January 03, 2008
In honor of my state of origin, site of the first caucuses, I'd like to clear up something about "Iowa Nice." Misbegotten coastal elites increasingly use the term to describe the Solonic politesse of the denizens of the state. But there is no "Iowa Nice." There has been a "Minnesota Nice" for decades, but although they might look like two flyover states near each other to some, they're actually pretty different. Minnesota has trees and lakes, Iowa is pancake flat. Iowans sound like John Wayne and Walter Cronkite, Minnesotans sound like the Swedish chef. The states make jokes about each other. They have a football rivalry. There's not an Iowa Nice, there's only a modest Iowan wisdom that may or may not be reflected in the byzantine results of the caucuses tonight.
Christine, Vic, Gordon, and I wish you a hello from the CALI display at the AALS meeting. Said booth is up two escalators, through the doors, and past the penultimate scene of the movie Michael Clayton. So if you see us, don't be strangers, and consider this an exercise in Blackberry tethered, laptop-on-the-go liveblogging.
The Section on Business Associations will meet today from 2:00-5:00 pm in Murray Hill A, Second Floor, Hilton New York. The focus of this year's meeting is "Corporate Law in Global Markets." This was my shot as Chair of the Section, and I am excited about the program. Here is the description:
The globalization of markets for capital, products, and managers has cast a bright spotlight on domestic legal regimes, including U.S. corporate governance laws. In the first half of the session, a roundtable discussion among scholars from the U.S. and Europe will explore the international competition of corporate governance laws. Participants in the roundtable discussion include:
John C. Coffee, Jr., Columbia University School of Law (Moderator)
John H. Armour, University of Cambridge
John C. Coates, Harvard Law School
Howell E. Jackson, Harvard Law School
Roberta S. Karmel, Brooklyn Law School
Donald C. Langevoort, Georgetown University Law Center
Kate Litvak, The University of Texas School of Law
Larry E. Ribstein, University of Illinois College of LawThe second half of the session will feature paper presentations based on submissions made in response to the Section's Call for Papers:
Stock Exchanges and the New Market for Securities LawsChris Brummer, Vanderbilt University Law School
The SEC's Global Accounting VisionLawrence A. Cunningham, The George Washington University Law SchoolThe Correlation Between U.S. Stock Prices and Cross-Listing Premia: A Challenge to Law-Based Theories of Cross-Listing
Kate Litvak, The University of Texas School of Law
The Conglomerate bloggers will be hanging out in the CALI booth in the AALS Exhibit Hall at 10 am today. If you are at the conference, please stop in!
January 02, 2008
Liz Glazer has a great post on a self-help gambit - the sort of thing that is always popular in January - and inquires: is there anything in it for us? I'm new to "Getting Things Done," but I've been consuming some of the businessey "you can do it - but only if you move that cheese!" literature, and I have to say, the life of an academic is nothing like the life I remember as a government lawyer, where I could thrill to the satisfaction of knocking out two motions (for extensions of time, probably) and three nasty letters in the course of a day. Now my projects have months-long timelines, but lots of discrete pieces. Am I supposed to approach this sort of work in the tortured genius novelist mode and, I don't know, stop bathing or remove myself to an unheated cabin in the Berkshires or something? Or should I be GTD, lifehacking, and practicing inbox-zero at a seven footnotes a day clip?
I'll look forward from hearing from you when you've solved your own productivity dilemmas. But in the meantime, read the Glazer.
December 29, 2007
I usually make New Year's Resolutions. But why? Justin Wolfers offers some possible explanations. Two of his suggestions resonated with me:
A clean slate: we rarely respect the irrelevance of sunk costs in our behavior. The New Year is a clean slate. If my behavior is history dependent (why not eat the chocolate cake if I’m already overweight?), then the clean slate allows my behavior to escape past poor behavior.
Cheap Talk: New Year’s resolutions are simply hot air, stated at around 11:55 pm, on a night involving plenty of alcohol. They are rarely respected, and there is no way for them to be enforced. They are a ritual, but not more important than kissing a loved one 5 minutes later.
Lots of commenters over there are pooh-poohing resolutions: "I just feel if there is something I really want to do I will commit to it any time of the year." While I am sympathetic to this idea, I also know that behavioral change is costly, and I find that having temporal focal points is useful in harnessing my emotional and spiritual reserves.
This is one of the main benefits of observing the Sabbath. It is a weekly opportunity to reevaluate and start anew. So I use the Sabbath for incremental changes and less frequent milestones -- e.g., moves, New Year's Day, the start or end of a semester, birthdays -- to launch more ambitious self-remodeling projects.
Have you seen StickK.com? If not, this story from the Yale Daily News offers a nice description of the concept:
Stickk.com, a new Web site developed by Yale economics professor Dean Karlan, law professor Ian Ayres and Jordan Goldberg ’06 SOM ’09, will allow users to create contractual commitments with family, friends and employers in order to reach personal goals such as losing weight, quitting smoking or earning better grades. Currently in the planning stages and with a launch date set shortly before 2008, the Web site harnesses the same basic concept as other user-generated, Web-based companies such as MySpace, Facebook, and YouTube.
The site allows users to create personal profiles viewable by the public or a private “support network,” members of which can comment on their progress — or lack of it, Goldberg said. He said he hopes the site will provide built-in accountability for users attempting to achieve difficult goals.
The name of the site, Goldberg said, comes from its use of the “carrot and stick” approach.
“We are trying to motivate people to accomplish personal goals by having users literally put something on the line,” Goldberg said. “We’re not simply a motivational site. We’re actually giving them the necessary tools for success.”
Those tools include a rewards program, under which users can pre-purchase items — such as a big-screen TV — through the Web site, Goldberg said. The transaction only goes through if the user accomplishes his or her goal.
A group of friends can also create a group contract in which each commits a certain amount of money to a pool. The entire pot goes to only those friends who accomplish their goals, Goldberg said.
Eric Posner questions the enforceability of the supposed "contractual commitment," but I suspect that absence of consideration is a losing argument. Customers are paying for the service, right?
Tyler Cowen is skeptical on other grounds:
I've long predicted this won't work; one group of potential customers doesn't really want to change, the other group is unwilling to give up control. It's not exaggerating to say that human nature is on the line here, and that if I am wrong this is probably the most important idea you will ever encounter.
So is Cowen objecting to making this a business? Or is he objecting to the idea that such commitments work? As to the latter, I have had my own vicarious experience with this, and I blogged about it in 2004:
A friend of mine recently asked me for a favor. He wants to lose weight, and he has a strategy: stop drinking beer. The only problem is that he does not trust himself to follow through on his resolution when his only incentive is to lose weight. That's where I come in.
He asks if I am supporting George Bush's reelection campaign. Well, not exactly, though I certainly am not voting for Kerry. Close enough. He hands me $250 and tells me to donate that to the Bush campaign if he breaks his resolution ... and he assures me that he will be honest about that. The thought that his actions might in any way support Bush's reelection is so abhorrent to him that he is now confident of his ability to abstain from drinking beer, at least until he reaches his weight goal.
As I note in the comments, my friend reached his goal and got his cash back. Of course, this raises the issue of why one would need to go to StickK.com when private ordering is so readily available.
Based on the news story excerpted above, the response I would expect is that StickK.com harnesses the power of community. Hmm. The interesting thing about that response is that our attention has shifted from the potential loss of money to the possibility of shame. If that is the motivation, my friend could have just announced his weight-loss intentions to the entire University of Wisconsin Law School community. Alternatively, he could have started a blog and posted about how he was trying to lose weight. (Ahem.)
Which brings me back to comment on the business model. Why would anyone need the product that StickK.com is selling?
In a memo entitled, Some Thoughts for Boards of Directors in 2008, Martin Lipton sets forth some of what he identifies as the key issues boards will face in the new year, and gives some advice on how to navigate those issues. In general, Lipton pinpoints two problematic trends confronting boards. First, he notes that in the last five years, hedge funds and other shareholder activists, through a variety of mechanisms such as proxy access proposals and majority vote campaigns, have sought to reshape the governance landscape in ways that pressure boards to focus on realizing short-term stock-market gains at the expense of promoting long-term shareholder value. Second, he maintains that legal and regulatory reforms, as well as these efforts by shareholders , have served to shift the board's role "from guiding strategy and advising management to ensuring compliance and performing due diligence." While Lipton insists that procedural safeguards and compliance are important, he notes that the current environment has not struck the right balance and thus threatens not just the important role of the corporate board, but also the success of American business more generally.
With this in mind, Lipton sets forth five key issues about which boards should be prepared to confront and tackle. 1) Balancing short-term performance and long-term success (which he believes may prove difficult as activist shareholders continue to mount campaigns to shift decision-making power away from boards). 2) Director elections (though he notes that the SEC finally voted to adopt a proposal reaffirming a company's right to exclude shareholder proposals for proxy access). 3) Shareholder proposals, especially pressure to implement those proposals that receive majority support. 4) Direct lines of communication with shareholders, apparently because such lines could create incentives for directors to appease shareholder activist. And 5) Executive compensation, including say on pay issues and option backdating. After pinpointing these issues, Lipton gives some guidance on the roles and duties of boards in seeking to address these issues.
Ultimately, the memo is an interesting examination of the governance trends of 2007 and their impact on boards--even if one does not agree with Lipton's assessment of that impact. At bottom, the memo underscores the notion that shareholders have in fact been active over this last year. And it depends on your vantage point whether you think that activism has yielded good or bad results. Indeed, one could view their results as glass half empty (proxy access) or glass half full (majority vote). Interestingly, of course, while some of the issues covered in the memo may be new, the overall theme is not, suggesting that broadly speaking boards confront the same challenge every year--that is, how best to achieve long-term value in the midst of pressures to produce short term results. More importantly, the memo highlights the difference in views about how best to achieve that value, that is, through board dominance or some measure of shareholder control. These are certainly not issues that will be resolved in 2008, but it will be interesting to what the attempts produce.
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I don't teach the Baby M case in Contracts, but this story from Marketplace about surrogacy in India and the current conflicted state of the law in the US may make me reconsider.
A quick search of Westlaw reveals a staggering amount of legal writing on various aspects of surrogacy. This is an area that seems ripe for an empirical study of surrogacy contracts, if one could assemble a meaningful collection. Especially if "commercial surrogacy" is not really about the money:
Despite the fact that nearly all commercial surrogacy arrangements involve compensation, studies in which surrogates have been asked about their motivations find that most reject money as motivation for their participation. Even if financial motivation is a factor, only a handful of women mention money as their primary motivation for entering into an agreement.
Katherine Drabiak et al., Ethics, Law, and Commercial Surrogacy: A Call for Uniformity, 35 J.L. Med. & Ethics 300, 303-04 (2007).
Does this non-monetary aspect of the relationship manifest itself in the contract provisions?
Speaking of losing weight, about halfway through the past semester, I started running for the first time in my life. My oldest son and I lift weights three times a week, and we decided to go from the weight room directly to the track. Talk about embarrassing! Despite having walked three miles to school every day, I couldn't make one lap around the track without cramping. And when I wasn't cramping, I was stopping to catch my breath. But I swallowed my pride and persevered. Now I am running one mile straight, followed by a quick jaunt up and down the "RB Steps" (100 steps connecting BYU's sports facilities to the upper campus).
I can't credit much of this progress to my iPod, even though I listen to it while I run. My first attempt at running to music was a complete failure. Simon & Garfunkel ... what was I thinking? Elton John was a step in the right direction, but "Rocket Man" isn't as peppy as the title would suggest. So I moved to the Temptations. "The Way You Do The Things You Do," "My Girl," "Get Ready," "Beauty Is Only Skin Deep" ... it takes me a long time to run a mile!
The main problem with the Temptations is the lyrics. It's hard to maintain a pace when you are doubling over with laughter. "The Way You Do The Things You Do" is hilarious, with gems like this: "If good looks were minutes, You know you could have been an hour ..." And how about "Beauty Is Only Skin Deep"? This must be the most insulting love song ever written: "A pretty face you may not posses, but what I like about you is your tenderness." And "My friends ask what do I see in you? But it goes deeper than the eye can view; You have a pleasin' personality and that's an ever lovin' rare quality."
Most of the Temptations songs are not great running songs anyway. If I am going to get serious about running, I need to add a new playlist to my iPod. After casting around the internet for suggestions, I am coming to the conclusion that running songs are highly idiosyncratic. For example, "Eye of the Tiger" does not work for me. And I cannot imagine listening to this list. But I can imagine running to my daughter's favorite song ...
December 27, 2007
Michael O'Hear is wondering about lateral hiring of law school faculty. He senses an upswing in lateral hiring and wonders whether it is driven by the demand side or the supply side.
- On the demand side: "lateral hiring seems more likely to provide an immediate reputational bump than entry-level hiring."
- On the supply side ...
"Perhaps the greater connectedness of the academy in the Internet age has spawned a generation of junior faculty members who feel less attached to their home institutions than previous generations and who are more motivated to make moves that will enhance opportunities or status within the national academic community. Likewise, for junior faculty members who are not entirely satisfied with their current situations (for geographical reasons or otherwise), the Internet provides opportunities to build a reputation relatively quickly, and also facilitates the sort of networking that may pave the way for lateral moves."
Notice the implicit assumption: that the driving force behind lateral hiring is scholarship. Of course, this is widely understood, but making that assumption explicit highlights the spread of scholarly ambition beyond elite law schools. While lower-ranked law schools may have their own unique missions -- and thus may be worthy receptacles of institutional investment by faculty members -- they also serve, in some instances, as "farm teams" for higher-ranked schools. Oddly, the quickest path to increased reputational capital for lower-ranked law schools probably does not come from hiring laterals, but from producing laterals for elite law schools.
All of this causes me to wonder: Is there any development in legal education of the past generation that has had a more important influence on the teaching of law than the spread of scholarly ambition beyond elite law schools?
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