Saturday, September 7, 2019

Beyond Bitcoin: Leveraging Blockchain to Benefit Business and Society

Have you ever wanted to learn the basics about blockchain? Do you think it's all hype and a passing fad? Whatever your view, take a look at my new article, Beyond Bitcoin: Leveraging Blockchain to Benefit Business and Society, co-authored with Rachel Epstein, counsel at Hedera Hashgraph.  I became interested in blockchain a year ago because I immediately saw potential use cases in supply chain, compliance, and corporate governance. I met Rachel at a Humanitarian Blockchain Summit and although I had already started the article, her practical experience in the field added balance, perspective, and nuance. 

The abstract is below:

Although many people equate blockchain with bitcoin, cryptocurrency, and smart contracts, the technology also has the potential to transform the way companies look at governance and enterprise risk management, and to assist governments and businesses in mitigating human rights impacts. This Article will discuss how state and non-state actors use the technology outside of the realm of cryptocurrency. Part I will provide an overview of blockchain technology. Part II will briefly describe how public and private actors use blockchain today to track food, address land grabs, protect refugee identity rights, combat bribery and corruption, eliminate voter fraud, and facilitate financial transactions for those without access to banks. Part III will discuss key corporate governance, compliance, and social responsibility initiatives that currently utilize blockchain or are exploring the possibilities for shareholder communications, internal audit, and cyber security. Part IV will delve into the business and human rights landscape and examine how blockchain can facilitate compliance. Specifically, we will focus on one of the more promising uses of distributed ledger technology -- eliminating barriers to transparency in the human rights arena thereby satisfying various mandatory disclosure regimes and shareholder requests. Part V will pose questions that board members should ask when considering adopting the technology and will recommend that governments, rating agencies, sustainable stock exchanges, and institutional investors provide incentives for companies to invest in the technology, when appropriate. Given the increasing widespread use of the technology by both state and non-state actors and the potential disruptive capabilities, we conclude that firms that do not explore blockchain’s impact risk obsolescence or increased regulation.

Things change so quickly in this space. Some of the information in the article is already outdated and some of the initiatives have expanded. To keep up, you may want to subscribe to newsletters such as Hunton, Andrews, Kurth's Blockchain Legal Resource. For more general information on blockchain, see my post from last year, where I list some of the videos that I watched to become literate on the topic. For additional resources, see here and here

If you are interested specifically in government use cases, consider joining the Government Blockchain Association. On September 14th and 15th,  the GBA is holding its Fall 2019 Symposium, “The Future of Money, Governance and the Law,” in Arlington, Virginia. Speakers will include a chief economist from the World Bank and banking, political, legal, regulatory, defense, intelligence, and law enforcement professionals from around the world.  This event is sponsored by the George Mason University Schar School of Policy and Government, Criminal Investigations and Network Analysis (CINA) Center, and the Government Blockchain Association (GBA). Organizers expect over 300 government, industry and academic leaders on the Arlington Campus of George Mason University, either in person or virtually. To find out more about the event go to: http://bit.ly/FoMGL-914.

Blockchain is complex and it's easy to get overwhelmed. It's not the answer to everything, but I will continue my focus on the compliance, governance, and human rights implications, particularly for Dodd-Frank and EU conflict minerals due diligence and disclosure. As lawyers, judges, and law students, we need to educate ourselves so that we can provide solid advice to legislators and business people who can easily make things worse by, for example, drafting laws that do not make sense and developing smart contracts with so many loopholes that they cause jurisdictional and enforcement nightmares.

Notwithstanding the controversy surrounding blockchain, I'm particularly proud of this article and would not have been able to do it without my co-author, Rachel, my fantastic research assistants Jordan Suarez, Natalia Jaramillo, and Lauren Miller from the University of Miami School of Law, and the student editors at the Tennessee Journal of Business Law. If you have questions or please post them below or reach out to me at mweldon@law.miami.edu. 

 

 

September 7, 2019 in Compliance, Conferences, Contracts, Corporate Governance, Corporations, CSR, Current Affairs, Financial Markets, Human Rights, Law Reviews, Lawyering, Legislation, Marcia Narine Weldon, Securities Regulation, Shareholders, Technology | Permalink | Comments (0)

Tuesday, August 27, 2019

Business Law and Leadership

Back in April, I posted on a leadership conference focusing on lawyers and legal education, sponsored by and held at UT Law.  I also posted earlier this summer on the second annual Women's Leadership in Legal Academia conference.  I admit that I have developed a passion for leadership literature and practices through my prior leadership training and experiences in law practice and in the legal academy.

Because lawyers often become leaders in and through their practice (both at work and their other communities) and because leadership principles interact with firm governance, I want to make a pitch that we all, but especially all of us teaching business associations (or a similar course), focus some attention on leadership in our teaching.  It is a nice adjunct to governance.  For example, management and control issues, especially director/officer processes in corporations, are a logical place to discuss leadership.  Who are the managers and the rank-and-file employees inspired by in managing and sustaining the firm?  Who is able to persuade the board to take action?  Is it because of that person's authority, or does that person hold a trust relationship with others that motivates them to follow?  And speaking of trust, it is an element of both leadership and fiduciary duty . . . .

As you consider my teaching suggestion, I offer you my latest blog post on our Leading as Lawyers blog.  It involves the importance of process to effective leadership.  The bottom line?

One can have a promising vision and strategy that emanate from the best of all intentions and ideas. But without engaging a process that includes effectual communication and input from, candid interchanges with, expressions of appreciation for, and buy-in from the relevant affected populations, those worthy intentions may be misinterpreted and those good ideas may die on the vine or not be implemented effectively.

We have all seen this happen in business governance.  Let's let our students in on the role that leadership plays in the practical application of business law.  It is bound to inform both their law practice and their lives.

August 27, 2019 in Business Associations, Corporate Governance, Joan Heminway, Lawyering, Teaching | Permalink | Comments (4)

Wednesday, August 14, 2019

First Day of School

Yesterday was the first day of 1L Orientation at Creighton University School of Law, which meant it was really my first day of school as a dean, too. I've been on the job for a month, but summer school has a very different feel.  This morning I also dropped my son off for this first day of high school.  (And my daughter starts 6th grade tomorrow.) It's a lot of firsts in our new city, at our new schools, and it's exciting. And perhaps a little intimidating. I am sure it was for our 1Ls, just like it was back when I started law school.  And I was about to turn 30.

There's lots of good advice for new law students our there (here, for example), so I focused my brief welcome to our new 1Ls on introducing myself and laying out my expectations for all of us.  This is obviously specific to Creighton Law, though I think and hope it is true at a lot of other places, too. I didn't actually write out a speech, but here's the gist: 

First, I let our new students know that we’re in this together. I chose to be here, and so did they. We all had options, and this is where we chose to be. I wanted to mark that so that we can remember why, when things get tough, we're here in the first place. The reason is at least slightly different for all of us, but we made the same choice. 

Next, I wanted them to know this: I have your back.  I have told the same thing to our faculty and staff, too.  That doesn't mean I can always say yes, but it does mean that I will work to see you, hear you, and help you.  

I also made clear that I would not ignore the past, but I will work to make sure we do not relive it, either. Our institution (like many others) has faced many challenges, internally and externally. We have a path forward and a group of people committed to our students.  I also wanted to make sure that they knew that even when, as a faculty, some of us disagree with each other, we all agree that our students come first. 

I then talked about how I plan to help us move forward: by building a foundation based on trust, faith, and hope. Trust in each other. Faith in our institution and values, spiritual and otherwise. And hope that working together, we can build a better, and more just, future for everyone. I noted that a key thing about faith and trust, is that they are personal choices. No one can give them to others. We can be trustworthy, which I will work to do. And we can support others in their faith.  But we each chose whether to trust and have faith.  By choosing to do this job, I am putting a lot of trust and faith into this institution and its people, and I hope others will do the same. 

Finally, I told our students what I need them to know:

You are a remarkable group. Every one of you belongs here, or you wouldn’t be here. We expect you to succeed, and we will help you succeed. I ask you to do everything you can to be all in. Be open and committed to what you are doing. This is a lot of work if you do it right, and it’s a lot of fun, too.

Good wishes to all of you in whatever your new beginnings may be. It's going to be a heck of a year. 

August 14, 2019 in Joshua P. Fershee, Law School, Lawyering | Permalink | Comments (3)

Friday, August 2, 2019

How (Not) To Teach an (Online) Transactional Drafting Course

Later today, the students in my nine-week online Transactional Lawyering: Drafting and Negotiating Contracts Course will breathe a sigh of relief. They will submit their final contracts, and their work will be done. They can now start reading for their Fall classes knowing that they have completed the work for their required writing credit. My work, on the other hand, won’t end for quite a while. Although this post will discuss teaching an online course, much of my advice would work for a live, in person class as well.

If you’ve ever taught a transactional drafting course, you know that’s a lot of work. You are in a seemingly never ending cycle of developing engaging content, teaching the material, answering questions, reviewing drafts, and grading the final product. Like any writing course, you’re in constant editing and feedback mode with the students.

If you’ve ever taught an online course, you know how much work it can be. I taught asynchronously, meaning I uploaded materials and the students had a specific time within which to complete assignments, typically one week or more. Fortunately, I had help from the University of Miami’s instructional design team, otherwise, I would likely have been a disaster. They provided me with a template for each module, which forced me to really think through the objectives for each class session, not just the course as a whole. In my traditional courses I have learning objectives, but I have never gone into so much detail either in my head or in writing about what I wanted the student to get out of each individual class.

Teaching a drafting course online was much more work than I expected, but I can’t wait to do it again. If you’re thinking about it, learn from my travails and triumphs. First, here are my suggested “Do’s”:

  1. Find a way to build community: I wanted to ensure that students felt connected to me. I scripted a welcome video and the instructional design team filmed and edited it. This way students saw my face. I wanted the students to see each other as well, so I required them to film a 2-minute introductory video of themselves and upload it so that students could “see” their classmates. Students then commented on their peers’ videos welcoming them to the class. I did short videos for most of the modules, but these did not always show my face. No video was more than 10 minutes long because apparently today’s students can’t pay attention for too much longer than that.
  2. Have students work in groups (at first): I divided the 16 students into 4 law firms based in part on what I saw in their videos. I wanted some diversity of gender, race, and experience in the groups. Students drafted a law firm agreement outlining how they would interact with each other, meet deadlines, and resolve disputes. They also picked a firm name and managing partner. They assessed themselves and each other as group members based on criteria that I provided. The group work minimized the amount of feedback that I had to provide. As a group, they drafted the law firm agreement, a client engagement letter, and worked on a short contract. Some assignments were graded and some were ungraded. The group work counted for 10% of the grade.  This percentage wasn’t enough of the grade to cause panic, and the team assessment ensured that they didn’t slack off and benefit from their peers’ hard work.
  3. Mix it up: For each class, I had students review a presentation on Echo 360. Often, they answered questions that I posed in the presentation or did exercises from Tina Stark’s contract drafting book. On other occasions, they posted responses to prompts on the discussion boards and commented (constructively) on other responses, citing the rule or principle that buttressed their position.
  4. Make them keep track of their time and do a bill: Every lawyer hates tracking time, but it’s a necessity. I tell the students that they’ll thank me later. Each student, even on group assignments had to track their time and turn in a bill. This helped me gauge how the groups and students compared to each other. I also knew which student worked on which parts of the contracts.
  5. Let them negotiate:  After the group work portion of the course ended,the students negotiated the terms of their final contract using a set of secret facts. I required them to develop and turn in a negotiation strategy using materials and videos that I put together. Armed with their BATNAs, WATNAs, and ZOPAs, I told them to spend no more than one hour negotiating. I required them to film their negotiations, upload them, and send them to me. They then worked on individual term sheets (for a grade). After the negotiations ended and I had received all term sheets, I released the secret facts and had the students assess themselves and their opposing counsel on their negotiation skills and tactics. I also provided feedback to each student on their negotiation performance and term sheets.
  6. Require them to communicate with the client:I required a 1-2 page client cover memo or email for almost every assignment focusing on tone, language, use of legalese, etc. In my comments, I explained the importance of this type of legal writing and of tailoring the language to different types of business clients. When they worked on NDAs, I reminded that them that client may never actually read the contract, so they needed to ensure that the cover memo was sufficiently detailed to provide material information without being overwhelming.
  7. Make them teachThey say that when you teach, you learn twice. I required the each student to develop a 5-7 minute video on an assigned topic. Each student “presented” to either a group of lay/business people or a group of junior associates attending a CLE. They then had to write a blog post of  between 750-1000 words. I required students to watch each other’s videos and comment as either a business person or a junior lawyer. This provided a review of the class for the viewers. This assignment counted for 10% of the grade, but as an extra incentive to take the assignment seriously, the student with the “best” video received an extra week to turn in the joint final contract, meaning that the opposing counsel also benefitted. FYI, I was generally blown away by the videos.
  8. Allow them to use precedents and then instruct them on the limitations: Many of the students had never seen an NDA, and I allowed them to use precedents. Most were surprised by how many comments I had on their final products, especially since many of the precedents came from big firms. This was a valuable lesson for them on precision and the dangers of blind cutting and pasting.
  9. Make them redline and draft a contract with opposing counsel:The final assignment required them to draft a contract based on their negotiated terms. They soon realized that they had to do additional negotiation because some of the terms did not make sense once they started to memorialize them.
  10. Have office hours and use video conferencing:I practically had to beg the students to have office hours with me. They had no problem emailing with questions, but generally didn’t utilize my office hours, which were incredibly flexible. I offered online and in person hours, but only two students met with me during the semester outside of the live mandatory office hours. I had a mandatory live grading session by video to discuss their NDAs, their upcoming negotiations, and any questions they had about the course. During that live grading session, I acted as a partner in their law firm and then stepped into professor role.

What didn’t work as well? As you can imagine, to do the job correctly, I had a LOT of work to do. I clearly gave too much work over a nine-week period, because I know much work I had to do to give them feedback. I just wanted them to be armed with the skills they will need in the real world, but I overdid it. And this meant that sometimes I did not meet my own deadlines for getting feedback to them. Truthfully, I imposed some of that burden on myself. I offered students the chance to turn in drafts of almost every assignment for feedback. About 25-30 percent of the students took me up on that offer, but every week, I emailed all of the students with tips to improve based on the trends that I saw. In retrospect, I would give fewer assignments over a longer period of time, and would better utilize the discussion boards to foster that sense of live class discussion.

After all of that, I’m gearing up to do it again for the Fall, this time over a 15-week period. Even though I will have more time, both I and the students will have other classes. I’m also teaching business associations and legal writing, and the students will have their own classes, jobs, law reviews, and extracurricular activities to contend with.

If you have any questions or tips, leave them below or email me at mweldon@law.miami.edu. I plan to learn more about course development at the University of Denver hybrid/online learning conference on September 26th. I’ll update this post after that conference. In the meantime, this weekend, I’ll be retooling my syllabus based on my summer experience and what I’ve learned this week at SEALS. Correction, I’ll retool in between grading the joint contracts.

August 2, 2019 in Contracts, Law Firms, Law School, Lawyering, Marcia Narine Weldon, Negotiation, Teaching, Technology | Permalink | Comments (1)

Monday, July 29, 2019

Social Enterprise Lawyering: More Than Mere Legal Competence is Required . . . .

For last year's Business Law Prof Blog symposium at UT Law, I spoke on issues relating to the representation of business firms classified or classifiable as social enterprises.  Last September, I wrote a bit about my presentation here.  The resulting essay, Lawyering for Social Enterprise, was recently posted to SSRN.  The SSRN abstract follows.

Social enterprise and the related concepts of social entrepreneurship and impact investing are neither well defined nor well understood. As a result, entrepreneurs, investors, intermediaries, and agents, as well as their respective advisors, may be operating under different impressions or assumptions about what social enterprise is and have different ideas about how to best build and manage a sustainable social enterprise business. Moreover, the law governing social enterprises also is unclear and unpredictable in respects. This essay identifies two principal areas of uncertainty and demonstrates their capacity to generate lawyering challenges and related transaction costs around both entity formation and ongoing internal governance questions in social enterprises. Core to the professionalism issues are the professional responsibilities implicated in an attorney’s representation of social enterprise businesses.

To illuminate legal and professional responsibility issues relevant to representing social enterprises, this essay proceeds in four parts. First, using as its touchstone a publicly available categorization system, the essay defines and describes types of social enterprises, outlining three distinct business models. Then, in its following two parts, the essay focuses in on two different aspects of the legal representation of social enterprise businesses: choice of entity and management decision making. Finally, reflecting on these two aspects of representing social enterprises, the essay concludes with some general observations about lawyering in this specialized business context, emphasizing the importance of: a sensitivity to the various business models and related facts; knowledge of a complex and novel set of laws; well-practiced, contextual legal reasoning skills; and judgment borne of a deep understanding of the nature of social enterprise and of clients and their representatives working in that space.

I hope that this essay is relatable and valuable to both academics and practicing lawyers.  Feedback is welcomed.  So are comments.  

Also, I will no doubt be talking more about aspects of this topic at a SEALS discussion group later this week entitled "Benefit Corporation (or Not)? Establishing and Maintaining Social Impact Business Firms," which I proposed for inclusion in this year's conference and for which I will serve as a moderator.  The description of the discussion group is as follows:

As the benefit corporation form nears the end of its first decade of "life" as a legally recognized form of business association, it seems important to reflect on whether it has fulfilled its promise as a matter of legislative intent and public responsibility and service. This discussion group is designed to take on the challenge of engaging in that reflective process. The participating scholars include doctrinal and clinical faculty members who both favor and tend to recommend the benefit corporation form for social enterprises and those who disfavor or hesitate to recommend it.

As you can see from the SEALS program for the meeting, the participants represent both academics (doctrinal and clinical) and practitioners who care about social enterprise and entity formation.   If you are at SEALS, please come and join us!

July 29, 2019 in Business Associations, Compliance, Conferences, Corporate Governance, Corporations, Joan Heminway, Lawyering, Social Enterprise | Permalink | Comments (4)

Friday, July 26, 2019

Sex, Lies, and M&A

I'm at the tail end of teaching my summer transactional lawyering course. Throughout the semester, I've focused my students on the importance of representations, warranties, covenants, conditions, materiality, and knowledge qualifiers. Today I came across an article from Practical Law Company that discussed the use of #MeToo representations in mergers and acquisitions agreements, and I plan to use it as a teaching tool next semester. According to the article, which is behind a firewall so I can't link to it, thirty-nine public merger agreements this year have had such clauses. This doesn't surprise me. Last year I spoke on a webinar regarding #MeToo and touched on the the corporate governance implications and the rise of these so-called "Harvey Weinstein" clauses. 

Generally, according to Practical Law Company, target companies in these agreements represent that: 1) no allegations of sexual harassment or sexual misconduct have been made against a group or class of employees at certain seniority levels; 2) no allegations have been made against  independent contractors; and 3) the company has not entered into any settlement agreements related to these kinds of allegations. The target would list exceptions on a disclosure schedule, presumably redacting the name of the accuser to preserve privacy. These agreements often have a look back,  typically between two and five years with five years being the most common. Interestingly, some agreements include a material adverse effect clause, which favor the target. 

Here's an example of a  representation related to "Labor Matters" from the June 9, 2019 agreement between Salesforce.com, Inc. and Tableau Software, Inc.

b) The Company and each Company Subsidiary are and have been since January 1, 2016 in compliance with all applicable Law respecting labor, employment, immigration, fair employment practices, terms and conditions of employment, workers' compensation, occupational safety, plant closings, mass layoffs, worker classification, sexual harassment, discrimination, exempt and non-exempt status, compensation and benefits, wages and hours and the Worker Adjustment and Retraining Notification Act of 1988, as amended, except where such non-compliance has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

c) To the Company's Knowledge, in the last five (5) years, (i) no allegations of sexual harassment have been made against any employee at the level of Vice President or above, and (ii) neither the Company nor any of the Company Subsidiaries have entered into any settlement agreements related to allegations of sexual harassment or misconduct by any employee at the level of Vice President or above.

The agreement has the following relevant definitions:

"Knowledge" will be deemed to be, as the case may be, the actual knowledge of (a) the individuals set forth on Section 1.1(a) of the Parent Disclosure Letter with respect to Parent or Purchaser or (b) the individuals set forth on Section 1.1(a) of the Company Disclosure Letter with respect to the Company, in each case after reasonable inquiry of those employees of such Party and its Subsidiaries who would reasonably be expected to have actual knowledge of the matter in question.

Even though I like the idea of these reps. in theory, I have some concerns.  First, I hate to be nitpicky, but after two decades of practicing employment law on the defense side, I have some questions. What's the definition of "sexual misconduct"? What happens of the company handbook or policies do not define "sexual misconduct"? The Salesforce.com agreement did not define it. So how does the target know what to disclose? Next, how should an agreement define "sexual harassment"? What if the allegation would not pass muster under Title VII or even under  a more flexible, more generous definition in an employee handbook? When I was in house and drafting policies, a lot of crude behavior could be "harassment" even if it wouldn't survive the pleading requirements for a motion to dismiss. Does a company have to disclose an allegation of harassment that's not legally cognizable? And what about the definition of "allegation"? The Salesforce.com agreement did not define this either. Is it an allegation that has been reported through proper channels? Does the target have to go back to all of the executives' current and former managers and HR personnel as a part of due diligence to make sure there were no allegations that were not investigated or reported through proper channels? What if there were rumors? What if there was a conclusively false allegation (it's rare, but I've seen it)? What if the allegation could not be proved through a thorough, best in class investigation? How does the target disclose that without impugning the reputation of the accused? 

Second, I'm not sure why independent contractors would even be included in these representations because they're not the employees of the company. If an independent contractor harassed one of the target's employees, that independent contractor shouldn't even be an issue in a representation because s/he should not be on the premises. Moreover,  the contractor, and not the target company, should be paying any settlement. I acknowledge that a company is responsible for protecting its employees from harassment, including from contractors and vendors. But a company that pays the settlement should ensure that the harasser/contractor can't come near the worksite or employees ever again. If that's the case, why the need for a representation about the contractors? Third, companies often settle for nuisance value or to avoid the cost of litigation even when the investigation results are inconclusive or sometimes before an investigation has ended. How does the company explain that in due diligence? How much detail does the target disclose? Finally, what happens if the company legally destroyed documents as part of an established and enforced document retention and destruction process? Does that excuse disclosure even if someone might have a vague memory of some unfounded allegation five years ago?

But maybe I protest too much. Given the definition of "knowledge" above, in-house and outside counsel for target companies will have to ask a lot more and a lot tougher questions. On the other hand, given the lack of clarity around some of the key terms such as "allegations," "harassment," and "misconduct," I expect there to be some litigation around these #MeToo representations in the future. I'll see if my Fall students can do a better job of crafting definitions than the BigLaw counsel did. 

July 26, 2019 in Compliance, Contracts, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Employment Law, Ethics, Law School, Lawyering, Litigation, M&A, Management, Marcia Narine Weldon, Teaching | Permalink | Comments (0)

Friday, May 3, 2019

Can Lawyers and Law Students Be (More) Effective Working and Learning Virtually?

I blogged two weeks ago about whether we were teaching law students the wrong things, the wrong way, or both. I’ve been thinking about that as I design my asynchronous summer course on transactional lawyering while grading asset and stock purchase agreements drafted by the students in my spring advanced transactional course. I taught the spring students face to face, had them work in groups, required them to do a a negotiation either in person or online, and am grading them on both individual and group work as well as class participation. When I looked at drafts of their APAs and SPAs last week, I often reminded the students to go back to old PowerPoints or the reading because it seemed as though they missed certain concepts or maybe I went through them too quickly— I’m sure they did all of the reading (ha!).  Now, while designing my online course, I’m trying to marry the best of the in person processes with some of the flipped classroom techniques that worked (and tweaking what didn’t).

Unlike many naysayers, I have no doubt that students and lawyers can learn and work remotely. For the past nine years, I have participated as a mentor in LawWithoutWalls, a mostly virtual experiential learning program started by University of Miami professor Michele DeStefano. Also known as LWOW, the program matches students from around the world with business people and practicing lawyers to develop a project of worth over sixteen weeks. Team members meet in January in person and never see each other in person again until April during a competition that is judged by venture capitalists, lawyers, entrepreneurs, and academics. I mentored a team of students from Bucerius in Germany, Wharton in Pennsylvania, and the University of Miami. Banking behemoth HSBC sponsored our project and staffed it with lawyers from Singapore, Canada, and the UK. Other mentors on the team hailed from Spain and the UK. On any given week, 7-10 people joined Skype calls, chatted in WhatsApp, drafted on Google Docs, and accessed Slack. They attended mandatory webinars weekly via Adobe Connect on developing business plans, pitching to VCs, and working with clients. Seventy percent of the people on the seventeen teams spoke languages other than English as the first language. 

How did this virtual experience work? Extremely well, in my view. After some growing pains, students adjusted quickly as did the business partners, who are used to setting up conference calls and working across borders. Some of the winning teams developed projects that provided virtual reality training on implicit bias for police officers; informed consumers about food freshness to combat food waste; and organized health information for foster care children on a blockchain-powered platform. Humble brag- my team won best overall project by developing a solution to use blockchain and smart contracts in syndicated lending that has the potential to save the bank almost 2 million per year. I also mentored last year’s winner, Team Spotify, with students from Miami, Colombia, and Chile and lawyers housed in Sweden, California, and New York. Each year, teams do almost all of this hard work remotely, across time zones, and with language differences. Students collectively interview hundreds of subject matter experts over 16 weeks, and the vast majority of those interviews take place via phone or video and with people in different countries. Other sponsors for LWOW included Accenture, White and Case, Pinsent Mason, Microsoft,  Cozen O'Connor, LegalZoom, Eversheds Sutherland, LatAm Airlines, and Legal Mosaic-- all companies and law firms that see the benefit of these skill sets.  Significantly, every year, a cohort of teams does all of the work virtually, never meeting in person for a kickoff. That virtual team winner competes in person with the traditional teams each April, and often wins the whole competition. Clearly, these students develop special skills by necessity. I plan to learn from those experiences as I design my course.

My experience with LawWithoutWalls and as a former compliance officer (where we often did training online and via video) makes me optimistic about online learning and working. In my summer course, I will have students work in groups, where they will use the latest virtual teaming tools. I will have live office hours via Skype, Zoom, or FaceTime, and I will require that some of the groups do their meetings via video as well to have a connection outside of email. Students will draft and edit on community bulletin boards. They will post their own video presentations and "webinars" geared toward fictitious business clients. Working collaboratively and creatively are key skills in the real world, and they will be key in my class. 

But there is a lot of resistance in both the legal community and academia regarding the online world. Last week, I attended a seminar at a law firm and met a member of the Florida Board of Bar Examiners. I asked his opinion on the state of students and young lawyers. I was particularly interested in his thoughts because he’s also a partner at a large law firm in our state. Like some quoted in my prior post, he believes that online coursework is a poor substitute for face to face learning. He further opined that when people don’t work in offices, they miss the camaraderie of being around peers and their work suffers. These are valid concerns. Many lawyers are unhappy in general, and the way people hide behind digital devices (even when in the same room/office) can lead to isolation, depression, and poor networking and social skills. 

But these drawbacks should not doom online learning and remote working. Most of my graduating 3Ls will take their bar prep courses online. They claim that it makes no sense to drive to campus “just to watch a video of a professor speaking.” They also like the idea of being able to rewind videos to take notes. The indicated that they will meet up with friends when they want to study together and may even come on campus to watch their online coursework for a sense of community. But significantly, they don’t see the need to learn in the traditional ways. Personally, I love good online courses but I also love the ability to have face to face interaction with teammates- even if that’s via video. Being in the same physical space also allows for chance interactions that can lead to enriching conversations. On the other hand, sometimes there's no choice. Many readers may remember that years ago, in harder economic times, companies cancelled non essential business travel and people got used to video meetings. Many employers now interview candidates by Skype first before bringing them in. Learning and working virtually is no longer a novelty. Some of our students  will work in co-working spaces for firms or companies where everyone works from home. 

Change is coming and in many places, already here. Law professors must prepare students to practice in this new world while not sacrificing pedagogical gains. This requires training on project management and effective communication with team members— all non-substantive topics and that will give many people pause. We also need to make sure that students know how to communicate with clients and employers face to face in business and social settings. Some professors will say- correctly- that they have enough to contend with making sure students understand the law and can pass the bar. But, for those of us interested in online learning, we need to do more. We have to make sure that we prepare students for both the "hard" and "soft" skills.  Most important, we need to make sure that these online courses have the rigor of traditional classes-- US News is watching.

I’m open to suggestions of what has worked for you and what hasn’t so please feel free to comment below or email me at mweldon@law.miami.edu.

May 3, 2019 in Current Affairs, Jobs, Law Firms, Law School, Lawyering, Marcia Narine Weldon, Negotiation, Teaching, Technology, Web/Tech | Permalink | Comments (2)

Monday, April 29, 2019

Trump's Deregulatory Promises and Accomplishments

My essay, "Mr Toad's Wild Ride: Business Deregulation in the Trump Era," was recently published by the Mercer Law Review as part of a volume featuring works from a recent symposium on "Corporate Law in the Trump Era."  The symposium was held back in October and resulted from ideas shared at a discussion group on "Corporate and Financial Reform in the Trump Administration" convened for the 2017 Southeastern Association of Law Schools conference.  A portion of the introduction explaining the overall nature of the essay follows (footnote reference omitted).

This Essay identifies and takes stock of the Trump Administration’s deregulatory efforts as they impact business interests, with the thought that even incomplete or biased information may be useful to transactional business lawyering. What of significance has been done to date? With what articulated policy goals, if any? How may—or how should—the success of the administration’s business deregulatory plans and programs be judged? What observations can be made about those successes? For example, who may win and lose in the revised regulatory framework that may emerge? The Essay approaches these questions from a transactional business law perspective and offers related observations. Spoiler Alert: to date, the deregulatory journey is characterized by haphazardness not unlike the motorcar experience that is the subject of the beloved Disneyland attraction, Mr. Toad’s Wild Ride—a joyride that includes surprises and may sometimes feel like it is taking us “merrily, merrily, merrily, merrily, merrily on our way to nowhere in particular!”

This is the second essay in a pair that I wrote over the past year on deregulation and the presidency.  I posted on the first essay here, with a bit of information about the project as a whole (which had its genesis in BLPB posts by Anne Tucker and me).*  I also posted on this project back in September, here.  Thanks to those of you who responded with ideas in the comments and in private messages in response to these earlier posts.  

Although not all of those comments made it into my work implicitly or explicitly, they were nevertheless helpful as I researched and thought through my theses on these two short reflective pieces.  I do have many more ideas relating to this topic.  No doubt those ideas--and some of yours--will find their way into other work as time moves on.

_____

* In reviewing my prior posts for this post, I noted that the text of  this post has the year of the Southeastern Association of Law Schools discussion group wrong.  It did, in fact, occur in 2017, and it therefore preceded the Association of American Law Schools conference discussion group referenced in the post.  I left a postscript on that page, but I wanted to clarify the matter here also.

April 29, 2019 in Anne Tucker, Current Affairs, Joan Heminway, Lawyering | Permalink | Comments (0)

Friday, April 19, 2019

Are We Teaching Law Students The Wrong Things, The Wrong Way, or Both?

It's that time of year again. Many states have released February 2019  bar passage rates. Thankfully, the rates have risen in some places, but they are still at suboptimal levels. Indeed, the July 2018 MBE results sunk to a 34- year low. A recent article on law.com lists some well-known statistics and theories, explaining, in part:

Kellye Testy, president of the Law School Admission Council . . .  suspects the falling pass rates are the results of a combination of factors, the most obvious being the lower credentials of incoming students. The declining quality of public education—meaning an erosion of the reading and writing foundations children develop in elementary and high schools—may also be a contributor, she said. Moreover, the evolving way that law is taught may explain why today’s law graduates are struggling more on the bar exam, said Testy, whose organization develops the LSAT. Professors now put less emphasis on memorizing rules, and have backed off on some of the high-pressure tactics—like the Socratic method—that historically dominated the classroom. “The way we used to teach wasn’t as good for caring for the student, but it made sure you could take a closed-book exam,” she said. “You knew the doctrine. It was much more like a bar exam, in some ways. Today, when you go into a classroom, it’s all PowerPoint. The teachers give them an outline, the students are on computers. There’s a different student approach and a different faculty approach.” The fact that so many law graduates now take bar preparation courses online rather than in person is another avenue worth examining for a potential correlation to falling pass rates, said Judith Gundersen, president of the National Conference of Bar Examiners. “You used to have to go to a lecture and show up every day,” she said. “Now so much of it is online. People are wondering whether that’s changing how people prepare, because there just isn’t that communal aspect where, ‘I have to prepare in case I get called on.’”

I'm not sure how I feel about these assertions. I agree that many students lack some of the key critical thinking and writing skills needed to analyze legal problems. I also see far fewer professors using the strict Socratic method and more allowing computers in class. I allow computers for specific activities but not throughout the class. I also employ more of a modified Socratic method, use powerpoint, and often post it in advance with questions for students to answer prior to class so that we can spend time in class applying what the students have learned. Am I doing a disservice to my students with a flipped classroom? Do we need to go back to rote memorization and cold calling students for the bar passage rates to rise? And if so, will that make our students better lawyers?

I remember how difficult it was to take the Florida bar after three years of law practice in New York. The rote memorization helped me pass the bar exam while working a full time job and caring for an infant as a single mother. But it didn't make me a better lawyer. Having worked for three years, I remember slogging through bar study thinking that what I was learning in bar prep had little to do with what I actually did in practice. When I prepared for the New York and New Jersey bars, I went to classes live but some were in a classroom via video. I'm not even sure that purely online courses were an option back in 1992. When I moved to Florida and studied for that bar, I used tapes in my car (yes, it was 1996). I had tried the live courses for a few days and realized that my time was better spent reciting the rules of evidence to my son in lieu of nursery rhymes. I passed three bars using two different methods but I wonder how well I would have done with an online version, the way most students study for the bar now. 

I no longer teach courses tested on the bar, but when I did, I had the perpetual conflict-- how do I make sure that the students pass the bar while instilling them with the knowledge and skills they will actually need in the real world? I see now how some of my transactional lawyering students dread going to the bar prep classes offered during the semester. But they also consider these classes a necessity to pass the bar even through they will engage in full time bar prep upon graduation. Does the proliferation of these law school bar prep classes mean that the doctrinal professors aren't teaching the students the way we learned? Or does it mean that that the students are no longer learning the way we did? I don't have the answers. 

But these articles do have an effect on how and what I teach. Under ABA Standard 306,  law schools can offer up to one-third of their credits online, including up to ten credits for first-year coursework. As I prepare to teach my contract drafting and negotiation class asynchronously online for the first time this summer, I'm learning about presenting information in short, digestible chunks for the students- no more than 15-20 minutes per video, and preferably even shorter, I'm told. I'm also reviewing the conflicting evidence about whether online courses are a help or a hindrance.

Some of my students have taken many courses online as undergraduates. As a compliance officer, I required employees to take courses online and did live training. Personally, I like taking online courses. But I don't know enough about how well students retain the information and how well they learn to use key skills to serve clients. I'm fortunate, though, to have excellent instructional designers working with me who understand adult learning much better than I do. I'm convinced that more students will seek online courses and more schools will adopt them as a way of earning more revenue through developing programs for working professionals and JD students who need more flexible schedules. This means many more of us may need to prepare for this new way of teaching and learning.

April 19, 2019 in Current Affairs, Law School, Lawyering, Licensing, Marcia Narine Weldon, Teaching | Permalink | Comments (1)

Friday, April 12, 2019

Why Businesses Should Not Ignore the Operation Varsity Blues Scandal

As a former compliance officer who is now an academic, I've been obsessed with the $25 million Varsity Blues college admissions scandal. Compliance officers are always looking for titillating stories for training and illustration purposes, and this one has it all-- bribery, Hollywood stars, a BigLaw partner, Instagram influencers, and big name schools. Over fifty people face charges or have already pled guilty, and the fallout will continue for some time. We've seen bribery in the university setting before but those cases concerned recruitment of actual athletes. 

Although Operation Varsity Blues concerns elite colleges, it provides a wake up call for all universities and an even better cautionary tale for businesses of all types that think of  bribery as something that happens overseas. As former Justice Department compliance counsel, Hui Chen, wrote, "bribery. . .  is not an act confined by geographies. Like most frauds, it is a product of motive, opportunity, and rationalization. Where there are power and benefits to be traded, there would be bribes." 

My former colleague and a rising star in the compliance world, AP Capaldo, has some great insights on the scandal in this podcast. I recommend that you listen to it, but if you don't have time, here are some questions that she would ask if doing a post mortem at the named universities. With some tweaks, compliance officers, legal counsel, and auditors for all businesses should consider: 

1) What kind of training does our staff receive? How often?

2) Does it address the issues that are likely to occur in our industry?

3) When was the last time we spot checked these areas for compliance ? In the context of the universities, were these scholarships or set asides within the scope of routine audits or any other internal controls or reviews?

4) What factors or aspects of the culture could contribute to a scandal like this? What are our red flags and blind spots? Do we have a cultural permissiveness that could lead to this? In the context of the implicated universities, who knew or had reason to know?

5) How can we do a values-based analysis? Do we need to rethink our values or put some teeth behind them?

6) How are our resources deployed?

7) Do we have fundamental gaps in our compliance program implementation? Are we too focused on one area or another?

8) Are integrity and hallmarks of compliant behavior part of our selection/hiring process?

Capaldo recommends that universities tap into their internal resources of law and ethics professors who can staff  multidisciplinary task forces to craft programs and curate cultures to ensure measurable improvements in compliance and a decrease in misconduct. I agree. I would add that as members of the law and business community and as alums of universities, we should ask our alma maters or employers whether they have considered these and other hard questions. Finally, as law and business professors, we should use this scandal in both the classroom and the faculty lounge to reinforce the importance of ethics, internal controls, compliance with law, and shared values.

 

April 12, 2019 in Business School, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Ethics, Law Firms, Law School, Lawyering, Management, Marcia Narine Weldon, Sports, Teaching | Permalink | Comments (0)

Tuesday, April 9, 2019

Court Says No Successor Liability Attaches When There Was No Entity

A 2017 opinion related to successor liability just posted to Westlaw.  The case is an EEOC claim "against the Hospital of St. Raphael School of Nurse Anesthesia (“HSR School”) and Anesthesia Associates of New Haven (“AANH”), alleging gender discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 . . . ." The plaintiff was seeking to join Yale New Haven Hospital (“YNHH”). MARGARITE CONSOLMAGNO v. HOSPITAL OF ST. RAPHAEL SCHOOL OF NURSE ANESTHESIA and ANESTHESIA ASSOCIATES OF NEW HAVEN, P.C., 3:11CV109 (DJS), 2017 WL 10966446, at *1 (D. Conn. Mar. 27, 2017). 

 
 
Apparently, the HSR School trained nurse anesthetists was owned and run by AANH a Connecticut “professional corporation.”  The plaintiff was in the HSR School for about six months before she was dismissed, she claimed, because of " gender discrimination and retaliation for reporting a staff member’s inappropriate sexual conduct." Id. The plaintiff sought to join YNHH because that entity took over running an anesthesia school that had been, in some form, the HSR school.  
 
The successor liability part is rather interesting, though largely devoid of facts from the transaction.  The court ultimately concludes that even though YNHH resumed a similar school, it was not a successor entity and could not be joined.  
 
A challenging part about the case is that entities are described, but often not clearly and with conflicting entity-type language.  For example, although AANH was a "professional corporation," the court explained that " [t]he AANH anesthesiologists, who were also partners in AANH, were responsible for deciding how the HSR School would operate." Id. at *2. One of the doctors was also referred to as an "ownership partner in AANH." Id. at *3. I suspect that anesthesiologists, like lawyers, traditionally created firms that were partnerships, so the principals often call themselves "partners," regardless of their actual entity type. Still, it would be nice for courts to clarify the actual roles of those involved.  
 
Furthermore, in describing the HSR School, the court states, 
 
There is no evidence that the HSR School had an existence that was independent of AANH. In fact, the HSR School was going to cease operating due to the fact that AANH was going to cease operating. The HSR School was not a limited liability corporation (“LLC”), private corporation (“P.C.”), or other legal entity registered with the Connecticut Secretary of State. (Tr. 141-142). There is no evidence that the HSR School had its own assets, bank account, or tax identification number. There is no evidence that the HSR School itself (as opposed to AANH) ever paid anyone for rendering services to the HSR School. There is no evidence that anyone other than AANH had operated the HSR School. Consequently, the Court finds that the predecessor in interest, for the purpose of assessing successor liability, is AANH.
Id. at *6. Ultimately, it appears the court has determined this was some version of an asset purchase  (even though neither party provided a copy of the asset purchase agreement), so the liability stayed with AANH.  This appears to be correct, but it's hard to know without that document.
 
And it is hard to know what the obligations are when additional relevant possible parties are.  The court further determined that the potential successor entities, "YNHH and Yale University are two separate corporate entities with separate governance structures."  Except there is no statement as to what types of entities they are, where they were formed, or anything else other than a reference to testimony from a witness who said YNHH was a separate entity from Yale University.  It would seem to me that some of the related documentation would be valuable, but the court has spoken.  
 
And fair enough. But I have to correct this: "The HSR School was not a limited liability corporation company (“LLC”), private professional corporation (“P.C.”), or other legal entity."  

April 9, 2019 in Business Associations, Corporations, Joshua P. Fershee, Lawyering, LLCs, M&A, Partnership | Permalink | Comments (0)

Saturday, April 6, 2019

Lawyers as Leaders

For the past two days, I had the privilege of attending a leadership conference hosted by UT Law's Institute for Professional Leadership.  I admit to being pretty passionate about leadership literature, training, and cultivation.  Some of that zeal no doubt comes from working with and studying the scholarship of business management.  However, I also have participated in two academic leadership training programs over the past ten years, the Higher Education Resources Service's HERS Institute and the Southeastern Athletics Conference's Academic Leadership Development Program.  Both were true eye-openers for me at a time when I was poised to assume a leadership role as our campus faculty senate president.

The conference this week was on developing leadership in lawyers.  It is part of a series of conferences/symposia that a group of law faculty interested in this topic have been convening for a number of years now.  Articles emanating from prior event proceedings are published here and here.   The authors of many of the articles in those law review books have also authored stand-alone books and other works on leadership in the legal profession published elsewhere.

This week's conference treatments of the topic spanned a wide range, addressing (for instance) the places and methods for training lawyers to be leaders, since lawyers hold a disproportionately high number of leadership positions in the public sector.  I enjoyed it all, but I was particularly inspired by the workshop on integrating well-being into leadership curricula, the roundtable discussions on what is already being done and what law practice needs, and the student/alumni panel on the importance and effectiveness of law school courses on leadership.  There were lots of good ideas shared in these sessions and throughout the conference, and many seeds were sowed for action and further discussion.  I hope to roll some of those ideas out on the BLPB over time.

Btw, the UT Law Institute for Professional Leadership has a blog.  I plan to author some posts for the blog that I will certainly highlight here.  But if you are interested in this topic more broadly, you may want to sign up to follow the blog by email (an option available on the blog site).  Also, feel free to contact me or the Institute's director, Doug Blaze, for more information.

April 6, 2019 in Joan Heminway, Lawyering | Permalink | Comments (0)

Tuesday, April 2, 2019

Still Howling at the Moon: Not All Businesses Are Corporations!

A new case from the Southern District of Texas recently appeared, and it is yet another case in which the entity type descriptions are, well, flawed. The case opens: 

Before the Court is the defendant’s, Arnold Development Group, LLC (the “defendant”) motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) and (3) (Dkt. No. 5), the plaintiff’s, Conesco Industries, LTD.; d/b/a DOKA USA, LTD. (the “plaintiff”) response to the defendant’s motion to dismiss (Dkt. No. 18) and the defendant’s reply in support of its motion (Dkt. No. 20).
 . . . .
The plaintiff is a New Jersey limited partnership doing business in Texas and throughout the United States. The defendant is a Missouri limited liability corporation.
CONESCO INDUSTRIES, LTD. d/b/a DOKA USA, LTD., Pl., v. ARNOLD DEVELOPMENT GROUP, LLC, Def.., 4:18-CV-02851, 2019 WL 1430112, at *1 (S.D. Tex. Mar. 29, 2019) (emphasis added). 
 
Everybody who reads this blog knew that was coming because I am writing about the case. Arnold Development Group, LLC, is not a limited liability corporation. It is a limited liability company.
 
So, fine, this kind of error is not remarkable, given my numerous posts on the subject. But the opinion, in the discussion section, follows with this gem: 
In the case before the Court, the defendant is a Missouri corporation and the plaintiff is a New Jersey corporation
Id. at *2. Nuh-uh.  The opinion had already established that we're dealing with a Missouri LLC and New Jersey limited partnership. Neither entity is a corporation.  
 
Fortunately, entity status here does not seem to have any clear impact on the personal jurisdiction analysis (this about specific jurisdiction), but still. The case was dismissed without prejudice, which means at least some of this language could come to bear in future versions of the litigation.  Here's hoping that the parties, and the next reviewing court (should there be one), are a little more careful with describing the entity types.  

April 2, 2019 in Corporations, Joshua P. Fershee, Lawyering, LLCs, Partnership | Permalink | Comments (0)

Monday, March 25, 2019

Mindful Business Lawyering - Yoga's Role

Yoga(Me-WII)

Colleen's post yesterday--and more specifically the last interview questions she asked ("[H]ow can power yoga be particularly helpful for professors or students?“)--inspired me to write about some work that I have recently done in studying the benefits of mindfulness to lawyers and in lawyering, and more specifically in business lawyering.  Colleen's entrepreneur yogi noted the obvious benefits of power yoga to physical health.  But she also noted what she termed "clarity of mind."  More specifically, she said: "I practice yoga to allow time away from devices and work emails, which in turn creates some distance to clear my mind and create clarity in how I want to interact with my environment."

I do, too.  And I have noticed that it makes a difference in the way I interact with people.  I am not alone.

I recently was challenged by my friends at the Tennessee Bar Association to present an hour of continuing legal education on mindfulness, reflecting on some of what I learned in my yoga instructor training last year and linking it to law practice.  Three of the eight limbs of yoga--asana (poses), pranayama (breath control), and dhyana (object-focused meditation)--are traditional mindfulness practices that I studied in that training program.  Of course, there are many more mindfulness practices in which one may engage.

So, if yoga and other mindfulness practices offer clarity of mind, why?  What's the secret?  And how might mindfulness practices practices affect business lawyers and their work?  I will start by offering a brief definition of mindfulness.

Mindfulness, which is defined here as "the self-regulation of attention with an attitude of curiosity, openness, and acceptance,” involves a focused state of mind that screens out life's distractions and allows one to observe one's sense of being in the here-and-now.  We can practice mindfulness in many everyday situations: speaking and listening, cooking, reading, crafting, etc.  Mindfulness trainers have examples and exercises that they employ to illustrate some of these mindfulness practices.  We also can practice mindfulness through yoga poses, breath work, and meditation.  I showed the Tennessee Bar Association audience some chair yoga, a breathing technique, and positioning for a chair-seated meditation--mindfulness practices that folks can do at their desks in an office setting or at home.

Of course, a clear mind should enable more fluid decision-making in the problem-solving that business lawyers do day-in and day-out.  Overall, communication and drafting should be easier--more efficient and effective.  But there's more.

A 2014 article in Time reported that “scientists have been able to prove that meditation and rigorous mindfulness training can lower cortisol levels and blood pressure, increase immune response and possibly even affect gene expression. Scientific study is also showing that meditation can have an impact on the structure of the brain itself.” In fact, neuroscientists have found (see here) that mindfulness may better enable the brain's gray matter in the frontal cortex to control decision-making rather that allowing the amygdala (the fight-or-flight part of the brain) to control decision-making.

This means that mindfulness practice--including yoga--can impact business law practice by conditioning lawyers to "hit the pause button" and rationally think through contested matters. As a result, tmindfulness practice has the capacity to reduce professional stress and enhance civility and collegiality.  (See Jan Jacobowitz's take on this for the American Bare Association.)  I have seen a lot of lawyers--in practice and in the law academy--whose anger is hair-triggered by stressful situations (especially negotiations or disagreements on process that generate frustration--more on that below).  It seems that scientists have begun to establish that yoga and other mindfulness practice (meditation seems to be the most-studied practice) can help us keep our cool in those situations.

I know that when I am over-caff'ed or over-tired, I am more assertive, more easily angered, and less able to take into account the whole of a situation in approaching requests, responses, negotiations, and other communications.  I also know that if I have just engaged in a focused yoga practice (that's me holding a Warrior II--Virabhadrasana II--pose, with a prop, in the photo above), I am more careful and considerate of others in engaging in those same communications.  Overall, my mind seems less burdened, less cluttered, more able to sort the important from the unimportant.  Business lawyers--and especially transitional business lawyers--cannot afford to squander relationships with clients, colleagues, and opposing counsel (not to mention an opposing counsel's client!) by over-reacting or responding to queries in anger or frustration.  

A personal business law story seems appropriate at this juncture.  In practice, I once participated in an unexpectedly hostile transaction negotiation session in which a mindful colleague was confronted by an over-stressed opposing counsel.  He leaned across the conference room table in an angry manner, with a reddened face and an imposing physical attitude, yelling about open deal items.  A representative of the lawyer's client soon called him off (and took him aside privately outside the room for a bit). I have always been proud that the opposing counsel's client hired my colleague and me to represent it on a subsequent transaction.  The client representative who had been present at that ugly meeting called my colleague personally and asked if she and I would work with the firm on that later transaction.

My friend and Colorado Law professor Peter Huang published a piece in the Houston Law Review about two years ago that expands on much of what I have written here--and more.  The article, entitled "Can Practicing Mindfulness Improve Lawyer Decision-Making, Ethics, and Leadership?," includes information from a fascinating array of sources and, like Peter's work generally, is very readable (even if long).  Peter is an economist and a lawyer.  He teaches business law.  In the article, he notes that "Mindfulness is now a part of business and finance, yet is not part of business law." He's right about that.  But we have the power to make it so, if we believe that mindfulness is important to business law.  In concluding, Peter offers us the link: "Practicing mindfulness offers lawyers an empirically-validated, potentially sustainable process to improve their decision-making, ethical behavior, and leadership. Doing so can improve the lives of lawyers, their clients, and the public."

So be it.  A good note on which to end.

[Editorial note: Footnotes have been omitted from the quotes to Peter Huang's article.  Check out the original for cited sources.]

March 25, 2019 in Joan Heminway, Lawyering, Wellness | Permalink | Comments (2)

Wednesday, March 20, 2019

Clue, LLC Edition: This Time, the Judge (or the Judge's Clerk) Did It

Get this, from a March 15 ruling and order on a motion for summary judgment: 

Greenwich Hotel Limited Partnership [GHLP] is a limited partnership organized under the laws of Connecticut, and is the owner of the Hyatt Regency Greenwich hotel. Answer to First Amended Complaint, dated Dec. 16, 2016 (“Am. Ans.”), ECF NO. 62, at 8. Hyatt Equities, L.L.C. (“Hyatt Equities”) is a limited liability corporation incorporated in Delaware, and is the general partner of Greenwich Hotel Limited Partnership. Id. at 9. The Hyatt Corporation (“Hyatt Corp.”) is a limited liability corporation incorporated in Delaware, and is the agent of Greenwich Hotel Limited Partnership. Id. at 9.

Benavidez v. Greenwich Hotel LP, 3:16-CV-191 (VAB), 2019 WL 1230357, at *1 (D. Conn. Mar. 15, 2019). 
 
Once more, for the people in back: LLCs are "limited liability companies," not "limited liability corporations."As such, LLCs are not "incorporated." LLCs are formed or organized. In addition, corporations are entities that provide shareholders limited liability, but they are generally not referred to as "limited liability corporations" because they might be confused with a separate and distinct entity type, the LLC.  
 
Whenever I read a case with this kind of language, I wonder how it happened.  Sometimes, like today, I go to the docket (thanks, Bloomberg Law) to see if the source of the wrongdoing (evil doing) was the party/lawyer or the judge/judge's clerk.  This time, it's pretty clear the lawyer got it right.  The case made it easy, as the ruling cited to the Answer to First Amended Complaint, which I pulled.  Here's how the lawyer's answer framed these "facts": 

"Upon information and belief, defendant Hyatt Equities is a limited liability company organized under the laws of the State of Delaware, and is the general partner of GHLP.

. . . .

Upon information and belief, defendant Hyatt Corporation is a corporation organized under the laws of the State of Delaware and is the agent of GHLP."

Benavidez v. Greenwich Hotel LP, 3:16-CV-191, Answer to First Amended Complaint, dated Dec. 16, 2016 (“Am. Ans.”), ECF NO. 62, at 9. This is all properly stated, but somehow it didn't translate to the ruling and order.  

Kudos to the filing attorneys on getting it right. I wonder if this is something that can be corrected? One would hope.  Okay, at least I hope so. 

March 20, 2019 in Corporations, Joshua P. Fershee, Lawyering, LLCs, Partnership | Permalink | Comments (0)

Friday, March 1, 2019

Loyola University Chicago School of Law is seeking applications for Co-Director of the Business Law Clinic/ Executive Director of the Business Law Center

The Business Law Clinic (Clinic) is part of a comprehensive curriculum in transactional law that is comprised of the Clinic, the Business Law Center (Center) and certificate and degree conferring programs. The Clinic, established in 1999, offers students a unique opportunity to develop essential lawyering skills in a professional, interactive environment. Loyola seeks a dynamic Clinic Co-Director/Center Executive Director to work collaboratively with the Clinic Co-Director and the Director of the Business Law Center to provide strategic leadership, teach the Clinic class, supervise student work with clients, and to assist the Center Director in the development of the business and transactional law curriculum, scholarly conferences and programming.

The Co-Director/Executive Director will serve as the Randy L. and Melvin R. Berlin Clinical Professor of Law that is a presumptively renewable long-term contract position with voting privileges within the Loyola University Chicago School of Law. Loyola University Chicago School of Law is a student-focused law center inspired by the Jesuit tradition of academic excellence, intellectual openness, and service to others. Our mission is to educate diverse, talented students to be responsible leaders in a rapidly changing, interdependent world, to prepare graduates who will be ethical advocates for justice and the rule of law, and to contribute to a deeper understanding of law and legal institutions through a commitment to research, scholarship and public service.

The Clinic is a focal point of student development of essential lawyering skills in a professional, interactive live-client environment. Students work under the direct supervision of the Co-Directors to represent entrepreneurs and small business owners, as well as individuals who are seeking legal assistance with not-for-profit organizations. The not-for-profit clients represented by the Clinic include organizations that encompass animal welfare, sports clubs, museums, community organizations, religious organizations, etc. The for-profit clients are entrepreneurs, inventors, service providers, and web-based business owners who are involved in a variety of industries. The Clinic Co-Directors work collaboratively to provide supervision and professional oversight of the work completed by law student clinicians in addition to teaching the Clinic classroom component. Business Law Center The Center is the hub for School of Law’s curriculum, research and programming related to business and transactional law. The Center is led by a nationally and internationally renowned Director that is a full-time tenured faculty member along with other esteemed scholars in business law. The Center Director works in close collaboration with the Business Law Clinic to ensure that students have access to a full and wide breadth of educational opportunities and programs.

The Center is a part of larger initiatives across the University, the Quinlan School of Business and the Chicago community that seek to implement Loyola’s social justice mission as it relates to providing access to business ventures and initiatives to underserved and minority communities. The Center includes the Institute for Investor Protection, The Rooftops Project, the JD Certificate in Transactional Law, and the Master of Laws (LLM) in Business Law degree.

Position Essential Duties and Responsibilities: The duties and responsibilities of the Co-Director/Executive Director include, but are not limited to the following: Strategic planning for the future direction of the Clinic for continued growth and development; Serve as the external advocate and collaborator for the Clinic in its work with the Center, the Quinlan School of Business and other community partnerships; Assist in the administration of the Clinic and the development of the Center; Supervision of law students, summer interns, and fellows in skill development and client representation including supervising students in client meetings, drafting contracts and other legal documents, conducting legal research, determining client legal issues, and advising and counseling clients; Teach and assist in the development of curriculum as part of the classroom component for the Clinic, the Transactional Law Certificate and the LLM in Business Law; Mentor and act as faculty advisor to student members of the Business Law Society; Assist the Center Director in organizing conferences, workshops and seminars in business and transactional law; and Engaging in scholarly research (preferred but not required).

Qualifications: The candidate must have the ability to engage successfully and work collaboratively with a diverse group of stakeholders including the Clinic Co-Director, the Center Director, students, clients, administrators, and community members. Excellent judgment, including sensitivity to the needs of clients, cultural nuances and confidential information. A commitment to serving not-for-profit clients and underserved and minority communities. Experience as a clinician or former clinical teaching fellow in a business/transactional law clinic or as a lawyer with significant practice experience in business law. Ability to work independently with minimal supervision and as part of an interprofessional team. Demonstrated commitment to detail and a process-oriented approach to supervision of clinic work. Demonstrated ability to organize and manage conferences, workshops and seminars. Flexible work attitude, ability to work effectively in a fast-paced environment with a small staff and frequent student turnover (due to semester long courses and graduation). Bachelor's degree and a JD from an ABA accredited law school degree required. Admission/eligibility for admission to the Illinois Bar. Adept user of internet, case management systems, e-mail and other office automation systems.

Selection Process: Review of applications will begin March 1, 2019 and continue until the position is filled. The position will begin on July 1, 2019. Applicants are to submit (1) a letter of interest describing the candidate’s reasons for applying for the position, (2) a curriculum vitae, (3) samples of scholarly or other written work if available, and (4) the names and contact information of three individuals prepared to provide professional references. Applications should be submitted through Loyola’s Careers website at https://www.careers.luc.edu/postings/10391. Inquiries should be directed to Professor Steven A. Ramirez, Director of Business Law Center, Loyola University Chicago, 25 E. Pearson, Chicago, IL, 60611, sramirez3@luc.edu.

Loyola University Chicago is an Equal Opportunity/Affirmative Action employer with a strong commitment to hiring for our mission and diversifying our faculty. As a Jesuit Catholic institution of higher education, we seek candidates who will contribute to our strategic plan to deliver a Transformative Education in the Jesuit tradition. To learn more about LUC’s mission, candidates should consult our website at www.luc.edu/mission/. Applications from women, minorities, veterans, and persons with disabilities are especially encouraged and preference will be given to candidates who can mentor female law students and those from communities that are underrepresented in the legal profession. Candidates are encouraged to consult our website to gain a clearer understanding of Loyola's mission at www.luc.edu/mission/index.shtml and our focus on transformative education at www.luc.edu/transformativeed/.

March 1, 2019 in Clinical Education, Jobs, Law School, Lawyering, Teaching | Permalink | Comments (0)

Tuesday, January 15, 2019

Sixth Circuit, Why Can't You Be More Like Your Sister, Eleventh Circuit? #LLCs

I am wading back into a jurisdiction case because when it to LLCs (limited liability companies), I need to. A new case from the United States Court of Appeals for the Sixth Circuit showed up on Westlaw.  Here's how the analysis section begins:

Jurisdiction in this case is found under the diversity statute 28 U.S.C. § 1332. John Kendle is a citizen of Ohio; defendant WHIG Enterprises, LLC is a Florida corporation with its principal place of business in Mississippi; defendant Rx Pro Mississippi is a Mississippi corporation with its principal place of business in Mississippi; defendant Mitchell Chad Barrett is a citizen of Mississippi; defendant Jason Rutland is a citizen of Mississippi. R. 114 (Second Am. Compl. at ¶¶ 3, 5) (Page ID #981–82). Kendle is seeking damages in excess of $75,000. Id. at ¶¶ 50, 54, 58, 64, 71 (Page ID #992–95). The district court issued an order under Rule 54(b) of the Federal Rules of Civil Procedure that granted final judgment in favor of Mitchell Chad Barrett, and so appellate jurisdiction is proper. R. 170 (Rule 54(b) Order) (Page ID #3021).

Kendle v. Whig Enterprises, LLC, No. 18-3574, 2019 WL 148420, at *3 (6th Cir. Jan. 9, 2019).

No. No. No. An LLC is not a corporation, for starters.  And for purposes of diversity jurisdiction, "a limited liability company is a citizen of any state of which a member of the company is a citizen." Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004).  As such the where the LLC is formed doesn't matter and the LLC's principal place of business doesn't matter. All that matters is the citizenship of each LLC member.  

In this case, I can tell from the opinion that Kendle and Rutland are "co-owners" of WHIG Enterprises. The opinion suggests there may be other owners (i.e., members).  The opinion refers to the plaintiff suing "WHIG Enterprises, LLC, two of its co-owners, and another affiliated entity." Kendle v. Whig Enterprises, LLC, No. 18-3574, 2019 WL 148420, at *1. The opinion later refers to Rutland as "another WHIG co-owner."  If we want to know whether diversity jurisdiction is proper, though, we'll need to know ALL of WHIG's members.  

Now, it may well be that there is diversity among the parties, but we don't know, and neither, apparently, does the court. That may not be an issue in this case, but if people start modeling their bases for jurisdiction on the Kendle excerpt above, things could get ugly. The Eleventh Circuit, as noted above. A more recent case further reminds us to check diversity for all members in an LLC.  Thermoset Corporation v. Building Materials Corp. of America et al, 2017 WL 816224 (11th Cir., March 2, 2017).

I figured that I should give a shout out to folks getting right, given all my criticism of those getting it wrong.  Come, Sixth Circuit, let's get it together. 

January 15, 2019 in Corporations, Current Affairs, Joshua P. Fershee, Lawyering, LLCs | Permalink | Comments (1)

Saturday, January 5, 2019

How to Be A Happy Lawyer (Or At Least Less Miserable) in 2019.

 

 

It's the  start of a new year and a new semester. As Joan wrote earlier this week, we need to step back and take stock of our mental health. I'm the happiest lawyer I know and have been since I graduated from law school in 1992, but many lawyers and students aren't so lucky. In fact, I probably spend 25-35% of my time on campus calming students down. Some have normal anxiety that fades as they gain more confidence.  I often recommend that those students read Grit or at least listen to the Ted talk. Others tell me (without my asking) about addictions, clinical depression, and other information that I should not know about. I know enough to refer to them to help. Closer to home, my 22-year old son has lost several friends to suicide. Many of those friends went to the best high schools and colleges in the country and seemed to have bright futures. And as we know, the suicide rate for lawyers is climbing.

Thankfully, the American Bar Association has gathered a number of resources for law students here. Practicing lawyers can find valuable tools for lawyer well-being here and a podcast for lawyers in recovery here. Law students can access their own ABA wellness podcast here. To help keep my energy high, I listen to a lot of podcasts of all types. I’ve found that listening to wellness podcasts, meditating, and exercising instead of watching the news has had a dramatic impact on my health. I know for a fact that the wellness stuff works. Due to significant stressors as a caretaker, my blood pressure spiked to a clinically dangerous level last week. This week, with mindfulness exercises and other wellness activities, I was able to lower it to normal levels without my new medication having kicked in yet. This is a big deal for me because despite my professional happiness, I’ve been hospitalized twice in 14 months for medical conditions exacerbated by stress. Being calm and stress free is literally a matter of life and death for me. Some of the podcasts I listen to are probably too “woo woo” to post for this audience but if you’re interested, you can email me privately at mweldon@law.miami.edu. I’ll keep your secret.

Mainstream lawyer/business wellness podcasts include:

The Happy Lawyer Project (“The Happy Lawyer Project is an inspirational podcast for young lawyers looking to find happiness in life with a law degree. Each episode provides you with the tips, advice, encouragement and inspiration you need to craft a life and career you love.")

The Resilient Lawyer (“Practical and actionable information you can use to be a better lawyer. The Resilient Lawyer podcast is inspired by those in the legal profession living with authenticity and courage. Each week, we share tools and strategies for finding more balance, joy, and satisfaction in your professional and personal life! You'll meet lawyers, entrepreneurs, mentors and teachers successfully bridging the gap between their personal and professional lives, connecting the dots between their mental, emotional, physical and spiritual selves.”)

Happy Lawyer, Happy Life ("A knowledge centre for lawyers who want to make the best of their life in and outside of the law.")

The Tim Ferris Show (“Each episode, I deconstruct world-class performers from eclectic areas (investing, sports, business, art, etc.) to extract the tactics, tools, and routines you can use.  This includes favorite books, morning routines, exercise habits, time-management tricks, and much more.”)

The Mindful Lawyer (it's no longer running, but my colleague Scott Rogers pioneered the field and these are short tracks.)

Dina Cataldo Soul Roadmap (“So, you’re a lawyer who doesn’t have it all figured out? Design the life you deserve. Stop killing yourself to achieve success and redefine it instead.”)

You may need more than a podcast to get you through whatever you're going through right now. If you, a student, a colleague, or family member needs immediate help, please get it. I’ve cut and pasted the resources below from our law school’s web page for students.

Key National Referral Services

Suicide Prevention

National Suicide Prevention Lifeline, 1-800-273-TALK (8255), National, Toll-Free, 24 Hours
Dave Nee Foundation, 646-801-7392
Law Lifeline, 1-800-273-TALK (8255)

Chemical Dependency and Self-Help Sites

Addition Recovery Resources for Professionals, 540-815-4214
Alcoholics Anonymous (AA), 212-870-3400
American Medical Association, 800-621-8335
Center for Substance Abuse Treatment (CSAT), 240-276-1660
Cocaine Anonymous (CA), 310-559-5833
CODA Drug Abuse Hotlines, 1-877-446-9087

Crystal Meth Anonymous (CMA), 213-488-4455
Dual Recovery Anonymous (DRA), 913-991-2703
International Lawyers in A.A. (ILAA), 944-566-9040
Marijuana Anonymous (MA), 800-766-6779
Narcotics Anonymous (NA), 818-773-9999
National Clearinghouse for Alcohol and Drug Information(SAMHSA), 1-877-SAMHSA (726-4727)
National Institute on Drug Abuse (NIDA), 301-443-1124
Nicotine Anonymous (NA), 415-750-0328

Compulsive Gambling

Debtors Anonymous (DA), 781-453-2743
Gamblers Anonymous (GA), 213-386-8789

Eating Disorders

Anorexia Nervosa & Associated (Eating) Disorders (ANAD), 630-577-1330
Overeaters Anonymous (OA), 505-891-2664

Family Support

Adult Children of Alcoholics (ACOA), 562-595-7831
Al-Anon/Alateen, 757-563-1600
Nar-Anon Family Groups, 310-534-8188
Co-Dependents Anonymous (CODA), 888-444-2359
Co-Dependents of Sex Addicts (COSA), 763-537-6904

Mental Health Sites

Anxiety Disorders Association of America (ADAA), 240-485-1001
Journal of General Psychiatry (JAMA), 1-800-262-2350
Children and Adults with Attention Deficit/Hyperactivity Disorder(CHADD), 1-800-233-4050
Depression and Bipolor Support Alliance (DBSA), 800-826-3632
Lawyers with Depression
National Alliance on Mental Illness (NAMI), 800-950-6264
National Institute of Mental Health (NIMH), 1-866-615-6464
National Mental Health Association (NMHA), 703-684-7722

Sexual Addiction and Compulsivity

Sex Addicts Anonymous (SAA), 800-477-8191
Sex & Love Addicts Anonymous (SLAA), 210-828-7900
Sexaholics Anonymous (SA) 615-370-6062

I'm sure that I've missed a number of resources. I just finished attending a wellness tea brunch at a French patisserie with fresh baked goods and champagne so I'm incredibly relaxed (#selfcare). If you have more resources to add, please feel free to comment below. Let’s make this the best year yet for our students and for ourselves. If I can ever be an ear for anyone, I’m always available.

 

January 5, 2019 in Current Affairs, Law Firms, Law School, Lawyering, Marcia Narine Weldon, Psychology, Wellness | Permalink | Comments (1)

Tuesday, January 1, 2019

5 Quotes for the New Year

To start the New Year, I found a few thoughtful quotes to help me get in a good state of mind. I thought I’d share. Wishing you health, love, and success for 2019. 

“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” – Henry Ford

“It is difficult, but not impossible, to conduct strictly honest business.” – Mahatma Gandhi

“Don’t bargain yourself down before you get to the table.” – Carol Frohlinger

“Goals are dreams with deadlines.” – Diana Scharf Hunt

“Our goals can only be reached through a vehicle of a plan, in which we must vigorously act. There is no other route to success.” – Stephen A. Brennan

January 1, 2019 in Joshua P. Fershee, Law School, Lawyering, Philosophy | Permalink | Comments (0)

Tuesday, December 18, 2018

There Once was an LLC with a Partnership Agreement Governing the Minority Shareholder's Interest

Sometimes I think courts are just trolling me (and the rest of us who care about basic entity concepts). The following quotes (and my commentary) are related to the newly issued case, Estes v. Hayden, No. 2017-CA-001882-MR, 2018 WL 6600225, at *1 (Ky. Ct. App. Dec. 14, 2018): 

"Estes and Hayden were business partners in several limited liability corporations, one of which was Success Management Team, LLC (hereinafter “Success”)." Maybe they had some corporations and LLCs, but the case only references were to LLCs (limited liability companies).

But wait, it gets worse:  "Hayden was a minority shareholder in, and the parties had no operating agreement regarding, Success."  Recall that Success is an LLC. There should not be shareholders in an LLC. Members owning membership interests, yes. Shareholders, no. 

Apparently, Success was anything but, with Hayden and Estes being sued multiple times related to residential home construction where fraudulent conduct was alleged. Hayden sued Estes to dissolve and wind down all the parties’ business entities claiming a pattern of fraudulent conduct by Estes. Ultimately, the two entered a settlement agreement related to (among other things) back taxes, including an escrow account, which was (naturally) insufficient to cover the tax liability.  This case followed, with Estes seeking contribution from Hayden, while Hayden claimed he had been released. 

Estes paid the excess tax liability and filed a complaint against Hayden, "arguing Hayden’s breach of the Success partnership agreement and that Estes never agreed to assume one hundred percent of any remaining tax liabilities of Success." Now there is a partnership agreement?  Related to the minority shareholder's obligations to an LLC?  [Banging head on desk.] 

The entity structures to these business arrangements are a mess, and it makes the opinion kind of a mess, though I would suggest the court could have at least tried to straighten it out a bit.  It even appears that the court got a little turned around, as it states, "While Estes may have at one time been liable for a portion of Success’s tax liabilities incurred from 2006 to 2010, once the parties signed the Settlement Agreement, his liability ended pursuant to the release provisions contained therein."  I think they meant that Hayden may have been liable but no longer was following the release, especially given that the court affirmed the grant of summary judgment to Hayden.  

For what it's worth, it appears that the court analyzed the release correctly, so the resolution on the merits is likely proper. Still, blindly adopting the careless entity-related language of the litigants is frustrating, at a minimum.  But it does give me something else to write about. As long as these case keeping showing up, and they will keep showing up, Prof. Bainbridge need not wonder, "Is legal blogging dead?"  Not for me, and I don't think for those of us here at BLPB, anyway. 
 



 

December 18, 2018 in Contracts, Corporations, Joshua P. Fershee, Lawyering, Litigation, LLCs, Partnership | Permalink | Comments (0)