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Author: Lawrence Cunningham

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When There’s Nothing Else to Say

Are the following two paragraphs likely to have been composed with originality, independently by two different people, or does it seem likely that one was adapted from the other?

“We’re pleased to have the opportunity to become a part of what we believe to be the finest family of companies ever assembled under one corporate name. Warren Buffett, Chairman of Berkshire Hathaway has demonstrated a legendary record of protecting the unique characteristics of individual businesses in a diverse portfolio of companies. We’re excited to be a part of it.”

“We couldn’t be more pleased than to have the opportunity to become a part of what we believe to be the finest family of companies ever assembled under one corporate name. Warren Buffett has demonstrated a legendary track record for growth and we want to be part of it.”

These are from Berkshire Hathaway press releases, several years apart (1997 and 2000), quoting senior executives of generations-old family companies being sold to the conglomerate Warren Buffett leads.  My hunch is that cribbing occurred, but of a fairly innocuous sort.

A Berkshire manager, experienced in drafting press releases, asked the selling executive for a comment.  Having never given a comment for a business press release of this sort, the recipient asked for examples or suggestions of what to say.

Taking a habit from the page of corporate lawyers, the Berkshire manager likely culled some examples from precedent and sent them over.  The family businessman then read through the samples, picked the one he liked the best, touched up the wording a bit and sent it back.

I came across this curious incident in the context of a larger research project on Berkshire Hathaway’s acquisitions over the past forty years. Part of the project concerns annotating and documenting the joint expectations at the outset.  To do that, I’m reading through public company disclosure documents, minutes of meetings and other resources, including press releases. 

Press releases announcing corporate mergers are prone to hyperbole and generalities and I’ve found quite a bit of that. Yet, especially when a public company is involved, they are also carefully vetted.  And I’ve seen quite a bit of useful, distilled, clear detail in the Berkshire press releases, including the pair quoted.  

Written independently or not, this pair reflects a widespread perception in the business world that Berkshire is a unique corporate home where Buffett has been exceptionally good at helping companies grow.   

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Prawf Entry Level Hiring Down

We have reported on the weak market for lateral law professor hires on several occasions this year (all links can be accessed here).  Now Sarah Lawsky, a former colleague of mine at GW, lately of Irvine, finds an equally weak market for entry level law professors this year.

Prof. Lawsky offers an array of FAQs, graphs and interactive features to make it fun despite the grim news; she is also very careful to stress the limits of her report, which she emphasizes repeatedly is incomplete.   Paul Caron illustrates some of the ways that Prof. Lawsky’s data might be sliced and diced here, as does Brian Leiter, here, and David Zaring, here.

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Symposium Redux: Essays and Lessons

The Essays of Warren Buffett: Lessons for Corporate America is as rich as the man, judging by the variety and depth of commentary contributed to this week’s on-line symposium about the new third edition of the 300-page book.

A dozen luminaries from various walks of life and backgrounds, and with very different viewpoints, addressed issues such as target audience; thematic approach; selected content; what is Berkshire?; and even who is Warren Buffett?

Seventeen years after hosting an in-person conference on the subject, I remain awestruck at the varied impressions that can be generated by the same set of material. Herewith, a recap of this week’s contributions, at least as I saw them, leading off with a hearty thanks to all who contributed to the symposium.  Read More

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Introducing Symposium: The Essays of Warren Buffett

We at Concurring Opinions are delighted to welcome a dozen luminaries and thousands of readers to this week’s on-line symposium featuring The Essays of Warren Buffett: Lessons for Corporate.  

I began studying Warren Buffett’s letters to the shareholders of Berkshire Hathaway in 1992 when researching what became my first scholarly article, tracing the intellectual history of efficient market theory.  The letters went against the grain of prevailing academic work, so they served as a sort of contrary exhibit rather than supporting many standard assertions.  

The letters were smart, witty, arresting and expansive, addressing governance, mergers, investing, accounting, taxes and many other topics I would spend my career teaching and writing about. I could not put them down. Yet nor could I, acting alone, give them a place of respect in the academy that I thought they deserved but had not received.

So I decided to host a symposium featuring the letters, gathering a group of 20 scholars to dissect their content. Through Monroe Price, then Dean of Cardozo Law School, where I worked, I contacted Bob Denham, a close Berkshire adviser then and now, who passed along my proposal, which Warren embraced.

Susan and Warren Buffett & Charlie Munger at Cardozo 1996

We held a two-day conference in New York on October 27-28, 1996, with five separate panels of four to six people each. Warren was in the front row participating actively in the discussion throughout, flanked by his wife Susie (pictured at left), son Howard, insurance maven Ajit Jian and business partner Charlie Munger (likewise pictured)—who also had a lot to say during the conference.

The centerpiece of the conference was a collection of Buffett’s letters, which I had rearranged thematically, and would later publish as The Essays. The arrangement both enabled a correspondence between the collection and the panel topics and papers, as well as the emergence of an unmistakable organizing principle: the fundamental idea that price and value are different things.

That meant that stock markets are not so efficient as to invariably produce a price that is a reliable proxy for value. This idea is so deep, and was so contrary to academic literature and classroom teaching, that it received an entire section of the collection and separate panel at the symposium. But it was even larger because pretty much all the other principles in The Essays—about governance, mergers, accounting and so on—followed from that tenet.

Since the conference edition (1997), we published a revised first edition (2001), a second edition (2008) and now a third edition (2013), in each case maintaining the themes that have animated the material from the beginning while adding discussion of contemporary issues that radiate from them.

We have often thought of hosting a reunion symposium on The Essays and this week, thanks to the generosity of a dozen luminaries, we do so.  Following is a run-down of the participants in this week’s symposium, half of whom participated in the original.  They are listed in roughly the order in which their contributions appear (with links to pieces as they have been posted).

[To see all posts in the symposium grouped together, click the following link, which also appears below every post in the symposium: "Symposium: The Essays of Warren Buffett: Lessons for Corporate America."]

Read More

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Wachtell Lipton’s Errors on Shareholder-Paid Director Bonuses

Amid debate over shareholders offering contingent payments to directors, Wachtell Lipton recommends an option that may be tempting for incumbent boards: unilaterally adopting a bylaw banning the arrangements.  Boards should be wary of this advice.

True, Wachtell’s position concurs with my view that such payments are lawful, contrary to the position urged by my esteemed fellow corporate law Prof., Stephen Bainbridge.  But that’s where Wachtell and I part company, first because Wachtell’s proposal is myopically universal and second because it errs on a basic legal point about board and shareholder power.

In my view, not only are the arrangements lawful, but shareholder bodies ought to have the choice to embrace or reject them.  My guess is that they are desirable for some corporations in some settings and not so for others.  Therefore, the use or rejection of these ought to be determined, as with much else in corporate life and law, in context by business people participating in particular governance situations. Read More

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Max Olson Helps Berkshire Hathaway with Letter Compilation

Max Olson, Compiler (700 pp.) $24.50

BRK Letters & Compilations

Berkshire Hathaway used to compile bound volumes of Warren Buffett’s letters to its shareholders but stopped that practice years ago.  Only collectors could put their hands on such a thing.  Until now. A young fan of the man and company has published a full compilation and put it on sale for $24.50 plus shipping.  It is a good service and I am grateful to the fan, Max Olson, for sending me a comp copy (pictured at right; he sent them because I published The Essays of Warren Buffett: Lessons for Corporate America).

Berkshire annual reports of the late 1980s and early 1990s (some pictured at left), all stated that compilations of letters from earlier annual reports, dating to 1977 (also pictured), were available on request from the company without charge.  By the mid-1990s demand had begun to rise, prompting a new policy: continuing to offer the historical compilations to shareholders for free, but charging non-shareholders $15 (for production and shipping).

Beginning with the 1997 report, the letters, again dating to 1977, were made freely available on the internet (and they still are there).  The two-volume historical compilation remained available, but now at a charge of $30, payable by non-shareholders and shareholders alike (shipping included).  In 1999, the printed set became a three-volume issue and the charge was raised to $35 for all.

Those printed volumes have not been available for several years (and I feel lucky to have some in my library). That’s been a relief to staff at Berkshire’s famously minimalist headquarters, a handful of people with no time to process payments and stuff envelopes.  It is this lacuna that Max Olson’s alternative fills, a good job, especially at the price of $24.50 (plus shipping). Read More

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Deep Dive in Prawf Lateral Market Confirmed

As anticipated (here and here), 2013 witnessed a deep dive in lateral recruiting by law schools and movements by law professors.

Only 41 schools secured recruits, which totaled 56 prawfs, according to the latest information reported at the Faculty Lounge.

Compare similar information reported since 2006  in the following table.  (Obviously, FL may have missed some results, so the data are not necessarily complete, but that is true for 2013 as well as any prior year.)

Year Schools Faculty
2006      71   132
2007      72   131
2008      80   136
2009      68   114
2010      72     92
2011      55     93
2012      56     84
2013      41     56
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Notes on Berkshire’s 2013 Annual Meeting

Whimsical moment at the 2013 BRK AGM

FOR NOTES ON 2014 MEETING, SEE HERE.

Spent the weekend in Omaha with my wife at the Berkshire Hathaway shareholders’ meeting, one of many I’ve attended since my first in 1998 after publishing The Essays of Warren Buffett: Lessons for Corporate America.  The pace is always busy and has gotten hectic as I’ve gotten to know more people and the scale and size of the meeting expands.

For us, this meant, besides the meeting, which takes place from about 9 to 4 on Saturday, various interviews (Yahoo! Finance Friday, USA Today Saturday afternoon and Motley Fool Saturday evening); book signings (conference at U. Nebraska Friday evening, the Bookworm Sunday early afternoon and Hudson Books later Sunday); and social gatherings (a party given by hedge fund manager Whitney Tilson Friday evening and Warren Buffett’s brunch for out of town friends on Sunday).

The result was catching up with scores of people I know through this world, including both luminaries and students, those I’ve known for decades and those I’ve gotten to know more recently.  One comes away with reflections, during such occasions, and herewith a few of mine. Read More