Law, Management and Entrepreneurship

Law, Management and Entrepreneurship

Course Number 1540

Senior Lecturer Lena G. Goldberg
Fall; Q1Q2; 3 credits
X-Schedule: 1:15-3:15
23 Sessions
Exam and Project

Career Focus

This course is designed to develop the legal literacy of MBA students by honing legal instincts that will help business leaders avoid legal pitfalls, attain a competitive edge and promote long-term success. Expanding well beyond the basic legal concepts introduced in LCA, the course will refine students’ understanding of how law affects all aspects of business, and develop a deeper appreciation of how legal systems operate and how to operate within the boundaries of legal systems. Revamped from last year’s offering to respond to increased student interest in private equity, a major module of the course focuses on contracts and understanding legal documentation relating to private equity transactions. The course will also explore legal issues involved in starting, joining or investing in start-ups and decision making from the time an entrepreneur conceives, starts to build and obtains financing through development of exit strategies. The course has a global perspective and should be of interest to both U.S. and non-U.S. students.

No prior legal training is assumed. Class discussion will be based on both business school cases and other materials including excerpts from judicial opinions, statutes, news reports and analysis, and actual deal documentation. There will be 23 in class sessions, 18 of which will run the usual 80 minutes from 1:15 to 2:35; the remaining 5 classes will use the 40-minute expanded time period (1:15 to 3:15) for deep dives into selected topics and interaction with class guests including prominent attorneys and entrepreneurs. In addition, a project designed to develop familiarity with and enhance understanding of private equity deal documentation will be worked on in teams in lieu of three classes.

Educational Objectives

The course has four objectives:

  • First, explore the global legal environment, develop an approach to managing and maximizing the value of the corporate legal function, and analyze the dynamic nature of law;
  • second, develop literacy in: basic agency, contracts, legal documentation, torts, and the dynamics of litigation; explore intellectual property (IP), mergers and acquisitions (M&A), and the basics of bankruptcy; and examine contemporary issues in securities law, including cross-border transactions, private equity transactions and regulatory responses to complex financial instruments;
  • third, enhance students’ understanding of the legal life cycle of a start-up including structuring and financing issues, tax considerations, founder/investor conflicts, liquidity and exit issues; and
  • fourth, consider what’s customary and fair in various transactions and the communications' challenges of translating legal advice and analysis into decision-ready advice managers can use.

Course Content and Organization

The course is organized around four modules.

The Legal Environment of Business: introduces the concept of law as incorporated in the legal systems of various countries, highlights differences among the major types of legal systems, develops approaches to managing the legal function and maximizing its utility; introduces the concepts of jurisdiction and the basics of litigation.

Contracts and Private Equity Documentation: introduces contract law and builds on that introduction to develop an understanding of private equity deal documentation and the essential elements of the contracts underlying private equity transactions. Students will be divided into two groups: the first group will analyze documentation related to a private equity carve-out involving a public company, and the second group will analyze documentation related to acquisition of a privately held company. Working in teams within each group, students will analyze the assigned documentation and prepare and present their analyses to the class, followed by debrief and discussion. To facilitate team meetings, there will be no in class meetings on the days reserved for student preparation of their presentations.

Liability: Torts, Crimes, and Litigation over Major Transactions: explores the various types of liability and litigation encountered by businesses including basic torts and tort litigation, M&A litigation, IP lawsuits, antitrust suits, bankruptcy litigation, and criminal prosecution in the context of securities regulation and international white collar crime.

The Legal Environment for Entrepreneurship: explores the role of the legal systems in creating and sustaining a climate that facilitates entrepreneurial activity and the role of counsel in helping to launch, grow and protect new businesses. It considers the following stages in the life cycle of a start-up: Formation (pre-formation issues, different forms of business organization, NDAs, contractual arrangements and other legal protections for corporate assets and opportunities, and governance and control under VCs); Employment Relationships (certain legal aspects of developing, rewarding and retaining employees, including non-competition agreements, assignments of rights, and employment litigation); and Growth and Exits (strategies for maximizing the value of intellectual property, founder/VC disputes , wash-outs, and legal aspects of exit strategies, including PE exits and IPOs).

Grading

One-third of the final grade will be based on class participation, one-third on the presentations prepared as part of the second module and one-third on a final exam. Peer feedback on the group presentations will be an important factor in the grade for the presentation.