Author: Lawrence Cunningham

5

Unintended Consequences of Scholarship

unintended.consequencesSteven Davidoff, Barbara Black and Eric Chaffee gave me the honor of delivering the keynote address at the fourth annual National Business Law Scholars Conference at Ohio State University last week.

Now, Gordon Gee, president of Ohio State, had just announced his retirement. This followed several bad jokes he’d made that had become public—about Notre Dame, Catholic priests and relative literacy across the Southeastern Conference.  Besides encouraging his retirement, I understand that the board of trustees have now banned attempts at public joke telling on the OSU campus, including at conferences.  Which was a relief, because I didn’t have any good jokes to start with, I told the audience.

After that obligatory bit of humor, it was on to remarks based on one of my recent books, The AIG Story, which I wrote along with the company’s long-time chairman Hank Greenberg. One of the book’s themes that I wanted to highlight is the dangers of a one-size-fits-all approach to corporate governance.  For the assembled audience of young business law scholars, moreover, I wanted to intersect that with some thoughts on scholarly life, my notes on which follow.

It is wonderful to be able to write law review articles that other scholars respect as well as books for a general audience, I said.  They are connected.  Both require networks. I felt little need to tell those assembled about the value of participating in conferences; they were there. It takes work and is worthwhile.

Frank Partnoy reminds me of my advice to him when he entered teaching: hit on all cylinders. Teach well, help your students, write articles, books, op-eds, essays, white papers; give workshops and lectures; testify and run host conferences; meet the press; today I extol blogging as well—as I do here at Concurring Opinions. Read More

0

NYT editorial quotes Dan Solove likening NSA snooping to Seurat art: one small dot seems trivial, but together a portrait emerges. Here. (LAC)

10

Views on Surveillance May Depend on Degree of Responsibility

In the uproar over the U.S. surveillance program, at first it is not easy to classify the sides.  One-time lefty veep Al Gore is horrified by the program while the young right-winger Rand Paul fulminates about it as an “assault on the Constitution.” The seasoned Democrat Diane Feinstein calmly defends the program as lawful, authorized by three branches of government in different ways; the ACLU responds that this a pox on all the branches.  The editors of the New York Times are outraged by the governmental excesses (a “dragnet”) while the White House demurs.  The press and blogosphere are viral, though it is too soon to gauge the public’s net view (something that in any event can be opaque or fickle,e.g. this and this).  

I admit being torn about the correct policy in this situation, the balance between privacy and security, or even how to think about their relationship if there is not a trade-off.  But reading the papers and reports in the fury of this moment, one salient feature that seems to divide the viewpoints is the degree to which a person is in a position of responsibility for government administration.  It is a lot easier for those without such responsibility to criticize governmental actions.  If a terrorist slips through the cracks, blame will not be assigned to bloggers, journalists, policy wonks, citizens, former government officials or even disgruntled government officials who do not believe in government.  Blame will be assigned to, and the burden of guilt borne by, those in office who believe that government has some responsibility to protect the country.

0

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.   

0

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.

2

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

0

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