Slate takes on law schools: Supply v. Demand

October 29th, 2010

Online newsmagazine Slate checked in yesterday with this story about how law schools acting in their own financial interest are creating an oversupply of debt-laden grads who cannot find jobs in the legal profession.  While the article doesn’t contain much in the way of shocking new revelations, it very nicely summarizes the disconnect between how prospective J.D.’s view the market for their services…and what that market actually is.  It also suggests–perhaps less stridently than it should–that law schools and student loan companies and even the American Bar Association have vested near-term interests in continuing to create this oversupply.  The basics:

Supply:

1.  The number of JD’s awarded by schools is up 11.5% over the past ten years. 

2. The number of newly accredited law schools is up 9% over the same period. 

3. The number of LSAT takers is up 20%  since 2007.

Demand:

1. The number of law jobs available has fallen by 7.8% since 2007.

2. This represents a 50% steeper decline in jobs than that seen in the general economy.

3. This trend is expected to continue.

4.  In an effort to preserve their rankings and continue the flow of incoming students, schools report job placement and salary stats that they have to know are misleading, making the supply look richer than in actually is.

On this last point:  it has become increasingly clear that schools are fudging the post-graduate employment rates and salary figures that they send to U.S News and World Report and the National Association of Legal Placement.    When they report that “88% job placement,” what they really mean to say is “since those students who have jobs are way more likely to repond to our questionnaire than those who don’t have jobs, and since we include temporary and part-time jobs as ‘employment,’ and since we’ve created thousands of make-work fellowships to keep our employment numbers up, we’re guessing that the percentage of our recent grads who are fully employed might be closer to 40%…but we’re going to call it 88% because that keeps the applications flowing in.”  Also, when schools report a mean salary of $80,000 for first-year grads, they may technically be accurate, but only because the small percentage of grads who land high-paying BigLaw associateships  disproportionately elevate that mean.  The median salary–what the typical grad might reasonably expect to earn–is definitely much, much lower and so (surprise!) goes unreported by the schools.

The article concludes that there will have to be a contraction among the nation’s law schools in the future, with the better schools and the schools that are better equipped to handle new market realities surviving while the weaker schools fail.  The logic seems irrefutable.

Or, if you’re Massachusetts, you could choose this time to launch a brand new state law school.

So you want to go to law school? (video)

October 21st, 2010

Watch this.  I did.  Then I laughed so forcibly that the bad, tepid coffee I was trying to choke down spit-sprayed all over my computer.  Now I have to call IT.  They will not amused.  But you will be amused.  If you watch this.

Jerk Knee Reaction

October 8th, 2010

We’ve written before about Bolivian President Evo Morales’  plan to market a coca leaf-based soft drink called Coca-Colla.  We’ve even suggested some trademark strategies that Evo might pursue as he follows this dream.  Because what’s the point of working your way up to head of state if you can’t use the position to infringe on the word’s best known trademark?  It’s good to be El Presidente, after all.

So, imagine our delight when we saw this week that during a friendly soccer match, our pal Evo intentionally kneed an opposing player in a, um, politically sensistive area. 

Our minds literally reeled under the weight of all the jokes that occured to us immediately upon viewing this.  Sadly, none of them are fit for publication on a work blog.  Let’s just say that as election season fast approaches here in the U.S., we’d all like to see this sort of thing added to the stale debate format we’re currently stuck with.

You go Evo. Sit next to Mahmoud Ahmadinejad at your next UN visit and recreate this act.  You’ll be the most beloved leader in the world.

So long, Zucker

September 24th, 2010

Jeff Zucker announced today that he was leaving NBC upon completion of the Comcast merger in a few months.  This surprised nobody.  Comcast isn’t ponying up almost $14B so that it can leave the network in the hands of the man who oversaw its precipitous dive from #1 to #4 in the ratings.  And it isn’t letting its flagship be captained by the man whose handling of the Olympics and Leno debacles alone had the peacock hemorrhaging nearly a quarter billion in losses last year.

Still, if you read Jeff Zucker’s own comments in the press release, you might actually for a minute believe that this was somehow Jeff Zucker’s decision, or that it was done out of the deep goodness of the altruistic heart of Jeff Zucker.  And that might confuse you, or confound your sense of how the world should work. 

Fear not.  Thanks to our homegrown Interpreter technology, our backgrounds in law and marketing–and to an intensive Berlitz tutorial–we at Brightleaf speak fluent Pressrelease.  Please…allow us to translate for you: 

————————————————– 

RELEASE: SEPTEMBER 24, 2010, 11:55 A.M. ET

[This means "September 24th, 2010, a little bit before lunchtime. Mmmmm....lunchtime."]

UPDATE: NBC Universal’s Zucker To Leave Co After Comcast Deal

["Co" as used here means "company" and not "country." Or "cosmos." Pity.  It would be cool if he were actually forced to leave the cosmos. Like those bad guys in Superman II *sigh*]

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[The above are a list of social media and social media tools.  Despite the fact that they are used daily by several hundred million users and profoundly impact his industry's operating model, Jeff Zucker barely knows what these things are.  He believes them to be worthless.]  

By Nat Worden 
Of DOW JONES NEWSWIRES 

[Nat Worden is a writer.  Jeff Zucker barely knows what these things are either.  And he believes them to be worthless too. If he had his way, he'd replace them all with reality show producers.  Or, maybe, out of blind panic, he'd replace the network's entire script-written 10PM line-up with a lame talk-show that re-hashes the same three two tired schticks over and over and over to a rapidly aging audience.  Oh...wait...he did do that.]

NEW YORK (Dow Jones)–NBC Universal Chief Executive Jeff Zucker confirmed widespread speculation that he will leave the media giant after its corporate parent, General Electric Corp. (GE), completes a deal to sell a majority stake of the company to Comcast Corp. (CMCSA), the nation’s largest cable provider.

[The door is closing Jeffrey.  Be on the other side of it, please.]   

The move was Comcast’s call, according to a person familiar with the matter.

[Hello...Jeff?  Comcast calling.  Get. Out.  Now.  Seriously dude...what did you expect?  When you took over the network's programming, it was #1.  Now it's #4.  One of the three networks now ahead of us was barely in existence when you took over.  And the friggin' CW is about one Gossip Girl spin-off from overtaking us too.  At the rate you're going, we'd be behind the DuMont Network by May sweeps.  So we repeat.  Get. Out.  Now.]   

In a memo to employees, Zucker said the deal’s closing is still months away, and he will remain in his job until then, and he will continue to approach his job “with the long-term interest of the company in mind.”

["If I leave now, I won't be able to negotiate as much severance.  So I will cling to my desk like a baby koala to its milk-laden mama."]

“Now, it is clear to me that this is the right decision for me and for the company,” said Zucker, who has spent his entire 24-year career at NBC. “Comcast will be a great new steward, just as GE has been, and they deserve the chance to implement their own vision.”

["My vision?  When I took over the network I added another hour of the Today Show, expanded thirty-minute sitcoms into forty-minute sitcoms, and dumped a truckload of money onto the cast of "Friends" so they'd do one last season that nobody would watch because their premise had long since run out.   My entire tenure is one long string of cloning things that already exist and force-feeding more of those things to the public.  In my career-defining move, I put Jay Leno into five primetime slots a week, creating what Entertainment Weekly would call the absolute worst show of 2009.  I once ran four primetime episodes of Deal or No Deal in a six-day period.  Wall-to-wall Howie Mandel... that's my vision. THAT'S...MY...VISION. Deal with it.]

He added that he has yet to contemplate what his next career move will be, but he “wanted to be honest with you about this news as soon as I could.”

["Even I can't see anyone ever hiring me again...but I wanted to pretend that my departure was at least a little bit voluntary so I'm releasing this news before anyone else does.  But if I'm still here in February, they will bury me under the ice at the Rockefeller Plaza rink."]  

Comcast’s chief operating officer, Steve Burke, a former Disney executive, is expected to take the reins at NBCU. Previously, the companies said Zucker would report to Burke, who would oversee the merger.

[Comcast:  "You didn't really think we were serious when we said that, did you? C'mon...he programmed four primetime hours of Howie Mandel into six days.  That's practically a war crime."] 

Comcast’s landmark deal to control NBCU has been held in limbo since it was announced last year, subject to a regulatory approval process in Washington, D.C., that has grown heated at times amid controversy over the consolidation of media. For his part, Zucker had assumed an awkward position, since many observers have expected him to lose his job.

["Why would everyone expect me to lose my job?  Just because a New York Times article called me "the most destructive media executive to ever exist?" That's a reason?] 

Zucker presided over a difficult period for the company as prime-time ratings for its broadcast network plummeted to last place, while the rise of digital media and the decline of the U.S. advertising market has weighed on its overall business.   

["So, I completely missed the boat on this Interwebs thing.  Big deal.  It's a fad--the CB radio of its generation.  But I made it so you can watch entire episodes of Minute to Win It online.  Hey--idea storm--maybe I'll supersize Deal or No Deal and Minute to Win It and use 'em to replace the Thursday night sitcoms.  Three hours of Mandel and Fieri--that's what America wants."]

For his part, Zucker turned NBCU into a company largely comprised of cable networks, which have been the most profitable and resilient businesses in media, and he famously commented that the broadcast television model was “broken.”  

["...And I should know: I broke it when I greenlighted "Joey".]

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com   

Gone Jeffrey Gone

September 20th, 2010

A few years ago I had some dealings with a fast-rising associate—let’s call him “Jeffrey”–at a very large law firm.  I have to admit that I did not much care for Jeffrey.  He exhibited a pronounced tendency to agree to something during verbal negotiations and then, later, while back at his desk drafting, move the agreement goal posts dramatically.  To put it mildly, this produced a degree of mistrust between my client and his client that ultimately did not serve anyone well.  Except, maybe for the extra billable hours that it generated for Jeffrey’s timesheet.

However, Jeffrey seemed to be very well regarded at this firm.  He was clearly very smart and very, very hard-working.  He had been given a high degree of autonomy on my deal, and ran the junior associates under him the way a mid-level partner would.  By all appearances, under the metaphysics that govern the BigLaw associate universe, Jeffrey’s star was rising.

When I recently ran into one of his co-workers I was surprised to hear that Jeffrey had been let go.  We at Brightleaf work with a lot of large law firms and are well aware of the exodus of their associates over the past two years.  Still, given Jeffrey’s apparently upward trajectory, his departure initially seemed odd to me.

When I asked what lead to Jeffrey’s ouster, I was told (paraphrasing), “the stuff that got him to the doorstep was not the stuff that was going to get him over the transom.”  I’ve thought about this conversation over the past month or so, and have come to believe more than ever that the way firms train and rate and promote associates does those associates a disservice.  It’s not just the pace and lack of formal instruction and pressure to bill hours, it’s what Jeffrey’s co-worker said:  the selection pressures you evolve against in one phase of your profession often leave you ill-suited for the next phase.

This is certainly true for other professions as well.  Focus and self-involvement might get you to the top ranks of the pre-med class at a competitive college, but they do not correlate with the empathy and listening skills required of excellent doctors.  Republicans race to the right and Democrats to the left during party primaries, only to then have to race each other desperately back to the middle for the general election.  The course you chart to follow your goal often abandons you part way to that goal.  It’s like an old boss of mine used to say:  if you are trying to get to the moon and you start climbing a mountain, you might delude yourself into thinking that you are getting closer and closer to your goal as you go up and up.  But ultimately, no matter how hard and fast you climb, when you reach the summit, you’ve gone as far as you can go along that approach.   In order to reach your goal, you have to come down from the mountain and build a rocket. 

From what I could see, Jeffrey’s particular work style—lots and lots of hard-churned hours driven in part by a willingness to keep re-negotiating negotiated points on behalf of his client, a pinch of personal abrasiveness—worked well in the short term but killed him in the long.   They got him up the mountain but kept him from the moon.  Ultimately, it was difficult to see how even his clients would like his approach for long…let alone how he would ever bring in new clients.  And the large firm that benefitted for years from the undoubtedly huge number of hours he spent during his climb should perhaps shoulder much of the blame for encouraging him on that path before pushing him off a cliff.

Let’s hope wherever Jeffrey is now, he’s hard at work on his rocket.

A matter of ethics: Qwest makes InsideCounsel Top Ten

August 23rd, 2010

InsideCounsel Magazine just released its list of the ten most innovative corporate legal departments.  We were particularly glad to see Qwest listed as the winner for innovation in the area of ethics leadership.

If you read any of the trade periodicals aimed at legal department management, you probably recognize Rich Baer’s name.  In 2008, Corporate Counsel Magazine named Qwest the country’s best legal department, commending Rich Baer on cleaning up the ethical morass created by the company’s former CEO Joseph Nacchio.  In particular, the magazine lauded the deftness with which Baer and a few top lieutenants safeguarded corporate assets in the face of a blizzard of shareholder lawsuits resulting from Nacchio’s reign. Or, as Corporate Counsel put it, Baer ”rescued the company from the brink of bankruptcy”  caused by with “the fallout for Nacchio’s unceremonious departure.”  (To see exactly how “unceremonious” Nacchio’s life is these days, check this little modern-day odyssey out).

In a few short years, Baer has transformed Qwest’s legal into a model of ethical innovation.  Working with the University of Denver Business School, Qwest now runs training sessions for its people that are aimed at the specific ethical issues confronting corporate lawyers.  The program has become so successful that other Denver-area companies now pay to send their legal departments to Qwest training (Qwest donates those fees to charity).

Our Chief Market Development Officer, Dave Curran, was a General Counsel and Chief Compliance Officer in previous lives, and he ran several Compliance Risk Management businesses, including Integrity Interactive.  Dave notes that at far too many companies, “corporate ethics programs are reactive, motivated by attempts to game federal sentencing guidelines by appearing contrite after a violation has occurred.   What Rich has done at Qwest is notable for three reasons:  it’s impressively proactive, it makes ethical corporate practice a deep part of Qwest’s culture, and, by involving other companies and the University of Denver, it really drives ethical leadership as part of Qwest’s brand.”

Much deserved congratulations to Rich Baer and Qwest.

And Now For Something Completely Different

July 21st, 2010

Matthew Hudson, formerly of O’Melveny’s European operations and founder of Proskauer’s UK office, announced yesterday that he was leaving BigLaw and starting his own London-based firm, MJ Hudson, LLP.

“So what?” you say.  ”Partners these days are shearing off from large firms like ice sheets from Antarctic glaciers.”  What’s so different about this one?” 

Well, since you asked, two things, really:

The first is that when the United Kingdom’s Legal Service Act takes effect in January, 2011, Hudson plans to have his private equity clients buy ownership stakes in the firm and share in its profits.  Legal Week notes also the possibility that Hudson might also invest in his clients’ businesses, an idea that Hudson says he gleaned from Skadden’s practice of taking equity as compensation for the work it does for start-ups.  Interestingly, he spends almost as much space on his website detailing the sectors he has invested in as he does listing the clients he has worked for.

The second point of difference is that Hudson’s new firm plans to pursue aggressively a range of non-hourly billing models.  In an AmLaw blog interview, Hudson admits on this second point that “billing by the hour means that you may end up rewarding inefficiency.”   Now, this is a bit like saying that eating nothing but jellybeans may promote tooth decay.  Fundamentally, even if an hourly billing firm is extremely ethical, the less efficient it is, the longer it takes to complete a task, and the longer it takes, the more that firm charges for that task.  To clients, that pretty much sounds like the dictionary definition of “rewarding inefficiency.”     No matter.  We’ll forgive the understatement.

Speaking broadly about the raison d’etre for the new firm, Hudson says:

“This structure brings out the benefits of traditional advisory partnership while adding superior 21st century service and pricing. It is an idea whose time has come. The last two years have emphasised the need to re-think many of the ways people in the financial and legal world do business. From now on, clients will want to know that law firms genuinely understand their needs and want to develop a long term alignment of interests.”

“Alignment of interests” is something you hear frequently from law firms.  In this case, it sounds like Hudson means it.

Cool stuff.

Nonsense on stilts

July 8th, 2010

Tuesday’s Boston Globe carried this front page story about the new University of Massachusetts School of Law.

Before we dig into it, a bit of background:  for the past several years, the Massachusetts Legislature  and Board of Higher Education have waged a tumultuous battle over whether the Commonwealth’s public university system should create a public law school by absorbing the private, unaccredited Southern New England School of Law and merging it into the University of Massachusetts’ nearby satellite campus in the town of Dartmouth.  The plan’s proponents noted that 44 states already had a public law school.  They promised to keep costs low enough so that the school would be reasonably affordable to its students.  They reassured all that the school would be self-sustaining economically and would add no cost burdens to an already-strapped state budget.  After several defeats, these proponents resurrected the plan (again) in 2009 and (this time) won approval for the new institution, to be called the University of Massachusetts School of Law. (Sadly, my proposal to dub it “Dartmouth Law School,” gained no traction.)  The school, still unaccredited, began accepting students this spring for fall admission.

The author of the Globe article, Tracy Jan, compared data between the old private school and the new public one, and, citing a rise in applications for admission (from 201 to 462 ) and in average LSAT score for inbound students (from 141 to 146), pronounced the UMass Law off to a “strong start. ”  Yay.

Jan continued on, noting that the school’s relative affordability makes it ideal for students who wish to pursue legal careers in public service fields.  Those fields traditionally do not pay well enough to accomodate the massive loan debt many law students graduate with.  Therefore, the thinking goes, lower tuition equals lower postgraduate debt equals more freedom to pursue lower-paying work. Jan then lauds (anectdotally) the breadth of this fall’s incoming class, which we are told includes students “as old as 59″ as well as: “an MIT alumnus and son of Italian immigrants who is leaving the high-tech industry to pursue a law career to protect the rights of new immigrants,” ”a victim-witness advocate in the Bristol district attorney’s office,” and “an occupational safety professional who wants to ensure that workplace health and safety standards are enforced.”

To quote cranky 18th century British philosopher, Jeremy Bentham, this article is ”nonsense on stilts.”  

We love lawyers.  We work with lawyers.  Many of us are lawyers.  We’re passionate about the future of the legal profession and we live that future every day.

Jan’s entire argument is only focused on the front door:  a law school is fulfilling its purpose if its admissions policy and cost structure allow it to let in more students and different types of students than you might find at other law schools.  To the extent that any school does these two things, she feels it can be deemed “off to a strong start.” 

This is not the purpose of law school–or any graduate school for that matter–any more than the loading dock is the purpose of the factory.  The simple core purpose of any graduate school in any field is to (a) educate its students in such a manner that (b) prepares those students for successful careers in that field.   And here, UMass Law is destined to be a failure before it even begins.  Here’s why…

(a) Educating its students – The school is still unaccredited and cannot coherently claim that it will offer anything approaching an acceptible legal education until it becomes so.  It plans to seek that accreditation, which it describes as a “long-term goal,” over the next few years.  In the twenty-eight years that it existed as the Southern New England School of Law, it twice applied to the ABA for accreditation and was denied both times.  So what will be different this time?  Hmm.  Let’s see…I guess that as a first rehabilitative step towards accreditation, the fact that the “new” school made the “old” school’s professors re-apply for their jobs, and then re-hired all but one of them, is not likely a good sign of sweeping change.  According to the ABA’s former Accreditation Committee chair and that Committee’s lead consultant, it will likely take $90M-$102M to upgrade the school to the point where accreditation is feasible.  This means that UMass-Law will either have to break its promise to become accredited or its promise to not burden Massachusetts taxpayers. Or, theoretically, it will break both promises.

Whatever.  Let’s assume that somehow the school finds the money under a rock and pulls this off.  It still fails epically at…

(b) Preparing those students for successful careers in their chosen field.  Put simply, there are no careers to be successful at.  Okay…that’s a slight exaggeration.  But only a slight one.  To say that there is presently a glut of law school graduates and a dearth of jobs for them would be a massive understatment.  Over the past 2-3 years, the legal industry has been shedding jobs at an unprecedented rate, and 2010 is shaping up at the worst year yet.  The National Association of Law Placement estimated that 2011 will be even worse, calling the market for future law school graduates “very compromised.”

Longer term, things are even more uncertain.  Most commentators forecast that technological and financial trends will force a contraction and overall re-shaping of how legal services are provisioned.  In his book, The End of Lawyers(?), Richard Susskind forecasts several general trends that will lower traditional attorney demand: in-sourcing, de-lawyering, relocating, off-shoring, outsourcing, subcontracting, co-sourcing, leasing, home-sourcing, open-sourcing , computerizing, no-sourcing.

[Check out Susskind's book for a deeper look at these trends.  Basically, they translate in aggregate to this:  the market for legal services will increasingly have less appetite for highly paid attorneys performing rote and repetitive tasks for which viable alternatives exist.  Attorney work will necessarily devolve to a more strategic core that focuses on consultative, high-end while process work is offloaded, automated, or eliminated. This will shrink the demand for the bottom end of the attorney market while transforming the industry.

So, as UMass-Law graduates begin to enter the job market in a few years, they will be fighting over fewer jobs with the graduates of the Commonwealth’s eight private law schools (Boston College, Boston University, Harvard, Massachusetts College of Law [unaccredited], New England School of Law, Northeastern, Suffolk, Western New England School of Law), as well as with the backlog of recent graduates who are still looking for legal work.  And those other graduates will likely be viewed by employers as more qualified.  UMass Law’s recent jump in median LSAT to 146 places it in the 29th percentile of all test takers.  The scores for the schools that UMass Law graduates will most directly compete with?  New England School of Law is at 152 (56th); Suffolk is at 157 (71st);  Northeastern at 161 (86th).  When you factor in that Massachusetts is already third among U.S. states in lawyers per-capita, it becomes very difficult to see where UMass Law graduates will find work. 

If you view, as the Globe article does, that schools exist to admit students broadly and not charge them too much, then you may well view the existence of UMass Law positively.  If, however, you think that maybe, just maybe, people go to graduate schools so that they might one day have jobs, that you’ll view this as the mistake that it really is.  And you might wonder why we weren’t launching a Computer Science school or an Institute for Clean Energy Technology.  You know, areas where the demand for graduates might meet the supply of graduates in the coming decades.

Don’t-take-credit-for-the-weather….One final note: the fact that the applications are rising  and that the school is therefore able to be slightly more selective should not be interpreted as signs of success.  Despite the headlines about law firms layoffs and serial deferrals of start dates for incoming first year associates, all of the Commonwealth’s private law schools reported increases in applications this year as well.  Nationwide, almost 20% more people took the LSAT last year than the year before.  This is what happens in a recession: people unable to find jobs retreat into school in the hopes that their prospects will be better in a few years.

LZR on Why Carried Interest Matters

June 14th, 2010

Lynne Zagami Riquelme came to Brightleaf from a background at Proskauer Rose and Brown Rudnick.  At the former, she participated in spirited debates on the subject of carried interest taxation and its implications for the tech economy.  Here’s her well-informed take on this in-the-news issue…

In recent months, a lot of attention has been paid to the question of whether Congress, as part of a larger financial overhaul, will change the taxation of carried-interest income for managers of investment funds that are organized as partnerships.  In other words, Congress is poised to change the face of private equity and venture capital as we know it.

We know an overhaul is in the works – House and Senate bills are being debated, Elizabeth Warren is talking tough to NPR and ads for Fox News are asking whether America is broke.  We here at Brightleaf don’t presume to know the future (and we can’t seem to find a crystal ball on eBay), but we’re pretty sure we’re in for the biggest set of financial reforms since the 33’ and 34’ Acts were passed.     

Further, we bet that whatever reform measure is passed will include an increase in an important tax rate tied to long-term investment.  Congress has been trying, with limited success until now, to change the tax treatment of carried-interest income, which is the share of profits that private equity, venture capital and real estate fund managers receive as part of their compensation.  The problem, according to Senate Finance Committee Chairman Max Baucus (D., Mont.) and House Ways and Means Committee Chairman Sander Levin (D., Mich.), is that carried-interest is treated as capital gains (and taxed at a rate of 15%), when it should be considered ordinary income (and taxed at rates up to 38.5%).  Their argument?  That the managers running these funds have been paying capital gains rates on money that should be treated as wages because they earn this money for managing other people’s money (i.e. working).  Indeed, many proponents of the change argue investment managers should be thankful the U.S. isn’t proposing a U.K.-style excise tax of 50% on managers’ incomes.

So what’s wrong with that argument?  There are two important things to note: 1) fund managers take on a lot of risk when they make investments and 2) lots of people benefit when fund managers take these risks.  The first point boils down to this – fund managers don’t make money just by going to work, as the rest of us do.  Carried-interest, in the context of private equity and venture capital funds, is earned years after an initial investment is made.  Further, as Douglas Lowenstein, president of the Private Equity Council, points out, “earning carried-interest involves taking risks . .  . and exposing yourself to the possibility that you’ll have to return your earnings if things don’t work out.”  The rest of us simply don’t face consequences like this in our professional lives.

Second, saying that keeping carried-interest rates low provides an unfair advantage to fund managers is remarkably shortsighted.  When we begin orienting our tax policy around people, and not activities, we set a dangerous precedent.  Do fund managers sometimes make lots of money?  Yes.  But in the process, they provide essential funding to companies that in turn hire U.S. workers (indeed, emerging companies were the only ones to add jobs in 2009).  The Private Equity Council’s report on the proposed rate change states that the hike could prevent between 36,600 and 127,800 jobs from being created through private equity investments.  Taxing carried-interest at lower rates encourages capital formation, construction activity, and job creation, all of which are in short supply these days.  Can we really afford to discourage those activities at this point in history? 

We here at Brightleaf are inclined to say no.  In fact, we’ve spent the past few years growing and hiring talented workers thanks to the support of a venture capital firm.  While other companies were struggling, we were bringing in additional talent to respond to the demands of a changing legal industry.  We were advising law firms and corporate legal departments on ways they can incorporate document automation into their plans for the future.  And we will continue to do more of this.  Whether other companies will be as fortunate as we have been, we’re not so sure.

Brightleaf announces Round Two of Entrepreneurship Talks with Foley Lardner

June 8th, 2010

After the success of our first round of Entrepreneurship Talks wth Foley Lardner, we’re glad to be heading back for a second at 2:00 PM (EDT) on June 17th.  We’re focusing this time on practical (!) solutions to the intellectual property challenges that face new ventures.  Details and official Foley press release here.

And, for those of you who want a re-cap of the first round, you can listen to our Dave Curran and Foley’s Gabor Garai right here.