Lawyering

Subscribe to Lawyering via RSS

Last year, I was asked to contribute to a symposium on law and entrepreneurship hosted at the University of North Carolina.  Although I had to Skype in for my presentation from Little Rock, Arkansas (where I had just given a separate, unrelated CLE presentation), the panel to which I was assigned was fabulous.  Great scholars, with great ideas.

For my contribution to the symposium, I chose to reflect on the unfulfilled promise of the potentially mutually beneficial relationship between an entrepreneur and a business finance lawyer.  I recently posted the published work memorializing my thoughts on the topic, featured this spring with several other articles from the symposium in a dedicated edition of the North Carolina Law Review.  The brief abstract for my article follows:

Entrepreneurs have the capacity to add value to the economy and the community. Business lawyers—including business finance lawyers—want to help entrepreneurs achieve their objectives. Despite incentives to a symbiotic relationship, however, entrepreneurs and business finance lawyers are not always the best of friends. This Article offers several approaches to bridging this gap between entrepreneurs and business finance lawyers.

My hope in writing this article was to infuse some energy into conversations about the role…

With a Fourth of July post, I was inclined to write something patriotic and connected with our great nation and to law schools generally. As an unabashed and unapologetic fan of the Hamilton: An American Musical, a couple of analogies from this brilliant production seemed appropriate to convey my thoughts on law school and leaving a legacy.  

First, I think most of us who are fortunate enough to serve as law professors recognize the great gift we have to pursue our passion and to be part of educating the next generation of people who understand the rule of law and have the skills to protect the rights of individuals and groups. This is especially needed for those who are marginalized or under represented and thus less likely to be able to enforce their rights without the help of our legal system.  This is an incredible legacy in America, set in motion by some our nation’s founders.  

Like John Adams defending British soldiers and Alexander Hamilton defending Loyalists after the war, lawyers (and law professors) do not need to compromise their own views to embrace the ideals they seek to uphold. We can vigorously maintain our personal views…

I am such a fan of Sinclair Oil Corp. v. Levien,  280 A.2d 717 (Del. 1971), that I use the case in both Business Organizations and in Energy Law. The case does a great job of giving a basic overview of parent-subsidiary relationships, some of the basic fiduciary duties owed in such contexts, and it sets up the discussion of why companies use subsidiaries in the first place. 

On fiduciary duties and when the intrinsic (entire) fairness test applies: 

A parent does indeed owe a fiduciary duty to its subsidiary when there are parent-subsidiary dealings. However, this alone will not evoke the intrinsic fairness standard. This standard will be applied only when the fiduciary duty is accompanied by self-dealing — the situation when a parent is on both sides of a transaction with its subsidiary. Self-dealing occurs when the parent, by virtue of its domination of the subsidiary, causes the subsidiary to act in such a way that the parent receives something from the subsidiary to the exclusion of, and detriment to, the minority stockholders of the subsidiary

On what test to apply to parent-subsidiary dividends: 

We do not accept the argument that the intrinsic fairness test can never

…

I listened to a podcast today entitled “What Law Schools Should be Teaching, and Aren’t (with Mark Cohen).” Cohen is the founder and CEO of Legal Mosaic. In a previous life he served as a partner in a large law firm, a partner in his own boutique firm, a receiver, and the founder of a now defunct legal tech startup, Clearspire.

Given all of his experience, I value what he has to say about what law schools need to do to prepare students for the current legal marketplace. I recommend that you listen to the podcast yourself, but here is his list of gaps in student knowledge:

  1. How to interview clients
  2. The importance of project management, collaboration and teamwork
  3. How to provide legal solutions and not just merely legal opinions.
  4. How to use technology and deal with the rise of legal process outsourcing
  5. Marketing and getting clients
  6. The importance of emotional intelligence

Many may quibble with his list in an age in which bar passage rates are at historical lows. But I think he has a point, especially since most of students will work for small law firms and will not have the infrastructure/safety net of…

Regular readers know that I monitor courts and other legal outlets for improper references to LLCs as “limited liability corporations” when the writer means “limited liability companies.” I get a Westlaw update every day. Really. Every day. So while it may seem that I write about examples a lot, I tend to think I am showing great restraint.  

At times, this is just a semantic issue, or at least a more amorphous “how one thinks about entities” issue.  Usually, at a minimum such cases can cause confusion about entity type and what laws apply, which may eventually lead courts to an improper analysis and application of the wrong laws.  It certainly leads some lawyers to incorrectly characterize their clients and their cases.  

For example, a recent case from the United States District Court for the Western District of Washington gets the law right, but still creates some potential confusion. Consider this excerpt: 

Cash & Carry asserts that the court’s jurisdiction is based on diversity of citizenship. (Not. at 2.) For purposes of assessing diversity, the court must consider the domicile of all members of a limited liability company. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n LLC

…

Last weekend, retired NFL receiver Calvin Johnson made news when he revealed that he was not pleased with the Detroit Lions and how they handled his retirement. Johnson is apparently frustrated that the Lions required him to pay back about 10% of the  unearned $3.2 million remaining on his $16 million signing bonus from his 2012 contract. This is apparently a thing for the Lions, who sought all of the unearned signing bonus money remaining on Barry Sanders’ contract when he abruptly retired in 1999.

This is in contrast to Tony Romo’s retirement, in which the Dallas Cowboys released him, making the $5 million remaining on the signing bonus Romo’s.  Cowboys owner Jerry Jones said he was following the “Do Right Rule” when he allowed the team to release him.  The Seattle Seahawks made a similar decision with Marshawn Lynch.  

Some have argued that Johnson is being “pettier” than the Lions in this spat.  Mike Florio, a sports writer and graduate of WVU College of Law, where I teach, argued that “while Johnson has every right to be miffed at the Lions, Johnson also should be miffed at himself. Or at whoever advised him to retire instead of biding his time until…

This past week was a big one for loyalty stories.  First, we have the New York Times reporting that President Trump asked former FBI director James Comey for his pledge of loyalty, to which Comey apparently promised “honesty.”  (The White House disputes this report.) 

Then, we have a high school quarterback in Illinois being forced to decommit from the University of Wisconsin’s, apparently because he tweeted that the University of Georgia had offered him a scholarship.  The student called Wisconsin Coach Budmayr, telling him he had the offer and said he was “still 100% committed to the Badgers.” The next day Budmayr apparently told him that he was no longer a good fit for Wisconsin and that he should keep looking.  The reason: lack of loyalty.  

Obviously, I only have the facts as they have been portrayed in these articles, and there are two sides to every story.  Nonetheless, these anecdotes got me to thinking about loyalty and how people tend to perceive the concept. 

To some, loyalty means fidelity.  This can be in the physical or emotional sense, as in the marriage context.  Some view extend it to ideological loyalty.  And to some, it means undying, uncompromising agreement and support.  It…

The Legal Skills Prof Blog has posted an article entitled Our Broken Bar Exam by Deborah Jones Merritt. The post discusses Merritt’s proposal for a task force on the bar exam. Merritt’s article states, among other things:

The bar exam is broken: it tests too much and too little. On the one hand, the exam forces applicants to memorize hundreds of black-letter rules that they will never use in practice. On the other hand, the exam licenses lawyers who don’t know how to interview a client, compose an engagement letter, or negotiate with an adversary.
 
This flawed exam puts clients at risk. It also subjects applicants to an expensive, stressful process that does little to improve their professional competence… The bar examination should test the ability of an applicant to identify legal issues in a statement of facts, such as may be encountered in the practice of law, to engage in a reasoned analysis of the issues, and to arrive at a logical solution by the application of fundamental legal principles, in a manner which demonstrates a thorough understanding of these principles… Why doesn’t our definition of minimum competence include cognitive skills that are essential for effective client…

More than a few legal blogs and scholars have taken note of a recent paper by Adam Bonica (Stanford University), Adam S. Chilton (University of Chicago), Kyle Rozema (Northwestern University) and Maya Sen (Harvard University), “The Legal Academy’s Ideological Uniformity.”  The paper finds that those in the legal academy are more liberal than those in legal profession generally.  Anecdotally, I have to say I am not surprised. 

The abstract of the piece is as follows:

We find that approximately 15% of law professors are conservative and that only approximately one out of every twenty law schools have more conservative law professors than liberal ones. In addition, we find that these patterns vary, with higher-ranked schools having an even smaller presence of conservative law professors. We then compare the ideological balance of the legal academy to that of the legal profession. Compared to the 15% of law professors that are conservative, 35% of lawyers overall are conservative. Law professors are more liberal than graduates of top 14 law schools, lawyers working at the largest law firms, former federal law clerks, and federal judges. Although we find that professors are more liberal than the alumni at all but a handful of law schools, there is a strong relationship between

…

As a business lawyer in private practice, I found it very frustrating when the principals of business entity clients acted in contravention of my advice.  This didn’t happen too often in my 15 years of practice.  But when it did, I always wondered whether I could have stopped the madness by doing something differently in my representation of the client.

Thanks to friend and Wayne State University Law School law professor Peter Henning, who often writes on insider trading and other white collar crime issues for the New York Times DealBook (see, e.g., this recent piece), I had the opportunity to revisit this issue through my research and present that research at a symposium at Wayne Law back in the fall of 2015.  The law review recently published the resulting short article, which I have posted to SSRN.  The abstract is set forth below.

Sometimes, business entity clients and their principals do not seek, accept, or heed the advice of their lawyers. In fact, sometimes, they expressly disregard a lawyer’s instructions on how to proceed. In certain cases, the client expressly rejects the lawyer’s advice. However, some business constituents who take action contrary to the advice of legal counsel…