ECONOMIC ANALYSIS OF LAW
Economic Analysis of Law, Steven Shavell
What effects does law have? Do individuals drive more cautiously, clear ice from sidewalks more diligently, and commit fewer crimes because of the threat of legal sanctions? Do corporations pollute less, market safer products, and obey contracts to avoid suit? And given the effects of legal rules, which are socially best? Such questions about the influence and desirability of laws have been investigated by legal scholars and economists in a rigorous and systematic manner since the 1970s. Their approach, labeled "economic," is widely considered to be intellectually important and to have revolutionized thinking about the law. This course will provide an in-depth analysis and synthesis of the economic approach to the analysis of the major building blocks of our legal system - tort law, property law, contract law, criminal law, and the legal process. The course will also address welfare economic versus moral conceptions of the social good. The course is aimed at a general audience of students. No economic background is needed to take it.
Seminar: Consumer Contracts, Oren Bar-Gill and Florencia Marotta-Wurgler
Consumer contracts are receiving increasingly intense scrutiny by legislators, regulators and courts. Can we rely on assent to ensure fair terms? Or must we seek alternatives to assent? What should be done about arbitration clauses, unilateral change clauses, liability disclaimers, lax privacy policies and other problematic terms in consumer contracts? Should regulators respond with mandates and bans or should they pursue less paternalistic approaches? Can contract law doctrine protect consumers? The seminar will explore these and related questions.
Seminar: Law, Economics, and Organizations, Lucian Bebchuk, Oliver Hart, Louis Kaplow, Holger Spamann and Kathryn Spier
This seminar will involve the presentation by speakers of papers in the fields of law and economics, law and finance, and contract theory. The two-credit seminar will meet for one and a half hours for two-thirds of the weeks in each of the two terms. Lunch will be served. A student may take the seminar for only one term, for one credit (2 credit fall/spring terms, 1 credit fall term, or 1 credit spring term). The seminar is given jointly with the FAS Economics Department, and should be taken only by students with substantial prior interest in and exposure to economic analysis. (If you have questions about this, please contact Professor Kaplow.) Students may satisfy the course requirement either by submitting, before sessions, short written comments on the paper to be presented or by writing a short seminar paper on an approved topic.
Seminar: Law and Economics, Louis Kaplow and Steven Shavell
This seminar will provide students with an opportunity to engage with ongoing research in the economic analysis of law. At most of the meetings, invited speakers--some from the Law School--will present works in progress. Students are required to submit, before sessions, brief written comments on the papers to be presented. Enrollment in either or both terms is permitted. Some background in economics or law and economics is helpful; however, knowledge of technical economics is unnecessary.
Seminar: Behavioral Economics, Law and Public Policy, Cass Sunstein
This seminar will explore a series of issues at the intersection of behavioral economics and public policy. Potential questions will involve climate change; energy efficiency; health care; and basic rights. There will be some discussion of paternalism and the implications of neuroscience as well.
CORPORATIONS AND FINANCE
Law, Economics and Psychology, Oren Bar-Gill
The law aims to control, guide, or facilitate many aspects of human behavior. To achieve these goals legal policymakers should benefit from an accurate account of how people make decisions. One leading account is the rational choice model of neoclassical economics. We will review the important contributions made by traditional economic analysis of law based on the rational choice model. Recently psychologists and behavioral economists have begun to challenge the dominant rational choice account, arguing that in many circumstances the standard model fails to provide a satisfactory account of human decision-making. As a result, a new model is emerging - a model informed by a more nuanced understanding of the interrelations between the law, economics and psychology of decision-making. We will explore the implications of this new model for legal policy. Topics will include law enforcement, decision-making by judges and juries, pre-trial settlement negotiations, contract law, and tort law.
Controlling Shareholders, Lucian Bebchuk and Assaf Hamdani
This course will meet for 6 two-hour sessions during September and October and will end by the end of October. Sessions will focus on selected issues and policy debates concerning the laws governing companies that have a controlling shareholder. While corporate law courses at HLS often focus on companies with dispersed shareholders, a significant fraction of public companies in the United States, and even more so around the world, have a controlling shareholder. Issues that may be considered include the difference between the governance problems of public companies with and without a controlling shareholder, sales of control blocks, corporate freezeouts, executive pay, self-dealing transactions, director independence and minority representation, dual-class companies and corporate pyramids. The course aims at giving students a good sense of the issues that companies with controlling shareholders raise for courts, lawmakers, and researchers, and the ways in which policy arguments about such issues can be developed. Readings will mainly be law review articles and discussion papers.
Corporate and Capital Markets Law and Policy, Lucian Bebchuk and Scott Hirst
This course will consider a range of policy issues in the law governing corporations, securities, capital markets, and financial institutions. Issues to be considered include the allocation of power between managers and shareholders, takeover contests, shareholder activism, executive compensation, cross-country differences in corporate and securities laws, corporate social responsibility, securities regulation, and financial regulation. A substantial number of sessions will feature outside speakers; such speakers will include prominent practitioners presenting on current policy and practice issues and prominent academics presenting on current research. To illustrate, recent speakers in this course have included prominent hedge fund activists, the former CEO of a major corporation, a prominent M&A litigator, and professors from Harvard, Columbia and Virginia. Readings will mainly be law review articles and discussion papers. Many of the readings will use economic reasoning, and an interest in or tolerance for such reasoning will be helpful. The aim of the course will be to give students a good sense of the issues that have been discussed in the literature or in current debates, and the ways in which policy arguments about such issues can be developed.
Securities Litigation, Allen Ferrell
The class will explore a variety of issues that arise in securities litigation. These issues will include accounting fraud, proxy fraud, underwriter liability, the interplay of SEC, criminal, class, and opt-out actions, the extraterritorial application of U.S. securities law, and insider trading. The class will also cover the recurring themes of securities litigation - state of mind, pleading, gatekeeper liability, duty, materiality, class certification, causation, damages, and settlement -- as they arise in various settings.
Venture Law and Finance, Jesse Fried
The course introduces students to U.S. venture capital (VC) contracting, focusing on the cash flow and control rights of investors. It also examines the legal framework in which such contracting takes place. Reading materials include VC financing documents, relevant California and Delaware caselaw, and academic and practitioner articles.
Introduction to Securities Regulation, Howell Jackson
This course is designed to offer an overview of the regulation of securities and securities markets in the United States. The curriculum will be organized around the work of the Securities and Exchange Commission, including its oversight of the public offering of securities under the Securities Act of 1933 and its supervision of capital market operations under the Securities Exchange Act of 1934. Attention will also be given to the Commission's enforcement activities and the relationship between those activities and private securities litigation. As time permits, we will touch upon issues of cross-border coordination in the public oversight of both capital raising and enforcement activities.
Regulation of Financial Institutions, Howell Jackson and Margaret Tahyar
This course explores the regulation of financial institutions in the United States, covering a range of firms including banks, mutual funds, securities firms, and insurance companies, as well as financial markets more generally. We will examine the many different supervisory mechanisms that have evolved in the United States to regulate financial firms, with a particular emphasis on jurisdictional boundaries, ongoing reforms in prudential regulation, consumer financial protection, and the oversight of systemic risks.
Corporations, Reinier Kraakman
This course surveys the role of legal structure and legal controls on business enterprises with an emphasis on the legal duties of the managers, directors, and controlling shareholders of U.S. public corporations. Aspects of the law of agency and non-corporate business entities are reviewed to highlight their continuities and breaks with the law of business corporations. Topics include fiduciary law, shareholder voting, executive compensation, derivative suits, control transactions, mergers and acquisitions, and insider trading. The emphasis throughout is on corporate law as both an enabling device--empowering actors by providing a flexible durable legal form-- and corporate law as a regulatory device, constraining corporate insiders from opportunism and the mismanagement of corporate assets.
Corporations, J. Mark Ramseyer
This course surveys the role of legal controls on business organizations. Aspects of the law of agency, partnership, and closely held corporations are reviewed to highlight continuities and discontinuities with the publicly held corporation. Topics include basic fiduciary law, shareholder voting, derivative suits, reorganizations, and control transactions. The emphasis throughout is on the functional analysis of legal rules as one set of constraints on corporate factors among others.
Bankruptcy, Mark Roe
This basic bankruptcy course covers the major facets of bankruptcy that influence business financing transactions. Much of the deal-making in a financing transaction is negotiated in anticipation of a possible reorganization in Chapter 11 or of a private reorganization in its shadow. For many lawyers, contact with bankruptcy law is anticipatory and not in front of the bankruptcy judge. When feasible, students will read not just bankruptcy court opinions and the Bankruptcy Code, but materials that financing lawyers use day-to-day: a bond indenture, a prospectus, a complaint in a loan dispute, and SEC submissions. Students will ordinarily participate in a simulated Chapter 11 reorganization.
Corporations, Holger Spamann
This course surveys the legal rules governing corporations with an emphasis on the protection of shareholders against management and controlling shareholders. Topics include asset partitioning, fiduciary duties, derivative suits, executive compensation, shareholder voting, M&A, insider trading, fraudulent conveyance, and choice of law. One quarter of the course will be based on problems drawn from transactional settings. The course emphasizes financial and strategic considerations throughout.
Deals, Guhan Subramanian
This advanced negotiation course examines complex corporate deals. Many of the class sessions will be structured around recent or ongoing deals, selected for the complex issues of law and business that they raise. Student teams will research and analyze these transactions in order to present their most important aspects and lessons to the class. For many of these presentations (as well as some more traditional case studies and exercises), the lawyers, bankers, and/or business principals who participated in the transaction under discussion will attend class, listen to the team ’s assessment, provide their perspectives, and suggest broader negotiation insights.
Seminar: Topics in Mergers and Acquisitions, John Coates
Research and writing seminar on advanced topics in M&A. The semester will be spent reading and discussing existing research on a number of topics (hostile takeovers and defenses; short-termism and activist investors; risk-allocation and earn-outs; dispute management and arbitration; shareholder litigation and forum bylaws; deal structure and currency; post-merger integration; non-financial factors affecting pricing; etc.).
Seminar: Law and Finance of Start-Up Companies, Allen Ferrell
This seminar will cover topics in the area of start-up company law. Topics include institutional and legal arrangements important to start-up companies, agency problems facing start-up firms and mechanisms to deal with these problems, contractual issues start-up companies face, and the structure and operation of venture capital funds.
Seminar: Empirical Methods in Corporate, Securities and Capital Markets Law, Allen Ferrell and Alma Cohen
Empirical methods have been playing an increasingly central role in the analysis of issues in corporate, securities and capital markets law. The aim of this course will be to give students a sense of the empirical methods that have been applied to the study of such issues, some key issues to which such methods have been applied, and how to evaluate and criticize such empirical studies. Among the subjects we may cover are antitakeover defenses and statutes, regulatory competition in corporate law, the effects of shareholder activism, insider opportunism and corporate structures around the world. Some sessions will feature speakers who do current empirical research. Readings will be mainly from articles in law reviews and economics or finance journals. Some priori exposure to, or familiarity with, empirical methods (for example, from an undergraduate course on empirical methods) will be helpful.
Seminar: Current Issues in Corporate Governance, Jesse Fried
This seminar focuses on current topics in executive compensation and corporate governance at widely-held U.S. firms. Most of the sessions will feature leading attorneys and other distinguished practitioners discussing their work.
Taxation, Mihir Desai
This course focuses on the U.S. federal income tax and the policy considerations that inform the design of the tax, which has become an important governmental tool for influencing many aspects of modern American life. The course accordingly examines not only the concept of taxable income, but also how the federal government uses the tax to influence the behavior of taxpayers across the income spectrum. A principal goal of this course is also to teach students to analyze and apply a complex federal statute. Unless waived by the instructor, Taxation is generally a pre-requisite for J.D. students in the advanced tax courses.
Taxation, Louis Kaplow
This course is an introductory study of federal income taxation covering inclusion and exclusion of items in computing gross income; deductions from gross income; tax accounting; capital gains and losses; and the treatment of the family and trusts. Consideration will be given to the interaction of legislative, executive, and judicial agencies in the making, administering, and interpreting of the tax law; to the goals of the tax law and possibilities for future development of it; to the private lawyer's professional role with respect to administration of the tax law; and to the impact of the tax law on private property transfers and other transactions.
Antitrust Law, Louis Kaplow
This course examines the law, economics, practice, and policy of the federal antitrust laws. The main subjects are horizontal agreements (among competitors), mergers, and monopolization. Given the nature of the subject, including legal practice, there will be a heavy ecomonics emphasis, although throughout the analysis will be non-technical and should be accessible to those without prior background.
Trusts and Estates, Robert Sitkoff
This course examins freedom of disposition in American succession law by way of: (a) intestate succession; (b) wills (including execution, revocation, interpretation, and contests); (c) will substitutes (i.e., nonprobate transfers) and planning for incapacity; and (d) trusts (including creation, fiduciary administration, modification, termination, spendthrift and other asset protection trusts, and charitable trusts).
Analytical Methods for Lawyers, Kathryn Spier
Lawyers in almost every area of practice (litigation, corporate, government, public interest) deal routinely with problems that are usefully illuminated by basic business and economic concepts. This course is designed to teach the most important analytical methods to law students, in a manner that will be fully accessible to those with no prior quantitative training or background in the subjects covered. Using text, classroom activities, and written exercises, we will explore how these tools may be used to analyze concrete problems that arise in a wide range of legal practice settings. The course will consist of seven units: Decision Analysis/Games and Information, Contracting, Accounting, Finance, Microeconomics, Law and Economics, Statistics.
Business Strategy for Lawyers, Kathryn Spier
This course presents the fundamentals of business strategy to a legal audience. The class sessions include both traditional lectures and business-school case discussions. The lecture topics and analytical frameworks are drawn from MBA curriculums at leading business schools. The cases are selected for both their business strategy content and their legal interest. The main course material is divided into four parts. The first part presents the basic frameworks for the analysis of strategy. The topics include economic and game theoretic approaches to strategy, competitive advantage and industry analysis. The second part is concerned with organizational and contractual responses to agency problems. Topics include pay-for-performance, corporate control, and the design of partnerships and other business associations. The third part takes a broader view of business associations, considering the horizontal and vertical scope of the firm and the advantages of hybrid organizational forms such as franchising and joint ventures. The fourth part covers special topics in competitive strategy, including product differentiation, tacit collusion, facilitating practices, network externalities, market foreclosure, and innovation.