR educators. 

I know many of our readers only teach business law courses, but adding negotiations to my teaching package has made me see the various intersections between negotiations and business law.  This semester, I set aside some time in my business law classes to discuss a bit of the negotiations literature, and the students seemed to appreciate it.  I just signed up for the listserv, so I cannot speak to its quality yet, but I do think more business law professors should consider exploring the world of ADR.

April 17, 2014 in Business Associations, Business School, Haskell Murray, Law School, Negotiation, Teaching | Permalink | Comments (0)

Friday, April 11, 2014

Delaware Court of Chancery Mediation

On March 24, the petition for certiorari was denied in the Strine v. Delaware Coalition For Open Government, Inc. case, ending the Delaware Court of Chancery's experiment with arbitration by their sitting judges.  (H/T Brian Quinn). 

As far as I know, however, sitting judges on the Delaware Court of Chancery still conduct mediation.  A Chancellor or Vice Chancellor does not mediate his own cases, but rather mediates the cases assigned to one of the other four judges on the court (if the parties agree to submit to mediation). 

More information about the Delaware Court of Chancery's mediation process is here.  The benefits of the mediation include:

  • Expertise.  You would be hard pressed to find someone more knowledgable about Delaware corporate law and the merits of a Delaware Court of Chancery case than a sitting Delaware Chancellor or Vice Chancellor. 
  • Relatively Inexpensive.  The fee is only $5,000 a day, for cases that are already on the Chancery docket, which is a decent amount of money, but is dwafted by the legal fees spent in almost all of these cases.  For mediation only cases (cases not already on the docket), there is a $10,000 initial fee and a $5,000 for each additional day.  
  • Confidential.  All mediation proceedings are strictly confidential.

These are many of the same main benefits as the Delaware Court of Chancery arbitration, but, of course, in mediation, the judge is not making a decision, but rather assisting the parties in reaching a voluntary settlement.  

According to Steven Davidoff, in the Strine case, "the federal court found that the arbitration proceedings were effectively a civil trial, with no difference in judges, place or proceeding except the secrecy and the arbitral nature." 

Mediation, however, is quite a bit different than a civil trial.  While the comments of a sitting Chancellor may carry a lot weight with the parties, a mediator does not come to a determination for the party and the parties are able to walk away from the mediation at any time.

In short, judicial mediation carries many of the benefits of judicial arbitration, but the practice of judicial mediation seems to be more difficult to challenge. 

April 11, 2014 in Business Associations, Delaware, Haskell Murray, Negotiation | Permalink | Comments (0)

Friday, March 28, 2014

Harvard Negotiation Institute

Harvard

Just received my confirmation for the Harvard Negotiation Institute, which takes place this June at Harvard Law School.

I decided to jump right into the "Advanced Negotiation" workshop, so we will see how that goes.  It is pricey, but I hope it to be a good investment for my institution and something I can draw on in my classes.

Like I have said before, I believe that negotiation should be a required course at law schools and business schools everywhere (though I realize that is now a self-interested opinion).  Every lawyer and business person spends a great deal of time negotiating. 

After the Institute, I am sure I will blog about the experience. 

March 28, 2014 in Haskell Murray, Negotiation, Teaching | Permalink | Comments (0)

Northwestern, NCAA, and Negotiation

Now that I am teaching MBA courses in negotiation, I see negotiations everywhere.

For example, in reading about the extremely interesting NLRB ruling in favor of the Northwestern University football players – holding that the players are “employees” and can unionize – I came across this Sports Illustrated article:  Northwestern ruling sends clear message: NCAA, it's time to negotiate.

Former Northwestern quarterback Kain Colter does a nice job articulating some of the interests from the players’ side of things in this video.

Given this ruling, which will be appealed, and the O’Bannon v. NCAA case which is set for trial on June 9, there is likely to be a great deal of negotiation between the NCAA and players outside of the courtroom over the next few months.  As the cases move closer to potential resolutions in favor of the players, the NCAA’s BATNA (best alternative to a negotiation) weakens.   The NCAA, however, may raise doubts about the players’ BATNA, by raising things like the possible tax implications of a court victory.

These will be complex, multi-party, multi-issue negotiations.  The parties with interests at stake include current and former players, coaches and athletic directors, colleges and universities, the NCAA, and the lawyers on either side.  The sports fans also have interests at stake, but while we may be considered, I doubt we will get an actual seat at the negotiation table. 

The interests of all these groups create quite the confusing web.  The NCAA and the players would be wise to ask questions aimed at uncovering all of the underlying interests of the other parties and try to reach a mutually beneficial resolution outside of court.

For more information, from other professors, on the NLRB ruling in favor of the Northwestern football players see below:

March 28, 2014 in Haskell Murray, Negotiation, Sports, Teaching | Permalink | Comments (2)

Tuesday, January 7, 2014

Teaching Negotiation

Tonight, I will teach my first negotiation class, to a group of Belmont University MBA students.  Over the past months, I have read a number of books on negotiation and reflected upon the negotiation I did in practice and am still doing in my professional life and personal life.  The more I read and think about the subject, the more I am convinced that law students and lawyers (in addition to business students and business people) need more training in negotiation.

In litigation, I have heard that well over 90% of cases settle before trial, requiring negotiation, and in the transactional context, negotiation is ever-present.    

The late-Roger Fisher of Harvard Law School (and co-author of the perennial best seller Getting to Yes) has a short video clip about negotiation v. litigation posted below. My legal training did a good job sharpening my critical thinking, improving my attention to detail, and preparing me to "win" arguments.  However, I cannot remember much time devoted to joint-problem solving, uncovering underlying interests, and dealing with people problems.  While much of what is written in Getting to Yes and its progeny is common sense, it is easy to stray from its guidelines without considerable practice.

I am excited about teaching this "Decision Making and Negotiation Skill" MBA class and may add additional blog posts as the semester progresses.  Each class includes mock negotiations from Harvard Law School's Program on Negotiation and/or The Dispute Resolution Research Center at the Kellogg School of Managment at Northwestern University

Perhaps some of the business law professors reading this blog would like to incorporate some of the negotiation/dispute resolution literature into their classes.  I know a number of professors who include one or more mock negotiations in their classes, but wonder how many also talk about the theory and research on the subject to inform the classroom interaction.  For those interested in doing further reading in the area, I enjoyed Negotiation And Settlement Advocacy: A Book Of Readings, which does a nice job of compiling and editing a range of articles.  Also, Professor Leigh Thompson (Northwestern) has an excellent book entitled The Mind and Heart of the Negotiator, which we use in our course. 

 

January 7, 2014 in Haskell Murray, Negotiation, Teaching | Permalink | Comments (0)