The Wall Street Journal reported recently on the Transactional LawMeet, which is basically the equivalent of a moot court competition for law students, but for transactional law. The impetus for this sort of program is the sense that the law school curriculum has always been more focused on training litigators, while transactional attorneys have to learn most of their craft on the job after graduation. I think this overstates it a bit. My first year “Lawyering” class at NYU Law included a mock negotiation. (I totally botched it, as my counterpart could see my notepad, indicating the final number I was willing to accept in the negotiation.) Also, most law schools have classes in the substantive law that’s most relevant to transactional work, e.g., Contracts, Corporations, Securities Regulation and Secured Transactions.
The Wall Street Journal recently profiled the increasing proliferation of “family offices,” investment firms set up by, and under the sole control of, very wealthy families. Family offices also provide services other than investment advice – accounting, legal, household management, etc. They have been around at least since one was set up by the Rockefeller family but have become commonplace in recent years. The staggering growth in wealth that has fed the growth of family offices is, of course, the subject of much political debate about causes and what if anything to do about it, but for purposes of this post I’ll steer clear of that minefield.
The Journal article cites privacy as one of the main rationales for using a family office, as the entity will typically not have to make public disclosures. However, assuming the alternative to a family office is investing one’s fortune with funds (hedge, private equity, venture capital), there wouldn’t be much of a privacy issue there, as a fund’s limited partners (investors) can expect to have their confidentiality respected. (Of course, there’s no reason why even the super-wealthy need to employ alternative investments like this. Warren Buffett has made a good case recently that because of funds’ fee structure, investors would be better off with simple index funds.)
If you are a regular reader of my blog posts (Hi, Mom!), you’ve noted that I address several substantive topics of interest in corporate and securities law to my clients and other attorneys, along with “softer” topics about the business of law practice, dealing with clients, etc. The substantive posts are, by design, short and to-the-point, unlike a big firm’s detailed summary of the latest 500-page rule release from the SEC (because there’s no need to duplicate those law firm memos, which are freely available to all, and also, more importantly, because I don’t want to write long memos). But hopefully, these posts have some value to my readers.
I thought it would be helpful to list these posts (through January 2017) in one handy place for easy reference, with links, in reverse chronological order within each category:
Financing Transactions/Securities Offerings
- Recent Trends in Financing Startups
- The Shark Tank Approach to Startup Investing
- Regulation A+ – An Improved Way for Smaller Companies to Go Public
- Regulation A+ – How It Fits into the System
- The Latest on Possible Tweaks to the Accredited Investor Definition
- Should You Be Making Blue Sky Filings in New York?
- Streamlining of Blue Sky Filings
- Using Self-Directed IRAs for Friends and Family Financings
- SAFE Equity as an Alternative to Convertible Notes
- Equity as an “Expensive” Form of Financing
- SEC Advisory Committee Report on Accredited Investor Definition
- SEC Crackdown on Undisclosed Unregistered Offerings
- The SEC’s Guide to Avoiding Investor Scams
- Reverse Mergers
- The Latest from the SEC on Private Offering Regulation
- Limiting Investment Risk for Non-Accredited Investors
- When to Use PPMs
- Further Thoughts on JOBS Act and Investor Fraud
- Regulation A+ Proposed Rules
- Bridge Loans
- The Arian Foster IPO
- Verification of Accredited Investor Status
- Use of General Solicitation and Advertising in Rule 506 Offerings
- Use of Finders in Securities Offerings
SEC Disclosure Matters
- The SEC Proposes Expanding the Pool of Smaller Reporting Companies
- The SEC’s Discussion of Risk Factors
- Congress Acts on Forward Incorporation by Reference
- The Pay Ratio Rule and the Effect of Disclosure
- Get That Form 4 Filed!
- Regulation FD
- Risk Factor Gone Viral
As part of the extensive media coverage of Prince’s recent death, it’s been reported that Prince died without a will as a result of his distrust of lawyers. If true, it’s a pretty disastrous result from an estate administration perspective. The problem is not so much that he has a large estate – under Minnesota’s laws of intestate succession, his siblings and half-siblings would receive their share of the assets. Rather, the issue is that the Prince business doesn’t end with his death. Sales of his music predictably skyrocketed post-mortem, and there are a number of decisions to be made with respect to music rights going forward, such as what to do with his extensive vault of unreleased music. Who makes those decisions? What if the heirs can’t agree on that?
One of the most challenging aspects of running a law practice is keeping clients happy – to the extent possible – with the legal fees they’re being charged. My goal (easier said than done) is to accurately predict in advance for the client the cost of a particular matter. Of course, if a matter is being done on a fixed fee basis, then there’s no chance of the client being surprised by the invoice, but setting the fee involves accounting for uncertainty in the amount of time to be spent. I have found over my years of practice that efforts by clients to save on legal fees often have the counterintuitive effect of raising them in the long run. Some common examples:
- “Let me take a crack at it first and send it to you” — Clients often think they will save on legal time by taking a DIY approach and sending me a contract that they’ve drafted for my review, rather than just asking me to draft it in the first place after informally discussing the terms with me. With very, very few exceptions (and ethical obligations preclude me from specifically naming them here), my clients, while they may be very talented at running their respective businesses, are terrible at drafting contracts. Often, it takes me longer to clean up the resulting mess than it would be for me to start from scratch.