The Faculty Lounge

UDC Seeking a Visitor to Teach Contracts and Bus. Orgs.

The University of the District of Columbia David A. Clarke School of Law seeks a visiting professor to teach Contracts II (UCC Art. II, etc.) and Business Organizations in the Spring semester of 2024. Applications are encouraged from women, candidates of color, LGBTQIA+ candidates, disabled candidates, and others whose background and experience would contribute to the diversity of the law school community.

 

UDC Law is the District of Columbia’s only public law school and is one of only six American Bar Association approved law schools at a Historically Black College or University. UDC Law has a statutory mission to recruit and enroll students from groups traditionally underrepresented at the bar; to provide a well-rounded theoretical and practical legal education that will enable students to be effective and ethical advocates; and to represent the legal needs of low-income residents through the School’s legal clinics.

 

With questions or to express interest, please contact UDC Law Associate Dean for Academic Affairs Matt Fraidin at [email protected]. 

CFP: Mass Incarceration and its Disproportionate Effect

This just in:

The Idaho Law Review at the University of Idaho School of Law invites proposals for its annual symposium, which will be held via Zoom in March or April of 2021. This year’s topic, Mass Incarceration, will focus on disparities in U.S. state and federal prisons and solutions toward equitable prison reform.

The 2021 Symposium hopes to tackle issues related to mass incarceration and its disproportionate effect across race, gender, socio economic status, and sexuality. In particular, we are interested in papers and proposals dealing with:
The school-to-prison pipeline
Pre-trial incarceration and bail reform
Health inequities among prisoners, including the COVID-19 pandemic The outsourcing and privatization of prisons
Immigration and incarceration
First Amendment implications of criminalizing protest and dissent Alternatives to the current prison system

The Idaho Law Review wants to bring diverse voices to Idaho in order to engage in difficult conversations relating to our current criminal justice system. As such, we are seeking submissions from individuals with a variety of experiences and backgrounds, both inside and outside the legal field. These submissions may include alternatives to traditional law review articles including commentaries and essays, both of which may be shorter in length. Quality submissions will be published in our annual Symposium edition, with authors being invited to participate in a series of panel discussions relating to mass incarceration.

Submission Procedure

Proposals should be approximately 250-500 words, double-spaced, and must be submitted by e- mail to Erin Hanson, Chief Symposium Editor, at [email protected] no later than 5 p.m. December 1, 2020. Feel free to contact Professor Shaakirrah R. Sanders, Symposium Faculty Advisor, at [email protected]. Proposals will be selected on a rolling basis, with final selections completed by December 18, 2020. Preference of presentation times will be given to those also planning to submit an article for publication. Articles will be due to the Idaho Law Review on January 29, 2021.

Board Diversity In The News Again

Thanks to California, corporate board diversity or, more specifically, gender diversity, is in the news again. SB 826 which, according to news reports, Gov. Jerry Brown is expected to sign, passed the state Senate in a 23-9 vote and the Assembly in a 41-26 vote. The statute would require “publicly held domestic or foreign corporation[s] whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California” to have a minimum of one female director on its board by the end of 2019. By the end of 2021, those numbers would increase for corporations with five directors, who would need to have a minimum of two female board members, and for corporations with six or more directors, who would need to have at least three female board members.

The bill provides the usual business case for board diversity, claiming that “publicly held companies perform better when women serve on their boards of directors.” The bill then goes on to cite as evidence a number of reports, including by MSCI and Credit Suisse, among others.

I have detailed at some length, both here, in a series of papers (co-authored with Lissa Broome and John Conley), in a piece for the NY Times, and in a recent public radio debate, why these studies that simply confirm the well-known correlation between board gender diversity and firm performance cannot be taken as evidence that gender diversity causes superior performance. This is more than just a recitation of the old “correlation doesn’t equal causation” argument. In this case there are strong empirical and theoretical reasons to believe that such a conclusion is premature.

As an empirical matter, although some peer-reviewed studies do show improved corporate performance (or other benefits, e.g. better compliance with legal mandates) from having more women on boards, others show no effect or even a negative effect. As a theoretical matter, there are other plausible explanations for the correlation. For example, better performing firms could have the luxury to focus on board diversity in a way that firms struggling to meet basic earning goals might not. In fact, this point was emphasized to us in a number of director interviews, including interviews with female and minority directors.

In addition, women and minority directors with the type of C-suite experience generally preferred for corporate boards are fairly scarce commodities who may have the luxury of choosing only the most profitable and least risky boards on which to serve. There are exceptions to this -- for example, financial and accounting expertise are in high demand, and many of our respondents told us that they thought this was an avenue by which more women might be included on boards. Moreover, we might question whether the qualifications demanded of directors do more to exclude women and minorities than they do to ensure director competency. These are valid and important questions, but don’t undercut the argument that women are drawn to profitable companies, rather than create profitable companies. Finally, both gender diversity and superior firm performance could be caused by some third factor – for example, a forward-looking management.

All of this is detailed in the articles that I will link to below. But, the point is that the evidence cited in SB 826 to justify intervention in the director selection process does not show what the bill and its supporters claim. In addition, as I discuss in Thursday’s radio interview, the bill has constitutional problems. The bill’s sponsors apparently recognize that quotas present an Equal Protection Clause problem yet argue that their proposal does not constitute a quota – a claim I contest in the interview. I expect discussion to increasingly focus on those issues if, as expected, the bill becomes law.

Including more women (and minorities) on corporate boards is a good thing. In all of our articles, Lissa, John, and I discuss a number of social goods that might emerge from having a more inclusive environment in the power structures of American corporations, including its boardrooms. For example, a focus on board diversity might encourage corporations (and search firms) to look outside of their usual networks for directors – networks in which women and minorities tend to be underrepresented. A diverse board might signal to consumers, employees, and other constituencies that their voices and views are represented in the highest reaches of American businesses. And one might simply argue that it is unfair that the (rather considerable) financial benefits that stem from directorships in many public corporations are not shared more equally by women and other underrepresented groups.

But we need to be realistic about what board diversity can and cannot accomplish, and more honest about what the evidence does and does not show. A failure to do so could well set back the cause of gender (and racial diversity) in the boardroom and, more importantly, in corporate management.

Comments to this post are closed, so if you want to talk to me about it find me on twitter @KimKrawiec.

Articles and book chapters about board diversity:

Diversity and Talent at the Top: Lessons From the Boardroom, in Diversity in Practice: Race, Gender, and Class in Legal and Professional Careers 37-80 (Spencer Headworth et al eds., 2016) (with John M. Conley & Lissa L. Broome)

A Difficult Conversation: Corporate Directors on Race and Gender, 26 Pace International Law Review 13-22 (2014) (with John M. Conley & Lissa L. Broome)

The Danger of Difference: Tensions in Directors’ Views of Corporate Board Diversity, 2013 University of Illinois Law Review 919-958 (2013) (with John M. Conley & Lissa L. Broome)

Dangerous Categories: Narratives of Corporate Board Diversity, 89 North Carolina Law Review 759-808 (2011) (with John M. Conley & Lissa L. Broome)

Does Critical Mass Matter? Views from the Board Room, 34 Seattle University Law Review 1049-1080 (2011) (with Lissa L. Broome & John M. Conley)

Narratives of Diversity in the Corporate Boardroom: What Corporate Insiders Say about Why Diversity Matters, in Discourse Perspectives on Organizational Communication 201-660 (2011) (with John M. Conley & Lissa L. Broome)

Signaling Through Board Diversity: Is Anyone Listening?, 77 University of Cincinnati Law Review 431-464 (2008) (with Lissa L. Broome)

 

In the media:

KQED Radio, debate with Betsy Berkhemer-Credaire, board member and past president, National Association of Women Business Owners of California, which sponsored SB 826

NY Times Room for Debate

Prior Faculty Lounge blog posts:

http://www.thefacultylounge.org/board-diversity/

Bay Area Friends: Third Annual Kagan Lecture

Bay area Loungers may be interested in the upcoming Robert A. Kagan Lecture in Law and Regulation at Berkeley Law’s Center For The Study of Law And Society. The lecture is Thursday, March 16, from 3:30 - 5:15pm (see the flyer for more info) and features Lauren B. Edelman (Agnes Roddy Robb Professor Of Law And Professor Of Sociology, U.C. Berkeley), who will discuss her work on legal endogeneity. Robin Stryker (Professor, School Of Sociology, University Of Arizona) and I will provide commentary.

I’m looking forward to this. Edelman’s work has had a great influence on my own thinking and writing about the regulation of business entities, and I’m looking forward to this chance to reflect on her (and Kagan’s) impact.

Hope to see you there!

Faculty Hire: University of Massachusetts School of Law

U.Mass. is looking to hire a professor who will have clinical obligations (clinical professors are on the tenure track). Full details can be found here.

Call for Papers: Designing Ethical Review Processes for Big Data Research

The Future of Privacy Forum is hosting an academic workshop supported by the National Science Foundation to discuss ethical, legal, and technical guidance for organizations conducting research on personal information. Authors are invited to submit papers for presentation at a full-day program to take place on December 10, 2015. Papers for presentation will be selected by an academic advisory board and published in the online edition of the Washington and Lee Law Review. Four papers will be selected to serve as “firestarters” for the December workshop, awarding each author with a $1000 stipend. Submissions, which are due by October 25, 2015, at 11:59 PM ET, must be 2,500 to 3,500 words, with minimal footnotes and in a readable style accessible to a wide audience. Publication decisions and workshop invitations will be sent in November. Details here.

U.Mass. Hiring Announcement

Tenure-Track Clinic Director

UMass Law is committed to graduating justice-centered lawyers prepared to practice responsibly and creatively. The school’s two in-house clinics were developed to meet critical community needs. Because approximately a quarter of each incoming class is admitted into our Public Interest Law Fellowship program, there is much energy for using the law to increase access to justice. Because UMass Law is dedicated to creating access to legal education for groups underrepresented in the profession, our student body has an appreciation for the disparities in access to justice, the difference law can make, and the importance of understanding how the law operates in the real world for real people.

We may hire a tenure-track faculty member who will serve as in-house clinic director. While we have a preference to continue the work of our Community Development Clinic, which provides representation to entrepreneurial businesses in the South Coast region, we are open to modification of the type of work in which our Community Development Clinic engages. The faculty director will also teach one section of a doctrinal course each semester, likely Business Organizations.

UMass Law is located on the South Coast of Massachusetts, about one hour from Boston and thirty minutes from Providence and Cape Cod. As the only public law school in Massachusetts, UMass is poised to become a leader in stewarding justice in the state, and the new tenure-track clinic director will be an integral part of that growth.

Qualifications: J.D., licensed in Massachusetts within one year of hire. Five years’ combined law practice and law clinic experience. To apply, please submit a letter and resume electronically to Associate Dean Eric Mitnick ([email protected]).

The University of Massachusetts reserves the right to conduct background checks on potential employees. UMass Dartmouth is an Affirmative Action, Equal Opportunity, Title IX Employer.

CFP: SECOND WORKSHOP ON COMPARATIVE BUSINESS AND FINANCIAL LAW

AMERICAN SOCIETY OF COMPARATIVE LAW

YOUNGER COMPARATIVISTS COMMITTEE

SECOND WORKSHOP ON COMPARATIVE BUSINESS AND FINANCIAL LAW

The Younger Comparativists Committee (YCC) of the American Society of Comparative Law (ASCL) is pleased to invite submissions for its second workshop on comparative business and financial law to be held on February 5-6, 2016 at UC Davis School of Law in Davis, California. The purpose of the workshop is to highlight, develop, and promote the scholarship of new and younger comparativists in accounting, banking, bankruptcy, corporations, commercial law, economics, finance, and securities.

Up to fifteen papers will be chosen from those submitted for presentation at the workshop pursuant to this Call for Papers. The workshop audience will include invited young scholars, faculty from UC Davis School of Law and Graduate School of Management, faculty from other institutions, and invited guests.

Submissions will be accepted from scholars who have held a full-time academic appointment for no more than ten years as of June 30, 2016.

Submission Instructions

To submit an entry, scholars should email an attachment in Microsoft Word or PDF containing an abstract of no more than 1000 words before October 15, 2015, to the following address: [email protected]. Please title the email “YCC Business Law Workshop – [Name].” Abstracts should reflect original research that will not yet have been published, though may have been accepted for publication, by the time of the workshop. Abstracts should include a cover page with the author’s name, title of the paper, institutional affiliation, contact information, as well as the author’s certification that she/he qualifies as a younger scholar.

Scholars may make only one submission. Both individual and co-authored submissions will be accepted. For co-authored submissions, at least one author must qualify as an eligible younger comparativist.

Notification

Invitees will be selected via a blind review by a workshop selection committee. Authors of the submissions selected for the workshop will be notified no later than November 15, 2015. There is no cost to register for the workshop but participants are responsible for securing their own funding for travel, lodging and other incidental expenses. A limited number of travel stipends may be awarded to scholars from ASCL member schools who demonstrate financial need. If you would like to be considered for a travel stipend, please make that request in your submission.

Final papers for the workshop will be due no later than January 18, 2016.

Acknowledgements and Questions

The YCC gratefully acknowledges the support of UC Davis School of Law and the California International Law Center. Please direct all inquiries to Professor Afra Afsharipour, Chair of the Program Committee, by email
at [email protected] or telephone at 530-754-0111.

Please feel free to share this Call for Papers with any colleagues who may be interested.

The Program Committee:

Afra Afsharipour (UC Davis School of Law) (Chair)
Martin Gelter (Fordham University School of Law)
Haider Ala Hamoudi (University of Pittsburgh School of Law) Virginia Harper Ho (University of Kansas School of Law)

Workshop Selection Committee:

Afra Afsharipour (UC Davis School of Law)
Martin Gelter (Fordham University School of Law)
Haider Ala Hamoudi (University of Pittsburgh School of Law) Virginia Harper Ho (University of Kansas School of Law) Andrew Tuch (Washington University School of Law)

YCC Board of Directors:

Afra Afsharipour, Professor of Law, University of California - Davis Richard Albert, Associate Professor, Boston College, Chair
Virginia Harper Ho, Associate Professor, University of Kansas, Treasurer Sally Richardson, Associate Professor, Tulane University

Ozan Varol, Associate Professor, Lewis & Clark, Vice Chair & Secretary

Responses to the Dewey Trial Survey

Response to our Reader Survey predicting outcomes in the Dewey LeBoeuf trial was less than robust—just a couple dozen of you registered your views.  But the trend in our admittedly small  sample is clear:  In Megaphone Mark Slackmeyer’s timeless words, “That’s Guilty! Guilty, Guilty, Guilty!!”

About 80% of respondents opined that former Firm Chair Steven Davis would plead to or be found guilty of all or some of the charges he faces.  Davis is the manager against whom we’ve seen the least evidence so far of knowledge or complicity (though I wouldn’t say we’ve seen none, and we still have a long ways to go).  About 90% of respondents believed that former CFO Joel Sanders would plead to or be found guilty of some or all of the charges.  And (count ‘em) 100% of you think former Executive Director Stephen DiCarmine is headed for the Big House. 

The differences among your assessments of the defendants' chances are interesting because it bears remembering that Sanders is a CPA as well as a lawyer, and was in charge of the accounting function at the firm.  The upper-middle managers who have pleaded guilty appear to be saying that Sanders signed off (figuratively, if not literally) on the bad things they admit being a part of, though only some have testified so far.  If I were handicapping the Race to Rikers at this point, I’d have put Sanders in the lead.  (And no, I don’t think any of these guys will literally spend time in Rikers Island if convicted; they seem more likely destined for some minimum-security facility.  Readers familiar with the New York prison system may have more sophisticated guesses than mine.)

Judging from the daily news reports, the skilled and aggressive defense lawyers are making a few points here and there, but they don’t seem to be racking up the kind of score needed to win over the jury.  The prosecution is methodically presenting a fairly textbook case of accounting fraud; it may not be flashy, but it seems to be getting the job done.  Whether the People will inject some emotional oomph at some point remains to be seen.  The direct victims of the fraud were the bank and other financial institutions that loaned the Dewey firm the lost money--not  the most sympathetic victims you ever saw.  But thousands of Dewey employees lost their jobs in a depressed economy as a result of the piggery of a fairly sizeable cadre of partners (most of whom were not part of the criminal conspiracy alleged in the pending trial) who demanded too much and provided too little in return, and that was enabled by the accounting fraud the prosecution is presenting. 

One thing we’re not seeing is anyone who had the courage or the vision to call out the nonsense while it was going on.  That’s interesting—even Enron had Sherron Watkins.  It bears considering why, so far was we can tell, no one at Dewey said a word.  What was it about this place that stifled, or lulled, any hint of dissent?

I’ll report further as time and interest dictate.

--Bernie

CFP: AALS Program of the Section on Securities Regulation

Call for Papers
AALS Section on Securities Regulation - 2016 AALS Annual Meeting

January 6-10, 2016  New York, NY

The AALS Section on Securities Regulation invites papers for its program on “The Future of Securities Regulation:  Innovation, Regulation and Enforcement.”

TOPIC DESCRIPTION: This panel discussion will explore the current trends and future implications in the securities regulation field including transactional and financial innovation, the regulation of investment funds, the intersection of the First Amendment and securities law, the debate over fee-shifting bylaws, the ever-expanding transactional exemptions including under Regulation D, and judicial interpretations of insider trading laws.  The Executive Committee welcomes papers (theoretical, doctrinal, policy-oriented, empirical) on both the transactional and litigation sides of securities law and practice.

ELIGIBILITY: Full-time faculty members of AALS member law schools are eligible to submit papers. Pursuant to AALS rules, faculty at fee-paid law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit. Please note that all faculty members presenting at the program are responsible for paying their own annual meeting registration fee and travel expenses.  NOTE FURTHER, AALS has announced reduced registration fees for junior faculty for the 2016 conference.

PAPER SUBMISSION PROCEDURE: Up to four papers may be selected from this call for papers. There is no formal requirement as to the form or length of proposals. However, more complete drafts will be given priority over abstracts, and presenters are expected to have a draft for commentators two weeks prior to the beginning of the AALS conference.

Papers will be selected by the Section's Executive Committee in a double-blind review. Please submit only anonymous papers by redacting from the submission the author's name and any references to the identity of the author. The title of the email submission should read: "Submission - 2016 AALS Section on Securities Regulation."

Please email submissions to the Section Chair Christine Hurt at:  [email protected] on or before August 21, 2015.

Challenging Boardroom Homogeneity

Recently, I had the good fortune to attend Challenging Boardroom Homogeneity, a symposium and book launch hosted by Aaron Dhir at Yale Law School.  Lounge readers may remember that Aaron participated in our recent What’s The Return on Equality? mini-symposium here at the Lounge, in which he discussed some of the findings from his interviews with Norwegian directors that form the basis for his book. 

 I won’t say much about the book right now (though I may come back with a more detailed discussion later), other than to say that I definitely recommend it for anyone interested in this subject matter.  Although I am significantly more skeptical than Aaron when it comes to directors’ assertions regarding the business case for boardroom diversity, the material he’s collected is a real contribution to the field and really essential reading. 

The book launch and symposium was a great event that included many folks whose work in this area I’ve admired for some time.  And, as is particularly appropriate for the topic, it was a highly diverse group on a number of fronts, with academics from law, economics, sociology, political science, and psychology represented, as well as directors, business leaders, and others active in this space from the non-academic side.  It was one of the better events I’ve attended. 

The photo is of our group at the end of an excellent day’s discussion. 

How Will The Dewey Trial Turn Out? A Reader Survey

The lawyers are out of the starting gate, but there's still time to predict the outcome.  Below is a survey on how the Dewey trial is going to turn out (see my post from Friday on the beginning of the trial here).  The survey will be open for the next week, until midnight on Monday, June 8.  Results will be shared that week if there are enough predictions to make it meaningful.

Scroll down and make sure you complete the survey as to each of the three defendants!

Create your own user feedback survey

The Dewey LeBoeuf Trial Begins

Students of BigLaw Behaving Badly will have noticed that the trial on financial fraud charges of three top managers at the failed Dewey LeBoeuf firm has begun.  Former Firm Chair (managing partner) Steven Davis, Executor Director Stephen DiCarmine and Chief Financial Officer Joel Sanders—essentially the CEO, COO and CFO of the law firm—have been charged with fraud, theft, falsifying business records and conspiracy by the Manhattan District Attorney.  Needless to say, these are serious felonies.  A jury has been empaneled, and opening statements were delivered earlier this week (see here and here).

The gist of the charges is that Davis, DiCarmine and Sanders oversaw the falsification of the firm’s accounting records by reclassifying various categories of non-income as income.  The purpose of these accounting tactics, the prosecutors allege, was to mislead the firm’s lenders that the firm was in compliance with its financial covenants (that is, in good enough financial condition that the lenders did not have the contractual power to “call” their loans and demand their immediate and full repayment).  Lest this seem like small beer, it’s worth remembering that Dewey was a billion-dollar business with a $100 million bank line, and another $150 million in privately-placed debt securities.

A year ago when the indictments were handed up, I posted an essay in this space about the nature of the charges, and some ways in which they appeared to be unusual for a large institutional law firm.  Part of my point was that, while it’s not unusual in the annals of financial crime for ordinary nonprofessional businesses to cook their books in order to protect their access to outstanding lines of credit, the financial frauds that lawyers commit as lawyers usually involve different kinds of victims and motives than this one did.

Once you see this mess as a fraud by a business on its lenders, though, the opening statements are (judging from the media reports, at least) about what you’d expect.  The prosecutors promise to prove that the firm’s top management orchestrated, or at least countenanced, serious accounting mischief because the firm’s survival depended on keeping the firm’s credit lines open and outstanding.  And they will produce a half-dozen employees not all that far down the food chain (including the firm’s finance director and comptroller), who have already pleaded guilty, to explain the fraud and the top dogs’ involvement.  Davis and DiCarmine have offered the traditional “Splendid Isolation” defense—it’s lonely at the top because no one ever tells you anything, or at least tells you anything clearly enough so you can appreciate, with the limited financial acumen characteristic of those running billion-dollar partnerships including some of the most sophisticated lawyers in the world, that the only thing standing between your empire and catastrophic loan defaults that will precipitate an immediate financial collapse is some bald and indefensible accounting fictions (yeah, you’re right; their lawyers didn’t put it quite like that). 

CFO Sanders’ defense is more difficult and seems less clear.  He is a Certified Public Accountant who was in charge of the firm’s accounting function.  This likely makes it a lot harder as a practical matter for him to claim that he didn’t have some sense of what was going on or understand its significance.  His lawyer suggested in opening that he was just doing his job to keep the firm afloat during difficult financial times, and couldn’t really have believed there was anything untoward going on because he dealt with the lenders and agreed to their right to examine the firm’s records.  Because no real fraudster ever thinks he can avoid getting caught (yeah, you’re right again; his lawyer didn’t say that last part either).

The prosecution faces the classic challenges of a big financial fraud case—the facts are voluminous, intricate, and depend on accounting principles that seem at best arcane to ordinary jurors.  On the plus side of the prosecution’s advocacy ledger, the defendants may be expected to excite very little juror sympathy:  They’re lawyers.  They’re rich lawyers.  They’re rich lawyers who were pulling down millions of dollars a year during the Great Recession.  They’re rich lawyers who were pulling down millions of dollars a year that depended on a continuing survival of their empire.  They’re rich lawyers who were pulling down millions of dollars a year that depended on a continuing survival of their empire through tactics that some jurors may associate (albeit inaccurately) with the financial and lending misconduct that drove us into the Great Recession.

In the tradition of handicapping horse races like these, I invite readers to predict the outcome in the Comments.  Make sure you break down your prediction by defendant (and, if you think it will vary, by the kind of charge).  You can explain if you want, or just prognosticate.  I can promise that there will be no reward, or even recognition, for those who prove most prescient.  [Update:  To make this easier, I've added a Reader Survey on the Lounge here.  Just click to predict.  Make sure you scroll down and make your predictions as to each of the three defendants.]  

The trial is expected to last five or six months.  The lawyers involved are experienced and highly regarded, so it should be a good show.  I’ll try to comment from time to time, so stay tuned.

--Bernie

Two Cheers for Corporate Experimentation

I have a new law review article out, Two Cheers for Corporate Experimentation: The A/B Illusion and the Virtues of Data-Driven Innovation, arising out of last year's terrific Silicon Flatirons annual tech/privacy conference at Colorado Law, the theme of which was "When Companies Study Their Customers."

This article builds on, but goes well beyond, my prior work on the Facebook experiment in Wired (mostly a wonky regulatory explainer of the Common Rule and OHRP engagement guidance as applied to the Facebook-Cornell experiment, albeit with hints of things to come in later work) and Nature (a brief mostly-defense of the ethics of the experiment co-authored with 5 ethicists and signed by an additional 28, which was necessarily limited in breadth and depth by both space constraints and the need to achieve overlapping consensus).

Although I once again turn to the Facebook experiment as a case study (and also to new discussions of the OkCupid matching algorithm experiment and of 401(k) experiments), the new article aims at answering a much broader question than whether any particular experiment was legal or ethical. Here is how the abstract begins:

“Practitioners”—whether business managers, lawmakers, clinicians, or other actors—are constantly innovating, in the broad sense of introducing new products, services, policies, or practices. In some cases (e.g., new drugs and medical devices), we’ve decided that the risks of such innovations require that they be carefully introduced into small populations, and their safety and efficacy measured, before they’re introduced into the general population. But for the vast majority of innovations, ex ante regulation requiring evidence of safety and efficacy neither does—nor feasibly could—exist. In these cases, how should practitioners responsibly innovate?

My short answer to this question is that responsible innovators should inculcate a culture of continuous testing of their products, services, policies, and practices, and that it is a kind of moral-cognitive mistake (which I dub the "A/B illusion") for the rest of us to respond to these laudable (and sometimes morally obligatory) experimental efforts by viewing it as more morally suspicious for innovators to randomize users to one of two (or more) conditions than to simply roll out one of those conditions, untested, for everybody. The long answer, of course, is in the article. (The full abstract, incidentally, explains the relevance of the image that accompanies this post.)

Thanks to Paul Ohm and conference co-sponsor Ryan Calo for inviting me to participate, to the editors of the Colorado Technology Law Journal, and to James Grimmelmann for being a worthy interlocutor over the past almost-year and for generously unfailingly tweeting my work on Facebook despite our sometimes divergent perspectives. James's contribution to the symposium issue is here; I don't know how many other conference participants chose to write, but issue 13.2 will appear fully online here at some point.

If you would rather hear, than read, me drone on about the Facebook and OkCupid experiments (and some other recent digital research, including Apple's ResearchKit and the University of Michigan's Facebook app-based GWAS, "Genes for Good," as well as learning healthcare systems and the future of human subjects research) you may do so by listening to episode 9 of Nic Terry's and Frank Pasquale terrific new weekly podcast, This Week in Health Law.

CFP: Third Annual Workshop For Corporate & Securities Litigation

Third Annual Workshop for Corporate & Securities Litigation

Boston University Law School
October 2-3, 2015

This annual workshop brings together scholars focused on corporate and securities litigation to present their works-in-progress. The papers may address any aspect of corporate and securities litigation or enforcement, including but not limited to securities class actions, fiduciary duty litigation, or comparative approaches to business litigation. We welcome scholars working in a variety of methodologies, including empirical analysis, law and economics or other fields, and traditional doctrinal analysis. Participants will generally be expected to have drafts completed by the fall, although work in a more formative stage may also be included. Each author will provide a brief introduction, but most of the time in each session will be devoted to collective discussion of the paper.

Submission Procedure
If you are interested in participating in the conference, which will be held at Boston University Law School on October 2-3, 2015, please send an abstract or draft of the paper you would like to present to[email protected] no later than May 29, 2015. Please include your name, current position, and contact information in the e-mail accompanying the submission. Authors of accepted papers will be notified by June 30, 2015.

Questions

Any questions concerning the workshop should be directed to the organizers: Professor David Webber ([email protected]), Professor Jessica Erickson ([email protected]) and Professor Verity Winship ([email protected]).

Reminder: "What’s The Return On Equality? A Conversation About Board Diversity" starts Monday

This is just a reminder that the Faculty Lounge mini-symposium on board diversity will be held next week.  Regular Lounge readers know that we occasionally host mini-symposia on special topics here, such as the recent Taxing Eggs symposium.  And next week’s topic will be board diversity.

Efforts to encourage greater corporate board diversity are now nearly universal.  Though different jurisdictions employ different methods – from reporting to quotas to more informal public, market, or government pressure – the drive to diversify the boardroom is being felt around the world.  But why?

The Faculty Lounge will host a special mini-symposium on corporate board diversity with guest experts in the field.  What methods are different jurisdictions using to promote board diversity and with what effect?  More importantly, what do board diversity advocates hope to achieve with these changes?  Finally, what do our panel of experts believe will be the ultimate result of these efforts?  

Join us in the Lounge next week as our panel of experts address these and other issues.  Panelists include:

Lissa Lamkin Broome

Wells Fargo Professor of Banking Law and Director of the Center for Banking and Finance

University of North Carolina, School of Law

John Martin Conley

William Rand Kenan Jr. Professor of Law

University of North Carolina, School of Law

Aaron A. Dhir

Associate Professor, with tenure, Osgoode Hall Law School; Visiting Professor of Law, Yale Law School, and Global Justice Senior Fellow, Yale MacMillan Center.

Lisa M. Fairfax

Leroy Sorenson Merrifield Research Professor of Law; Director of Conference Programs, C-LEAF

Kimberly D. Krawiec (a.k.a. me!)

Kathrine Robinson Everett Professor of Law, Duke University 

Darren Rosenblum

Professor of Law, Pace Law School

Daria Roithmayr

George T. and Harriet E. Pfleger Chair in Law

USC School of Law

 

See you all next week!

 

The “What’s The Return On Equality?” Mini-Symposium: 

What’s The Return On Equality? A Conversation About Board Diversity

What’s The Return on Equality?: Aaron Dhir on Quotas

What’s The Return On Equality: Kim Krawiec On The Business Case For Board Diversity

What’s The Return On Equality: Lisa Fairfax on Board Diversity’s End Game

What’s The Return On Equality: Darren Rosenblum On Quotas

What’s The Return On Equality: Daria Roithmayr

What’s The Return on Equality: Aaron Dhir On Disclosure

What’s The Return On Equality: Taking Stock of Day 1

What’s The Return On Equality? Lisa Fairfax on Board Vacancies: The Cure and the Problem?

What’s The Return on Equality: Aaron Dhir Responds To Questions

What’s The Return On Equality: John Conley Responds To Daria Roithmayr

What’s The Return On Equality: Darren Rosenblum On Examining Diversity 

What’s The Return On Equality: Daria Roithmayr on Quotas

What’s The Return On Equality: Lisa Fairfax On Will We All Get There?

What’s The Return On Equality: Kim Krawiec on Lisa Fairfax on Will We All Get There?

Dacheng Dentons Is A Big Deal, But Is It A Big Deal?

Commanding the headlines in the legal press for the last week or two is the tie-up between the Chinese law firm Dacheng and the international law firm Dentons.  As law-firm deals go, this is a very big one by any measure.  Dacheng is the largest domestic law firm in China, with several thousand lawyers.  Dentons is one of the UK-US leviathans, a product on the model of DLA Piper and Hogan Lovells of a US conglomerate centered on what was once Chicago-based Sonnenschein Nath & Rosenthal and the UK snowball known as Dentons.  The resulting combination will boast nearly 6,600 lawyers, well over half again as large as what had been the biggest nongovernmental law firm in the world, Baker & McKenzie, with a mere 4,100 or so.

So Dacheng Dentons is a big deal.  But is it a Big Deal?  Is it transformative, an augury of things to come in BigLaw?  Some consultants and commentators seem to think so.  A recent report (link to Lexis) cites various “experts” opining that the combination “mark[s] a new age of megafirms that may leave the legal industry with only firms that are tiny or enormous.”  I think that’s (to put it charitably) doubtful, the vision of naturalists who see a whale and predict that everything in the sea will eventually either become just like it or never outgrow a minnow. 

There are at least three reasons to doubt Dacheng Dentons as a Template for Everything.  The first one is that there’s a lot to consider about how the combination is going to turn out.  Dentons  is a recognizable type in Global BigLaw—as described above, a US-UK combination of high-end international firms whose business model is centered on charging premium rates for complex, multijurisdictional work this class of firms claims is best performed by a single organization with integrated local and international expertise in many places at once.  Dacheng is reportedly something very different, a huge but decentralized network of domestic lawyers that has grown by what one student of China’s legal markets (link to Lexis) calls a “franchise” approach—“Dacheng goes to a province, looks for a local firm, negotiates with them, and then tells them ‘You can use our name.’” 

It is hardly an original observation that the success of a law-firm combination depends on full and effective integration of the constituents' cultures, networks, and economics.  Otherwise all you get is something that is a lot bigger with a lot more overhead and no profitable synergies—something consultants who have not recovered from business school call a lose-lose.  It is also commonplace to observe that differing structures and cultures challenge productive integration.  Dacheng’s “franchise” structure is radically different from, and not easily reconciled with, Dentons' aspirations to be a well-oiled, fully integrated international juggernaut.  Who’s in charge, and how do you draw these thousands of loosely affiliated lawyers scattered across an enormous country into something much more coordinated than they may be accustomed to? 

The economics of the two models are drastically different as well.  Dacheng reportedly generates revenue per lawyer of $78,000 among its 4,000 or so Chinese lawyers—less than one-tenth the revenue per lawyer at Dentons and firms like it.  Do these practices fit together at all?  Remember that Dentons already has traditional foreign-firm offices in China, with partners making traditional seven-figure foreign-partner incomes, and associates paid traditional six-figure US-UK salaries.  The New York Times reports Dentons Chair Joseph Andrews as saying that “the new venture would be more integrated than most, with a unified compensation system across its network of partnerships.”  How are all these people and their practices going to fit together when they are housed in the same offices under the same management?  Which clients get charged according to which constituent’s rate structure?

Aside from these questions about whether and how the combination will work, the second reason to doubt the coming primacy of this law-practice model is how competitive the model will actually prove to be.  Very big firms of this kind are predicated on the theory that a firm with established presence and expertise in a great many places will do a demonstrably superior job at serving global business concerns and handling complex multijurisdictional transactions, and that clients with this need will recognize the quality and efficiency of these services and gladly pay for them.  And that theory may prove out.  But it may not.  One thing we know for sure is that maintaining many offices in many places (Dacheng Dentons will reportedly have 120 offices in 50 nations), and building out the technological and management infrastructure necessary to coordinate meaningfully among them, is enormously expensive.  Less gargantuan international firms with an ability to find skilled lawyers in places where they are not themselves present to meet occasional need suffer far less of these diseconomies of scale.  And early reports of the performance of some of these agglomerations of acquaintances on the Dacheng Dentons model suggest that you don’t always get the best lawyer for every purpose in every market at a single firm, leading to uneven quality in the large international engagements that are precisely the ones in which consistently high quality through one-stop shopping is the signal selling point the huge firms claim to offer.  (For a characteristically thoughtful and vivid exposition of these points, see this essay by Mark Hermann.)

Third and finally, even if the combination works perfectly, and even if it proves to be a winner in the market for legal services, there is no rational reason why the market would force every law firm of any size to be either a Dacheng Dentons leviathan or a mom-and-pop minnow, as some “experts” seem eager to predict.  Law firms serve their clients.  Successful law firms know their clients and what those clients need in services and pricing.  No law firm, or at least no law firm I know of, considers itself all things for all people.  So unless you believe that every business in the world will eventually prove to be either a globe-bestriding colossus like Coca-Cola or Exxon-Mobil, or a corner bodega or hairdresser, you recognize that there is likely to be a very wide range of business sizes and geographical footprints for as far into the future as any of us could possibly see.  In fact, one of the most important developments in the legal services market over the last several years is the demonstrable trend among larger businesses with high-end needs traditionally served by the biggest and highest-priced firms to move significant amounts of premium-priced, complex work to less-large and less-sprawling firms willing and able to charge 10% to 30% less to do it.  In short, firms with different skill and service profiles at different price-points are going to prove more competitive in many sectors of a diversified 21^st-Century economy, both here and abroad, than any one model would prove across all.  And that’s particularly true for the super-premium-priced, super-high-overhead Dacheng Dentons model that is rationally constructed for a particular, relatively limited, category of legal work. 

So will Dacheng Dentons be a force to be reckoned with in the growing market for international legal services?  Maybe.  Is this the end of the world as we know it?  Nah. 

Bernie

Diversity and the Professions at AEA Tomorrow

Having just finished up the Business Associations program on The Future of the Corporate Board this morning, I’m now off to Boston for a panel tomorrow at the American Economics Association Annual Meeting.  If any other law profs happen to be wandering the halls, definitely stop in to say “hello.”  I’ll be discussing my research on board diversity, and whatever lessons it may hold for diversity in the professions.  Other panelists will discuss the single woman penalty and diversity and the innovation economy.  Fellow law prof Laura Beny (Michigan) is moderating and will also discuss diversity and law firms. 

Unfortunately, the timing of the two conferences was such that I’m only able to attend the last day of AEA.  That’s too bad, as there were a number of sessions that I really wanted to attend.  Ah well. Can’t be everywhere at once. 

 

Jan 05, 2015 8:00 am, Boston Marriott Copley, New Hampshire

National Economic Association

Diversity and the Professions (J4)

 

Presiding: LAURA N. BENY (University of Michigan)

 

Diversity and the Innovation Economy

LISA D. COOK (Michigan State University)

 

Diversity and Performance of Elite United States Law Firms

LAURA N. BENY (University of Michigan)

 

Diversity and Talent at the Top: Lessons from the Boardroom

KIMBERLY KRAWIEC (Duke University)

 

Leadership and the Single Woman Penalty: A Role Expectations Account of Early Career Barriers to Promotion for Female MBAs

JENNIFER MERLUZZI (Tulane University)

DAMON PHILLIPS (Columbia University)

 

Discussants:

TERRY-ANN CRAIGIE (Connecticut College)

ROBYNN COX (Spelman College)

 

The Future of the Corporate Board at AALS

I’m hoping to see many of you at the AALS in the upcoming days.  Do remember to check out the Business Associations program, which is in the coveted time slot of 8:30 am – 10:15 am on Sunday in Thurgood Marshall East, Mezzanine Level.  Naturally the main draw here is the moderator, but there are some other notable presenters and discussants as well, as you can see from the program below.  Reading through the papers, I’d expect our discussion to touch specifically on managing the corporation for the long term versus the short term, balancing long term goals against management entrenchment, board independence, board diversity, connections between board diversity and board independence, and more. 

 

The Future of the Corporate Board

Moderator: Kimberly D. Krawiec, Duke University School of Law

Discussants: Christine Hurt, BYU Law School

   Robert B. Thompson, Georgetown University Law School

Speakers from a Call for Papers:

Sean J. Griffith, Fordham University School of Law

Jeffrey David Manns, The George Washington University Law School

Darren Rosenblum, Pace University School of Law

Andrew Abraham Schwartz, University of Colorado School of Law

How will boards adapt to recent changes and challenges in the business, legal, and social environment in which corporations operate? The recent global financial crisis and the continuing need for many corporations to compete internationally mean that today’s boards face economic pressures that their predecessors did not. This pressure is heightened by the rise of activist investors, many of whom aggressively push for changes to corporate management and governance. On the legal front, new regulations, such as Dodd-Frank, impose heightened compliance and other burdens on many companies and boards. And on the social front, pressures for socially responsible corporate behavior and greater racial and gender diversity on boards continues. Our program seeks to examine the ways in which boards have, and will in the future, respond to these challenges.

Business meeting at program conclusion.

Conference on Digital Experimentation (CODE) at MIT Sloan

Another stop on my fall Facebook/OKCupid tour: on October 10, I'll be participating on a panel (previewed in the NYT here) on "Experimentation and Ethical Practice," along with Harvard Law's Jonathan Zittrain, Google chief economist Hal Varian, my fellow PersonalGenomes.org board member and start-up investor Ester Dyson, and my friend and Maryland Law prof Leslie Meltzer Henry.

The panel will be moderated by Sinan Aral of the MIT Sloan School of Management, who is also one of the organizers of a two-day Conference on Digital Experimentation of which the panel is a part. The conference, which brings together academic researchers and data scientists from Google, Microsoft, and, yes, Facebook, may be of interest to some of our social scientist readers. (I'm told registration space is very limited, so "act soon," as they say.) From the conference website:

The ability to rapidly deploy micro-level randomized experiments at population scale is, in our view, one of the most significant innovations in modern social science. As more and more social interactions, behaviors, decisions, opinions and transactions are digitized and mediated by online platforms, we can quickly answer nuanced causal questions about the role of social behavior in population-level outcomes such as health, voting, political mobilization, consumer demand, information sharing, product rating and opinion aggregation. When appropriately theorized and rigorously applied, randomized experiments are the gold standard of causal inference and a cornerstone of effective policy. But the scale and complexity of these experiments also create scientific and statistical challenges for design and inference. The purpose of the Conference on Digital Experimentation at MIT (CODE) is to bring together leading researchers conducting and analyzing large scale randomized experiments in digitally mediated social and economic environments, in various scientific disciplines including economics, computer science and sociology, in order to lay the foundation for ongoing relationships and to build a lasting multidisciplinary research community.