Friday, November 18, 2022

Why the Judge Was Right to Rule Against DeSantis' Stop WOKE Act

As much as I love being a professor, it can be hard. I’m not talking about the grading, keeping the attention of the TikTok generation, or helping students with the rising mental health challenges.

I mean that it’s hard to know what to say in a classroom. On the one hand, you want to make sure that students learn and understand the importance of critical thinking and disagreeing without being disagreeable.

On the other hand, you worry about whether a factual statement taken out of context or your interpretation of an issue could land you in the cross hairs of cancel culture without the benefit of any debate or discussion.

I’m not an obvious person who should be worried about this. Although I learned from some of the original proponents of critical race theory in law school, that’s not my area of expertise. I teach about ESG, corporate law, and compliance issues.

But I think about this dilemma when I talk about corporate responsibility and corporate speech on hot button issues. I especially think about it when I teach business and human rights, where there are topics that may be too controversial to teach because some issues are too close to home and for many students and faculty members, it’s difficult to see the other side. So I sometimes self censor.

My colleagues who teach in public universities in Florida had even more reason to self censor because of the Stop WOKE act, which had eight topics related to race, gender, critical race theory and other matters that the State deemed “noxious” or problematic.

Yesterday, a federal court issued a 139-page opinion calling the law “dystopian.” The court noted that Justice Sotomayor could violate the law by guest lecturing in a law school and reading from her biography where she talks about how she benefitted from affirmative action. That’s absurd.

I had the chance to give my views to the Washington Post yesterday. This law never personally affected me but as the court noted, the university is the original marketplace of ideas. I told the reporter that one of my areas of expertise, ESG, is full of the kinds of issues that the government of the State of Florida has issues with. I told him that I was glad that I worked at a private university because academic freedom makes me more comfortable to raise issues.  I noted that students need the ability to play devil's advocate and speak freely because there's no way to mold the next generation of thinkers and lawmakers without free speech. I explained that you can't write the laws if you're not willing to hear more than one point of view. 

I hope that we get back to the days when professors don’t self censor, whether there’s a law in place or not. Of course there are some statements that are unacceptable and should never be taught in a classroom.

But I worry that some in this generation don’t know the difference between controversial and contemptible. That goes for my friends of all ideologies.

I worry that some students are missing out on so much because our society doesn’t know how to engage in civil discourse about weighty topics. So people either rant or stay silent.

In any event, my rant is over.

Today is a day for celebration.

Congratulations to my colleagues in public universities.

Reason has won out.

November 18, 2022 in Constitutional Law, CSR, Current Affairs, Human Rights, Law School, Lawyering, Legislation, Litigation, Marcia Narine Weldon, Teaching | Permalink | Comments (2)

Monday, November 14, 2022

Business Lawyers as "Financial Institutions"?

Earlier today, I received a communication from the American Bar Association's Governmental Affairs Office.  It was a request for action (as would often come from a government affairs office) relating to the ENABLERS Act amendment to the National Defense Authorization Act (NDAA).  The contents admittedly somewhat stunned me.  I include them in pertinent part below.

This . . . Senate amendment, like the similar amendment contained in the House-passed version of the NDAA, would regulate many business lawyers and law firms under the Bank Secrecy Act (BSA) and could require them to report a substantial amount of attorney-client privileged and other protected client information to the government.

The ENABLERS Act amendment, sponsored by Sen. Sheldon Whitehouse (D-RI), would change the BSA’s definition of “financial institution” to include lawyers and law firms that provide legal services to clients involving company formation, trust services, acquiring or disposing of interests in those entities, and many other specified financial activities. It would also require the Treasury Department to issue new regulations that could subject these lawyers and law firms to some or all of the BSA’s requirements for financial institutions. This could force you to submit Suspicious Activity Reports (SARs) on your clients’ financial transactions (without notifying the clients); identify and verify your clients’ accounts to the government; establish due diligence policies that could conflict with state supreme court rules; create costly and burdensome new anti-money laundering programs within your law firm; and undergo periodic or random audits to assess compliance. 

I have not been following this at all.  I wonder if any of you have been . . . .  Of course, the ostensible purpose is to combat money laundering--certainly a worthy goal.  But the incursion on the lawyer-client relationship, assuming the description above is accurate (and I am still wading into this, in all candor), does seem rather vast.  Please leave comments if you have thoughts to offer.  I am intrigued.

November 14, 2022 in Joan Heminway, Lawyering, Legislation | Permalink | Comments (0)

Friday, November 4, 2022

How Generation, Nationality, and Expertise Influence Stakeholder Prioritization of Tech Social Issues- Pt. 2

Last month, I posted about an experiment I conducted with students and international lawyers. I’ve asked my law student, Kaitlyn Jauregui to draft this post summarizing the groups’ reasoning and provide her insights. Next week, I’ll provide mine in light of what I’m hearing at various conferences, including this week’s International Bar Association meeting. This post is in her words.

After watching The Social Dilemma, participants completed a group exercise by deciding which social issues were a priority in the eyes of different tech industry stakeholders. The Social Dilemma is a 2020 docudrama that exposes how social media controls that influences the behavior, mental health, and political views of users by subjecting them to various algorithms. Director Jeff Orlowski interviewed founding and past tech employees of some of the biggest companies in Silicon Valley to bring awareness to viewers.  

Groups of primarily American college students, primarily American law students, one group of Latin American lawyers, and one group of international lawyers completed the exercise. Each of the groups deliberated from the perspective of a CEO, investor, consumer, or NGO.  Acting as that stakeholder, the team then ranked the following issues in order of importance: Incitements to violence, Labor Issues, Suppression of Speech, Mental Health, Surveillance, and Fake News. 

How The Groups Performed

The college students attend an American law school, but they are not necessarily all American. The groups’ logic behind their rankings could not be provided. I provided the rankings in the last post.

Law Students

The law students attend and American law school, but they are not necessarily all American. They considered six social issues.

Team CEO: Law Students

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Mental Health

4.    Fake News

5.    Suppression of Speech

6.    Incitements to Violence

The law students assigned to view the issues as a CEO based their rankings on an internal to external approach. They believed the CEO is responsible for the operations of the company so would first try to solve internal issues such as labor issues because that would directly affect the bottom line. Surveillance and mental health ranked #2 because the team assumed that these issues directly related to customer satisfaction and retention. Because this group took on the role as a tech CEO and not a social media CEO, they did not view 4-6 as important. Fake news was only relevant if it was about the company. Suppression of speech was not problematic to them because it would not directly impact their business. Finally, they did not view incitement to violence as relevant to the business operations so ranked it last.

Team Investor: Law Students

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Surveillance

4.    Suppression of Speech

5.    Fake News

6.    Mental Health

The law students who prioritized social issues as if they were an Investor approached the task considering market forces. They chose labor issues first because it poses challenges to business operations. Whatever looks bad for revenue generation such as incitement to violence and surveillance means their investment would look bad as well. It is important to note they viewed this assignment as an institutional investor. The remaining factors were not imperative to the success of the tech company so were ranked lower.

Team NGO: Law Students

1.    Fake News

2.    Incitement to Violence

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    Suppression of Speech

The law students who took on a role as an NGO based their sense of urgency on the danger and risks the involved in each issue. At the top was fake news because they thought misinformation when taken as fact was unhealthy for making decisions and forming opinions. Incitement to violence closely followed because political polarization can lead to hateful actions outside of social media. They found mental health to be important because of statistics showing teens committing self-harm or worse as a result of social media use. Although labor Issues are abroad, the NGO team could not ignore it. Surveillance was not key to them because they believed platforms are already taking measures against it. And lastly, suppression of speech was not as important to them as deleting hate speech and fake news.

Team Consumer: Law Students

1.    Surveillance

2.    Mental Health

3.    Incitement to Violence

4.    Suppression of Speech

5.    Fake News

6.    Labor Issues in Supply Chain

The law students who took on their natural roles as consumers found social issues more important than financial forces. They referred to the many advertisements that tech companies like Apple and Google are posting against surveillance. The effects of social media on mental health and even physical health also stood out to them. As a group of law students, they are informed individuals who can spot fake news so did not see that as a priority. Lastly, labor issues are not in the consumers’ sight so are out of mind and therefore not a priority.

Latin American Lawyers

*The Latin American Lawyers did not consider Fake News or Incitements to Violence.

Team CEO: Latin American Lawyers

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Suppression of Speech

4.    Mental Health

5.    -

6.    -

The Latin American lawyers ranked the social issues regarding business success and long-term goals. Labor issues were their top concern because it influences the legal challenges faced by the company and the costs of production. “Information is power” so surveillance restrictions would greatly decrease money earned from selling data gathered. They did not see suppression of speech as an issue because the company itself is not limited. Mental health was ultimately last because it does not impair business operations.

Team Investor: Latin American Lawyers

1.    Mental Health

2.    Surveillance

3.    Labor Issues in the Supply Chain

4.    Suppression of Speech

5.    -

6.    -

The Latin American lawyers listed their priorities as a socially responsible Investor. Mental health triggered the most urgency for them because the negative influence of social media on users is growing and is not slowing down. Heavy surveillance conflicts with the rights of persons like themselves so it is a great risk for them. Although labor issues were important, they did not think of it as a widespread issue affecting large populations of people. Lastly, suppression of speech was not a concern at all for them.

Team NGO: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers who participated as an NGO focused their efforts on user experience and rights. They found surveillance to be a growing concern and a human right violation for users. Suppression of speech was also very important to them, especially in the scope of the team’s nationality because of political distress in their home countries. For countries with political instability, their citizens are more conscious of infringed rights through social media. Fake news and censorship on virtual platforms can ultimately destroy the democracy of countries in their point of view. The team preferred life over work so chose to rank mental health higher than labor issues.

Team Consumer: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers used their personal perspective as consumers to rank in accordance with social concerns. Surveillance was seen as a major problem because it makes users uncomfortable knowing that their activity is tracked and sold as data. Suppression of speech was grouped with fake news as an important issue regarding the rights and freedom of the consumers. The gatekeeping of information from mainstream media in general was a concern for these consumers because they feel as if they are being controlled and concealed from the truth. Although the negative mental health results on teens from social media is important, the consumers thought this was the responsibility of parents and not of other consumers. Labor issues were of no concern because the consumers felt as if they have no control over the matter. 

International Lawyers

The International Group comprised of participants from Bolivia, Brazil, Bulgaria, Canada, Colombia, Ecuador, Egypt, Ethiopia, India, Iran, Jamaica, Mexico, Nepal, Sweden, Switzerland, and Ukraine. The group was not assigned to rank Mental Health as a social issue. The groups’ logic behind their rankings could not be provided.

Team CEO: International Lawyers

1.    Fake News

2.    Labor Issues in the Supply Chain

3.    Surveillance

4.    Incitement to Violence

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Socially Responsible)

1.    Incitement to Violence

2.    Fake News

3.    Labor Issues in the Supply Chain

4.    Surveillance

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Institutional)

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Suppression of Speech

4.    Fake News

5.    Surveillance

6.    -

Team NGO: International Lawyers

1.    Fake News

2.    Labor Issues in Supply Chain

3.    Suppression of Speech

4.    Incitements to Violence

5.    Surveillance

6.    -

 

Team Consumer: International Lawyers

1.    Incitements to Violence

2.    Suppression of Speech

3.    Fake News

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    -

 Insights

When given a business or financial oriented role, the teams ranked the social issues by focusing on whether it impacts company performance. Teams with community or advocate roles tended to rank the social issues according to impact on society. Team CEO prioritized labor issues and surveillance the most. Labor issues along with incitements to violence were of top concern for Team Investor. Fake news was the number one issue for Team NGO. Team Consumer, which reflects the average personal view of the participants, believed incitements to violence and surveillance were the most pressing social issues in the tech industry. Labor issues were the least important to the consumer participants, which is interesting in scope of consumer purchase decisions overall and not just in tech.

The Team Consumer data is reflective of each of the groups’ personal beliefs because all participants are also consumers. The College Students prioritized mental health. Both the law students and the Latin American lawyers found surveillance the most important tech issue. International lawyers instead thought incitement to violence more pressing. A possible explanation is that people in the U.S. and Latin America are trying to protect their privacy from intrusive technology. Because the international lawyers had participants from countries where incitement to violence are occurring, that may be why it was important to them.

Suppression of speech closely followed for Latin American Lawyers and International Lawyers whereas Mental Health was the second priority for the primarily American law Students. Many citizens of countries around the globe face oppressive governments that censor speech which may be influential in why Suppression of Speech was ranked highly. In the United States, citizens are guaranteed freedom of speech and press which is why this issue may not be as concerning for them. American teens also suffer from more mental illness as a result of social media use, possibly why it is second place.

Practices in corporate culture and opinions on social issues are influenced by the ethnic makeup of the employees. Although the stakeholder roles the groups took are the most determinative factor, their nationality is naturally a bias in their decision-making.

The Lewis Model is a triangular spectrum that identifies the prominent features of different cultures. Richard Lewis spoke 10 languages, visited 135 countries, and work in over 20 of them to find observable variability in social behavior. He recognized that stereotypes are unfair, but also emphasized that social norms are standards in each country. There are three defined points of culture: Linear Active, Multi-active, and Reactive.

  • Linear actives — those who plan, arrange, organize, do one thing at a time, follow action chains. They are truthful rather than diplomatic and do not fear confrontation. Their work and as well as personal life is based on logic rather than emotions. Linear actives like facts, fixed agenda and they are very job oriented. They are able to separate social-private and professional life.
  • Multi-actives — people belonging to this cultural category are able to do many things at once, planning their priorities not according to a time schedule, but according to the relative thrill or importance that each appointment brings with it. These cultures are very talkative and impulsive. These characteristics predict their orientation on people. They feel uncomfortable in silence. Multi-active people prefer face to face sessions.
  • Reactives — member of this group has in the priority list courtesy and respect on the top. This group is best listening culture. Listening quietly, reacting calmly and carefully to the other side's proposals are their traits as well. Reactive cultures are the world’s best listeners in as much as they concentrate on what the speaker is saying, do not interrupt a speaker while the discourse or presentation is on-going. Reactive people have large reserves of energy. Reactives tend to use names less frequently than other cultural categories.

How does the Lewis Model explain the results?

The primarily American college and law students fall under linear-active with their priorities aligned with individual rights and performance.

The Latin American lawyers are multi-active, think about the social issues in terms of impact on the community and on building relationships.

The International lawyers are comprised of participants all over the world, bringing in aspects from all over the spectrum.

The Lewis Model most likely plays a part in how each participant individually arrived at their own rankings and how they then communicated to agree on a reflective ranking together. The conversations guiding to the final result would have probably shown more insight as to how and why these social issues are important.

Age

The age of the participants is another influential factors because of the generational variation in trust in surveilling technologies. Generation Z, Millennials, and Generation X+ were asked in a survey how comfortable they felt with programs like Alexa or Siri on a scale from 1 to 10, 1 being very and 10 being not.

Generation Z: 7.73

Millennials: 8.28

Generation X+: 8.90

Older generations are more uneasy about virtual assistant technology.

With age comes more experience and better foresight. Researchers in Texas found that “older adults use the experience in decision-making accumulated over their lifetime to determine the long-term utility and not just the immediate benefit before making a choice. However, younger adults tend to focus their decision-making on instant gratification.”

How does age explain the results?

The majority of the college and law students were Generation Z or Millennials whereas the practicing attorneys were mostly Millennials or more senior.

As generations progress, younger people are more comfortable with surveillance technology than older people.

Expertise

Expertise of the participants surely impacted how they ranked social issues. The knowledge of experts in comparison to novices gives them a wider and practical approach to business and social issues. Here are some key aspects:

  1. Experts notice features and meaningful patterns of information that are not noticed by novices.
  2. Experts have acquired a great deal of content knowledge that is organized in ways that reflect a deep understanding of their subject matter.
  3. Experts’ knowledge cannot be reduced to sets of isolated facts or propositions but, instead, reflects contexts of applicability: that is, the knowledge is “conditionalized” on a set of circumstances.
  4. Experts are able to flexibly retrieve important aspects of their knowledge with little attentional effort.
  5. Though experts know their disciplines thoroughly, this does not guarantee that they are able to teach others.
  6. Experts have varying levels of flexibility in their approach to new situations.

Perhaps the practicing attorneys foresaw further down the line as to why one social issue was more pressing than another.

Thank you, Kaitlyn for providing your analysis of the results. Next week, I’ll provide mine.

November 4, 2022 in Business Associations, Comparative Law, Compliance, Corporate Personality, Corporations, CSR, Current Affairs, Human Rights, International Law, Law School, Lawyering, Marcia Narine Weldon, Social Enterprise, Teaching | Permalink | Comments (0)

Friday, October 7, 2022

How to Contract Conference- February 16-17 in Miami

I had originally planned to post Pt. 2 of the blog post I did a couple of weeks ago, but this announcement is time sensitive.

I'm thrilled to announce that the Transactional Skills Program at the University of Miami School of Law is partnering with Laura Frederick for the second How to Contract conference. It's time sensitive because we are considering holding a side event with a contract drafting and negotiation competition for law students if there's enough interest. If you think you would be interested, please email me at mweldon@law.miami.edu.

For lawyers, there are virtual and live options for the contract conference. I've cut and pasted from the website so you can see why you should come to sunny Miami (and it won't be hurricane season):

It is not about the mega deals.

ContractsCon is about the contracts you work on EVERY DAY. We want to help you learn how to draft and negotiate the deals you see all the time.

Because for every 100-page specialized contract sent to outside counsel, there are thousands of smaller but important ones that in-house counsel and professionals do day in and day out.

ContractsCon focuses on how we manage risk and make the tough decisions with less time and information than we need.

It is not a summary of recent case law.

ContractsCon is about providing actionable advice to help you do the work that you have sitting in your inbox RIGHT NOW.

It's not about case names or citations and we don't get into academic explanations.

ContractsCon focuses on the real-world expertise from experienced practitioners that you need to improve your contract skills and expertise and become better at drafting and negotiating in the real world.

It is not going to put you to sleep.

ContractsCon is about the fun and awesomeness of contracts. We are organizing it to be a true lovefest for everything contracts.  

Why not combine learning about contracts with having fun?

You'll meet other lawyers and professionals passionate about contract drafting and negotiating. Our sessions and workshops feature contracting superstars who love what they do and will share their excitement with you. Plus we're planning a ton of activities on-site and online to keep you engaged. 

ContractsCon is designed for in-house lawyers and professionals who want to learn:

  • the insights and techniques needed to handle the commercial contracts filling their inbox every day,
  • how experienced lawyers manage risk, work efficiently, and make the hard decisions in challenging circumstances,
  • WHAT to say, WHY to say it that way, and HOW to reach the best-negotiated deal you can with your contract counterparties.

Virtual ticket holders get access to 6 HOURS of no-fluff practical contract training by experienced practicing lawyers.

People who attend in person in Miami get 12 HOURS of training, including 6 hours of interactive skills workshops.

I hope to see you in Miami in a few months. Don't forget to follow Laura Frederick on LinkedIn for great contract drafting tips and to let me know whether you and your students might be interested in participating in a contract drafting competition. 

 

 

 

 

 

 

October 7, 2022 in Commercial Law, Conferences, Contracts, Corporations, Law Firms, Law School, Lawyering, LLCs, M&A, Marcia Narine Weldon, Negotiation, Teaching, Unincorporated Entities | Permalink | Comments (0)

Monday, October 3, 2022

The Wit and Wisdom of Tom N.

It was so wonderful to be able to host an in-person version of our "Connecting the Threads" Business Law Prof Blog symposium on Friday.  Connecting the Threads VI was, for me, a major victory in the continuing battle against COVID-19--five healthy bloggers and a live audience!  Being in the same room with fellow bloggers John Anderson, Colleen Baker, Doug Moll (presenting with South Carolina Law friend-of-the-BLPB Ben Means), and Stefan Padfield was truly joyful.  And the topics on which they presented--shadow insider trading, exchange trading in the cloud, family business succession, and anti-ESG legislation--were all so salient.  (I offered the abstract for my own talk on fiduciary duties in unincorporated business associations in last week's post.)  For a number of us, the topic of our presentations arose from work we have done here on the BLPB.

This year, as I noted in my post last week, we had a special guest as our luncheon speaker.  That guest would be known to many of you who are regular readers as "Tom N."  Tom has commented on our blog posts here on the BLPB for at least eight years.  (I rooted around and found a comment from him as far back as 2014.)  And Tom lives right here in Tennessee--in middle Tennessee, to be exact (closer to Haskell Murray than to me).  You can check out his bio here.  I am delighted that we were able to coerce Tom to give up a day of law practice to come join us at the symposium.

The title/topic for Tom's talk was "A Country Boy Busines Lawyer's View from Down in the Weeds."  The talk was, by design, a series of reflections on Tom's wide-ranging business law practice here in the state of Tennessee.  He tries to stay out of the courtroom, but by his own recounting, he has been in court in every county in the state--and Tennessee has 95 counties!  

In the end, Tom ended up offering a bunch of tips for law students and lawyers (both of whom were in attendance at the symposium).  I took notes during Tom's talk.  I have assembled them into a list below.  The key points are almost in the order in which they were delivered.  The stories that led to a number of these snippets of practical advice were priceless.  You had to be there.  Anyway, here is my list, together with a few editorial comments of my own.  Tom can feel free to add, correct, or dispute my notes in the comments!

  • Take tax courses; if you fear they may hurt your GPA, audit them.
  • Use all available resources to get more knowledge.  (Tom indicated that he bought Westlaw/used Practical Law as a solo practitioner for many years but recently gave it up.  he also noted that he regularly reads a number of the law prof blogs.)
  • Be a bar association member and access the resources bar associations provide.  (Tom noted the excellent written materials published by the American Bar Association and the superior continuing legal education programs produced by the Tennessee Bar Association.)
  • “You are going to learn to write in law school.”  (Tom advised focusing on clear, efficient writing—something I just emphasized with my Business Associations students last week.)
  • Publish in the law.  (Tom shared his view that writing in the law improves both knowledge and analysis.)
  • Expect the unexpected, especially in court (e.g., confronting in court transactions in pot-bellied pigs involving a Tennessee nonprofit).  And as a Corollary: "You can't make this stuff up."  The truth often is stranger than anything you could make up . . . .)
  • In business disputes, never assume that an attorney was there on the front end.  (And yes, there was mention of the use by many unknowledgeable consumers of online entity formation services.)
  • As a lawyer, be careful not to insert your own business judgment.  The business decision is the client's to make.
  • Relatedly, let the business people hand you the framework of the deal.
  • Along the same lines: "I am not paying people to tell me I can’t do it; I am paying people to tell me how to do it.”  (As heard by Tom from his father, a business owner-manager.  I think many of us have heard this or learned this—sometimes the hard way . . . .  I do try to prevent my students from learning that lesson the hard way by telling them outright.)
  • And further: “You want to screw up a deal, put the lawyers in the center of it.”
  • As a courtroom lawyer, know the judges and—perhaps more importantly—court clerks!
  • Introduce yourself to everyone; they may be in a position to help you now or later (referencing the time he introduced himself, unknowingly, to John Wilder, the former Lt. Governor of Tennessee, who proceeded to introduce him to the local judges).
  • Preparation for the bar exam is a curriculum of its own.  (That's close to a quote.)
  • “A lot of things go more smoothly of you can get people talking.”  (Tom is more of a fan of mediation than arbitration.)
  • Local rules of court may not be even published; sometimes, you just need to pick up the phone and call the court clerk.  (Another reason to get to know local court clerks!)
  • Developing rapport with a judge is incredibly important to successful courtroom lawyering.
  • Saying "I don’t know" does not hurt anything; in fact, it may help judges/others develop confidence in you and your integrity.
  • Your law school grades will not matter after your first or second job.  Employers will be looking at you and your professional record, not your grades.

I am sure I missed something along the way.  Maybe my fellow bloggers in attendance will have something to add.  But this list alone is, imv, pure gold for students and starting lawyers.

October 3, 2022 in Colleen Baker, Conferences, Corporate Governance, Family Business, Haskell Murray, Joan Heminway, John Anderson, Lawyering, Securities Regulation, Stefan J. Padfield, Unincorporated Entities | Permalink | Comments (1)

Friday, September 23, 2022

How Generation, Nationality, and Expertise Influence Stakeholder Prioritization of ESG Issues Pt. 1

You can’t read the business press without seeing some handwringing about ESG. It’s probably why I’ve been teaching, advising, and sitting on a lot more panels about the topic lately. Like it or not, it’s here to stay (at least for now) so I decided to do a completely unscientific experiment on lawyer and law student perceptions of ESG using a class simulation. Over the past three months, I’ve used the topic of tech companies and human rights obligations to demonstrate how the “S” factor plays out in real life. I used the same simulation for foreign lawyers in UM’s US Law in Action program, college students who participated in UM’s Summer Legal Academy, Latin American lawyers studying US Business Entities, and my own law students in my Regulatory Compliance, Corporate Governance, and Sustainability class at the University of Miami.

Prior to the simulation, I required the students to watch The Social Dilemma,  the Netflix documentary about the potentially dangerous effects of social media on individuals and society at large. I also lectured on the shareholder v. stakeholder debate; the role of investors, consumers, NGOs, and governments in shaping the debate about ESG; and the basics of business and human rights. Within business and human rights, we looked at labor, surveillance, speech, and other human rights issues that tech and social media companies may impact.

Participants completed a prioritization exercise based on their assigned roles as either CEO, investor, government, NGO, consumer, or influencer. It’s not an apples-to-apples comparison because some groups did not look at all of the issues and some had different stakeholders. In this post, I will provide the results. In a future post, I’ll provide some thoughts and analysis.

The topics for prioritization were:

Labor- in complex global supply chains that often employ workers in developing countries, how much responsibility should companies bear for forced labor particularly for Uyghur labor in China and child labor in global mining and supply chains? What about the conditions in factories and warehouses before and during the COVID era? 

Surveillance- how much responsibility do tech companies bear for the (un)ethical use of AI and surveillance of citizens and employees?

Mental Health- how much should companies care about the impact of the “like” button and the role social media plays in bullying, self-esteem, anxiety, depression, addiction, and suicide, especially among pre-teens and teens?

Fake News- should a social media company allow information on platforms that is demonstrably false? What if allowing fake news is profitable because it keeps more eyeballs on the page and thus raises ad revenue? Should Congress repeal Section 230?

Incitement to violence- what responsibilities do social media companies have when content leads to violence? We specifically looked at some of the issues with Meta (Facebook) and India, but we also examined this more broadly.

Suppression of Speech- should a social media company ever suppress speech? This was closely related to fake news and the incitement to violence prompt and some groups combined these.  

The Rankings

 

International Lawyers (approximately 40 total participants)

The international lawyer group consisted of participants from Bolivia, Brazil, Bulgaria, Canada, Colombia, Ecuador, Egypt, Ethiopia, India, Iran, Jamaica, Mexico, Nepal, Sweden, Switzerland, and Ukraine. The group was not assigned to rank mental health as a social issue.

CEO:

  1. Fake news
  2. Labor
  3. Surveillance
  4. Incitement to violence
  5. Suppression of speech

Socially responsible investors:

  1. Incitement to violence
  2. Fake news
  3. Labor
  4. Surveillance
  5. Suppression of speech

Institutional investors:

  1. Labor
  2. Incitement to violence
  3. Suppression of speech
  4. Fake news
  5. Surveillance

NGO:

  1. Fake news
  2. Labor
  3. Suppression of speech
  4. Incitement to violence
  5. Surveillance

Consumers:

  1. Incitement to violence
  2. Suppression of speech
  3. Fake news
  4. Labor
  5. Surveillance

Latin American Lawyers (approximately 10 total participants)

The Latin American lawyers combined fake news and incitements to violence with suppression of speech.

 CEOs:

  1. Labor
  2. Surveillance
  3. Suppression of speech
  4. Mental health

Investors (they chose socially responsible investors):

  1. Mental health
  2. Surveillance
  3. Labor
  4. Suppression of speech

NGO:

  1. Surveillance
  2. Suppression of speech
  3. Mental health
  4. Labor

Consumers:

  1. Surveillance
  2. Suppression of speech
  3. Mental health
  4. Labor

 

Law Students (approximately 52 total participants)

The law students considered six social issues. Several are LLMs or not from the United States, although they attend school at University of Miami.

CEOs:

  1. Labor
  2. Surveillance
  3. Mental Health
  4. Fake News
  5. Suppression of Speech
  6. Incitements to Violence

Investors:

  1. Labor
  2. Incitements to violence
  3. Surveillance
  4. Suppression of speech
  5. Fake news
  6. Mental health

NGO:

  1. Fake news
  2. Incitement to violence
  3. Mental health
  4. Labor
  5. Surveillance
  6. Suppression of speech

Consumers:

  1. Surveillance
  2. Mental Health
  3. Incitement to Violence
  4. Suppression of speech
  5. Fake news
  6. Labor

College Students

Given how little work experience this group had, I divided them into groups of CEOs, investors (no split between institutional and socially responsible investors), members of Congress, social media influencers, and consumers. They also combined suppression of speech, fake news, and incitement to violence in one category.

            CEOs:

  1. Speech
  2. Surveillance
  3. Labor issues
  4. Mental health ramifications

            Investors:

  1. Labor issues
  2. Speech
  3. Surveillance
  4. Mental Health

            Congress:

  1. Speech
  2. Surveillance
  3. Labor
  4. Mental Health

     Consumers:

  1. Mental Health
  2. Speech
  3. Labor
  4. Surveillance

            Influencers:

  1. Mental Health
  2. Speech
  3. Labor
  4. Surveillance

What does this all mean? To be honest, notwithstanding my sophisticated, clickbait blog title, I have no idea. Further, with two of the groups, English was not the first language for most of the participants. Obviously, the sample sizes are too small to be statistically significant. I have thoughts, though, and will post them next week. If you have theories based on the demographics, I would love to hear your comments. 

September 23, 2022 in Corporate Personality, Corporations, CSR, Current Affairs, Human Rights, International Business, Law School, Lawyering, Marcia Narine Weldon, Technology | Permalink | Comments (0)

Friday, July 29, 2022

Practical Tips for Teaching or Training Adult Learners

Millions of law school graduates around the US just took the bar exam. Others are preparing to enter colleges and graduates schools in a few weeks. How will these respective groups do? While a lot depends on how much and how well they study, a large part of their success or failure may depend on how they've been taught. I recently posted about how adults learn and what the research says we should do differently. In this post, I'll show how I used some of the best practices in the last ten days when I taught forty foreign lawyers from around the world  and thirty college students in separate summer courses offered by the University of Miami as well as nine Latin American lawyers who were taking courses in business law from a Panamanian school. I taught these disparate groups about ESG, disclosures, and human rights. With each of the cohorts, I conducted a simulation where I divided them into groups to prioritize issues based on whether they were a CEO, an investor, a consumer, the head of an NGO, and for the US college students, I added the roles of a member of Congress or influencer. In a future post, I will discuss how the groups prioritized the issues based on their demographics. Fascinating stuff. 

Depending on what you read, there are six key principles related to adult learning:

1. It seems obvious, but adults need to know why they should learn something. Children learn because they are primed to listen to authority figures. Too often in law school or corporate training, there's no correlation to what they learn and what they actually do. When I taught the two groups of foreign lawyers, I talked about the reality and the hype about ESG and how the topic could arise in their practices with specific examples. When I spoke to the college students who were considering law school, I focused on their roles and responsibilities as current consumers and as the future investors, legislators, and heads of NGOs. Same powerpoint but different emphasis.

2. Adults are self-directed. Under one definition, "self-directed learning describes a process by which individuals take the initiative, with or without the assistance of others, in diagnosing their learning needs, formulating learning goals, identifying human and material resources for learning, choosing and implementing appropriate learning strategies, and evaluating learning outcomes." This may seem radical because many of my colleagues complain that today's students need a lot of hand holding and spoon feeding, and I agree to some extent. But I also think that we don't give students enough credit and we underestimate them. I developed my curriculum for the practicing lawyers but I also asked what they wanted to learn and what would be most useful for them. I only had a few hours with them, so I wasn't able to explore this much as I would have. But in some of my traditional courses at the law school and when I train adults in other contexts, I often give a choice of the exam type and topic. This ensures that they will submit a work product that they are passionate about. At the end of my traditional classes at the law school, I also ask them to evaluate themselves and me based on the learning outcomes I established at the beginning of the semester. They tend to be brutally honest about whether they've taken responsibility for their own learning.

3. Adults filter what we tell them through their life experiences. In my traditional classes, I send out a survey to every student before the semester starts so that I understand their backgrounds, perspectives, and what's important to them. I often pick hypotheticals in class that directly address what I've learned about them through the surveys so it resonates much more clearly for them. With my three groups this week, I didn't have the chance to survey them but I knew where they were all from and used examples from their countries of origin, when I could. When the college students entered the Zoom room, I asked them to tell me why they picked this class. This helped me understand their perspectives. I also picked up on some of their comments during discussion and used those data points to pivot quickly when needed. It would have been easy to focus on my prepared lecture. But what does ESG mean to a lawyer in Bolivia, when that's not a priority? College students quickly grasped the context of socially responsible investing, so I spent more time there than on the Equator Principles, for example. The cultural and generational differences were particularly relevant when talking about the responsibility of tech companies from a human rights perspective. The lawyers and students from authoritarian regimes looked at social media and the power to influence the masses in one way, while the college students saw the issues differently, and focused more on the mental health issues affecting their peers. Stay tuned for a future post on this, including interesting discussion on whether Congress should repeal Section 230.

4. Adults become ready to learn only when they see how what they are learning applies to what they need to do at work and at home. With the foreign lawyers, I focused on how their clients could have to participate in due diligence or disclosure as part of a request from a company higher up in the supply chain. I focused on reputational issues with the lawyers who worked at larger companies. College students don't deal with supply chains on a regular basis so I spent more time focusing on their role as consumers and their participation in boycotts at their universities and their activism on campus and how that does or does not affect what companies do. 

5. Adults need a task-centered or problem-focused approach to learning. I had to lecture to impart the information, but with each group, they learned by doing. I had 12 hours with the Latin American lawyers so to test them on their understanding of US business entities, instead of having them complete a multiple choice quiz, I asked them to interview me as a prospective client and develop a memo to me related providing the advice, which is what they would do  in practice. They, with the other groups, also prioritized the issues discussed above from their assigned roles as CEO, NGO head, institutional investor, or consumer. When I teach my compliance course to law students, they draft policies, hold simulated board meetings, and present (fake) CLEs or trainings. My business and human rights students  have the option to draft national action plans, write case studies on companies that they love or hate, or write develop recommendations for governments for their home country. Students are much more likely to engage with the material and remember it when they feel like they are solving a real problem rather than a hypothetical.

6. Adults need extrinsic and intrinsic rewards. Everyone I taught this week will get some sort of certificate of completion. But they all chose to take these courses and those who weren't part of the UM program either self paid or were reimbursed by their employers. None of them were required to attend the classes, unlike those in elementary and high school. When students choose a course of study and learn something relevant, that's even more important than the certificate or diploma. 

I hope this helps some of you getting ready for the upcoming semester. Enjoy what's left of the summer, and if you try any of these suggestions or have some of your own, please leave a comment.

 

July 29, 2022 in Business Associations, Corporate Governance, Corporations, CSR, Current Affairs, Financial Markets, Human Rights, International Business, Law School, Lawyering, LLCs, M&A, Marcia Narine Weldon, Teaching | Permalink | Comments (0)

Friday, July 8, 2022

How and Why Adults Learn- Pt 1.

We need to be honest. Most of our students aren't learning or retaining the information we teach them. If you're not in academia, you've likely attended a a required training or taken a course on your own and you probably can't fully articulate what you've learned or how it applies to what you do daily in your profession. Over the past few months, I've been spending time with neuroscientists learning about learning. I'll pass on some pointers over the next posts to translate how and what we want to teach to how our students or employees actually learn. For example, we all know about the "gunners" in our classrooms or those who beg for the extra point on the exam so that they can maintain their stellar GPAs. But for the most part, adults don't get motivated through gold stars and report cards in the same way that younger learners do. 

I'll start with an overview of ten things we need to know about how adults learn. I'll expand on them in future posts. 

1) Many professors focus on pedagogy, which is based on how children learn and still stick to the teacher-centered approach of learning. The science of adult learning is called andragagy, and neuroandragogy adds the overlay of neuroscience and neurophysiology. 

2)  The myth of learning styles has been debunked for years, but we still continue to focus on visual, auditory, and kinesthetic approaches when we teach. Although people have preferences, when we try to teach to a specific style, we actually perpetuate a fixed mindset rather than encouraging a growth mindset. By the way, for those who have read Carol Dweck's work on growth mindset, please remember that it's like the appetizer and without sound teaching and instruction (the main course), it won't matter what kind of mindset the students have. 

3) Most of our law students and employees have been digital natives since birth. They've been playing on tablets and on smartphones before they could read. They learn via YouTube, TikTok, and social media with algorithms that cater to what they want and need. Many of them are also content creators with their own social media accounts. They understand how algorithms change and thus change their content to get more views and likes. Like it or not, they expect the same from professors or corporate trainers.

4) Adult learners are task-oriented and would rather solve a problem than passively receive content from a professor. Similarly, adults need much more self-directed learning than younger learners and want to apply the knowledge immediately. This may be why clinics are so popular in law school and why the best corporate training leaves attendees with tangible, actionable learnings. 

5) Children listen to teachers because they don't have much context and have been raised to listen to and respect adults (whether that always happens is a different story). Adult learners have years of lived experience and are typically taking a course for a specific purpose. When we teach them something new, it may be harder for them to absorb or retain because they filter it through their working memory first, and this slows them down. They also determine very quickly whether they "need to know" this information. This may explain why so few students retain information after an exam. It doesn't relate to what they believe they need to know for their careers after graduation, particularly if we teach theory and don't connect it to practice. 

6) The average adult attention span in a lecture is 15-20 minutes. Some argue that it's shorter. In addition, adult learners tend to learn more by doing than by merely listening. This makes the standard lecture format the least effective way for adults to learn. 

7) The brain understands the world through emotion, metaphors, and symbols, but we spend time most of our time using words. We need to go to experiences that speak to the brain. Adult learning experts want us to forget the Descartes quote, "I think therefore I am," and instead reframe it to "I feel, therefore I know."

8) Movement and play are particularly helpful for adult learning, just like with children. Sometimes we need to have students get up and move around in class and develop activities that can anchor the learning. 

9) The best way to reach adult learners is to provide a choice of topics, real world problems, and relevance to current or future positions. Adult learners need to know the why behind the what we are teaching. They won't accept it blindly just because we are in the front of the classroom as younger learners will.

10) Scaffolding and formative assessment are critical for metacognition, reflection, and reapplying what adults have learned. According to cognitive neuroscientist Dr Jared Cooney Horvath, we forget about 60-70% of what we learn within 48 hours. This means we need to change how we teach so students can change how they learn and retain information. 

I'll dive in more deeply to these topics in the future. How do you "play" in a professional education setting? Do you have to dance like a TikTok video star to reach students? What do I mean the students have to have a choice of topics? What is the "curve of forgetting" and how can we use those insights to maximize learning outcomes? What is heutagogy and how can we help students with self-directed learning? How will these students make it in the real world if we cater to them this way?

You may miss the "good old days" where students sat in a two-hour lecture, had one final exam at the end of the semester, and we could dust off our notes the next semester to do it all over again. Those days are gone forever. Corporate trainers use microlearning and short 3-7 minute videos to convey key concepts to workers. That's what's happening in "the real world." We don't have to change everything we do, but we need to re-think how WE think so that the next generation of lawyers can learn what they need to learn. 

What tips or best practices do you have to share about teaching and learning?

July 8, 2022 in Clinical Education, Law School, Lawyering, Marcia Narine Weldon, Psychology, Teaching, Technology | Permalink | Comments (0)

Monday, July 4, 2022

Celebrating Independence without the Trappings: A Business Law Prof "Take"

Stefan's Independence Day post is far more erudite than mine.  Kudos and thanks to him for the substantive legal content.  This post covers more of a teaching point--one that I often think about in the background but want to being to the fore here.

I am focused in writing this on things like family reunions, local holiday festivities, grilling out, and fireworks.  It has been a rocky road to the Fourth in these and other aspects this year.  Overlapping causes can easily be identified.  As if the continuing COVID-19 nightmare were not enough . . . .

I will start with COVID-19, however.  I have heard of many who are missing family and other events this weekend because of positive COVID-19 diagnoses, test results, or exposures.  I was sad to learn, for example, that Martina Navratilova had to miss the historic Wimbledon centennial celebration, including the Parade of Champions, yesterday.  But there is more.

The air travel debacles have been well publicized.  Weather, labor shortages, and other issues contribute to the flight changes and cancellations airlines need to make on this very popular travel weekend--expected to set records.  And gas prices have stymied the trips of some by land (again, at a time during which travel was expected to be booming), although news of some price drops in advance of the weekend was certainly welcomed.  Even for those who are well and able to travel to spend holiday time with family, it has been a challenge.

The cost of your cookout this year also may be higher, should you choose to have one.  Supply chain turmoils and the effects of inflation and the war in Ukraine all are listed as contributing factors.  (The linked article does note that strawberries are a good buy, nevertheless, which is welcome news to me.)

And yes, fireworks displays also have been disrupted.  The causes include both concerns about weather (dry conditions and flammables do not mix well!) as well as the impact of labor shortages, inflation, and other factors influencing the supply of goods.  Of course, there also is a high demand for fireworks in the re-opened socio-economic environment.  All have been widely reported.  See here, here, here, and here.

These holiday weekend disappointments create personal strife.  But why should a business law prof care about all of this? 

I find that stepping back and looking at the state of business at given times can be instructive in reflecting on the ways in which business law policy, theory, and doctrine do and should operate in practice.  In an inflationary period with labor shortages, what profit-seeking business would not be looking at customers, clients, and employees as an important constituencies?  In an era of supply chain dislocations, what business managers would not be focused on strong, positive relationships with those who sell them goods and services significant to their business?  And, of course, with investment returns of direct and indirect import to the continued supply of funding to business ventures, firms need to pay heed to investor concerns.  Note how these observations allow for commentary on principles of/underlying contract law, contract drafting, securities regulation, fiduciary duty in (and other elements of) business associations law, insurance law, and more.

Looking at legal theory, policy, and doctrine in practical contexts can useful to a business law prof for teaching, scholarship, and service--depending on the nature of a person's appointment and the institution at which the prof teaches.  The current Fourth of July woes are but one example of how those connections can be made.  But I want to invite folks to make them, especially in their teaching--in current courses (if you are teaching over the summer) and in fall and spring course planning, which I know many folks are now doing.

In closing, I send sympathetic vibes to all who had plans foiled by (or who decided to have a "staycation" and avoid) some or all of the holiday weekend dislocations I highlight in this post.  I hope you found joy in your Independence Day weekend nonetheless.

July 4, 2022 in Business Associations, Contracts, Corporate Finance, Current Affairs, Financial Markets, Insurance, Joan Heminway, Law School, Lawyering, Research/Scholarhip, Service, Teaching | Permalink | Comments (0)

Friday, June 10, 2022

Why Transactional Lawyers Need to Educate Themselves on Compliance

Prior to joining academia, I served as a compliance officer for a Fortune 500 company and I continue to consult on compliance matters today. It's an ever changing field, which is why I'm glad so many students take my Compliance, Corporate Governance, and Sustainability course in the Fall. I tell them that if they do transactional or commercial litigation work, compliance issues will inevitably arise. Here are some examples: 

  • In M&A deals, someone must look at the target's  bribery, money laundering, privacy, employment law, environmental, and other risks
  • Companies have to complete several disclosures. How do you navigate the rules that conflict or overlap?
  • What do institutional investors really care about? What's material when it relates to ESG issues?
  • What training does the board need to ensure that they meet their fiduciary duties?
  • How do you deal with cyberattacks and what are the legal and ethical issues related to paying ransomware?
  • How do geopolitical factors affect the compliance program?
  • Who can be liable for a compliance failure?
  • What happens when people cut corners in a supply chain and how can that affect the company's legal risk?
  • What does a Biden DOJ/SEC mean compared to the same offices under Trump?
  • Who is your client when representing an organization with compliance failures?
  • and so much more

I'm thrilled to be closing out the PLI Compliance and Ethics Essentials conference in New York with my co-panelist Ben Gruenstein of Cravath, Swaine, & Moore. It's no fun being the last set of presenters, but we do have the ethics credits, so please join us either in person or online on June 28th. Our areas of focus include:

  • Risk assessment, program assessment, and attorney-client privilege
  • Ethical obligations for lawyers and compliance officers
  • Which compliance program communications can (and should) be privileged?

In addition to discussing the assigned issues, I also plan to arm the compliance officers with more information about the recent trend(?) of Caremark cases getting past the motion to dismiss stage and compliance lessons learned from the Elon Musk/Twitter/Tesla saga. 

Here's the description of the conference, but again, even if you're not in compliance, you'll be a better transactional lawyer from learning this area of the law. 

Compliance and ethics programs are critically important to the success of any organization. Effective programs allow organizations to identify and mitigate legal risks. With an increasingly tough enforcement environment, and greater demands for transparency and accountability, an effective compliance program is no longer just “nice-to-have.” It’s essential. 

Whether you are new to the area or a seasoned compliance professional, PLI’s program will give you the tools you need to improve your organization’s compliance program.  We will review the principal elements of compliance programs and discuss best practices and recent developments for each.  Our distinguished faculty, drawn from major corporations, academia, law firms and the government, can help you improve your program, increase employee awareness and decrease legal risk.  Compliance and Ethics Essentials 2022 is highly interactive and includes case studies, practical tools and real-time benchmarking.

What You Will Learn 

  • Designing and conducting effective compliance risk assessments that enhance your program
  • Structuring your program for appropriate independence and authority
  • The evolving role of the board
  • ESG and your compliance program
  • Using data analytics to improve your program
  • Encouraging reporting and investigating allegations of wrongdoing
  • Best practices in compliance codes, communications, training and tools
  • Ethics for compliance professionals

Who Should Attend

If you are involved in any aspect of corporate compliance and ethics as in-house counsel, a compliance and ethics officer, human resources executive, outside counsel, or risk management consultant, this event should be on your annual calendar.

Special Feature: Special luncheon presentation with guest speaker

If you do come to the conference, I would love to grab a cup of coffee with you, so reach out.

June 10, 2022 in Compliance, Conferences, Consulting, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Financial Markets, Lawyering, Legislation, M&A, Marcia Narine Weldon | Permalink | Comments (0)

Monday, May 23, 2022

Teaching Leadership to Transactional Business Lawyers

The edited (and annotated) transcript of my 2021 "Try This" session from the 7th Biennial Conference on the Teaching of Transactional Law and Skills ("Emerging from the Crisis: The Future of Transactional Law and Skills Education," hosted virtually by Emory Law in the spring of 2021) was recently published.  Leadership for the Transactional Business Law Student, 23 Transactions: Tenn. J. Bus. L. 311 (2022), offers background and tips on teaching leadership to transactional business law students.  The substantive part of the SSRN abstract follows.

We do not always acknowledge this in legal education, but our students are learning to be leaders, because lawyers are leaders. That is as true of transactional business lawyers as it is of litigators, lawyers who hold political or regulatory appointments, lawyers engaged with compliance, and lawyers in general advisory practices. Yet, most law schools do little, if anything, to teach law students about leadership, or allow them to explore the contours and practices of lawyer leadership.

This edited transcript explains the importance of teaching leadership skills, traits, and processes to transactional business law students and offers insights on how instructors in a law school setting might engage in that kind of teaching as part of what they do. . . .

Edited transcripts of interactive teaching sessions at conferences are imperfect communication tools.  But I hope the publication of my teaching forum offers some food for thought for fellow business law profs (and maybe others).  I continue to explore teaching law leadership in specific and general settings.  Along those lines, I will have more to say about teaching leadership in law schools in a future post featuring my recently published piece in the Santa Clara Law Review on teaching change leadership, which I mentioned in an earlier post on Teaching Leadership in/and Law.

May 23, 2022 in Joan Heminway, Law School, Lawyering, Teaching | Permalink | Comments (2)

Monday, April 18, 2022

Partner Freeze-Outs are Fascinating!

On Friday, I have the honor and pleasure of presenting a continuing legal education session for the Tennessee Bar Association with Dean Matt Lyon from the LMU Duncan School of Law.  Our topic?  Partner freeze-outs--situations in which a co-venturer in a business recognized as a partnership is excluded from the business by their fellow co-venturers.  This exclusion often occurs through or involves the formation of a limited liability entity, typically a corporation or limited liability company, to conduct the operations of the business going forward.  That new business entity does not include one of the initial co-venturers.  We have titled our session "No Partner Left Behind: Organizing a Limited Liability Entity for a Pre-existing Business Venture."

I truly enjoy the judicial opinions in this area.  You probably know some of them.  Holmes v. Lerner may be one of the better known cases in this space.  But there are others.  Some of the claims in these cases, like the claims in Holmes v. Lerner, stem from co-venturers involved in a de facto partnership--a venture recognized under statutory law as a partnership for which there is no express written acknowledgment of partnership.  Entrepreneurs beware!

The partnership freeze-out genre of judicial opinions is related to the old chestnut Meinhard v. Salmon, a partnership opportunity case relating to the exclusion of a "coadventurer" from a subsequent leasehold for the property that had been the subject of the co-venturers original joint venture.  These judicial opinions also can be connected to the more recent, interesting, and aberrant Energy Transfer Partners, L.P. v. Enter. Prod. Partners, L.P., in which the court finds that “[a]n agreement not to be partners unless certain conditions are met will ordinarily be conclusive on the issue of partnership formation as between the parties,” foreclosing an argument made by one of the parties to the agreement that a partnership was nonetheless formed by conduct under the statutory definition.

It turns out that Matt and I are not the only folks intrigued by these cases.  Twenty-three years ago, Frank Gevurtz wrote a nifty article on partner freeze-outs: Franklin A. Gevurtz, Preventing Partnership Freeze-Outs, 40 MERCER L. REV. 535 (1989).  Ultimately, Frank focuses in on planning and drafting ideas as a means of avoiding litigation in this area.  Like Frank, Matt and I offer lawyering points emanating from what we learned in reviewing judicial opinions of this kind.  Of course, these law practice points require that co-venturers be aware of the creation of a partnership in the first place.  These cases certainly make for animated discussions in entrepreneurship and other small business settings and are especially great fodder for discussion in a business associations law course.

April 18, 2022 in Entrepreneurship, Joan Heminway, Lawyering, Partnership | Permalink | Comments (2)

Friday, March 25, 2022

Post-pandemic evolution, change management, and the role of in-house counsel

Join me in sunny Miami on April 26 for this in-person conference featuring outside counsel, inhouse practitioners, and academics. 

Panel topics include:

Change Management: The Legal Department of the Future -  More and more, in-house legal departments are employing new hybrid and remote work models, incorporating artificial intelligence and technology in their workflows, and restructuring and absorbing new teams after mergers, acquisitions, and divestitures. This panel discussion will focus on how the in-house legal department can be a champion in leading successful developmental and transformational change by implementing change management best practices to be effective and efficient, remaining client-focused, and being a trusted business advisor.

Remote Work:  Accelerated Adoption and Related Challenges - Which option would you choose: on-site, hybrid, or virtual? We will discuss the pros and cons of remote work arrangements, including the challenges of implementing a remote work policy in Latin America where the legal framework is a complex patchwork of requirements, as well as the strategies for creating culture and building a team in a remote work environment.

Counseling the Board of Directors (the panel I'm on)-  This panel will focus on issues that arise when counseling the board of directors and address important topics, including governance, ethics, fiduciary duties, director liability, best practices (diversity and environmental, social, and governance (ESG)), privileged insurance, and D&O insurance all in the context of private and public companies operating in the United States and Latin America.

Supply Chain: Challenges and Opportunities- Lessons learned from recent disruptions in global supply chains will shape crossborder business in the coming years. Our panel will discuss short- and long-term challenges and opportunities in supply chain management and logistics, as well as practical strategies for using technology, contractual protections, and risk-transfer solutions to overcome future supply-chain challenges.

What Is Your Company’s ESG Score? This panel will discuss the origins of climate change management, sustainability and how to operationalize it at your company, as well as how to transition to a low-carbon economy— including standards and disclosures. Panelists will also discuss the importance of implementing mechanisms to adopt a company’s ESG score as an ethical obligation to company commitments and as a governance imperative.

Click here to register.

If you make it down to Miami, I promise to buy you a mojito or cafecito. And don't worry, hurricane season doesn't start until June. 

 

March 25, 2022 in Compliance, Conferences, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Financial Markets, International Business, Law Firms, Lawyering, Marcia Narine Weldon | Permalink | Comments (0)

Monday, February 28, 2022

2022 Online Symposium – Mainstreet vs. Wallstreet: The Democratization of Investing Friday, March 4 12:30-3:30

2022 Online Symposium – Mainstreet vs. Wallstreet: The Democratization of Investing

I'm thrilled to moderate two panels this Friday and one features our rock star BLPB editor, Ben Edwards. 

                                                                     REGISTER HERE

The University of Miami Business Law Review is hosting its 2022 online symposium on Friday, March 4, 2022. The symposium will run from 12:30 PM to 3:30 PM. The symposium will be conducted via Zoom. Attendees can apply to receive CLE credits for attending this event—3.5 CLE credits have been approved by the Florida Bar. 

The symposium will host two sessions with expert panelists discussing the gamification of trading platforms and the growing popularity of aligning investments with personal values.

The panels will be moderated by Professor Marcia Narine Weldon, who is the director of the Transactional Skills Program, Faculty Coordinator of the Business Compliance & Sustainability Concentration, and a Lecturer in Law at the University of Miami School of Law.

Panel 1: Gamification of Trading 

This panel will focus on the role of social media and “gamification” of trading apps/platforms in democratizing investing, and the risks that such technology may influence investor behavior (i.e., increase in trading, higher risk trading strategies like options and margin use, etc.).

Gerri Walsh:

Gerri Walsh is Senior Vice President of Investor Education at the Financial Industry Regulatory Authority (FINRA). In this capacity, she is responsible for the development and operations of FINRA’s investor education program. She is also President of the FINRA Investor Education Foundation, where she manages the Foundation’s strategic initiatives to educate and protect investors and to benchmark and foster financial capability for all Americans, especially underserved audiences. Ms. Walsh was the founding executive sponsor of FINRA’s Military Community Employee Resource Group. She serves on the Advisory Council to the Stanford Center on Longevity and represents FINRA on IOSCO’s standing policy committee on retail investor education, the Jump$tart Coalition for Personal Financial Literacy, NASAA’s Senior Investor Advisory Council and the Wharton Pension Research Council.

Prior to joining FINRA in May 2006, Ms. Walsh was Deputy Director of the Securities and Exchange Commission’s Office of Investor Education and Assistance (OIEA) and, before that, Special Counsel to the Director of OIEA. She also served as a senior attorney in the SEC’s Division of Enforcement, investigating and prosecuting violators of the federal securities laws. Before that, she practiced law as an associate with Hogan Lovells in Washington, D.C.

Ari Bargil:

Ari Bargil is an attorney with the Institute for Justice. He joined IJ’s Miami Office in September of 2012, and litigates constitutional cases protecting economic liberty, property rights, school choice, and free speech in both federal and state courts.

In 2019, Ari successfully defended two of Florida’s most popular school choice programs, the McKay Program for Students with Disabilities and the Florida Tax Credit Program, before the Florida Supreme Court. As a direct result of the victory, over 120,000 students in Florida have access to scholarships that empower them to attend the schools of their choice.

Ari also regularly defends property owners battling aggressive zoning regulations and excessive fines in state and federal court nationwide and litigates on behalf of entrepreneurs in cutting-edge First Amendment cases. He was co-counsel in a federal appellate court victory vindicating the right of a Florida dairy creamery to tell the truth on its labels, and he is currently litigating in federal appellate court to secure a holistic health coach’s right to share advice about nutrition with her clients. In 2017, Ari was honored by the Daily Business Review as one of South Florida’s “Most Effective Lawyers.”

In addition to litigation, Ari regularly testifies before state and local legislative bodies and committees on issues ranging from occupational licensing to property rights regulation. Ari has also spearheaded several successful legislative campaigns in Florida, including the effort to legalize the sale of 64-ounce “growlers” by craft breweries and the Florida Legislature’s passage of the Right to Garden Act—a reform which made it unlawful for local governments to ban residential vegetable gardens throughout the state.

Ari’s work has been featured by USA Today, NPR, Fox News, Washington Post, Miami Herald, Dallas Morning News and other national and local publications.

Christine Lazaro:

Christine Lazaro is Director of the Securities Arbitration Clinic at St. John’s University School of Law. She joined the faculty at St. John’s in 2007 as the Clinic’s Supervising Attorney. She is also a faculty advisor for the Corporate and Securities Law Society.

Prior to joining the Securities Arbitration Clinic, Professor Lazaro was an associate at the boutique law firm of Davidson & Grannum, LLP.  At the firm, she represented broker-dealers and individual brokers in disputes with clients in both arbitration and mediation.  She also handled employment law cases and debt collection cases.  Professor Lazaro was the primary attorney in the firm’s area of practice that dealt with advising broker-dealers regarding investment contracts they had with various municipalities and government entities.  Professor Lazaro is also of Counsel to the Law Offices of Brent A. Burns, LLC, where she consults on securities arbitration and regulatory matters.

Professor Lazaro is a member of the New York State and the American Bar Associations, and the Public Investors Arbitration Bar Association (PIABA). Professor Lazaro is a past President of PIABA and is a member of the Board of Directors.  She is also a co-chair of PIABA’S Fiduciary Standards Committee, and is a member of the Executive, Legislation, Securities Law Seminar, and SRO Committees. Additionally, Professor Lazaro is the co-chair of the Securities Disputes Committee in the Dispute Resolution Section of the New York State Bar Association and serves on the FINRA Investor Issues Advisory Committee. 

Panel 2: ESG Investing

The second panel will address the growing popularity of ESG funds among investors that want to align their investments with their personal values, and the questions/concerns that arise with ESG funds, including: 1) explaining what they are; 2) discussing the varying definitions and disclosure issues; 3) exploring if investors really give up better market performance if they invest in funds that align with their values; and 4) asking if the increased interest in ESG funds affect corporate change? 

Thomas Riesenberg:

Mr. Riesenberg is Senior Regulatory Advisor to Ceres, working on climate change issues. He previously worked as an advisor to EY Global’s Office of Public Policy on ESG regulatory issues. Before that he worked as the Director of Legal and Regulatory Policy at The Sustainability Accounting Standards Board pursuant to a secondment from EY. At SASB he worked on a range of US and non-US policy matters for nearly seven years. He served for more than 20 years as counsel to EY, including as the Deputy General Counsel responsible for regulatory matters, primarily involving the SEC and the PCAOB. Previously he served for seven years as an Assistant General Counsel at the U.S. Securities and Exchange Commission where he handled court of appeals and Supreme Court cases involving issues such as insider trading, broker-dealer regulation, and financial fraud. While at the SEC he received the Manuel Cohen Outstanding Younger Lawyer Award for his work on significant enforcement cases. He also worked as a law clerk for a federal district court judge in Washington, D.C., as a litigator on environmental matters at the U.S. Department of Justice, and as an associate at a major Washington, D.C. law firm.

Mr. Riesenberg graduated from the New York University School of Law, where he was a member of the Law Review and a Root-Tilden Scholar (full-tuition scholarship). He received a bachelor’s degree from Oberlin College, where he graduated with honors and was elected to Phi Beta Kappa. He is a former chair of the Law and Accounting Committee of the American Bar Association, former president of the Association of SEC Alumni, former treasurer of the SEC Historical Society, and a current member of the Advisory Board of the BNA Securities Regulation and Law Report. For seven years he was an adjunct professor of securities law at the Georgetown University Law Center. He is an elected member of the American Law Institute. He serves on the boards of several nonprofit organizations, including the D.C. Jewish Community Relations Council and the Washington Tennis & Education Foundation. He is the author of numerous articles on securities law and ESG disclosure issues.

Benjamin Edwards:

Benjamin Edwards joined the faculty of the William S. Boyd School of Law at the University of Nevada, Las Vegas in 2017. In addition to being the Director of the Public Policy Clinic, he researches and writes about business and securities law, corporate governance, arbitration, and consumer protection. Prior to teaching, Professor Edwards practiced as a securities litigator in the New York office of Skadden, Arps, Slate, Meagher & Flom LLP. At Skadden, he represented clients in complex civil litigation, including securities class actions arising out of the Madoff Ponzi scheme and litigation arising out of the 2008 financial crisis.

Max Schatzow:

Max Schatzow is a co-founder and partner of RIA Lawyers LLC—a boutique law firm that focuses almost exclusively on representing investment advisers with legal and regulatory issues. Prior to RIA Lawyers, Max worked at Morgan Lewis representing some of the largest financial institutions in the United States and at another law firm where he represented investment advisers and broker-dealers. Max is a business-minded regulatory lawyer that always tries to put himself in the client’s position. He assists clients in all aspects of forming, registering, owning, and operating an investment adviser. He prides himself in preparing clients and their compliance programs to avert regulatory issues, but also assists clients through examinations and enforcement issues. In addition, Max assists advisers that manage private investment funds. In his little spare time, Max enjoys the Peloton (both stationary and road), golf, craft beer, and spending time with his wife and two children.

February 28, 2022 in Compliance, Conferences, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Financial Markets, Law Reviews, Law School, Lawyering, Legislation, Marcia Narine Weldon, Research/Scholarhip, Securities Regulation | Permalink | Comments (0)

Friday, December 31, 2021

New Year's Resolution for Lawyers

People rarely keep resolutions, much less ones they don’t make for themselves, but here are some you may want to try.

  1. Post information about the law and current events that lay people can understand on social media. You don’t need to be a TikTok lawyer and dance around, but there’s so much misinformation out there by “influencers” that lawyers almost have a responsibility to correct the record.
  2. Embrace legal tech. Change is scary for most lawyers, but we need to get with the times, and you can start off in areas such as legal research, case management, accounting, billing, document automation and storage, document management, E-discovery, practice management, legal chatbots, automaton of legal workflow, contract management, artificial intelligence, and cloud-based applications. Remember, lawyers have an ethical duty of technological competence.
  3. Learn about legal issues related to the metaverse such as data privacy and IP challenges.
  4. Do a data security audit and ensure you understand where your and your clients’ data is and how it’s being transmitted, stored, and destroyed. Lawyers have access to valuable confidential information and hackers know that. Lawyers also have ethical obligations to safeguard that information. Are you communicating with clients on WhatsApp or text messages? Do you have Siri or Alexa enabled when you’re talking about client matters? You may want to re-think that. Better yet, hire a white hat hacker to assess your vulnerabilities. I'll do a whole separate post on this because this is so critical. 
  5. Speaking of data, get up to speed on data analytics. Your clients use data every day to optimize their business performance. Compliance professionals and in-house lawyers know that this is critical. All lawyers should as well.
  6. Get involved with government affairs. Educate legislators, write comment letters, and publish op-ed pieces so that people making the laws and influencing lawmakers can get the benefit of your analytical skills. Just make sure you’re aware of the local, state, and federal lobbying laws.
  7. Learn something completely new. When you do your CLE requirement, don’t just take courses in your area of expertise. Take a class that has nothing to do with what you do for a living. If you think that NFTs and cryptocurrency are part of a fad waiting to implode, take that course. You’ll either learn something new or prove yourself right.
  8. Re-think how you work. What can you stop, start, and continue doing in your workplace and family life?
  9. Be strategic when thinking about diversity, equity, and inclusion. Lawyers talk about it, but from what I observe in my lawyer coaching practice and the statistics, the reality is much different on the ground and efforts often backfire.
  10. Prioritize your mental health and that of the members on your team. Do you need to look at billable hours requirements? What behavior does your bonus or promotion system incentivize? What else can you do to make sure that people are valued and continually learning? When was the last time you conducted an employee engagement survey and really listened to what you team members are saying? Whether your team is remote or hybrid, what can you do to make people believe they are part of a larger mission? There are so many resources out there. If you do nothing else on this list, please focus on this one. If you want help on how to start, send me an email.

Wishing you a safe, healthy, and happy 2022.

December 31, 2021 in Compliance, Contracts, Corporations, Current Affairs, Ethics, Film, Intellectual Property, Jobs, Law Firms, Lawyering, Legislation, Management, Marcia Narine Weldon, Technology, Wellness | Permalink | Comments (0)

Friday, December 24, 2021

ESG in 2022- Pt 1

I’ve been thinking about environmental, social, and governance issues (“ESG”) for almost twenty years -- long before they became mainstream. As an in-house lawyer at a public company prior to joining academia, I had no choice. I teach, research, and consult on these issues now and have a whole lot of thoughts about them, which I'll share in coming posts. 

I had the honor of presenting on "ESG and India in 2022" yesterday. ESG is a hot topic in India, as it is everywhere - - I have either attended or spoken on half a dozen panels on ESG this year to introduce the topic to lawyers. If you're not familiar with the term or think it's completely irrelevant to what you do for a living, here are some common classifications for investors that integrate ESG into their portfolio selection and investment process. 

Environmental: climate change, water, alternative energy, pollution & waste management

Social: human rights, workplace standards, worker health safety, diversity & equal opportunity, labor relations, land grabs

Governance: bribery & corruption, board diversity, corporate political contributions, executive compensation, disclosure & transparency, board independence, tax avoidance

If you're a transactional lawyer, chances are you or your clients deal with at least one these issues directly or indirectly.

Here are some interesting statistics from the 2021 RBC Global Asset Management Responsible Investment Survey, which had over 800 respondents from all over the world. For context, almost half of the respondents had over one billion in assets under management:

  • 72% of global investors integrate ESG principles in their investment approach and decision-making.
  • 96% of respondents in Europe, 81% in Canada (down from 89%), and 65% in US say they use ESG in decision making.
  • 83% of global investors said ESG-integrated portfolios are likely to do as well or better than non-ESG-integrated portfolios, about the same as last year.
  • 97% of EU and 75% of US investors believe ESG-integrated portfolios perform as well as or better than non-ESG integrated portfolios.

During my talk, I focused on the following topics at the audience's request:

1. What is Environmental Social Governance (ESG) and why is sustainability is important?

2. How can investors apply these non-financial factors as a part of their analysis process to identify material risk and growth opportunities?

3. What is sustainable investing? How does it differ from ESG integration?

4. Co-relation between a smart investment and sustainable innovation.

5. Did this pandemic teach us a lesson about ESG? How is it going to affect the call for the climate change issue?

6. Responsibility, sustainability, and diversity are the pillars of ESG. How are MNCs are adopting this?

7.What do ESG practitioners do and what is the scope for growth/ global career opportunities in ESG?

It was an honor to talk about ESG to an audience from a country where these issues are a literally a matter of life and death. For example, almost 20% of deaths in India in 2019 were attributable in part to pollution. I’ve also been thrilled to introduce my law students to these concepts and help them discern the facts from the hype. If they are any indication, the next generation of lawyers will think of ESG as a matter of course and not as a special category of legal or business issues. 

 

 

 

 

December 24, 2021 in Compliance, Conferences, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Financial Markets, Human Rights, International Business, International Law, Law School, Lawyering, Marcia Narine Weldon, Securities Regulation, Social Enterprise, Teaching | Permalink | Comments (0)

Tuesday, November 23, 2021

Penn State Law Minority Business Development: Special Open Session (November 30, 2021, 4:00 PM - 6:45 PM EST)

This just in from friend-of-the-BLPB Sam Thompson at Penn State Law.  Sam hopes we will bring this program to the attention of those "who might be interested in learning more about this very important topic," including law school administrators, faculty, and students.  I know I plan to make others aware.

+++++

Dear Colleagues: This semester I am teaching a course dealing with issues in Minority Business Development, a subject I took as a student literally 50 years ago in my third year at the University of Pennsylvania Law School.  Because of the importance of this topic, Penn State Law has permitted me to make the course open to anyone who is interested in this very important topic, and recordings of all of the sessions of the course are available on the Penn State Law website here.

The course is divided into the following three segments:

Part I, Introduction and in-Depth Analysis of the Minority-White Gap in Business Ownership,

Part II, The Lawyer’s Essential Tools in Representing a Minority-Owned Small Business, and

Part III, The Big Ideas for Addressing the Minority-White Gap in Business Ownership

Part I was covered over five sessions and ended with a discussion with Professor Berdejo of the Loyola Law School in LA about his recently published article in the University of Wisconsin Law Review entitled: Financing Minority Entrepreneurship.  Part II of the course focused on the Essential Tools that any lawyer needs in advising owners of a business.  Each of these sessions was led by an outstanding practitioner, including a lawyer from the following firms: McGuire Woods; Richards, Layton & Finger; Nelson Mullins; Schiff Hardin; Wachtell Lipton; and Starfield & Smith.  For this part, we principally used the Maynard et. al. Business Planning casebook. 

This brings me to Part III, The Big Ideas for Addressing the Gap, which will be held in one session on Tuesday, November 30, 2021.  This special session will be live over the Internet from 4 PM to 6:45 PM Eastern Time.  A recording of this session will also be available on the website for the course.  This Special Session is entitled Perspectives on Minority Business Development, and in this session, experts from across the country will engage in a live discussion of Minority Business Development issues. The event, which is divided into three sessions, includes perspectives of lawyers, an economist, a business school dean, tax policy experts, entrepreneurs, and Penn State Law students who are enrolled in the course.  Reactions to the presentations in the three sessions will be provided by Dana Peterson, Chief Economist at The Conference Board.  While Ms. Peterson was a banker at Citigroup, she was the co-author of a 2020 report by Citigroup entitled: Closing the Racial Inequality Gaps.  A flyer for the program is attached, and the event page for the program can be reached here.  

. . .

Regards, Sam

November 23, 2021 in Business Associations, Entrepreneurship, Joan Heminway, Lawyering, Teaching | Permalink | Comments (0)

Monday, October 4, 2021

Connecting the Threads 2021 - My Thread in the Tapestry . . . .

Screen Shot 2021-10-04 at 7.36.06 PM

With my bum shoulder and a lot of work on our dean search cramping my style over the past few weeks, I have been remiss in posting about the 2021 Business Law Prof Blog Symposium, Connecting the Threads V.  The idea behind the name (and Doug Moll likes to riff on it--so have at it, Doug!) is that our bloggers here at the BLPB connect the many threads of business law in what we do--here on the blog and elsewhere.

Anyhoo (as Ann would say), as always, my BLPB co-bloggers did not disappoint in their presentations.  I know our students look forward to publishing many of the articles and the related commentaries in the spring book of our business law journal, Transactions: The Tennessee Journal of Business Law.  I also am always so proud of, and interested to hear, the commentary of my colleagues and students.  This year was no exception.

In the future, I will post more about the article that I presented.  But I will offer a teaser here, accompanied by the above screen shot from the symposium.  (It was "Big Orange Friday" on our campus.  The orange had to be worn.  Go Vols!)

The title of my presentation and article is Choice of Entity: The Fiscal Sponsorship Alternative to Nonprofit Incorporation.  A brief excerpt from the continuing legal education handout for the symposium presentation is set forth below (footnotes omitted).

[T]his presentation urges that competent, complete legal counsel on choice-of-entity for nonprofit business undertakings should extend beyond advising clients on which form of business entity best fits their needs and wants, if any. For many small business ventures that qualify for federal income tax treatment under Section 501(a) of the U.S. Internal Revenue Code of 1986, as amended (“IRC”), as religious, charitable, scientific, literary, educational, or other eligible organizations under Section 501(c)(3) of the IRC . . . , the time and expense of organizing, qualifying, managing, and maintaining a tax-exempt nonprofit corporation under state law may be daunting (or even prohibitive). Moreover, the structures imposed by business entity law may not be needed or wanted by the founders or promoters of the venture. Yet, there may be distinct advantages to entity formation and federal tax qualification that are not available (or not as easily available) to unincorporated not-for-profit business projects. These may include, for example, exculpation for breaches of performative fiduciary duties and limitations on personal liability for business obligations available to participants in nonprofit corporations under state statutory law and easier clearance of or compliance with initial and ongoing requirements for tax-exempt status under federal income tax law.

The described conundrum—the prospect that founders or promoters of a nonprofit project or business may not have the time or financial capital to fully form and maintain a business entity that may offer substantial identifiable advantages—is real. Awareness of this challenge can be disheartening to lawyer and client alike. Fortunately, at least for some of these nonprofit ventures, there is a third option—fiscal sponsorship—that may have contextual benefits. This presentation offers food for thought on the benefits of fiscal sponsorship, especially for arts and humanities endeavors.

Again, I will have more to say about this later, once the article is fully crafted.  But your thoughts on fiscal sponsorship--and examples, stories, and the like--are welcomed in the interim as I continue to work through the article.

October 4, 2021 in Ann Lipton, Conferences, Joan Heminway, Lawyering, Nonprofits, Research/Scholarhip | Permalink | Comments (0)

Friday, September 24, 2021

Ten Ethical Traps for Business Lawyers

I'm so excited to present later this morning at the University of Tennessee College of Law Connecting the Threads Conference today at 10:45 EST. Here's the abstract from my presentation. In future posts, I will dive more deeply into some of these issues. These aren't the only ethical traps, of course, but there's only so many things you can talk about in a 45-minute slot. 

All lawyers strive to be ethical, but they don’t always know what they don’t know, and this ignorance can lead to ethical lapses or violations. This presentation will discuss ethical pitfalls related to conflicts of interest with individual and organizational clients; investing with clients; dealing with unsophisticated clients and opposing counsel; competence and new technologies; the ever-changing social media landscape; confidentiality; privilege issues for in-house counsel; and cross-border issues. Although any of the topics listed above could constitute an entire CLE session, this program will provide a high-level overview and review of the ethical issues that business lawyers face.

Specifically, this interactive session will discuss issues related to ABA Model Rules 1.5 (fees), 1.6 (confidentiality), 1.7 (conflicts of interest), 1.8 (prohibited transactions with a client), 1.10 (imputed conflicts of interest), 1.13 (organizational clients), 4.3 (dealing with an unrepresented person), 7.1 (communications about a lawyer’s services), 8.3 (reporting professional misconduct); and 8.4 (dishonesty, fraud, deceit).  

Discussion topics will include:

  1. Do lawyers have an ethical duty to take care of their wellbeing? Can a person with a substance use disorder or major mental health issue ethically represent their client? When can and should an impaired lawyer withdraw? When should a lawyer report a colleague?
  2. What ethical obligations arise when serving on a nonprofit board of directors? Can a board member draft organizational documents or advise the organization? What potential conflicts of interest can occur?
  3. What level of technology competence does an attorney need? What level of competence do attorneys need to advise on technology or emerging legal issues such as SPACs and cryptocurrencies? Is attending a CLE or law school course enough?
  4. What duties do lawyers have to educate themselves and advise clients on controversial issues such as business and human rights or ESG? Is every business lawyer now an ESG lawyer?
  5. What ethical rules apply when an in-house lawyer plays both a legal role and a business role in the same matter or organization? When can a lawyer representing a company provide legal advice to an employee?
  6. With remote investigations, due diligence, hearings, and mediations here to stay, how have professional duties changed in the virtual world? What guidance can we get from ABA Formal Opinion 498 issued in March 2021? How do you protect confidential information and also supervise others remotely?
  7. What social media practices run afoul of ethical rules and why? How have things changed with the explosion of lawyers on Instagram and TikTok?
  8. What can and should a lawyer do when dealing with a businessperson on the other side of the deal who is not represented by counsel or who is represented by unsophisticated counsel?
  9. When should lawyers barter with or take an equity stake in a client? How does a lawyer properly disclose potential conflicts?
  10. What are potential gaps in attorney-client privilege protection when dealing with cross-border issues? 

If you need some ethics CLE, please join in me and my co-bloggers, who will be discussing their scholarship. In case Joan Heminway's post from yesterday wasn't enough to entice you...

Professor Anderson’s topic is “Insider Trading in Response to Expressive Trading”, based upon his upcoming article for Transactions. He will also address the need for business lawyers to understand the rise in social-media-driven trading (SMD trading) and options available to issuers and their insiders when their stock is targeted by expressive traders.

Professor Baker’s topic is “Paying for Energy Peaks: Learning from Texas' February 2021 Power Crisis.” Professor Baker will provide an overview of the regulation of Texas’ electric power system and the severe outages in February 2021, explaining why Texas is on the forefront of challenges that will grow more prominent as the world transitions to cleaner energy. Next, it explains competing electric power business models and their regulation, including why many had long viewed Texas’ approach as commendable, and why the revealed problems will only grow more pressing. It concludes by suggesting benefits and challenges of these competing approaches and their accompanying regulation.

Professor Heminway’s topic is “Choice of Entity: The Fiscal Sponsorship Alternative to Nonprofit Incorporation.” Professor Heminway will discuss how for many small business projects that qualify for federal income tax treatment under Section 501(a) of the U.S. Internal Revenue Code of 1986, as amended, the time and expense of organizing, qualifying, and maintaining a tax-exempt nonprofit corporation may be daunting (or even prohibitive). Yet there would be advantages to entity formation and federal tax qualification that are not available (or not easily available) to unincorporated business projects. Professor Heminway addresses this conundrum by positing a third option—fiscal sponsorship—and articulating its contextual advantages.

Professor Moll’s topic is “An Empirical Analysis of Shareholder Oppression Disputes.” This panel will discuss how the doctrine of shareholder oppression protects minority shareholders in closely held corporations from the improper exercise of majority control, what factors motivate a court to find oppression liability, and what factors motivate a court to reject an oppression claim. Professor Moll will also examine how “oppression” has evolved from a statutory ground for involuntary dissolution to a statutory ground for a wide variety of relief.

Professor Murray’s topic is “Enforcing Benefit Corporation Reporting.” Professor Murray will begin his discussion by focusing on the increasing number of states that have included express punishments in their benefit corporation statutes for reporting failures. Part I summarizes and compares the statutory provisions adopted by various states regarding benefit reporting enforcement. Part II shares original compliance data for states with enforcement provisions and compares their rates to the states in the previous benefit reporting studies. Finally, Part III discusses the substance of the benefit reports and provides law and governance suggestions for improving social benefit.

All of this and more from the comfort of your own home. Hope to see you on Zoom today and next year in person at the beautiful UT campus.

September 24, 2021 in Colleen Baker, Compliance, Conferences, Contracts, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Delaware, Ethics, Financial Markets, Haskell Murray, Human Rights, International Business, Joan Heminway, John Anderson, Law Reviews, Law School, Lawyering, Legislation, Litigation, M&A, Management, Marcia Narine Weldon, Nonprofits, Research/Scholarhip, Securities Regulation, Shareholders, Social Enterprise, Teaching, Unincorporated Entities, White Collar Crime | Permalink | Comments (0)

Monday, July 19, 2021

Since the Pandemic is Still with Us . . .

 . . . I figure it is still OK to publish a link to the SSRN posting of my co-authored article from the 2020 Business Law Prof Blog symposium, Connecting the Threads.  Published earlier in the spring, this piece, entitled Business Law and Lawyering in the Wake of COVID-19, was written with two of my students: Anne Crisp (who will start her 3L year in about a month) and Gray Martin (who graduated in May and will take the bar exam next week).  My March 30, 2021 post on business interruption insurance came from this article.  The SSRN abstract is included below.

The public arrival of COVID-19 (the novel coronavirus 2019) in the United States in early 2020 brought with it many social, political, and economic dislocations and pressures. These changes and stresses included and fostered adjustments in business law and the work of business lawyers. This article draws attention to these COVID-19 transformations as a socio-legal reflection on business lawyering, the provision of legal services in business settings, and professional responsibility in business law practice. While business law practitioners, like other lawyers, may have been ill-prepared for pandemic lawyering, we have seen them rise to the occasion to provide valuable services, gain and refresh knowledge and skills, and evolve their business operations. These changes have brought with them various professional responsibility and ethical challenges, all of which are ongoing at the time this is being written.

No doubt both the changes to business lawyering and the lessons learned from the many substantive, practical, and ethical challenges that have arisen in the wake of COVID-19 will survive the pandemic in some form. This offers some comfort. While the thought of another systemic global crisis is unappealing at best, what we have experienced and learned will no doubt be useful in maneuvering and surviving through whatever the future may bring.

This article came to be because I agreed to take on additional research assistants after summer jobs were scuttled for many students in the spring of 2020.  I shared the germ of an idea with Anne and Gray.  They took that idea and ran with it, adding important new concepts and support.  The writing collaboration naturally followed.  They co-presented the article with me at the symposium back in October.  Working with them throughout was so joyful and fun--a true pandemic silver lining.

July 19, 2021 in Contracts, Corporate Governance, Current Affairs, Ethics, Joan Heminway, Law Firms, Lawyering | Permalink | Comments (0)