The Politics of the Income Tax

A Review of Dimensions of Law in the Service of Order: Origins of the Federal Income Tax by Robert Stanle

The Effect of Anti-Discrimination Provisions on Rank-and-File Compensation

The purpose of this Article is to provide a more considered, though still quite basic, exposition of the effect the anti-discrimination provisions are likely to have on rank-and-file compensation

The Venture Capital Investment Bust: Did Agency Costs Play a Role? Was it Something Lawyers Helped Structure?

This Article examines the question of why venture capital firms would continue to raise technology funds, and then invest those funds, when they were certain that the business markets for such investments were overvalued preceding the “crash” of April 2000. We interviewed a number of venture capitalists, lawyers, entrepreneurs, and other industry observers in search of an explanation. The explanations offered by key decision makers for the observed investment behavior can be categorized as of three types of theories: agency cost theories, herd behavior and other cognitive bias theories, and non–agency cost theories. Agency cost theories suggest that the activity took place because of the divergence between the long-term reputational and other interests of fund general partners (venture capital firms), and the short-term interests of their limited partner investors. Herd behavior explanations apply herding theory to the general movement of venture capital firms, but fail to provide a satisfactory explanation for the direction of the “herd.” Non-agency cost theories include explanations premised upon gaming strategies by better-informed venture capitalists in the context of less-informed public markets at the end of the investment pipeline. All of the theories surveyed are problematic in at least some respects, and none fully explains the pattern of investment observed

Why Start-ups ?

The prototypical start-up involves an employee leaving her job with an idea and selling a portion of that idea to a venture capitalist. In many respects, however, the idea should be worth more to the former employer. The former employer can be expected to have better information concerning the employee-entrepreneur and the technology, have opportunities to capture economies of scale and scope not available to a venture capital-backed start-up, and will receive more favorable tax treatment than the start-up should the innovation fail. In connection with an auction of the idea, the former employer should have both a more accurate estimate of its value and receive an element of private value not available to the venture capitalist. In turn, this should give rise to a powerful winner\u27s curse: each time a venture capitalist wins the auction, it will have paid more than a party that has better information and receives an element of private value. The puzzle, then, is why do we ever observe start-ups? Professors Joseph Bankman and Ronald J. Gilson suggest three interrelated explanations. First, the venture capitalist may have superior information with respect to some subset of employee innovations. Second, employer bids on employee innovation can create an incentive for employees to establish internal property rights in their research efforts that may reduce the future output of the employer\u27s research and development efforts. Finally, employees are not homogenous. The attractiveness of venture capital financing depends critically on employee personal characteristics, such as risk aversion. The employer sets the internal payoff to discovery – its bid – to equalize the marginal benefit of retaining employees who might otherwise leave to the marginal cost of establishing unfavorable incentives for future research and development for those employees who do not find venture capital financing a close substitute for continued employment. In some cases, this calculus might lead to a no bid policy. In virtually all cases, the pay-off will be set too loll to retain all employees, and start-ups ensue

Anxiety Psychoeducation for Law Students: A Pilot Program

Many law students experience anxiety, which can impair academic performance and reduce quality of life. The authors developed a brief psychoeducation program designed to help law students cope with anxiety. The program was based on the cognitive behavioral model of anxiety and was offered to first-year students at Stanford and Yale Law School. Class attendance was voluntary and consisted of two one- to two-hour meetings. Student response was measured by anonymous online surveys. Virtually all the students thought the material was worthwhile and should be taught as a part of the curriculum. Students reported using many of the techniquesdescribed to reduce anxiety, and many students reported a decline in anxiety. Student comments were almost uniformly positive. The success of this pilot suggests that other faculty may find it worthwhile to adopt a version of the psychoeducation program. Other scholars may wish to refine the cognitive behavioral approach used in this program, or develop and test approaches based on other techniques, such as mindfulness or positive psychology