December 06, 2007
Like many law schools, my law school is currently conducting a curriculum review. The Task Force has been asked to find ways to "re-imagine" our curriculum, to make it more relevant to students and, specifically, to find ways to keep 3Ls engaged in their last year of study. I'm not on the Task Force, but I've been doing some thinking on ways to improve the corporate law curriculum.
We have what I would characterize as a fairly traditional corporate law curriculum: a four-credit survey course in Business Organizations followed by a good number of business law electives, including Securities Regulation, M&A, Corp Fin, etc. Because we're located so close to Philadelphia, we're fortunate to draw on some highly-skilled adjuncts to teach classes in specialized areas, such as Financial Services Law and Mutual Fund Regulation. We don't have a certificate program in corporate law, but we do offer a joint JD/MBA degree.
I know that providing students with more drafting and counseling opportunities would be beneficial. And so would helping our students obtain better knowledge of business basics. But I'm trying to think outside the box.
So . . . anybody aware of any law schools that have done something new and different to their corporate law curricula?
I suspect because it is the admissions season, recently I have been receiving a number of emails about Harvard's decision to expand its tuition-free program for students from low and middle income families--though it is not really new. In 2004, Harvard announced that parents of families with income of less than $40,000 would not have to contribute to the cost of their child attending Harvard. Now, such a break will be given to parents of families with income of less than $60,000. In addition, Harvard has reduced the contribution for families with income between $60,000 and $80,000. A US News and World Report article has highlighted the fact that there are a growing number of schools offering students free schooling. And apparently these school programs are having an impact. Indeed, Harvard notes that its program has been very successful in attracting students from lower income brackets. Apparently, during the first full year of its program, the number of students enrolled at Harvard from lower income brackets increased by 24 percent for the entering class. To be sure, financial aid programs like the one instituted at Harvard only underscore the staggering costs of higher education and the fact that many families find themselves priced out of the market. Nevertheless, they do have an important impact.
December 05, 2007
Although I am usually reluctant to give gift cards because they seem too impersonal, I will admit that they are my fall-back gift of choice. Apparently, other people do not share my reluctance. Thus, Consumer Reports reveals that a majority of shoppers will give at least one gift card this holiday season. Then too, at least one poll reveals that gift cards top the wish list for a majority of consumers--so I need not be concerned that people will find my gift card inappropriate. Alas, as others have noted, including those on this blog, there are many problems associated with gift cards, particularly the problem that so many of them go unredeemed. The National Retail Foundation estimates that, similar to last year, this year there will be some $8 billion in unredeemed gift cards. The fact that consumers are leaving so much money on the table has many concerned. Thus, legislatures have been crafting laws aimed at addressing the problem of unredeemed gift cards. Moreover, in November of this year, Consumer Reports began running a full page ad in the New York Times essentially reminding consumers not to lose money through gift cards that become lost, expired, or simply unused. But others are seeking to capitalize off of this phenomenon.
Indeed, a couple of companies have emerged that allow people to buy, sell, and trade gift cards. Two examples are Plastic Jungle and Cardavenue. Plastic Jungle allows people to sell their gift cards at less than fair value for a fee, and to buy gift cards for less than their full value while Plastic Jungle keeps the difference. Cardavenue even has an auction for gift cards.
To be sure, these companies certainly will not solve the problem of unredeemed gift cards, particularly for those people who put their cards in an envelope never to be found again. However, they do allow some important benefits, providing consumers with an efficient way to get cash for their gift cards or get rid of those cards at stores they never shop. I also suspect it allows purchasers to "bundle" cards to obtain the optimal amount they would like to use at a given store, while enabling sellers to get rid of those cards that only have a small value. Moreover, while some have suggested that these cards are a "win-win" for retailers, they in fact are an accounting headache. Therefore, to the extent that these companies facilitate greater use of gift cards, they also provide benefits for companies by allowing them to reduce the liability they must carry on their balance sheet. And maybe that is a "win-win." At the very least, the emergence of these companies suggest that when there is money left on the table (albeit in the form of a gift card), the market will find a way to spend it.
When Adam Liptak wrote about the willingness of judges to play the role of charitable donors with left over class action settlement proceeds, it was news to me. The schmancy new poli sci blog The Monkey Cage recommended that charities ramp up their "take a judge to lunch" program. Heh. But the whole "judges doing something different" concept is not an outlier, it's a meme. Judges are by no means inevitably activist, but they're not just neutral arbiters either - sometimes, they revel in the opportunity to run an agency. Other times, they prefer comedy. And now they're doing charity. Breaks up the workday at least.
Bonus: I like the Monkey Cage's quick hit take on favorite Serbian political aphorisms too.
The WSJ Law Blog asks if any readers have ever been "seconded" -- loaned by their law firm to a client for an extended period of time. I have to confess that in the Fall of 1995, as a third-year associate, I was seconded to a major client of my law firm, a large oil & gas company. As the Law Blog suggests, the client at the time was under a hiring freeze, so the legal department creatively had its outside law firm send me over to help out with the workload. I never saw the economics of this -- paying my full rate for 8 hours a day didn't seem to be a cheap way to get labor, but no one asked me.
The Law Blog also suggests that being seconded is (1) a good gig and (2) a good way to segue out of your law firm to a client. At least in my case, I don't think either were true. First, even though I had a new 8-5 job, it didn't seem to replace my regular job. Most days I found myself leaving the client's offices at 5:30 and walking back to my other office to start my second shift. Just because I was housed a few blocks away didn't stop partners from calling me and giving me assignments. Therefore, my work day (and work week) was not shortened during my secondment. Second, the reason that I was there was that the client had a hiring freeze. So, hinting about a permanent job would have seemed a little silly, even if I had wanted one. In fact, while I was there, management had an all-company meeting (without me) in which budget cuts were announced in all "cost centers," such as legal. That afternoon, I saw a senior in-house attorney reading the classified section of the Texas Lawyer at his assistant's desk.
All of this is not to say that I didn't learn valuable things during my two months there. I got to know my client without the buffer of senior partners between us. I learned a lot about how this specific business worked and about how generally legal departments are viewed within a company. Although I was relieved when it was over, I appreciated the experience. Although, unlike the Law Blog's prediction, it made me realize that the grass was not really greener on the other side of that particular fence.
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The December 2007 edition of the Harvard Business Review has an article entitled "Deals Without Delusions" (by Dan Lovallo, Patrick Viguerie, Robert Uhlaner, and John Horn). This article caught my eye because of my interest in behavioral corporate finance (the psychology of managerial decision making). Focusing on M&A decisions, the article offers an interesting assessment of various psychological biases that can impact managers.
A particularly tough question in this area is what to do about managerial psychological bias, if anything? One prospect is to do more by way of formalizing dissent on boards, such as through the appointment of a formal devil's advocate (although I would never mandate such a thing). Lots of studies, for example, suggest that dissent can counter various biases. Without question, there are lots of challenges with this idea. As many have pointed out, too much dissent can foster distrust. Managers may start playing things too close to the vest. Managers may become timid. The devil's advocate may start competing against the CEO for power. And the like. That said, it strikes me that there is room for the board to participate more in managerial decision making in a constructive way. Perhaps board members do not have the time or expertise to override managers' business recommendations (hence, the ascendancy of the monitoring board). However, board members might be able to press managers (in a way they often do not) so that managers themselves make better, more informed, more rational (i.e., less biased) decisions. That's what the devil's advocate function envisions.
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December 04, 2007
I told you guys I read the book, now go read the review - and even better, get a chance to pipe in with a comment for Daniel Lyons, Fake Steve Jobs himself. He's over thataway as well.
December 03, 2007
First, let me thank the folks at the Conglomerate for inviting me to guest blog. I’m a regular reader and look forward to having a chance to share some thoughts.
Let me start with an observation: The “private” securities market is becoming larger and larger and ever more important. For example, the growth in private equity has received much attention lately (in part as a result of claims that companies have gone/stayed private to avoid regulatory burdens (e.g., SOX)). The hedge fund industry is now well over a trillion dollar industry, having ballooned in recent years. In addition, the Rule 144A market is huge, and more active secondary trading of Rule 144A offerings is expected in the future. Brian Cartwright, the SEC’s general counsel, made similar observations in an interesting speech on “The Future of Securities Regulation” that he delivered on October 24, 2007 at Penn Law School (a copy of his speech is available on the SEC’s Web site).
This leads me to the following question: How will the growth of the private market for securities (or, to use Cartwright’s term, continuing “deretailization”) impact securities regulation going forward? Will calls for regulating private pools of capital intensify? One reason people have called for hedge fund regulation is because the industry has grown so considerably. Alternatively, we have seen calls to reduce the burdens on public companies – in effect, to scale back some of the SOX-era reforms and to address securities class actions. Further, will there be growing calls to ease the Investment Company Act burdens that presently limit the ability of mutual funds to engage in hedge-fund-like strategies?
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I'm embarrassed to admit that I lived in the Philly area for six years before I finally visited the The Barnes Foundation. As the official website says, the Barnes Foundation holds one of the world's finest private collections of Impressionist, Post-Impressionist and early-Modernist paintings. There are literally dozens of masterpieces by Renoir, Cezanne, Matisse, and Picasso. The paintings, by themselves, are amazing, but equally intriguing is the unique way in which the paintings are displayed. You probably won't see anything like this in any other museum:
Kind of wild, right? These "ensembles" were created by Dr. Barnes as an educational technique.
More recently, the Barnes foundation has gotten fair amount of press because it looks like the collection will be moving from Merion, PA (a suburb of Philadelphia) into Philadelphia itself. This decision is controversial because it contradicts the express terms of Dr. Barnes's trust, which states that the collection must remain in its original gallery in Merion. The Barnes Foundation trustees were able to break the trust, citing financial necessity.
You trust lawyers out there will probably find the details of the case interesting, and you can read about some of them in this article from the New York Times. As you'll see, the story is even more interesting because apparently there's lots of juicy local, Philly, and state politics going on.
Right now, it looks as if the Barnes collection will be moving into their new digs sometime in 2009, so if you happen to be in the Philadelphia area any time soon, you might want to make a point to visit the Barnes in its original location.
Have you ever been asked to complete the US News survey that is used to rank law schools? Do you try to game the system for the home team? Well, maybe a little bit, right?
What would you expect of college football coaches? Here is an interesting graphic showing how each coach with voting rights cast those votes in the final ballot.
Hmm, let's see. Jim Tressel? Ohio State is #1, a point on which 46 of the 60 coaches agree.
Les Miles? LSU is #1. (No way a Michigan man could vote for Ohio State!)
Frank Beamer? LSU beat Virginia Tech, so LSU must be #1. But Virginia Tech is #2.
Bob Stoops? Of course, Oklahoma is #1. (Biased you say? Not at all. Steve Spurrier agrees with him.)
The only other team with a #1 vote ; Hawaii. Thanks to Hal Mumme, coach of New Mexico State, which is also in the Western Athletic Conference.
We are thrilled to have Troy Paredes joining Jennifer O'Hare as a current guest blogger. Troy is a professor at Washington University Law School, where he teaches corporations, securities regulation, and corporate finance. He has written all sorts of interesting things about hedge funds and corporate governance generally. We look forward to reading more of his insights here.
I suppose that presidential campaign trivia is no sillier than other types of trivia. "Teams that win the toss at the Super Bowl and score a field goal in the next possession and have some sort of red in their jersey go on to win 50% of the time." So brace yourself for political trivia: "Candidates who place second in Iowa and who hail from a state that starts with M-Z go on to win the general election 50% of the time." The NYT today jumps in with this factoid: Very few of the presidential choices studied Latin.
Apparently, Latin, whose death has been long exaggerated, is on the demise. As the classical education has given way to more practical majors, so has Latin been pushed aside as well. Should we mourn this turn or try to revive this classical language? I say revive! I was a Latin student and proud member of the National Junior Classical League. In Latin class, I learned the basics of language, more grammar than I ever learned in English, Roman history, mythology, literature and more. I learned helpful historical insights such as "all wars are economic." I am generally a proponent of practical language training, such as the learning of Spanish for all Texas schoolchildren, but I think Latin is a practical language to learn. Latin increases one's own English vocabulary, for one thing. My eight-year-old takes Latin (in addition to Spanish), and I could not be happier.
December 02, 2007
Gene Wojciechowski rails against the BCS (again), but he is all about who should be in the so-called "national championship." Sure, LSU v. Ohio State is silly, but can you name any single game that would not look silly as the "national championship" after this season? Would this problem be solved with a Plus One? No. Yet there is no prospect of a playoff in college football ... at least in the largest division.
The problem with our national championship fetish is that it distracts us from the other perverse effects of the BCS system, all of which relate to the huge dollars sloshing around the BCS. Most teams have no shot at the mythical national championship, but getting into a BCS bowl is a realistic aspiration for many programs, if they game the system. And the payoff is huge. The lesson from this year: schedule like Kansas, whose non-conference games were against Central Michigan, SE Louisiana, Toledo, and Florida International. ALL AT HOME!!!
A subsidiary lesson -- this time for conferences -- is that you shouldn't have a conference championship game. The Big 12 knocked Missouri out of the "national championship." The ACC may have cost Boston College a chance to represent the conference as a second BCS team. The big winner is the Big Ten, which gets Ohio State into the big show and three-loss Illinois into the Rose Bowl. (Sorry Christine and Vic, but that is the biggest scandal after Kansas making the Orange Bowl.)
What about Hawaii? Shouldn't the only undefeated team be playing in the "national championship"? Not if they come from the WAC. Hawaii takes a scheduling penalty in the minds of pollsters because they have a soft schedule. The problem here is that no one wants to play Hawaii! They might lose!
Hawaii coach June Jones wanted his football team to open the season at Michigan. The Wolverines wouldn't play the Warriors and instead hosted Division I-AA Appalachian State, which beat Michigan 34-32 in one of the biggest upsets in college football history.
Hawaii was scheduled to play Michigan State this season, but the Spartans paid $250,000 to cancel the game. Jones tried to replace the Spartans with Southern California, but even the Trojans wanted no part of quarterback Colt Brennan and the Warriors' high-octane offense.
By the way, I just heard an interview with Bronco Mendenhall, in which he was talking about a hole in BYU's schedule created by Nevada's decision to replace BYU with Grambling State on Nevada's 2008 schedule. (The reason? Nevada's schedule was too difficult!) Bronco said that BYU has had inquiries from some Division I schools (rumor: Florida State), but BYU is not interested. After watching Hawaii march into the BCS by beating the likes of Northern Colorado and Charleston Southern, BYU has learned its lesson. When you have a choice, schedule like Kansas.
November 30, 2007
Tom Kirkendall has all the details of the real story behind the NatWest Three case and resulting plea bargain. Here.
In addition to the SEC's recent rule change permitting IFRS financial statements by foreign private issuers, here are a few other noteworthy developments:
1. Rule 144 changes: The SEC voted to shorten the holding period for restricted securities of reporting companies from one year to six months. Also for sales by non-affiliates, volume limits, manner of sale requirements, and other restrictions are eliminated, except for the requirement of current public information until the securities have been held for one year. For affiliate sales of debt securities, the Commission eliminated the manner of sale requirements and eased the volume limits.
2. Proxy access: The SEC codified its intepretation of Rule 14a-8(i)(8) allowing issuers to exclude proxy access shareholder proposals. In a party-line vote, Commissioner Annette Nazareth dissented.
3. Terrorism disclosures: The SEC recently issued a concept release seeking public comment on its efforts to monitor and facilitate public access to company disclosures regarding business activities with State Sponsors of Terrorism (Cuba, Iran, North Korea, Sudan, and Syria).
4. ISS 2008 Proxy Advisory Policy Updates: Proxy advisory firm ISS Governance Services (fka Institutional Shareholder Services) recently announced its US and international policy updates regarding its proxy voting recommendations.
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November 29, 2007
While Brian Tamanaha bemoans the surplus number of JDs out there, SUNY Binghamton is planning to start a law school. I understand why California wanted to start a second state-supported law school in the southern part of the state (though I'm surprised it didn't do so at UCSD). And I know that New York, with only two state supported law schools, has fewer than Florida and Texas. And I even know we're in an era of law school growth. So yes, yes, there's all that.
But I don't get why the state should invest in Binghamton. Don't the law schools in Syracuse and Buffalo have that part of the state covered? To say nothing of Albany? And as for the downstate market, there's ten-odd law schools in the NYC area that would both get better students and be easier to recruit at (Pace, Hofstra, St John's, NYLS, NYU, CUNY, Columbia, Fordham, Cardozo, and Touro would be the ones in New York state that come to mind - but there's others in New Jersey and CT). SUNY is chronically underfunded; does New York need another fourth tier law school? And I know Binghamton claims to be the flagship institution and all that, but if you started the thing at Stony Brook, at least you could leverage the law and courts strength there.
But best of luck to you, Binghamton Law School. May you reverse the many strikes against you with something truly creative, something that will make you the unlaw school. Maybe you will hire a faculty composed entirely of Ph.D-no-J.D.'s, maybe you'll have students who go on "rounds" in traffic court, or maybe you'll institute a laser-like focus on networking and job acquisition from orientation day 1. Maybe.
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