The School of Law business professors have taken their classes on the road-- to a local law firm and to the Maryland Intellectual Property Legal Resource Center-- to pave the students\u27 ways with valuable real-world experience

Dwin, Brad

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Digital Commons @ UM Law

19 JD MAGAZINE SUMMER 2002BRAD DWINUNIVERSITY BUSINESS LAW PROFESSORSTEACH OUTSIDE OF THE TRADITIONALCLASSROOM"Successful lawyers in this day and ageneed more than just classroom time, theyneed real-world experience," says busi-ness Professor Lisa Fairfax. Fairfax andher colleague, Professor Richard Booth,have given their students exactly thatopportunity. Fairfax's seminar on corpo-rate transactions and Booth's seminar onbusiness planning and venture capitalprovide students with academic compo-nents needed to succeed as businesslawyers as well as the chance to applytheir newly learned skills to real businesssituations.Fairfax, a member of the faculty since2000, is thrilled by the popularity of herseminar and even had to waitlist studentsduring the fall 200 1 semester. "The goaling companies, such as Gap and RalphLauren," explains Fairfax. Students weregiven specific information about the cor-poration, such as the number of share-holders, the amount of its assets and theorganizational structure. In addition, sev-eral legal issues were introduced into theacquisition process, including licensingagreements, whether or not to retain cer-tain employees and a pending discrimina-tion lawsuit.The acquisition was a five-partprocess. First came the letter of intent, inwhich the intention to purchase the com-pany was clearly stated. Next came thedue diligence phase, during which thestudents learned all of the necessary factsabout the company. Then, the students"Successful lawyers in thisday and age need more than justclassroom time, they needreal-world experience."of the course was simple," states Fairfax,"to introduce students to real-world cor-porate transaction experiences. Most lawschool courses tend to lean toward litiga-tion, but this course is designed to havestudents go through the corporate trans-action process from start to finish."To aid students in that process, a mockcorporation was established with the helpof attorneys at the Baltimore firm ofVenable, Baetjer & Howard. The mockcorporation, "Suburban Wear," wasdesigned to be acquired by a fictitiousclient represented by the class. "The com-pany was created from a conglomerationof research gathered from various cloth--PROFESSOR LISA FAIRFAXdrafted an acqUlSltlOn agreement andreviewed the various provisions of theagreement. Since most students hadnever seen a closing contract, Neal H.Strum '91, a venture capital financingexpert from Venable, spoke about issuessuch as private equity offerings and thedifference between acquisition and equi-ty-type financing-in other words, thedifference between purchasing a wholecompany or acquiring just a piece of it.The fourth part of the process was thereview of various legal opinions about thedocument, including issues particular tothe clothing industry.The final part of the acquisitionA DOUBLE DOSEOF REALITYProfessor Lisa Fairfax's seminar on corporatetransactions took students to Baltimore'sVenable, Baetjer & Howard where they puttogether a 'test" deal.Students in Professor Richard Booth's seminaron business planning and venture capitalventured to Montgomery County to help afaux farmer grow his business.WWW.LAW.UMARYLAND.EDU 20processwas closing the deal. For this part,Fairfax's students went to Venable,Baetjer & Howard and participated in asimulated closing in the firm's conferenceroom. Strum gave a lecture on themechanics 0 the closing process. Thestudents were each given a packet of doc-uments and went through the process ofclosing the transaction. To commemoratetheir experience, students were given T-shirts and paperweights as "deal toys," acommon practice in the corporate world.Fairfax stressed that one of the mostimportant elements of the corporatetransaction process is the ability to workrelated story on page 11.)The center, which operates like a lawschool clinic, offers entrepreneurs infor-mation about forms of organization,finance, governance, tax, and intellectualproperty issues. Students will gain a rich-er understanding of these issues by juxta-posing classroom learning with real-world interaction with entrepreneurs.Booth's class also uses a model com-pany, "MacDonald Farms, LLC," a sup-plier of fresh produce to high-endrestaurants. The owner of the business isinterested in setting up a Web-basedordering and billing system and is con-"One of the central points of the classis that there is no single rightanswer in doing a deal."as a team. "Corporate law is very group-oriented. All parties need to be pleasedwith the acquisition agreement, includingattorneys on both sides, as well as theirclients. Everyone involved needs to take areasonableposition and possess the abilityto settle disputes judiciously," she notes.Booth has taken his seminar on busi-ness planning and venture capital to theUniversity's satellite campus in Mont-gomery County. Unlike Fairfax'sseminar,which focuses on larger corporations,Booth's concentrates on start-up compa-nies and small businesses. The ultimateplan is for the seminar to serve as an aca-demic offering in connection with theSchool of Law's Maryland IntellectualProperty Legal Resource Center, locatedin the Maryland Technology Develop-ment Center in Montgomery County,which houses 30 start-up companies. (See21 JD MAGAZINE SUMMER 2002-PROFESSOR RICHARD BOOTHsidering taking on two partners-theperson who designed and developed thenecessary software and a venture capital-ist who can invest new funds. This prob-lem leads to a myriad of questions forthe lawyer advising the parties, rangingfrom ethical questions to valuation ofbusiness, from governance and financialstructure to the tax status of the deal:After setting up the business, the classmoves on to two potential future transac-tions involving the owner's plan to retireand cash out."One of the central points of theclass," explains Booth, "is that there is nosingle right answer in doing a deal, thereare often many good solutions for theparties." According to Booth, the coursefurther illustrates that it is not usually agood idea to rely on litigation and caselaw to protect the rights of the variousparties. ''Although students may get theimpression from traditional law schoolclasses that the courts can figure out therights and obligations of the parties if adispute arises, it quickly becomes appar-ent when viewed from the planning end,that many ambiguities need to beaddressed," Booth notes.Like Fairfax, one of Booth's primaryfocuses is to involve students with thelocal business community. "By utilizingthe Intellectual Property Center, studentshave firsthand contact with local busi-nesses and the legal issues that affectthem," Booth affirms. "The center pro-vides them with information that is equalparts business planning and intellectualproperty."

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