The CEO of the company, however, has other incentives. He still has a decent salary and gets to walk around town with his CEO business card. His incentive is to keep the company alive as long as possible. The CEO in this case is the agent.
Regardless of the amount of time the investors and the entrepreneur spend together, there is no way either party will know as much about the other's business—and motivation—as they know about their own. This information asymmetry, like agency dynamics, results in a misalignment of incentives.
Consider how contractual provisions could help alleviate this conflict. A contractual right to a board seat for the investors would be helpful. An odd number of board members, with at least one independent board member might be useful. Perhaps a term that says the company will give investors their money back in X years would protect against this situation.
Reputation Constraints
If you are playing a long-term game, reputation constraints can be even more important than a specific term in a contract. For instance, the venture capital industry is small, and reputation matters a lot. Bad behavior gets talked about, even if it's done behind closed doors and not out in the open. The smaller the ecosystem, the more this phenomenon exists, so as you focus on smaller geographies, the importance of reputation increases.
While there are some people who care less about their reputation than others, your reputation will be established over a long period of time. No contract is airtight, but how you deal with ambiguity and conflict will help define your reputation. This impacts both entrepreneurs and investors.
When considering how to create a contract, again, forget about most everything you learned in class and ask yourself: Does reputation matter to both of these parties? Will reputation constrain bad behavior here, or not? If we take the joint venture scenario where the relationship is a true win-win, then perhaps we have less to concern ourselves about. If this is a divorce (personal, business, or otherwise), then perhaps neither party cares about their reputation. The really interesting situations are where only one party cares about their reputation. These situations are ripe for abuse by the noncaring party.
Bottom line: Contracts isn't just for business lawyers. It's great for anyone who deals with relationships, so long as you consider the filter of our four concepts for contracts. If you get caught up in the technicalities of the law school class, it's a bore and seems irrelevant to most.
Civil Procedure
Frankly, we can't figure out who this is useful for unless you are going to be a litigator. Jurisdiction and evidence, with a focus on discovery and venue, are relevant in other legal areas, but they are usually better learned in those contexts than this one. We are sorry that we don't have more for you here.
Bottom line: If you are going into litigation, pay close attention. If not, consider taking this pass/fail if you can, and relax a bit. However, if your law school has an excellent professor of federal jurisdiction consider taking it. Understanding the rules of federal jurisdiction is vital for many areas of law, including intellectual property.
Property
This is another class that we are going to struggle with advising you what to get out of it. Unless you are going into property law and/or trusts and estates, this class is another mandatory head scratcher. If we squint, we can tell you that some of the logic games of figuring out who owns a piece of property due to an imperfect fee simple granted by a fertile octogenarian who enacted a rabbi trust might help you become a better critical thinker, but other than that, we are mostly clueless.
On a personal note, we would tell you to pay attention to the major concepts so that if you buy a house one day, you'll better understand the real estate contract, but other than that, at least it's more fun than civil procedure. We highly recommend a course in real estate transactions taught by a practicing adjunct.
Bottom line: Most of us found this class easier and more interesting than civil procedure. It's also often a more important subject matter on most state bar exams, so there is that.
Criminal Law
While you may believe this is only useful if you become a criminal defense attorney, a prosecutor, or a judge, keep in mind that being a lawyer is a lot like being a doctor (or owning a pickup truck). Once friends and family know you've graduated (or even before), they will start asking you for help all the time. To these people all doctors and lawyers should know everything about medicine and law, respectively. Jason's father, who was a radiologist, also got questions about cats and dogs. Anyways, just know that as a lawyer, you'll get asked a lot of random things. And this is where the value of criminal law can come in for everyone. Plus, in line with our overall advice, don't assume in law school that you will never practice or need some knowledge of a specific specialty.
We hope you won't get asked a lot of questions about manslaughter or homicide, but there's a good chance you'll get questions about search and seizure, Miranda rights, Fourth Amendment rights, and DUIs. If nothing else, pay attention to the differences between manslaughter and murder as there are some interesting interplays with how foreseeability works in torts. Also understand the differences between criminal and civil actions that deal with the same subject matter, as you'll look smarter when reciting the latest celebrity blowup on TMZ. Lastly, criminal procedure is more useful in this context than civil procedure, and also more interesting.
Bottom line: Every lawyer needs to know something about criminal law even if it's not what you practice. It's the “price of admission” to be able to call yourself a lawyer amongst friends and family. Putting aside the glib nature, if you are at all interested in criminal justice reform (what Jason spends a lot of his time on these days), then this class is a good foundation. You may not ultimately practice in the area, but you may decide to dedicate some of your time to issues around justice reform.
Constitutional Law
If you had asked us prior to the mid-2010s and the onslaught of social media what good constitutional law could be for non-con law lawyers, we would have said something to the effect of, “Every democracy needs well-informed citizens to keep that democracy strong.” And then we would have made a quip of the lack of jobs in this area and kept this section as short as our Civ Pro section.
Alas, a lot has changed. It feels like con law is now also part of the “price of admission” of being a lawyer. It's not just correcting your friends on Facebook who swear their First Amendment rights are being trampled upon by their private employer. It really is about being a well-informed citizen who can understand the real issues between the debates yelling we hear on cable news channels.
Invariably you are going to get into discussions with friends, family, clients, bosses, and others on this topic. Keep in mind that it isn't just about knowing the right answer but also about being able to lay out a thoughtful analysis in an empathetic way. Being a know-it-all won't help here or get you ahead; rather you need to be able to deliver the material in a mature way so that people will look up to you.
Bottom line: Con law is great for understanding what your rights really are. It's also useful to make yourself super frustrated reading social media posts about “people's rights” and “free speech.” This class is also adept at teaching you the fastest way to get into a fight during a family dinner party. Use you power wisely.
Legal Methods/Writing/Research
If your Methods class was anything like ours, it was very heavily biased toward litigation. And because of this, some of us
