Thank you to Erik and the team at the Conglomerate for organizing this roundtable and the prior roundtables.  As the relatively “newbie” person participating in this roundtable, I know that I will learn much from my esteemed co-participants.

Teaching Business Associations (BA) is a privilege.  I am quite thankful that I get to teach a class that is informed by and informs my scholarship.  I love the fact that I am often the first person to expose my students to business law.  I appreciate teaching a class where I can bring in a transactional perspective for students whose minds have been shaped by thinking through a litigation-lens in their first year.

But . . . teaching BA is much more challenging than any of my other courses.  I teach a 4 unit BA course that covers agency (just a small bit), partnerships, LLCs, closely-held corporations and big public corporations.  Frankly, it is often too much material to cover in one course.  My first year, I made the typical rookie mistake of trying to cram too much into the course.  By the end of the semester the students (and I) were exhausted.  So, over the past two years I have tried to figure out how to intelligently cut some of the material.  Nevertheless, I often find myself wishing that I could teach BA as a 5 or 6 credit course.  Part of this desire is driven by my need to ensure that there is enough coverage of unincorporated entities versus corporations. Part of it is driven by the background and goals of my students.  At the beginning of each semester, I distribute note cards asking students why they are taking the course.  In a class of about 80, there is a small group who were economics or business majors as undergrads, or LLMs interested in business law.  Many of these students hope to practice transactional law or business-related litigation at big law firms.  Another handful hopes to own a business or advise small businesses.  A few are taking the course to have a better understanding of their own small family business.  Unsurprisingly, the vast majority take the class because “it’s on the bar.” 

Given this diversity in student backgrounds and goals, I find that teaching both incorporated and unincorporated entities is critical. 

• First, this helps prepare those students who take the course in order to pass the bar.  This is not the only reason to take a BA class, but it is an important one for many of my students.  One of my goals is to ensure that I at least cover the basic concepts on the bar in a clear way. 
• Second, it helps all of the students understand the economic and legal significance of both incorporated and unincorporated entities.  Many of my students hope to do anything other than business law. Some have not thought very deeply about the role and importance of business, whether large or small, in our society.  Some have a relatively negative view of all businesses.  One of my favorite stories is from my first semester of teaching BA when a student came into office hours the first week and said “I just want you to know that I am taking this class because it is on the bar. I have never dealt with corporations, but I hate them and think that they are absolutely awful for our country.”  I asked, “So where did you buy your sweater?”  She replied “At The Gap.”  I smiled and said, “Let’s talk again in a few weeks.”  At the end of the semester, she came up to me again and said “Professor Afsharipour, I still hate corporations, but now I think I know why.”  When I teach BA (versus when I teach M&A), I often think of her as the type of student that I am trying to reach.  It’s not necessarily that I want her to love corporations, but I want her to understand their importance, the various legal rules that apply to them, and why we have developed the corporate form vis a vis partnerships or other unincorporated entities.  I hope that understanding partnerships and corporations can also help students appreciate the increasing importance of LLCs and what motivates business people to want to organize their firms as one form or another.
• Third, through coverage of both incorporated and unincorporated entities, I can try to introduce basic business concepts in the course at different junctures.  For example, throughout the partnership material, we talk a lot about money capital and human capital, the relationship between risk and return, and transaction cost factors.  We return to these concepts again in the corporations material.  We begin our study of corporations using a hypothetical fact pattern about three recent college graduates planning to start a new internet-related entertainment venture that they hope to sell or take public one day.  For those of you who use the O’Kelley/Thompson casebook, you should be familiar with this terrific hypothetical problem.  We talk about why forming a partnership may not help the founders achieve their business goals, especially as they plan to bring in additional investors fairly quickly.  By working through the problem at the early stages of the corporations material and returning to it throughout the rest of the course (including when discussing closely-held corporations), we address the types of capital being contributed to this firm, the risks and potential rewards of the business model, the risks associated with the relationship among the founders and other investors, and the transaction costs that the lawyers for the firm need to address.  We can then think about the way business decisions affect the choices a lawyer may be asked to make at the formation stage and the way the choices that a lawyer may make at the formation stage affects business decisions down the line.

Anyway, I will sign off now, and will save some more of my thoughts for later posts.

Roundtable: Corps/B.A. | Bookmark

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