Friday, February 5, 2016
Starting on the first day of my Advanced Business Associations course, I attempt to tease out the policy underpinnings and theoretical conceptions of entity law and, in particular, corporate law. This turns out to be a somewhat difficult task, since most students in the course, to the extent that they remember anything at all from their experience in the foundational Business Associations course, are more focused on what a corporation is and does than why we might have one in the first place. As the semester proceeds and the readings unfold, the students get more comfortable talking about the rationale for certain aspects of the corporate form and why corporate law structures and operating rules promise to achieve the goals of those organizing a firm as a corporation. But it's a slow process.
I have to believe that some of my fellow law professors face similar challenges with their students. I also believe that instructors in other educational settings face analogous difficulties when they incorporate abstract notions into the teaching of more "black letter" (for want of a better term at this point in my day) concepts. My approach has been to assign readings of primary and secondary material and use classroom discussion time and projects to reveal things about why the corporation exists, why venturers form them (as opposed to conducting business as sole proprietors or using another business form), and what issues we observe and might expect to observe as among corporate constituents as time unfolds. So, I plan to cover everything from the general role of entity law in fostering the conduct of business (by offering off-the-shelf rules for use by venturers in structuring and operating businesses) to notions of corporate personhood and the role of the corporation in society.
I am wondering if there is an alternative to my approach that any of you use in a similar course, or whether there is a particularly good set of foundational readings that you use to approach this set of issues in a business law offering. At the end of this semester, I will have taught this course in this general format twice, and I will be taking stock to shore it up to make sure the third time's a charm. [FYI, I start the semester with Bebchuk and Bainbridge, take a tour through the public company using the Disney case and its corporate documents, then move on to compare/contrast the publicly held firm with closely held corporations and unincorporated business associations before moving into some depth topics (M&A, complex business litigation, corporate social responsibility and the benefit corporation, etc.). It is a two-hour course.] Suggestions and other thoughts in comments or by email are welcomed.
Thursday, February 4, 2016
For the past four weeks I have been experimenting with a new class called Transnational Business and Human Rights. My students include law students, graduate students, journalists, and accountants. Only half have taken a business class and the other half have never taken a human rights class. This is a challenge, albeit, a fun one. During our first week, we discussed CSR, starting off with Milton Friedman. We then used a business school case study from Copenhagen and the students acted as the public relations executive for a Danish company that learned that its medical product was being used in the death penalty cocktail in the United States. This required students to consider the company’s corporate responsibility profile and commitments and provide advice to the CEO based on a number of factors that many hadn’t considered- the role of investors, consumer reactions, the pressure from NGOs, and the potential effect on the stock price for the Danish company based on its decisions. During the first three weeks the students have focused on the corporate perspective learning the language of the supply chain and enterprise risk management world.
This week they are playing the role of the state and critiquing and developing the National Action Plans that require states to develop incentives and penalties for corporations to minimize human rights impacts. Examining the NAPs, dictated by the UN Guiding Principles on Business and Human Rights, requires students to think through the consultation process that countries, including the United States, undertake with a number of stakeholders such as unions, academics, NGOs and businesses. To many of those in the human rights LLM program and even some of the traditional law students, this is all a foreign language and they are struggling with these different stakeholder perspectives.
Over the rest of the semester they will read and role play on up to the minute issues such as: 1) the recent Tech Terror Summit and the potential adverse effects of the right to privacy; 2) access to justice and forum non conveniens, arguing an appeal from a Canadian court’s decision related to Guatemalan protestors shot by security forces hired by a company incorporated in Canada with US headquarters; 3) the difficulties that even best in class companies such as Nestle have complying with their own commitments and certain disclosure laws when their supply chain uses both child labor and slaves; 4) the Dodd-Frank conflict minerals debate in the Democratic Republic of Congo and the EU, where students will play the role of the State Department, major companies such as Apple and Intel, the NGO community, and socially-responsible investors debating some key corporate governance and human rights issues; 5) corporate codes of conduct and the ethical, governance, and compliance aspects of entering the Cuban market, given the concerns about human rights and confiscated property; 6) corporate culpability for the human rights impacts of mega sporting events such as the Super Bowl, World Cup, and the Olympics; 7) human trafficking (I’m proud to have a speaker from my former company Ryder, a sponsor of Truckers Against Traffickers); 8) development finance, SEC disclosures, bilateral investment treaties, investor rights and the grievance mechanisms for people harmed by financed projects (the World Bank, IMF, and Ex-Im bank will be case studies); 9) the race to the bottom for companies trying to reduce labor expenses in supply chains using the garment industry as an example; and 10) a debate in which each student will represent the actual countries currently arguing for or against a binding treaty on business and human rights.
Of course, on a daily basis, business and human rights stories pop up in the news if you know where to look and that makes teaching this so much fun. We are focusing a critical lens on the United States as well as the rest of the world, and it's great to hear perspectives from those who have lived in Europe, Africa, Asia, and South America. It's a whole new world for many of the LLM and international students, but as I tell them if they want to go after the corporations and effect change, they need to understand the pressure points. Using business school case studies has provided them with insights that most of my students have never considered. Most important, regardless of whether the students embark on a human rights career, they will now have more experience seeing and arguing controversial issues from another vantage point. That’s an invaluable skill set for any advocate.
February 4, 2016 in Business Associations, Comparative Law, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Ethics, Financial Markets, Human Rights, International Business, International Law, Investment Banking, Law School, Lawyering, Marcia Narine, Securities Regulation, Teaching | Permalink | Comments (0)
Wednesday, January 27, 2016
As many of you know, I teach both traditional doctrinal and experiential learning courses in business law. I bring experiential learning to the doctrinal courses, and I bring doctrine to the experiential learning courses. I see the difference between doctrinal and experiential learning courses as a matter of emphasis. Among other things, this post explores the intersection between traditional classroom-based law teaching and experiential law teaching by analogizing business law drafting to yoga practice principles. This turned out to be harder than it "felt" when I first started to write it. So, the post may be wholly or partially unsuccessful. But I persevere . . . .
I begin by noting that we are, to some extent, in the midst of a critical juncture with respect to experiential learning in legal education. Some observers, including both legal practitioners and faculty, criticize the lack of experiential learning, noting that legal education is too theoretical and policy-oriented, resulting in the graduation of students who are ill-prepared for legal practice. Yet, other commentators note that too great an emphasis on experiential learning leaves students without the skills in theory and policy that they need to make useful interpretive judgments and novel arguments for their clients and to participate meaningfully in law reform efforts. Of course, different law schools have different programs of legal education (something not noted well enough, or at all, in many treatments of legal education). But even without taking that into account, many in and outside legal education (including, for example, in articles here and here) advise a law school curriculum that merges the two. I think about and struggle with constructively effectuating this all merger the time.
Now, about the yoga . . . . Most of you likely do not know that, in addition to teaching law, being a wife and mom, and other stuff, I enjoy an active yoga practice. As I finished a yoga class on Sunday afternoon, I realized that yoga has something to say about integrating doctrinal and experiential learning, especially when it comes to instruction on legal drafting in the business law area. Set forth below are the parallels that I observe between yoga and business law drafting. They are not perfect analogs, but they are, in my view, instructive in a number of ways important to the teaching mission in business law. The first two bullet points are, as I see it, especially important as expressions of the idea that law teaching is more complete and valuable when it holistically integrates doctrine, policy, theory, and skills. The rest of the bullets principally offer other insights.
Friday, January 22, 2016
I am taking a MOOC from University of Illinois and Coursera on digital marketing. I've been trying to take at least one course a semester. Both the underlying material, and the intricacies of online education have been interesting. I chose this course because I have family members in the digital marketing area, and I am taking (and discussing) this course with them.
Later, I may discuss some of the substantive take-aways from the course --- I have completed about 50% of the course so far --- but in this post I want to discuss business/academic entanglement.
In this digital marketing class, an assignment on co-creation (by firms & their customers) consisted of creating an online account with Starbucks, submitting an idea for consideration, and reporting how the idea was received by commenters. This was a useful exercise and it made the concept come alive, but I couldn't help wondering if Starbucks was somehow involved with University of Illinois and/or Coursera in creating this assignment. To be clear, I have no idea whether Starbucks was or was not involved. But, in any event, with the thousands (and maybe 10s of thousands) of people who are taking this course, this assignment seemed like a win for Starbucks. Well, actually, this idea submission portion of Starbucks' website was not functioning properly, leading to many, many complaints from the students on the course discussion boards, but the assignment could have been a big win for Starbucks. And eventually, a work-around was suggested, and I assume that many, many people still created online accounts with Starbucks when they might not have otherwise. The creation of those accounts, and the simple brand exposure, certainly has some value to Starbucks.
Anyway, my question is this: Are course creators ethically obligated to disclose entanglement or abstain from entanglement between businesses and their educational institutions?
Even if there is no entanglement (I am thinking about direct or indirect payments for the assignment), how should potential benefits to the educational institution be treated? For example, what if the University of Illinois plans to pitch Starbucks CEO Howard Schultz on making a contribution toward a new campus building and plans to bring up this assignment? Again, I don't know if there was any entanglement here, and I assume it was just an innocent and useful assignment. But with the increasing corporatization of higher education, I wonder about the appropriate boundaries between businesses and universities.
Thoughts from our readers are welcomed.
Wednesday, January 6, 2016
The AALS Section on Business Associations and Law is honoring 13 exemplary mentors for their contributions to scholarship, teaching and the development of new business law scholars. Those honored were nominated by fellow members of the AALS Section. The mentors will be recognized at the conclusion of the AALS BA Section meeting on January 8th (1:30-3:15) at the Annual AALS meeting in New York. Please join me in congratulating our colleagues and thanking them for their contributions to our field.
- Lynne L. Dallas (San Diego);
- Claire M. Dickerson (Tulane) (posthumous);
- Christopher R. Drahozal (Kansas);
- Egon Guttman (American);
- William A. “Bill” Klein (UCLA);
- Donald C. Langevoort (Georgetown);
- Juliet M. Moringiello (Widener Commonwealth);
- Marleen O’Connor (Stetson);
- Terry O’Neill (Emerita, Tulane);
- Charles “Chuck” R.T. O’Kelley (Seattle);
- Alyssa Christmas Rollock (formerly of Indiana-Bloomington);
- Roberta Romano (Yale); and
- D. Gordon Smith (BYU)
The AALS Annual meeting starts today in New York. The full program is available here, and listed below are two Section meeting announcements of particular interest to business law scholars:
Thursday, January 7th from 1:30 pm – 3:15 pm the SECTION ON AGENCY, PARTNERSHIP, LLC’S AND UNINCORPORATED ASSOCIATIONS, COSPONSORED BY TRANSACTIONAL LAW AND SKILLS will meet in the Murray Hill East, Second Floor, New York Hilton Midtown for a program titled:
"Contract is King, But Can It Govern Its Realm?"
The program will be moderated by Benjamin Means, University of South Carolina School of Law. Discussants include:
- Joan M. Heminway, University of Tennessee College of Law
- Lyman P.Q. Johnson, Washington and Lee University School of Law
- Mark J. Loewenstein, University of Colorado School of Law
- Mohsen Manesh, University of Oregon School of Law
- Sandra K. Miller, Professor, Widener University School of Business Administration, Chester, PA
BLPB hosted an online micro-symposium in advance of the Contract is King meeting. The wrap up from this robust discussion is available here.
Friday January 8th, from 1:30 pm – 3:15 pm join the SECTION ON BUSINESS ASSOCIATIONS AND LAW
AND ECONOMICS JOINT PROGRAM at the Sutton South, Second Floor, New York Hilton Midtown for a program titled:
"The Corporate Law and Economics Revolution Years Later: The Impact of Economics and Finance Scholarship on Modern Corporate Law".
The program will be moderated by Usha R. Rodrigues, University of Georgia School of Law, and feature the following speakers:
- Frank Easterbrook, Judge, U.S. Court of Appeals for the Seventh Circuit, Chicago, IL
- H. Kent Greenfield, Boston College Law School
- Roberta Romano, Yale Law School
- Tamara C. Belinfanti, New York Law School
- Kathryn Judge, Columbia University School of Law
- K. Sabeel Rahman, Brooklyn Law School
At the conclusion of the program, the officers of the Section on Business Associations would like to honor 13 faculty members
for their mentorship work throughout the year.
I hope to see many of you in New York soon!
January 6, 2016 in Anne Tucker, Conferences, Corporate Governance, Corporations, Delaware, Financial Markets, Joan Heminway, Law and Economics, Law School, Teaching, Unincorporated Entities | Permalink | Comments (0)
Thursday, December 31, 2015
The Five Corporate Scandals That Defined 2015 and Why I Resolve to Sneak More Ethics and Compliance into My Teaching
This is the time of year when many people make New Year’s resolutions, and I suppose that law professors do so as well. I’m taking a break from teaching business associations next semester. Instead, I will teach Business and Human Rights as well as Civil Procedure II. I love Civ Pro II because my twenty years of litigation experience comes in handy when we go through discovery. I focus a lot on ethical issues in civil procedure even though my 1Ls haven’t taken professional responsibility because I know that they get a lot of their context from TV shows like Suits, in which a young “lawyer” (who never went to law school) has a photographic memory and is mentored by a very aggressive senior partner whose ethics generally kick in just in the nick of time. It will also be easy to talk about ethical issues in business and human rights. What are the ethical, moral, financial, and societal implications of operating in countries with no regard for human rights and how should that impact a board’s decision to maximize shareholder value? Can socially-responsible investors really make a difference and when and how should they use their influence? Those discussions will be necessary, difficult, thought-provoking, and fun.
I confess that I don’t discuss ethics as much as I would like in my traditional business associations class even though some of my 2Ls and 3Ls have already taken professional responsibility. This is particularly egregious for me since I spent several years before joining academia as a compliance and ethics officer. I also use a skills book by Professor Michelle Harner, which actually has an ethics component in each exercise, but I often gloss over that section because many of my students haven't taken professional responsibility and I feel that I should focus on the pure "business" material. Business school students learn about business ethics, but law students generally don’t, even though they often counsel business clients when they graduate.
Yesterday, I tweeted an article naming five corporate scandals that defined 2015: (1) the Volkswagen emissions coverup (2) the "revelation" regarding Exxon’s research warning of man-made climate change as early as 1981 and its decision to spend money on climate change denial; (3) climate lobbying and the “gap between words and action,” in particular the companies that “tout their sustainability credentials” but are “members of influential trade associations lobbying against EU climate policy”; (4) the Brazil mining tragedy, which caused the worst environmental disaster in the country’s history, and in which several companies are denying responsibility; and (5) the “broken culture” (according to the Tokyo Stock Exchange) of Toshiba, which inflated its net profits by hundreds of millions of dollars over several years.
All of these multinational companies have in-house and outside counsel advising them, as did Enron, WorldCom, and any number of companies that have been embroiled in corporate scandal in the past. Stephen Bainbridge has written persuasively about the role of lawyers as gatekeepers. But what are we doing to train tomorrow's lawyers to prepare for this role? Practicing lawyers must take a certain number of ethics credits every few years as part of their continuing legal education obligation but we should do a better job as law professors of training law students to spot some of the tough ethical issues early on in every course we teach. This is especially true because many students who graduate today will work for small and medium-sized firms and will be advising small and medium-sized businesses. They won’t have the seemingly unlimited resources I had when I graduated in 1992 and went to work for BigLaw in New York. Many of the cases I worked on were staffed with layers of experienced lawyers, often in offices from around the world. If I naively missed an issue, someone else would likely see it.
So my resolution for 2016? The next time I teach business associations, I may spend a little less time on some of the background on Meinhard v. Salmon and more time on some of the ethical issues of that and the other cases and drafting exercises that my students work on. If you have ideas on how you weave ethics into your teaching, please comment below or email me at firstname.lastname@example.org.
I wish all of our readers a happy and healthy new year.
December 31, 2015 in Business Associations, Business School, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Ethics, Human Rights, Law School, Marcia Narine, Teaching | Permalink | Comments (1)
Wednesday, December 30, 2015
OK. No more complaining about grading--at least for another few months. Whew! I think I am getting too old for this crazy few weeks in December that involve holiday preparations and reading for the purpose of assessment.
This week, as I promised last week, I do want to say a bit more about the exams themselves, however. I noticed certain patterns of wrong answers this year (some of them common to ones noted in prior years that I have tried in various ways--unsuccessfully--to address in my teaching). I sent a message to my students that captured those common mistakes. An edited list of the observations I shared with them about those errors is included below.
- Management/Control vs. Agency. Management and control as an entity attribute is not the same as agency. The former involves internal governance--who among the internal constituents of the firm has the power to exercise the firm's rights and keep it operating, from a legal (and practical) point of view. The latter relates to the firm's liability to third parties. These two matters are set forth in different rules in each statute we covered in our course last semester. In the corporation, for example--the most complicated firm we studied, the board has the highest level of management and control rights. The officers have management and control power delegated by the corporation's organizational/organic documents (charter and bylaws, and maybe a shareholder agreement) and by the board. The shareholders have more limited management and control powers (through electing directors and approving charter and bylaw amendments, mergers and acquisitions, sales of all/substantially all the corporation's assets, and voluntary dissolutions). Of those three internal constituents, only the officers are agents of the firm who can bind the corporation to contracts and transactions with third parties. [I continued by offering other examples from partnership and LLC law.] . . . The main point is that one should not conflate management/control and agency. They are separate considerations.
- Compensation vs. Distributions. Rights to compensation and distribution are both financial benefits to the recipient, but they are different from each other in almost all respects. Compensation (salary and benefits) is paid in exchange for services. . . . Distributions represent returns (including current returns, like dividends, as well as amounts paid in dissolution--at the end of wind-up) to owners/equity investors. The MBCA also defines distributions to include amounts received in exchange for shares when the corporation buys them back from its shareholders.
- Limited Liability - Owners vs. Managers. Both shareholders, as corporate owners, and directors/officers, as corporate managers, may enjoy some form of limited liability. Separate those concepts out, however. Shareholders are afforded limited liability under the statutes in a different way than directors/officers. This is largely because the former do not typically have fiduciary duties to the firm, while the latter do. So, the latter must be accountable for the interests of the firm in taking action for or on its behalf.
- The Judicial Process. When asked to convey information about how a court addresses cases in an area, the best approach is to identify the court's standard of review or methodology/process as evidenced in the applicable body of cases--not to summarize each case individually . . . . Although the case summary approach may ultimately respond to the inquiry, it is not a sure way to do that and it is not efficient in any case. Imagine a client sitting through a series of case summaries after asking how a court handles a particular issue . . . . Ask yourself: would the client know that her question was answered in the end, and if so, would she be able to understand the answer?
- Using IRAC. IRAC is a legal reasoning approach used to apply law to facts to resolve a legal question involving a legally cognizable action. If you are asked a question on an exam about a rule of law that does not engage a fact pattern, then you do not need IRAC. Part B of the exam did not involve the application of law to dispute resolution or other activities. Yet, some of you tried to set out an answer in IRAC form for that part of the exam. It wasn't ultimately very successful (since there could not be an "A").
- Avoiding Redundancy/Inconsistency. In using IRAC or another legal reasoning technique, state the legal rule once in all of its relevant detail; then, use it. A number of you repeated the rule several times (sometimes with differing levels of detail) in answering a single exam query. This redundancy cost you time that could have been better spent on other parts of the exam, in many cases, and the approach sometimes led to inconsistent applications of the rule (because it was stated differently). For example, many of you stated (correctly) that the current RULPA allows limited partners to enjoy limited personal liability for the obligations of the limited partnership even if the limited partners exercise control. But later in the same response, some of you took that back by noting (incorrectly) that certain types of control would subject limited partners to personal liability for the obligations of the firm. Both cannot be true . . . .
- Using "Held" and Other Variants of "Holding". . . . [S]tatutes do not have holdings. Lawyers do not say that statutes "hold" particular rules. Rather, statutes "provide" or "state" or "set forth" matters or rules. Also, many of you misuse the word "hold" when referring to information from cases. A holding in a case is the response to a legal issue raised in the case. So, you should not say that a case "held" something unless that something represents the response to a legal issue raised in the case. For example, it's inaccurate to say that a case "held" something that represents a policy consideration or dicta.
That's it. (Although I cannot resist, especially in light of Josh Fershee's post yesterday, adding that one student did refer to LLC owners as shareholders--a bad cut-and-paste job from an earlier answer, imv.) I suspect that many who teach Business Associations see some of these same things with their students. Some of these mistakes are generic errors that also may be observed in other courses. No doubt, as I observed last week, some of these errors would not be made in situations that do not involve the stress and time pressure that an in-class examination entails. To me, however, all of these issues were important enough to bring to the attention to the entire class. I also invited--encouraged--all students to come back and review their exams, whether they "did better, as well as, or less well than . . . expected, hoped, or wanted." I hope that many of my students do take me up on that offer/suggestion. But I am not holding my breath.
Tuesday, December 22, 2015
My colleague Steve Bradford noted a little while back that this is the season grading, not grade whining. (Colleague Joan Heminway followed up with some sound advice on avoiding grade whining, too.) Add to the grading season an upcoming ABA site visit, and a few other deadlines, I'm feeling more overwhelmed than usual. And, this morning, I went for my run in wet and rainy 55-degree weather with some a stiff wind in my face (on the way out).
The wind in my face, coupled with Steve's sound words, reminded me of a post I wrote in November 2014, Better Teaching Idea: Try to Notice When the Wind Is at Your Back. When I got into the office, I read it again to try to help me get back to my work with a good mindset. The close of that piece was this:
If we want to be better teachers, better lawyers, and better people, we’d all do well to try to recognize when the wind might be (or might have been) at our backs. At various times, because of our race, gender, sexual orientation, class, religion, familial situation, education, or other reality, we have faced challenges, feeling the wind blowing directly in our faces. But at some point, most of us had the wind at our back, at least as compared to someone else. And certainly, some of us have had the help more than others.
Recognizing the challenges others face does not make our challenges less real or our accomplishments less significant. It just gives us the chance to have a closer, if not full, understanding of the challenges others face. Ideally, that can make us more fair, more accessible, and more reasonable. It is right to try, especially for those of us who have reaped the benefit of the wind at our backs more often than others.
I still very much believe this is true, and with the holidays rapidly approaching, it's a good reminder to me to be thankful for all I have, and to appreciate how well I have it.
I wish you all happy holidays, efficient grading, good beer and wine (not whine), and great friends and family.
Wednesday, December 16, 2015
CALL FOR PRESENTATION PROPOSALS
Institute for Law Teaching and Learning—Summer 2016 Conference
June 10-11, 2016
Washburn University School of Law—Topeka, Kansas
The Institute for Law Teaching and Learning invites proposals for conference workshops addressing the many ways that law schools are preparing students to enter the real world of law practice. With the rising demands for “practice-ready” lawyers, this topic has taken on increased urgency in recent years. How are law schools and law professors taking on the challenge of graduating students who are ready to join the real world of practicing attorneys? Can we be doing more?
The Institute takes a broad view of educational practices that promote real-world readiness. Accordingly, we welcome proposals for workshops on incorporating such teaching techniques in doctrinal, clinical, externship, writing, seminar, hybrid, and interdisciplinary courses. Workshops can address real-world readiness in first-year courses, upper-level courses, required courses, electives, or academic support teaching. Workshops can present innovative teaching materials, course designs, curricular or program designs, etc. Each workshop should include materials that participants can use during the workshop and also when they return to their campuses. Presenters should model best practices in teaching methods by actively engaging the workshop participants.
The Institute invites proposals for 60-minute workshops consistent with a broad interpretation of the conference theme. To be considered for the conference, proposals should be one single-spaced page (maximum) and should include the following information:
- the title of the workshop;
- the name, address, telephone number, and email address of the presenter(s);
- a summary of the contents of the workshop, including its goals and methods; and
- an explanation of the interactive teaching methods the presenter(s) will use to engage the audience.
The Institute must receive proposals by February 1, 2016. Submit proposals via email to Emily Grant, Co-Director, Institute for Law Teaching and Learning, at email@example.com.
More information is available at: http://lawteaching.org/conferences/2016/
Thursday, December 10, 2015
I’m knee deep in grading my business associations exams and so far, I’m pretty pleased. Maybe it’s my in-house background, but I spend a lot of time with my students getting them to focus on providing strategic advice to their fictional clients because that’s what my former clients demanded. My operations and executive colleagues complained that lawyers didn’t understand business or their pressure points and offered legal advice without thinking of the big picture or strategic considerations. With that in mind, my students work in law firms and do a variety of exercises from Michelle Harner’s skills book. When they answer questions in class based on cases or drafting exercises, I force them to think like a client rather than just the lawyer. I drill into them the importance of speaking to their clients in plain English, and I tell them if they can’t break the concepts down in their own words, then they don’t really understand them. Their final exam required them to advise a number of different clients based on the same fact pattern, and I am enjoying reading the different strategies that my 69 students devised based upon the same set of facts.
I get a break from teaching BA next semester but I will be thinking of other ways to teach my students to think like clients. I’ve recently read an article by Professor Alicia J. Davis from Michigan, who uses the HBS case study method in her advanced courses. I agree with her assertion that one drawback is that most law students lack the work experience and business knowledge to understand some of the concepts, but I may adopt some of her methods since my students work in law firms already, which is ideal for this method. The abstract of her article is below:
For the past twenty-five years, my academic and professional pursuits have straddled the line between business and law. I majored in business administration in college and then worked as an analyst in the Corporate Finance department at a bulge bracket Wall Street firm. After completing a JD/MBA, I returned to investment banking with a focus on middle-market mergers and acquisitions (M&A) and subsequently practiced law with a focus on private equity and M&A. Finally, in 2004, I found my current home as a corporate law professor. In my courses, which include Mergers & Acquisitions, Enterprise Organization, and Investor Protection, I strive to teach my students the substantive law, the ethics surrounding the practice of law, the nuts and bolts of how to execute transactions, and how corporations can be better world citizens. Though imparting those skills is a significant undertaking in and of itself, it is not enough. I also want my students to appreciate the underlying business rationales for the transactions we discuss in class and to begin to develop an intuition for sound business strategy.
A basic understanding of a client's business, of course, aids with traditional transactional lawyering tasks, such as due diligence, negotiating a deal, and drafting acquisition agreements. For example, if a lawyer knows that her client's acquisition target derives forty percent of its revenue from a particular customer, she will pay particular attention to that customer's contracts with the target during her due diligence review. She also will draft the M&A agreement's target representations and warranties section so that her client receives contractual assurances of full disclosure about the status of those customer contracts. However, in my teaching, I strive to go beyond giving my students this basic understanding. Perhaps I am too ambitious, but I want more for my students than understanding just enough about business to draft merger agreement provisions effectively. I want them to begin to develop the ability to serve as lawyers who provide legal advice in a strategic context.
A few days ago, co-blogger Steve Bradford posted on law professor complaints about grading under the title Warning: Law Professor Whine Season. OK. I typically am one of those whiners. But today, rather than noting that grading is the only part of the semester I actually need to be paid for (and all that yada yada), I want to briefly extoll one virtue of exam season: the positive things one sees in students as they consciously and appropriately struggle to synthesize the material in a 14-week jam-packed semester.
My Business Associations final exam was administered on Tuesday. Like many other law professors, I gave my students sample questions (with the answers), held a review session, and responded to questions posted to the discussion board on our class course management site. Sometimes, I dread any and all of that post-class madness. This year, I admit that there were few of the thinly veiled (and, by me, expressly discouraged and disdained) "is this on the exam?" or "please re-teach this part of the course . . ." types of questions or requests in any of the forums that I offered for post-class review and learning. That was a relief.
The students' final work product for my Corporate Finance planning and drafting seminar was due Monday. I met with a number of students in the course about that drafting assignment and about the predecessor project in the final weeks before each was due. I watched them work through issues and begin to make decisions, uncomfortable as they might be in doing so, that solve real client problems. Satisfying times . . . .
In fact, there have been a number of moments over the past week in which I was exceedingly proud of the learning that had gone on and was continuing to go on during the post-class exam-and-project-preparation phase of the semester. I offer a few examples here to illustrate my point. They come from both my Business Associations course, for which students take a comprehensive written final examination, and my Corporate Finance planning and drafting seminar, for which students solve a corporate finance problem through planning and drafting and write a review of a fellow student's planning and drafting project.
Thursday, December 3, 2015
CALL FOR PROPOSALS AND REGISTRATION INFORMATION
Emory’s Center for Transactional Law and Practice is delighted to announce its fifth biennial conference on the teaching of transactional law and skills. The conference, entitled “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills,” will be held at Emory Law, beginning at 1:00 p.m. on Friday, June 10th and ending at 3:45 p.m. on Saturday, June 11th.
CALL FOR PROPOSALS
We are accepting proposals immediately, but in no event later than 5 p.m. on Monday, February 15, 2016. We welcome proposals on any subject of interest to current or potential teachers of transactional law and skills, focusing particularly on our overarching theme: “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills.”
We hope to receive proposals about teaching: business/corporate law; contract drafting and other transactional drafting; deal skills (interviewing a client, conducting due diligence, negotiating, etc.); business and financial literacy; and ethics and professionalism.
We also welcome proposals about the interplay between teaching transactional law and skills and the ABA’s new experiential learning requirement (Standard 303(a)(3)). Moreover, with regard to the teaching of transactional law and skills, we would like to hear about your efforts to use technology in the classroom, create meaningful assessment tools, and conduct empirical studies. Please submit the proposal form electronically via the Emory Law website at http://bit.ly/trans-proposals before 5 p.m. on Monday, February 15, 2016.
Each session will be approximately 80 minutes long. We invite you to present your topic individually or with a panel of other participants and we encourage you to make your presentation creative and interactive. We look forward to receiving your proposals so that we can finalize the Program.
As in prior years, some of the conference proceedings as well as the materials distributed by speakers will be published in Transactions: The Tennessee Journal of Business Law, a publication of the Clayton Center for Entrepreneurial Law of The University of Tennessee.
Both attendees and presenters must register for the Conference and pay the registration fee of $189.00. The registration fee includes a pre-Conference lunch beginning at 11:30 a.m., snacks, and a reception on June 10, and breakfast, lunch, and snacks on June 11. We are planning an optional dinner for attendees and presenters on Friday evening, June 10, at an additional cost of $45 per person.
Registration is now open for the Conference and the optional Friday night dinner at our Emory Law website at http://bit.ly/trans-registration.
TRAVEL ARRANGEMENTS AND HOTEL ACCOMMODATIONS
Attendees and presenters are responsible for their own travel arrangements and hotel accommodations. Special hotel rates for conference participants are available at the Emory Conference Center Hotel, less than one mile from the conference site at Emory Law. Subject to availability, rates are $129 per night. Free shuttle transportation will be provided between the Emory Conference Center Hotel and Emory Law.
To make a reservation at the special conference rate, call the Emory Conference Center Hotel at 800.933.6679 and mention “The Emory Law Transactional Conference.” Note: The hotel’s special conference rate expires at the end of the day on Wednesday, May 18, 2016.
If you encounter any technical difficulties in submitting your proposal or in registering online, please contact Kelli Pittman, Conference Coordinator, at firstname.lastname@example.org or 404.727.3382.
We look forward to seeing you in June!
Sue Payne Katherine Koops
Executive Director Assistant Director
Thursday, November 5, 2015
With the recent release of bar results in many states, I have been obsessed of late about the sorry state of bar passage across the country--as well as specific bar passage issues relating to our graduates. So, rather than (as I should and will do soon) responding to Steve Bradford's prompting post on the final JOBS Act Title III crowdfunding rules and the related proposals regarding Rules 147 and 504 under the Securities Act of 1933, as amended (as well as his follow-up post on the Rule 147 proposal), I have decided to focus on bar passage for my few minutes of air time this week. Specifically, I want to begin to explore the question of what we can do, if anything, as business law professors to help more of our students succeed in passing the bar on the first attempt.
At a base level, this means we should endeavor to understand something about the reasons why our individual students fail the bar the first time around. A lot has been written about the national trends (inconclusively, as a general rule). And I am sure every law school is now analyzing the data on its own bar passage shortcomings. But my experience teaching Barbri and my conversations with former students who have not passed the bar indicate a number of possible causes. They include (and these are my descriptions based on that experience and those conversations, in no particular order):
- Failing to state the applicable legal rule(s) and apply them to the facts;
- Difficulty in processing legal reasoning in the time allotted;
- Nerves, sleep deprivation, illness and the like; and
- Engaging insufficiently with study materials and practice examinations.
Assuming that these anecdotal observations are, in fact, causes contributing to bar exam failures for at least some students, how might we be able to help?
Sunday, November 1, 2015
I teach both Civil Procedure and Business Associations. As a former defense-side commercial and employment litigator, I teach civ pro as a strategy class. I tell my students that unfortunately (and cynically), the facts don’t really matter. As my civil procedure professor Arthur Miller drilled into my head 25 ago, if you have procedure on your side, you will win every time regardless of the facts. Last week I taught the seminal but somewhat inscrutable Iqbal and Twombly cases, which make it harder for plaintiffs to survive a motion to dismiss and to get their day in court. In some ways, it can deny access to justice if the plaintiff does not have the funds or the will to re-file properly. Next semester I will teach Transnational Business and Human Rights, which touches on access to justice for aggrieved stakeholders who seek redress from multinationals. The facts in those cases are literally a matter of life and death but after the Kiobel case, which started off as a business and human rights case but turned into a jurisdictional case at the Supreme Court, civil procedure once again "triumphed" and the doors to U.S. courthouses closed a bit tighter for litigants.
This weekend, the New York Times published an in depth article about how the corporate use of arbitration clauses affects everyone from small businesses to employees to those who try to sue their cell phone carriers and credit card companies. Of course, most people subject to arbitration clauses don’t know about them until it’s too late. On the one hand, one could argue that corporations would be irresponsible not to take advantage of every legal avenue to avoid the expense of protracted and in some cases frivolous litigation, particularly class actions. On the other hand, the article, which as one commenter noted could have been written by the plaintiffs bar, painted a heartbreaking David v. Goliath scenario.
I see both sides and plan to discuss the article and the subsequent pieces in the NYT series in both of my classes. I want my students to think about what they would do if they were in-house counsel, board members, or business owners posed with the choice of whether to include these clauses in contracts or employee handbooks. For some of them it will just be a business decision. For others it will be a question of whether it’s a just business decision.
Thursday, October 29, 2015
I recently received information about this social enterprise & nonprofit clinical teaching fellowship position at Georgetown University Law Center. My friend, Georgetown law professor Alicia Plerhoples, is the director of the clinic, and the fellowship sounds like an excellent opportunity.
Georgetown Law Graduate Clinical Teaching Fellowship
Description of the Clinic
The Social Enterprise & Nonprofit Law Clinic at Georgetown University Law Center offers pro bono corporate and transactional legal services to social enterprises, nonprofit organizations, and select small businesses headquartered in Washington, D.C. and working locally or internationally. Through the Clinic, law students learn to translate theory into practice by engaging in the supervised practice of law for educational credit. The Clinic’s goals are consistent with Georgetown University's long tradition of public service. The Clinic’s goals are to:
- Teach law students the materials, expectations, strategies, and methods of transactional lawyering, as well as an appreciation for how transactional law can be used in the public interest.
- Represent social enterprises and nonprofit organizations in corporate and transactional legal matters.
- Facilitate the growth of social enterprise in the D.C. area.
The clinic’s local focus not only allows the Clinic to give back to the community it calls home, but also gives students an opportunity to explore and understand the challenges and strengths of the D.C. community beyond the Georgetown Law campus. As D.C. experiences increasing income inequality, it becomes increasingly important for the Clinic to provide legal assistance to organizations that serve and empower vulnerable D.C. communities. Students are taught how to become partners in enterprise for their clients with the understanding that innovative transactional lawyers understand both the legal and non-legal incentive structures that drive business organizations.
Description of Fellowship
The two-year fellowship is an ideal position for a transactional lawyer interested in developing teaching and supervisory abilities in a setting that emphasizes a dual commitment—clinical education of law students and transactional law employed in the public interest. The fellow will have several areas of responsibility, with an increasing role as the fellowship progresses. Over the course of the fellowship, the fellow will: (i) supervise students in representing nonprofit organizations and social enterprises on transactional, operational, and corporate governance matters, (ii) share responsibility for teaching seminar sessions, and (iii) share in the administrative and case handling responsibilities of the Clinic. Fellows also participate in a clinical pedagogy seminar and other activities designed to support an interest in clinical teaching and legal education. Successful completion of the fellowship results in the award of an L.L.M. in Advocacy from Georgetown University. The fellowship start date is August 1, 2016, and the fellowship is for two years, ending July 31, 2018.
Applicants must have at least 3 years of post J.D. legal experience. Preference will be given to applicants with experience in a transactional area of practice such as nonprofit law and tax, corporate law, intellectual property, real estate, or finance. Applicants with a strong commitment to economic justice are encouraged to apply. Applicants must be admitted or willing to be admitted to the District of Columbia Bar.
To apply, send a resume, an official or unofficial law school transcript, and a detailed letter of interest by December 15, 2015. The letter should be no longer than two pages and address a) why you are interested in this fellowship; b) what you can contribute to the Clinic; c) your experience with transactional matters and/or corporate law; and d) anything else that you consider pertinent. Please address your application to Professor Alicia Plerhoples, Georgetown Law, 600 New Jersey Ave., NW, Suite 434, Washington, D.C. 20001, and email it to email@example.com. Emailed applications are preferred. More information about the clinic can be found at www.socialenterprise-gulaw.org.
Teaching fellows receive an annual stipend of approximately $53,500 (taxable), health and dental benefits, and all tuition and fees in the LL.M. program. As full-time students, teaching fellows qualify for deferment of their student loans. In addition, teaching fellows may be eligible for loan repayment assistance from their law schools.
Wednesday, October 28, 2015
I had the honor of being invited to speak at the annual symposium for the Wayne Law Review two weeks ago. The event, which focused on Corporate Counsel as Gatekeepers, was well organized and attended--and also very stimulating. Speakers included Tony West as a keynote, a few of us academics, and a bunch of current and former practitioners--prosecutors, in-house counsel, and outside counsel.
My presentation focused on a story that bugs me--a story built on an experience I had in practice. In the story (which modifies the true facts), an executive flagrantly violates a securities trading compliance plan that I drafted in connection with a subsequent transaction that I worked on for the executive's firm. Specifically, the executive informs a friend about the transaction the day before it is announced, believing that the friend will never trade on the information. The friend trades. The incident results in a stock exchange and Securities and Exchange Commission (SEC) inquiries. No enforcement is undertaken against the firm. However, the executive signs a consent decree with--and pays a cash penalty to--the SEC and, together with the firm, suffers public humiliation via a front-page article in the local newspaper (since the SEC would not agree to forego a press release). This fact pattern gnaws at me because I wonder whether there is anything more legal counsel can do to prevent an executive from violating a compliance policy to the detriment of himself and the firm . . . .
Earlier this month BLPB editor Ann Lipton wrote about the Delaware Supreme Court opinion in Sanchez regarding director independence (Delaware Supreme Court Discovers the Powers of Friendship). On the same day as the Del. Sup. Ct. decided Sanchez, it affirmed the dismissal of KKR Financial Holdings shareholders' challenge to directors' approval of a buyout. The transaction was a stock-for-stock merger between KKR & Co. L.P. (“KKR”) and KKR Financial Holdings LLC (“Financial Holdings”). Plaintiffs alleged that the entire fairness standard should apply because KKR was a controlling parent in Financial Holdings. The controlling parent argument hinged on the facts that:
Financial Holdings's primary business was financing KKR's leveraged buyout activities, and instead of having employees manage the company's day-to-day operations, Financial Holdings was managed by KKR Financial Advisors, an affiliate of KKR, under a contractual management agreement that could only be terminated by Financial Holdings if it paid a termination fee.
Chief Justice Strine, writing an en banc opinion for the Court, upheld Chancellor Bouchard's finding that KKR could not be considered a controlling parent where "KKR owned less than 1% of Financial Holdings's stock, had no right to appoint any directors, and had no contractual right to veto any board action."
The Delaware Supreme Court upheld the familiar standard of effective control, absent a majority, which focuses on "a combination of potent voting power and management control such that the stockholder could be deemed to have effective control of the board without actually owning a majority of stock."
Chancellor Bouchard had noted that plaintiff's complaint stemmed from dissatisfaction at the contractual relationship between KKR and Financial Holdings which limited the growth of Financial holdings. Chancellor Bouchard wrote:
At bottom, plaintiffs ask the Court to impose fiduciary obligations on a relatively nominal stockholder, not because of any coercive power that stockholder could wield over the board's ability to independently decide whether or not to approve the merger, but because of pre-existing contractual obligations with that stockholder that constrain the business or strategic options available to the corporation.
Sometimes a "nothing new" case provides a good reminder of an established standard and provides clear language for recapping the concept to students. This will become a note case on "effective" control in my ChartaCourse corporations casebook and also a good illustration of the role of private agreements in shaping how legal standards are applied.
You can read the opinion at: Corwin et al. v. KKR Fin. Holdings et al., No. 629, 2014, 2015 WL 5772262 (Del. Oct. 2, 2015).
Wednesday, October 14, 2015
Last week was the oral midterm examination week for students in my in Business Associations class. I admit to exhaustion and jubilation at the end of that week every year. I think the students feel about the same way . . . .
This year's examination related to an expulsion of members in a member-managed limited liability company (LLC). The facts were based on an interesting Tennessee case with which many LLC aficionados are no doubt familiar: Anderson v. Wilder. The exam questions related to the validity and effects of the expulsion under the Revised Uniform Limited Liability Company Act and the LLC's operating agreement, the potential breaches of fiduciary duty and failure to comply with the contractual obligation of good faith and fair dealing, and the possible resulting causes of action and remedies--including any effects of the members' dissociation.
In a blog post last weekend from Lou Sirico and our other friends at the Legal Skills Prof Blog, I divined support for all of us who engage in practice-focused legal education: these teaching/learning methods can help students to thrive, not merely survive. It has been my (admittedly anecdotal) observation that students who engage in simulations (as well as those who participate in clinics and internships/externships) in law school are happier and more well-adjusted about their education and their post-graduation employment. Last week's oral midterms--conducted in groups of three--gave me some windows on that world. I will share a few here.
Thursday, October 1, 2015
Last night, I took my husband (part of his birthday present) to see The Illusionists, a touring Broadway production featuring seven masters of illusion doing a three-night run in Knoxville this week. I admit to a fascination for magic shows and the like, an interest my husband shares. I really enjoyed the production and recommend it to those with similar interests.
At the show last night, however, something unusual happened. I ended up in the show. I made an egg reappear and had my watch pilfered by one of the illusionists. It was pretty cool. After the show, I got kudos for my performance in the ladies room, on the street, and in the local gelato place.
But I admit that as I thought about the way I had been tricked--by sleight of hand--into performing for the audience and allowing my watch to be taken, I realized that these illusionists have something in common with Ponzi schemers and the like--each finds a patsy who can believe and suckers that person into parting with something of value based on that belief. That's precisely what I wanted to blog about today anyway--scammers. Life has a funny way of making these kinds of connections . . . .
So, I am briefly posting today about a type of affinity fraud that really troubles me--affinity fraud in which a lawyer defrauds a client. Most of us who teach business law have had to teach, in Business Associations or a course on professional responsibility, cases involving lawyers who, e.g., abscond with client funds or deceive clients out of money or property. I always find that these cases provide important, if difficult, teaching moments: I want the students to understand the applicable law of the case, but I also want them to understand the gravity of the situation when a lawyer breaches that all-important bond of trust with a client.