Last week Conglomerate tossed up the question of what should be recommended reading for incoming law students.
I'll toss up one now that is sure to be right up Conglomerate's alley (as well as Bainbridge and Ribstein)--what business books would you recommend to law students who want to learn more about business and the "deals" that we see in corporations, securities, and bankruptcy classes.
Many students come to law school as majors in fields such as History or English but become fascinated with corporate and commercial law. I often am asked whether I can recommend reading for these students that will give them some of the flavor and texture of a deal, or a merger, or a large bankruptcy, that lies behind the cases we read.
I usually recommend Barbarians at the Gate, which I think remains the most entertaining and informative description of the logic of agency costs, takeovers, etc. (Make sure you read the book rather than seeing the movie.)
And, of course, we bankruptcy lawyers retain a soft spot in our hearts for the famous workout scene in Tom Wolfe's A Man in Full. But I haven't ever found a really good book that takes the reader through the texture of a large bankruptcy case in the way that Barbarians at the Gate does for understanding the dynamics of a takeover.
I liked the documentary Startup.com from a few years back also, which was a nice look inside the business side of venture capital and the dot.com boom.
Recommended books can be either fiction or nonfiction--I'm looking for books tha will give the flavor and texture of business transactions for those who are trying to get the intuition, rather than a textbook presentation.
Donald Trump?
How about the books here: Business and the Holocaust - that may be a bit more controversial. Despite most of it being nonfiction.
Also:
Nocera, A Piece Of The Action (entertaining history of the explosive growth in consumer financial products in 20th century America)
David McClintock, Indecent Exposure (story of the Begelman scandal at Columbia Pictures, a modern classic)
James Stewart, Den Of Thieves (story of the Milken/Boesky scandal; a hommage to McClintock and itself a modern classic)
Ben Stein, A License To Steal (yes, that Ben Stein; essentially, a short polemic against Milken that serves as an argumentative companion to the Stewart book)
1. Lawrence Lederman, Tombstones: A Lawyers's Tales From the Takeover Decades (1992). Lederman started his career at Cravath in the 1960s and went to Wachtell just as the firm was getting started and became partner. This book, which chronicles Lederman's amazing M&A experiences during the 80s (including a highly personal account of how two episodes of insider trading shocked the firm and damaged its open culture), eventually precipitated a falling out between Marty Lipton and Lederman. Lederman is now head of the M&A and Corporate practice at Milbank Tweed. The bonus is that this book is immensely well-written. It reads like a novel.
2. Another excellent book is James C. Freund, Lawyering: A Realistic Approach to Legal Practicing (1979). This book is written from the perspective of a transactional lawyer (Freund is a prominent M&A lawyer at Skadden Arps), and covers some important terrain that is just not covered in any meaningful way in law schools: For example, showing the interaction between client business objectives and legal advice; handling clients and how expectations of clients can dramatically vary; how to interact with accountants and investment bankers involved in a deal; how context, including the competence and temperment of opposing counsel, affects negotiations and negotiation strategy; what type of lawyer "judgment" adds value and engenders client trust and confidence. I am actually assigning excerpts from this book for my Corporations course in the Fall. It is the perfect antidote for my many students who just want to focus on the law and ignore the business elements. Don't be fooled by the publication date; practical wisdom of this order never becomes old.
3. I know that you asked to steer clear of "text books," but this reference book is far and away the best on the market for the law student with little or no knowledge of business (~80 percent of a typical Corporations class): Robert W. Hamilton & Richard A. Booth, Business Basics for Law Students: Essential Concepts and Applications (3rd 2002). I now require this book in Corporations because it provides short, concise, and amazingly lucid discussions of a large number of business topics. It does not have a single footnote! But it does have an excellent indexing system. When a word is bolden in the text, it means that that term or concept is defined in another part of the book. Students no longer have an excuse for being ignorant of business concepts. Short, concise answers are at their fingertips.
While taking corporate finance, I read Den of Thieves, Barbarians at the Gate, Liar's Poker, When Genius Failed, Monkey Business, DisneyWar and The Predator's Ball. My fellow students claimed that I gave the appearance of being knowledgeble. In fact, in areas such as tender offers, those books were superior (in my opinion) to the Eisenberg casebook (especially with terms like greenmail, white knights, and poison pills).
McDonalds: Behind the Golden Arches. The orignal edition of this book got repetetive towards the end, but a facinating account of how McDonalds actually made its money (and it wasn't selling hamburgers).
Dan Palmer, Banker
The Informant - For an excellent overview of how commercial investigations and prosecutions actually work.
The Run of His Life - To understand the deviations in the Simpson case.
Even though the title is polemical, it's a great book about the contrasting goals of lawyers and businessmen and how they can impede or improve high stakes business deals.
I'd recommend Prof. Milton Regan's new book, "Eat What You Kill: The Fall of a Wall Street Lawyer." It provides a gripping and detailed review of John Gellene's fall from grace after he failed to disclose a conflict of interest in a bankruptcy matter.
Donovan G. Rinker's Amazon review of the book puts it well:
"Read for: lessons in bankruptcy law and practice, junk bonds, vulture investment, corporate law generally, white collar crime and trial tactics, and a nuanced ethical exploration"
"Avoid if: seeking simple answers, easily bored by thorough and balanced legal arguments"
I will also second Buffett's Berkshire Hathaway shareholder letters, which can be overrated but they are doubtless far more valuable than their price (free on Edgar).
efalken: I agree that Stein's argument in A License To Steal may be flawed, but it is plausible and very thoughtfully presented. It is worth reading even if Stein is wrong. (I disagree with Stein a lot these days, but that's another matter.)
I agree with you on BAG being the best overall; however for some delicate flower English major types, it may be a bit long and involved (not that it is technical, but still...). IOW start 'em on THE HOBBIT before hooking them on LOTR.
The Hamilton Booth text is good for learning the basics. I had Professor Hamilton for Business Associations at Texas. But I believe that the finest guide to the economics of business organizations is still Klein &Coffee Business Organization and Finance, now in its 9th edition. Upon my first reading of the text, I moaned to myself: Where was Klein (and this guide) back when I was a law student (J.D. 1977). It was and still is a joy to read.
Richard B. Sobol, Bending the Law: The Story of the Dalkon Shield Bankruptcy is a terrific non fiction account of how tort creditors were hometowned by an activist trial judge.
Arthur Solmssen, The Comfort Letter is a very good novel about a corporate transaction.
I used to make young associates read the Fruend book on mergers, but it is a bit much for a student.