Saturday, November 11, 2006

Antinomies and the Life of a Corporate Lawyer

Posted by Jeff Lipshaw

I will work with the Wikipedia definition of an antinomy as developed in Kant's work:  "the equally Kant rational but contradictory results of applying to the universe of pure thought the categories or criteria of reason proper to the universe of sensible perception."  So, for example, starting from the same empirical data, pure reason is capable of deducing the thesis that the universe has a beginning point, and the antithesis, that it does not.  Or reason is capable of deducing the thesis that causality means everything is determined, and the antithesis, that we have free will.

And so we find the corporate lawyer and the corporate executive faced with such antimonies, as pointed out in an eminently sensible way by Joe Nocera in the New York Times (November 11, Business Today) under the headline "The Paradoxes of Business as Do-Gooders."  The occasion is the annual Business for Social Responsibility conference in New York this weekend, at which companies like Starbucks, Time Warner, Chevron, Pfizer, and others are explaining why being good corporate citizens makes business sense.

Nocera observes, sensibly, that it is much easier to be a good citizen in a profitable company.  Indeed, that's consistent with the observation that environmentalism is a luxury of the developed countries; you don't worry too much about externalities when you are struggling just to house and feed people.  But the paradoxes and antinomies of the real world, faced by corporate lawyers and executives every day, are hardly the stuff of a solid, non-contradictory theory of human behavior.  SoPost from an empirical base, one side, represented in Nocera's article by Isaac Post (right) of the Competitive Enterprise Institute, says that corporate social responsibility "is a misguided attempt by a subcategory of business managers to deal with the crisis of corporate legitimacy."  Russell Roberts, an economist at George Mason University, adds "Doesn't it make sense to have companies do what they do best, make good products at fair prices, and then let consumers use the savings for the charity of their choice?"

But the nature of antinomy is that you can't win.  According to Nocera, "[f]rom the left, the essential criticism of corporate social responsibility is that it is little more than window dressing, intended to give companies a good name without having to back it up with real deeds."  Ah, would that the world were simple enough to explain by resort to the fruits of pure reason, notwithstanding that the same set of circumstances allows us to reason to wholly antithetical conclusions.

Last night, I had the pleasure of speaking for an hour, mainly answering questions about the life of a Apage_1 corporate lawyer, to the mergers and acquisition class taught by Professor Antony Page (left) at the Indiana University School of Law - Indianapolis.   The central question was - what does a general counsel do during an acquisition?  My response was that the general counsel has to understand the business deal and its importance to the company well enough to overrule high-powered Wall Street lawyers who are recommending that such-and-such a provision really should go into the agreement "to cover you just in case this-and-that happens," but also at the same time to understand when the language of a particular provision is important enough to stop the deal in its tracks.  That is the antimony of deal lawyering, because from the center of any such problem, you can always argue your way to either antithetical conclusion.  And so the students asked:  "how do you know which way to go?"  My only response is that of the Geoffrey Rush character in Shakespeare in Love who explained why everything in the hectic production of a play always works out, despite that "the natural condition [of the theater business] is one of insurmountable obstacles on the road to imminent disaster."

"I don't know; it's a mystery."

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