March 2015

In response to my earlier post entitled “So . . . You Think You Want a Business Law Job . . . .,” a reader commented as follows:

I have also seen the shift of students in my college going from other areas of law into corporate law. . . . What advice in general would you offer up? Is it a good, secure job market to want to get into in this economy?

My initial response was that, ” . . . in general I would not suggest that anyone become a lawyer of any kind merely because it is a good job in this or any other economy. You should want to be a lawyer before venturing off to law school.”  

Bottom line: the market for business law or any other legal jobs is not a uniformly good, secure job market.  Law school is not and never has been a “job ticket” in any case.  But those who have a desire to be business lawyers and work intelligently and diligently at finding a job in business law typically will be business lawyers.  I undertook to post further this week.

So, what else shall I say to pre-law students and law students interested in business law?  I will be relatively brief here and in my posts for a number of weeks since I am typing with one hand (my left, non-dominant hand) due to a broken right wrist–an extra-articular distal radius, or Colles’, fracture.  But I invite further observations in the comments.

The Fordham Journal of Corporate and Financial Law recently published a March 6, 2014, lecture from Former Delaware Supreme Court Chief Justice Myron T. Steele, Continuity and Change in Delaware Corporate Law Jurisprudence (available on Westlaw, but fee may apply).  As an aside, I’ll note that it appears to have taken a full calendar year for this to get published (at least on Westlaw), which seems crazy to me.  If there’s any question why legal blogs can fill such a critical role in providing timely commentary on legal issues, this is a big part of the answer.

In the lecture, Chief Justice Steele discusses three main areas: (1) multi-forum jurisdiction, (2) shareholder activism, and (3) the Nevada, Delaware, and North Dakota Debate (a “competition for charters”). 

As to multi-forum jurisdiction, he makes the unsurprising point that Delaware courts are of the view that first impressions of the Delaware General Corporation Law or other “internal affairs doctrine” issues should be handled in Delaware courts.  Of note, he explains that the Delaware constitution (art. IV, § 11(8)) now allows federal courts, the top court from any state, the SEC, and bankruptcy courts to certify questions directly to the Delaware…

I finally got it together and opened an account on SSRN (I know, I know), and posted two of my forthcoming pieces there.

The first, Searching for Market Efficiency, is a very short comment that will be published in the Arizona Law Review, discussing Donald Langevoort’s Judgment Day for Fraud-on-the-Market and Geoffrey Miller’s The Problem of Reliance in Securities Fraud Class Actions, both of which will be published in the same issue.  The comment discusses the Supreme Court’s recent decision in Halliburton, and the reasons behind courts’ difficulties in defining market efficiency for the purpose of Section 10(b) class actions.

The second, Manufactured Consent: The Problem of Arbitration Clauses in Corporate Charters and Bylaws, is a longer article forthcoming in the Georgetown Law Journal, and it deals with the claim that, because corporate governance documents are “contractual,” clauses that require arbitration of shareholder disputes must be enforced according to their terms, as required by the Federal Arbitration Act.  I’ve discussed this topic before; the Article spins things out in more depth.  I will eventually put up a longer post here summarizing the piece, but if there’s anyone who just can’t wait for the cliffs notes…

Marc

The Business Law Prof Blog is pleased to announce that Professor Marc Edelman will be joining us as a guest blogger for the month of  March. Quoting from his online bio, “Marc Edelman is an Associate Professor of Law at the Zicklin School of Business, Baruch College, City University of New York. He specializes in sports law, antitrust, intellectual property, and gaming law.” During the summers, he also teaches at Fordham University School of Law.

I was previously familiar with Marc Edelman’s work through my interest in sports and through a bit of reading in the antitrust area. All of his areas of interest have significant intersections with business law and I look forward to reading his posts. Given that he is one of the most recognized experts in the area of law & sports, we are especially privileged to have him with us right before March Madness. 

As many of you know, both I and my co-blogger Joan Heminway have written several articles on crowdfunding. My articles are available here and Joan’s are available here. I think that a properly structured crowdfunding exemption (unfortunately, not the exemption Congress authorized in Title III of the JOBS Act) could revolutionize the finance of very small businesses. 

Professor Darian M. Ibrahim, of William & Mary Law School, has posted an interesting and important new paper on crowdfunding, Equity Crowdfunding: A Market for Lemons? It’s available here.

Professor Ibrahim discusses two types of “crowdfunding” approved by the JOBS Act: (1) sales to accredited investors pursuant to SEC Rule 506(c), adopted pursuant to Title II of the JOBS Act; and (2) sales to any investors pursuant to the crowdfunding exemption authorized by Title III of the JOBS Act, but not yet implemented by the SEC. I don’t think the former should be called crowdfunding, but many people call it that, so I’ll excuse Professor Ibrahim.

Title II “Crowdfunding”

Professor Ibrahim points out that traditional investing by venture capitalists and angel investors is characterized by contractual controls and direct personal attention to the business by the investors. This allows the investors…

The following comes to us fromJ. Scott Colesanti and Mandy Li Weiner:

    To a degree large or moderate, New York shall soon be at the vanguard of Bitcoin regulation. Since last July, observers have been asked to witness the shotgun marriage of the coin of no realm and a daunting state licensing measure; to date, no vows have been taken.

    The initial proposal from the Department of Financial Services was truly bold and far-reaching. Eschewing a classification of Bitcoin itself, the Department took aim at parties doing business with State residents by issuing, buying/selling, converting or storing the notorious cryptocurrency (and other, similar virtual currencies). Such entities and operators would have been required to register for the popularly dubbed “Bitlicense” at an indeterminate cost.

The requirements attending the proposed Bitlicense were rich and varied. Traditional State consumer protection provisions focused on customer complaints and record keeping. More novel provisions seemingly borrowed from securities law authorities on business continuity planning and anti-money laundering programs, and from sister State warnings regarding cryptocurrencies as investments. Consequentially, New York’s broad, multi-layered protocol would have closed the door of entry to an appreciable number of businesses and startups, as well as related enterprises.

Not surprisingly, …