Professor Bainbridge...on law, politics, religion, culture & food

But you also have to note that most corporate lawyers are “transaction oriented” and have a difficult time making a living giving advice and preparing agreements in a time where agreements, and advice, are given out or sold cheaply on the internet.  It’s not the public interest lawyer who typically transitions into real estate or finance to make a living: it’s the transactional lawyers facing competition from mediocre advice.

At Law Day at Northwestern a decade ago, corporate lawyer Marcus Cole (now a professor at Stanford) said that he practiced public interest law every day.  If his corporate client was doing the right thing, he helped him do it, thus creating better lives for employees and customers.  And if his corporate client was doing the wrong thing, he told him to stop it and do the right thing, thus also serving the public interest. 

At this point, one prominent clinician walked out of the room in apparent disgust.

Marcus went on to describe his pro bono work for economic liberty.

A-MEN

I appreciate the post.

I’m a sixth-year securities / M&A;associate at a large (500+ lawyer) firm. I’ve always felt that my job was highly moral, yet even more highly abstracted. It’s easier to feel good about helping one identifiable, known individual avoid [INSERT LEGAL CALAMITY HERE] than it is to feel good about aiding “efficient capital deployment”, especially when you’re lower on the totem pole and think you’re only shuffling commas.  You get paid better for corporate work, but work that is more readily recognizable as socially valuable pays psychic (and social) dividends that don’t compare to corporate work. Don’t trust me - ask energy executives and “socially active” celebrities as to their respective experiences.

I keep an informal list of books that matter to me and that I recommend to others.  The ones that touch on this issue are:

(1) “The Mystery of Capital” - de Soto: real world consequences on individual people of legal and economic systems; I recommend this to every junior associate with whom I have a close working relationship.  Makes the concept (and importance) of “rule of law” clearer in a highly readable way.

(2) “IBM and the Holocaust” - Black: severe reminder that corporations are amoral, but that corporate amorality doesn’t shield the souls and reputations of the natural agents who carry out corporate actions.

(3) “Gain” - Powers: fictional juxtaposition of some of the themes played out in (1) and (2).

(4) “The Soul of a New Machine” - Kidder: less directly on point, but a fascinating story of team building and people doing difficult things well without recognition. I also recommend this to other attorneys - up and down the chain.

People like Chemerinsky don’t make me feel guilty; they make me feel uneasy about the degree to which public discourse has been ceded to positions like his.  I mention these books here largely because, if they aren’t already in your bag of professorial tricks, they might be useful additions.

I have to respectfully disagree.  In a perfect world, there would be no corporate lawyers.  Corporate lawyers are merely the result of America being over-regulated, and over-litigious.  If you want young lawyers to help make society a better place and to eliminate poverty, advise them to find ways to use their law degree to reduce the amount of over-regulation and over-litigiuosness in America.  Corporate lawyers do not reduce the amount of regulation and litigiuosness in America.  They merely respond to it.

Bravo, Prof. B! And for those naysayers: Get a clue, for you know not whereof you speak, nor what the people you’re speaking of actually DO.

Sadly, it was not until I was out of law school, and my own career path as a courtroom lawyer fairly well trodden, that I came to appreciate the opportunity for creative genius that’s inherent in being a deal lawyer. I thought being a “corporate lawyer” meant, well, creating corporations, which any chimpanzee with a form book and a word processor can do. Oh, I was woefully ignorant.

Businessmen of all stripes are bubbling over with ideas, some half-baked, some less.  A good deal lawyer not only will ensure that the transactions he facilitates are nicely documented, but rather, adds value to the transactions themselves. He is not the reagent, but the catalyst. Or, to switch metaphors just a bit: His baseline knowledge of subjects like corporate governance and business associations, overlaid with an understanding of state and federal regulation, permits him to play the role of grand master chef—mixing and matching the ingredients offered him by clients, sometimes finding a combination, a niche, a melding of potential with actual, that genuinely DOES create wealth. It’s not wealth out of nothing, but wealth out of passion and intelligence and lots of damned hard work for clients who appreciate that, because they hold themselves to those same standards.

Law schools have moot courts and mock trials that are fair approximations of what courtroom lawyers actually do. Even discounting for dramatic license, dozens of TV shows and movies have glamorized that practice area, criminal and civil. It’s genuinely a pity that there aren’t more realistic clinical programs designed to expose law students to business law practiced well and at high levels.

Prof,

I’m a corporate lawyer, and all of my co-workers at my BIGLAW firm in NYC are unreconstructed liberals.  My firm is known for its big corporate work, such that it’s worth its weight in STERLING (hint hint).  And everyone there is a big time liberal.  They’re all going to vote Democrat this year.

Back in the bubble, our CEO hooked up with our biggest creditor to basically steal the company in a contrived bankruptcy. Both had real New York meat eaters for attorneys.  Ironically it seems when their lawyers figured out what their client’s plan was, they convinced the creditor to drop his sward and pray to god we didn’t counter sue.  It helped that our attorney was a genius who showed them the pit they were about to leap into.  To your point, everyone came out looking pretty good in the end except of course the CEO.  He, I’m afraid, is an irredeemable asshole.

Forgive the obscenity but poppycock!  I know that in perfect libertarian world the market solves all problems but unfortunately reality has a habit of crashing that party.  The fact is history has shown us the market only will go so far and that once it reaches a certain point something else needs to step in.

I have no problem with public-spirited lawyers becoming corporate lawyers. I was a line officer during the “Cold War”, after all: Somebody has to keep an eye on things!

As I see it, the problem is not with lawyers, or with law schools; it is with the attitude (pervading American “business education") that growth of personal wealth is the only worthwhile objective of business. I have seen — in discovery battle after discovery battle — those “evil corporate lawyers” advising against the most self-serving, illegitimate (economically… such as wholesale refusal to internalize negative externalities) actions and policies. The main problem that I see is that the corporate Brahmins won’t listen to advice that is not consistent with their preconceptions. Very much, for that matter, like post-Vietnam military academy graduates.

I’m not advocating that corporate lawyers need to be inveterate naysayers. I’m only advocating that some corporate lawyers need to be forthright in expressing caution… and that the business community needs to learn that they just might be right. Although he was an arch-Protestant, I commend the words of Oliver Cromwell to the corporate Brahmins: “I beseech thee to consider that thou might’st be in error"… (don’t blame me for the bad grammar). The lawyers won’t always be right, but they’re going to be right more often than not… if, that is, they’re any good as lawyers.

In my TCS column, First, Kill All the Transactional Lawyers?, for which I did not write the headline, I argued:

Successful transactional lawyers build their practice by adding value to their clients’ transactions. From this perspective, the education of a transactional lawyer is a matter of learning where the value in a given transaction comes from and how the lawyer might add even more value to the deal.

Two competing hypotheses suggest themselves. The first might be termed the “Pie Division Role.” In this version of the transactional lawyer story, lawyers strive to capture value—maximizing their client’s gains from the deal. Although there are doubtless pie division situations in transactional practice, this explanation of the lawyer’s role is flawed. Pie division assumes a zero sum game in which any gains for one side come from the other side’s share. Assume two sophisticated clients with multiple advisers, including competent counsel. Is there any reason to think that one side’s lawyer will be able to extract significant gains from the other? No. A homely example may be helpful: You and a friend go out to eat. You decide to share a pizza, so you need to agree on its division. Would you hire somebody to negotiate a division of the pizza? Especially if they were going to take one of your slices as their fee?

The second hypothesis might be termed the “Pie Expansion Role.” In this version of the story, people hire transactional lawyers because they add value to the deal. This conception of the lawyer’s role rejects the zero sum game mentality. Instead, it claims that the lawyer makes everybody better off by increasing the size of the pie.

The emphasis herein on the pie expansion model is consistent with our concomitant emphasis on transaction costs economics. For the most part, lawyers increase the size of the pie by reducing transaction costs. One way of lowering transaction cost is through regulatory arbitrage. The law frequently provides multiple ways of effecting a given transaction, all of which will have various advantages and disadvantages. By selecting the most advantageous structure for a given transaction, and ensuring that courts and regulators will respect that choice, the transactional lawyer reduces the cost of complying with the law and allows the parties to keep more of their gains.