Designing the deal, continued
Before each expert arrived, the students prepared meticulously. They pored over the "deal documents"--sometimes numbering into the hundreds of pages--and read the public news reports about the deal. They were divided into small teams, with one group taking the lead for preparing and presenting each case. After meeting with Subramanian to go over their basic approach, each team participated in a conference call with a practitioner. "I asked each practitioner to spend about 20 minutes on the phone with the students to guide them for the class discussion. But the average call was more like 40 minutes," Subramanian said. "I shudder to think of the billable hours that our guests sacrificed for the benefit of our students."
The student team then presented its analysis to the class, with the visiting practitioner present. Allen Terrell '68, who represented Oracle during its contentious acquisition of PeopleSoft, was impressed with the student analysis of the case. "The students were extremely well-prepared and very involved," he said. "They were very perceptive about the strategies of the two warring camps in the takeover battle."
There was a clear understanding among the students that the discussions wouldn't leave the classroom. "That gave me comfort," said Terrell. "I had been intimately involved as the Delaware lead trial lawyer in the case. It was very fresh and still alive to a degree."
Although the actual discussions were off-the-record, Subramanian is able to disseminate some of the case study learning from the course more broadly. Along with Professor Lynn Paine '79 at HBS and David Millstone '05, he has written a case study about the Oracle-PeopleSoft deal, which draws in part from his own involvement as an expert witness. The case will be used at HLS, HBS and other law and business schools around the country. In addition, the Harvard Negotiation Law Review is planning on publishing a symposium issue this spring with a series of deal-making case studies related to the course.
Contrary to Subramanian's expectations, not a single lawyer or executive declined the invitation to come to class. "Harvard law students are a remarkable draw," he said. The law schools at Yale, Columbia and Stanford have similar deal-making classes, he notes, but the HLS course attracts bigger players and deal makers. "Some of our class guests were on their cell phones until 10:29 a.m. working on multibillion-dollar deals that we would read about a week later," said Subramanian. "But at 10:30 a.m. the cell phones went off and they were focused on the deal in our classroom. I'm really grateful for the effort and energy they put into our endeavor."
The freshness of all the deals made the class particularly compelling for students. "All of these deals were done within the past three years, and most of them I had read about on the front page of The [Wall Street] Journal," said Mark Veblen '05, who is beginning his career as a corporate associate at Wachtell, Lipton, Rosen & Katz in New York City. Veblen said what he learned in the class is more than he could ever have gleaned from a book on corporate law: "We dealt with the theory. But when the practitioners came in, they talked about the friction at the margins and how you have to understand that to predict how these deals will come out. It was quite fascinating."
The practitioners enjoyed the rare opportunity to view their business dealings through an academic lens. "The class gave me a chance to step back and look at a negotiation as more of an organic entity and to understand more about the gestalt of negotiation," said NBC's Graboff. "And I was surprised to hear that there are names for some of the things I did instinctively."
Graboff says he was deeply impressed by the students' sophistication and their grasp of the intricate points of negotiation. "They had a grounding in the real world," he said. "I would try to pepper some of my talk with glamorous Hollywood stories, but they wanted to get to the meat. No one ever said, 'Did you get to talk to Kelsey Grammer [the star of "Frasier"]?' They wanted to know about the negotiation itself."
Subramanian is already reworking the class for next spring's incarnation. He envisions changing at least 30 percent of the content each year as new deals with cutting-edge legal and transactional issues come to the fore. He picks cases that he comes across in the course of his research, through his expert testimony or consulting, and some just because they pique his interest as he reads the newspapers. For example, he is contemplating inviting experts from the Toys "R" Us leveraged buyout and maybe even examining the legal issues that emerge in forming a partnership agreement for a new Back Bay restaurant.
"In each of these deals we try to bring the negotiation theory to bear, but we also try to grapple with the messiness that is inherent in any real-world situation."
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