Tuesday, August 19, 2014

Summer's Over: More On Teaching Business Organizations

At West Virginia University College of Law, we started classes yesterday, and I taught my first classes of the year: Energy Law in the morning and Business Organizations in the afternoon.  As I  do with a new year coming, I updated and revised my Business Organizations course for the fall.  Last year, I moved over to using Unicorporated Business Entities, of which I am a co-author.  I have my own corporations materials that I use to supplement the book so that I cover the full scope of agency, partnerships, LLCs, and corporations.  So far, it's worked  pretty well.  I spent several  years with  Klein, Ramseyer and Bainbridge's Business Associations, Cases and Materials on Agency, Partnerships, and Corporations (KRB), which is a great casebook, in its own right.

I did not make the change merely (or even mostly) because I am a co-author. I made the change because I like the structure we use in our book. I had been trying to work with KRB in my structure, but this book is designed to teach in with the organization I prefer, which is more topical than entity by entity.  I'll note that a little while ago, my co-blogger Steve Bradford asked, "Are We Teaching Business Associations Backwards?" Steve Bainbridge said, "No." He explained, 

I've tried that approach twice. Once, when I was very young, using photocopied materials I cut and pasted from casebook drafts the authors kindly allowed me to use. Once by jumping around Klein, Ramseyer, and Bainbridge. Both times it was a disaster. Students found it very confusing (and boy did my evaluations show it!). It actually took more time than the entity by entity approach, because I ended up having to do a lot of review (e.g., "you'll remember from 2 weeks ago when we discussed LLCs most recently that ...."). There actually isn't all that much topic overlap. Among corporations, for example, you've got the business judgment rule, derivative suits, "duty" of good faith, executive compensation, the special rules for close corporations, proxies, and so on, most of which either don't apply to LLCs etc.... or don't deserve duplicative treatment.

I have great respect for Prof. Bainbridge, and his writing has influenced me greatly, but (not surprisingly), I come out more closely aligned with my perception of Larry Ribstein on such issues, and with Jeff Lipshaw, who commented, 

I disagree about the lack of topic overlap, and suspect Larry Ribstein is raging about this in BA Heaven right now. . . .

This may reflect differences among student populations, but the traditional corporate law course, focusing primarily on public corporations, is less pertinent in many schools where students are unlikely to be doing that kind of work when they graduate. It's far more likely that they'll need to be able to explain to a client why the appropriate business form is a corporation or an LLC, and what the topical differences between them are.

I completely agree, and I would go another step to say that I find the duplication to be a valuable reinforcement mechanism that is worth (what I have seen as limited) extra time.  I am teaching a 4-credit course, though, which gives me time I never had in my prior institution's 3-credit version. 

One thing I am doing differently this year is my first assignment, which seeks to build on what I see as a need for students here. That is, I think many of them will need to be able to explain entity differences and help clients select the right option. 

I had my students fill out the form for a West Virginia Limited Liability Company (PDF here). I had a few goals.  First, I don't like to have students leave any of my classes without handling at least some of the forms or other documents they are likely to encounter in practice.  Second, I did it without any instruction this time (I have used similar forms later in the course) because I thought it would help me tee up an introduction to all this issues I want them thinking about with regard to entity choice.  (It did.) Finally, I like getting students to see the connection between the form and the statute. We can link though and see why the form requires certain issues, discuss waivable and nonwaivable provisions, and talk about things like entity purpose, freedom of contract, and the limits of limited liability.  

If nothing else, the change kept things fresh for me.  I welcome any comments and suggestions on any of this, and I wish everyone a great new academic year.  


Agency, Business Associations, Corporations, Joshua P. Fershee, Law School, LLCs, Partnership, Teaching | Permalink

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Interesting approach, Josh. I actually think each instructor has to make his or her peace with a method of instruction. The best each of us can do for the others is to make suggestions as to possible approaches and the benefits and detriments of each.

I use the book I coauthored, which approaches the topic entity by entity (after covering agency law). As someone who regularly advises folks on choice of entity and lived through the introduction of LLCs and LLPs while practicing law, that’s the only way I logically can think about teaching the course. I give my students a template with categories of attributes of business association law (broad ones) and I advise them to use this tool (or one of their own choosing that serves the same purpose) to capture the rules of each form of business entity as we go through them.

I have a few thoughts about why I logically approach the course material this way that may jive with Steve’s (and I really am in his camp on this). After covering agency/sole proprietorships and partnerships, the students can apply their knowledge of the different attributes to “hunt” for the comparable rule in limited partnership law, limited liability company law, and corporate law. That’s a nice practice skill to learn. Also, the entity-by-entity approach enables the students to think holistically about what each form of entity is—what it stands for as an independent business association. In practice, one must understand each individual statutory framework well in order to locate and properly apply the rules and “see” the tradeoffs. Of course, teaching by topic, one can pull those things together at the end of the course by asking the students to apply the learning in a practical context as across all the entities studied.

That’s what I mean by my “different strokes for different folks” comment above. Josh, you and Jeff and Larry all are/were solidly knowledgeable guys. So, go with your flow!

At Tennessee, I teach the Business Associations course from a transactional planning background, and the three other folks who teach/have taught the course in the past few years have practice backgrounds in corporate and commercial litigation, business taxation, and bankruptcy and reorganizations. They also use the entity-by-entity approach, but our courses look and feel very different (based on syllabi review and student comments). I welcome that richness and variation, and I think the students do, too.

Thanks for the thoughtful post. I am back in the BA classroom in the AM. Hold onto your hats! ;>)

Posted by: joanheminway | Aug 19, 2014 3:18:24 PM

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