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Workshop Syllabus

Week 1

Introduction: Lawyer as Transaction Cost Engineer.

Introduction and overview

  • How to think about transactional problems and your role as a lawyer -- the Deals approach
  • Getting your feet wet -- how to analyze and manage complex transactional documents
  • Negotiation and Drafting Simulations -- purpose and ground rules

How and why lawyers serve as value-creating "transaction cost engineers"

  • Identifying transaction costs
  • Why the legal background matters:  Coase revisited
  • Why capital structure matters:  Mogdiliani & Miller revisited

Value creation vs. value division

  •     Think global, act local:  value creation in smaller contexts through efficient managing of business risk
  •     Negotiation:  moving beyond "bargaining power"

Discuss Javaboost Case

Assignment:

  1. Excerpt from Ron Gilson, Value Creation by Business Lawyers: Legal Skills and Asset Pricing, 94 Yale L.J. 239 (1984)
  2. Victor Fleischer, Deals: Bringing Corporate Transactions into the Law School Classroom, 2002 Colum. Bus. L. Rev. 475
  3. Beyond Winning pp. 9-43 (chapter 1).
  4. Read Javaboost Case and be prepared to discuss in class
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Week 2

Managing Uncertainty, Information Barriers, and Behavioral Incentives

Identifying Business Risks

  • Uncertainty
  • Information Problems
  • Behavioral Problems

Different ways of dealing with transaction costs

  • Structural
  • Contractual
  • Procedural
  • Reputation

In-Class Javaboost Exercise

Assignment:

  1. Beyond Winning pp. 127-155 (chapter 5)
  2. Ron Gilson, Engineering a Venture Capital Market, pp. 1-36.
  3. Javaboost, Part Two Problem Set
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Week 3

Value Creation through Contract

Identifying uncertainties

  • Legal/regulatory uncertainties
  • Technology uncertainty
  • Market uncertainty

Identifying structural solutions

  • Finding the right party to bear the risk
  • Negotiating the solution

Assignment:

  1. Read Streetwatch Case
  2. Getting to Yes, Intro - p.14
  3. Streetwatch Problem Set
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Week 4

Takeover Deals

Assignment:

In re Pure Resources, Inc. 

Guest speaker:  Dan Neff, Wachtell, Lipton, Rosen & Katz

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Week 5

Negotiation and Ethics
  • Reputation and repeat play
  • Lawyer as management consultant
    • Dealing with Irrational Exuberance
  • Ethical approaches
    • Formal compliance
    • Moral compliance
    • Dealing with conflicts
    • Dealing with blow-ups

Assignment:

  1. Joseph Bankman, Excerpt from The Structure of Silicon Valley Start-ups
  2. Victor Fleischer, Excerpt from Rational Exuberance
  3. Don Langevoort, Excerpt from Taking Myths Seriously
  4. Beyond Winning, pp. 274-294 (chapter 11).
  5. View the movie Startup.com prior to class
  6. Problem set
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Week 6

 

Value Division through Negotiation

  • Analyzing a contract
  • Finding hot spots
  • "Market practice" and other negotiation tactics

Assignment:

  1. Getting to Yes pp. 14-55, 81-94
  2. Rising Star Contract 
  3. Rising Star Problem Set
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Week 7

Drafting Simulation -- Rising Star Contract

Guest:  Jennifer Korff, Sony Music

Assignment:

  1. Negotiate and draft new section 8 of the recording contract (see instructor for confidential instructions)
  2. Eugene Volokh, Eschew, Evade and/or Eradicate Legalese
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Week 8

Drafting 101
  • Drafting 101:  Headers, Subject-Verb, terms of art, capitalized terms and when and how to use "legalese"
  • Communicating the big picture
  • Using precise language
  • Structuring clauses effectively
  • What "plain english" really means

The Art of Rewriting

  • The importance of editing
  • Finding the audience
  • Persuasion
  • How to think like a writer, not a lawyer

Assignment:

  1. Fred Bernstein, Don't Dodge the Drafts
  2. Write memo to client re: Rising Star results
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Week 9

Drafting Simulation -- Empress of Sag Harbor

  • Knowing your client
  • Recognizing trade-offs
  • Overdrafting and reputation / non-contractual restraints on strategic behavior

Assignment:
  1. Negotiate and begin drafting Empress of Sag Harbor contract (see instructor for confidential instructions) .
  2. Rewrite Rising Star memo.
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Week 10

Drafting Simulation -- Jennings Employment Agreement

In-class exercise re: Employment Agreement

Assignment:

  1. Finish drafting Empress book contract
  2. Read Jennings Employment Agreement 
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Week 11

Round One -- Streetwatch Simulation -- Term Sheet
  • Negotiation strategy
  • Understanding the business model
  • Understanding capital structure

Assignment:  Negotiate and draft the termsheet (see instructor for confidential instructions)

Class topics:

  • Designing a negotiation strategy
  • Dynamics of negotiation
  • Dealing with stressful or uncomfortable situations
  • Keeping your client involved

Guest speaker:  Jenny Lynn Cox, CLS '86, private practice in Silicon Valley, Adjunct Professor at Santa Clara (seminars in Technology Licensing and Licensing Strategy and Negotiation)

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Week 12

Round Two - Streetwatch Simulation
  • Intro to Basic Deal Documents
    • Certificate of Incorporation
    • Stock Purchase Agreement
    • Registration Rights Agreement 
  • In-class term sheet negotiation exercise

Guest:  Geoffrey Smith, Ascent Group

Assignment:

  1. Negotiate the liquidation preference and draft the letter of intent.
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Week 13

Round Three - Streetwatch Simulation
  • Deal follow-up
  • Litigation risk
  • Analysis of old deals
  • Contract as backdrop of re-negotiation

Assignment:

  1. Complete Streetwatch Certificate of Incorporation
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Week 14

Litigation and the Post-Deal Relationship.
  • Forensic Deal Engineering
  • Assessing litigation risk
  • Dealing with regulators
  • Managing the client

Assignment:

  1. Litigation Exercise
  2. Course Evaluations
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