Econo Legal Studies in Legal Practice (Final) [Read-Only] Legal... · Research On Value Creation (Cont’d) • Legal Dynamics and the idea of living law oLaw is a living thing, and

3/12/2014

1

L A W, S T R A T E G Y & C O M M U N I C A T I O N SCopyright JLPW 2013. All rights reserved.

ECONO LEGAL STUDIES INLEGAL PRACTICE

Speaker: Jeff Leong (Senior Partner)Messrs Jeff Leong, Poon & Wong

MALAYSIA

3/12/2014

2

INTERDISCIPLINARY

! Enhancing problem-solving skills.! Value creation.

* People who are able to cross, interpret and communicate between different disciplines are valuable. *

A STRATEGIC INTERDISCIPLINARY& CROSS-CULTURAL APPROACH

CROSS-CULTURAL

* Culture crossers who are able to study, learn and move in and out of

different cultures are invaluable. *

Copyright JLPW 2013. All rights reserved.

Introduction

• Law and Economics or Econo Legal Studies an integral and realistic part of legal practice todayo Geopolitics, business and lawo The price of oil and its impact on businesses and the economyo China’s 21st Century Maritime Silk Road, the new Asian

Infrastructure Investment Bank• Global business trends and their impact lawyers and the

delivery of legal services• The work of business lawyers in Asia• Attributes of good business lawyers• The Role of Business Lawyers• Re-emerging Trends in Legal Services

3/12/2014

3


Global Business Trends and their impact on lawyers


The Work of Business Lawyers

• Guiding businesses through birth, growth, expansion and death cycles• Setting Up Companies & Businesses• Joint Ventures• Mergers & Acquisitions (Buying & Selling Companies)• Expansion Abroad• Commercial Agreements – Licensing Agreements, Agencies,

Distributorships, Tenancies, Franchising• Employment & HR Issues• Venture Capital• Initial Public Offerings• Corporate Finance & Capital Market transactions• Disputes & Litigation• Reorganisation, Insolvency & Dissolution

3/12/2014

4

The Attributes of Good Business Lawyers

Commercial

Good Business Sense

Practical

Problem Solver

Brilliant

Sound Mind

Level headed

Astute judgment

Creative

Innovative

Responsive

Industry knowledge

Proactive

Helpful

Groundbreaking

Cutting edge

Do complex deals

Technical Skills

Talented

Versatile

Dealmaker

Well connected

Lead/dominant

player

Strong

Performer

Experienced

Knowledgeable

Value for money

Proven track

record

Effective

Insightful

Reliable

Thorough


The Attributes of Good Business Lawyers (Cont’d)

• Attributes based on research with inhouse counsels and corporations

• Attributes highly rated and sought after when appointing lawyers to work on transactions

• Attributes not taught in Law School• A good business lawyer knows law thoroughly and MORE!• Other skills are needed to create value • Commercial, good business sense, industry knowledge

and expertise requires years of legal practice to acquire and learn

3/12/2014

5


Research On Value Creation

• In collaboration with CDAMS, Kobe University, Japano Based on popular Deals Course in Columbia University, New York, USAo Application of transaction costs economics to understanding the

central role of lawyers in business transactionso Developing transferable concepts and ideas for the training of lawyers

regardless of whether common law or civil law legal traditiono Finding a way to train business lawyers faster by focusing on business

transactionso If entrepreneurs and business people are the “heart” of wealth

creation, then transactions are the lifeblood of economic developmento Well trained lawyers can play a key and important role in facilitating

business transactions


Research On Value Creation (Cont’d)

• Legal Dynamics and the idea of living lawo Law is a living thing, and it interacts with the circumstances and

situations around us in the world of businesso Business lawyers need to find practical solutions to legal

problems to enable parties to do their business deals within the confines of laws and regulations.

o Interdisciplinary and Cross cultural approach needed

3/12/2014

6


• Wealth Creation

Econo Legal Analysis of Transactions

• John R Commons in 1932: “the ultimate unit of activity… contain in itself the three principles of conflict, mutuality, and order. This unit is a transaction.”

• Oliver Williamson, Nobel Laureate for Economics 2009 named it the Commons Triple.

• Lewellyn in 1981, postulate “contract as a framework” as opposed to legal rules tradition in contract

• Galanter in 1981 on Legal Realism“Most disputes including many that under current rules could be brought to a court, are resolved through self avoidance, self-help, and the like…. in many instances the participants can devise more satisfactory solutions to their disputes than can professionals constrained to apply general rules on the basis of limited knowledge of the dispute”


Transaction as a Unit of Analysis

• Commons Triple (named by Oliver Williamson)

Mutuality Conflicts

Order

3/12/2014

7


Specialization, Exchange and Surplus Value


Conflict

• Zero-Sum Game as to the Sharing of Surplus Value

$50.

$70.

$45 or more. $75 or less.ZOPA:

$45~$75

+$5. +$25.

+$25. +$5.

3/12/2014

8


• Wealth Creation

Transaction is the Central Process for realising and distributing Surplus Values produced by the

Specialization of Labour


Classical Common Law Theory Of Contract

• Formation of ContractoOffer and Acceptanceo Intention to create legal relationsoConsideration

• Provided parties freely consent to contract, are competent to contract, for a lawful consideration and with lawful object

oOnce signed, Contract is legally binding and enforceable according to its terms, no matter how onerous

3/12/2014

9


• Wealth CreationAlternative Views Of Contract

• Is there an Asian view of Contracts?• Many different types of Contract, no “one size fit all”

contract• Impossible to know everything in the future at the time

of Contract• Transaction Costs Economics View

• Two Prototypes of TransactionsoDiscreteoRelational

• Lewellyn’s “contract as framework” approach


Contracts: Discrete and Relational

Two Prototypes of Transactions or Business Models

Discrete Relational

3/12/2014

10


Discrete Contracts

• Market Based Contractso Exchange of Money and Commodity (Credible Exchange)o Minimum Contact between Parties (Low Friction)o Payment to be made in exchange for the delivery of good

(Reduction of Opportunistic Behaviour)o Price automatically adapted according to Demands and Supplies

(Fair Distribution of Surplus Value)

• Low Transaction Costo still Social Co-operative Behaviour


Relational Contracts

• Ronald Coarse suggest thato due to the impossibility of forecasting needs far

into the future, long term contracts are of necessity incomplete. This incompleteness of long term contracts implies that they require periodic monitoring and direction.

• Individuality and Matching Based Contractso More Complex Transactions for seeking High

Surplus Valueo Longer Negotiation and Detailed Contracting

Processo Usually with Relation Specific Investmento Long Term Contractual Relationshipo High Incompletenesso Sophisticated Management of Mutual Relationship

is to be required.

3/12/2014

11


Relational Contracts (Cont’d)

• High Transaction Costo Needs for Relation Specific Safeguardso Continuous Necessity of Renegotiationo Risks for Lock In and Holed Up

• Relational Contracts are usually usedo in High Risk High Return Business or o for stabilising a business in highly contingent setting


• Contractual Practices and the Law of Contract

Each Transaction

Standard Form Contracts

Law of Contract

ÅiCodes, Principle sÅj

Dispute Resolution General Provisions

Uniform Rules Cases and Precedents

3/12/2014

12


‘Hardship’ from UNIDROIT Principles

• Article 6.2.1 (Contract to be observed)

“Where the performance of a contract becomes more onerous for one of the parties, that party is nevertheless bound to perform its obligations subject to the following provisions on hardship.”

• Article 6.2.2 (Definition of hardship)

“There is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party's performance has increased or because the value of the performance a party receives has diminished, and (a) the events occur or become known to the disadvantaged party after the conclusion of the contract; (b) the events could not reasonably have been taken into account by the disadvantaged party at the time of the conclusion of the contract; (c) the events are beyond the control of the disadvantaged party; and (d) the risk of the events was not assumed by the disadvantaged party.”


‘Hardship’ from UNIDROIT Principles (Cont’d)

• Article 6.2.3 (Effects of hardship)(1) In case of hardship the disadvantaged party is entitled

to request renegotiations. The request shall be made without undue delay and shall indicate the grounds on which it is based.

(2) The request for renegotiation does not in itself entitle the disadvantaged party to withhold performance.

(3) Upon failure to reach agreement within a reasonable time either party may resort to the court.

(4) If the court finds hardship it may, if reasonable, (a) terminate the contract at a date and on terms to be

fixed; or (b) adapt the contract with a view to restoring

its equilibrium

3/12/2014

13


Mystery of the 3 Pages Japanese Contract

Why are Japanese Contracts so short?• Japanese companies strive to achieve long-term business relationships based

on the spirit of wa.

• Friendship, trust and respect are the fundamentals of a long-term business relationship.

• The strength of the relationship and the goodwill that supports the relationship should resolve conflicts should they arise in the future.

• To preserve wa, Japanese prefer to resolve problems by negotiating with another party and achieve a mutual agreement originating from trust, rather than through litigation.

• Japanese contracts are relational in nature.


Warren Buffet’s One Page Contract

• In 1983, Warren Buffett walked into Nebraska Furniture Mart, the multi-million dollar furniture retailer built from scratch by Rose Blumpkin.

• Speaking to Mrs. B, as local residents called her, Buffett asked if she would be interested in selling the store to Berkshire Hathaway. Blumpkin's answer was a simple "yes", to which she responded she would part for "$60 million".

• The deal was sealed on a handshake and one page contract was pulled up. The Russian-born immigrant merely folded the check without looking at it when she received it days later.

3/12/2014

14


Teenage Mutant Ninja Turtles’ Napkin Contract

Did the creators really sign their first licensing deal on a napkin?

• It’s true. After the comic became a hit, Eastman and Laird were approached by various agents looking to license their creation.

• In 1986, Surge Licensing president Mark Freedman asked the artists if he could meet with them. Freedman, wearing an expensive suit, arrived in Northampton to find Eastman and Laird wearing shorts and covered in paint, in the process of painting their apartment.


Teenage Mutant Ninja Turtles’ Napkin Contract (Cont’d)

Did the creators really sign their first licensing deal on a napkin? (Cont’d)

• The agent promised to make themmillions. A sceptical Eastman andLaird reached for a napkin and drewup a non-exclusive, 30-day contract.

• Within a month, Freedman had a commitment from Playmates Toys. Action figures, candy, tote bags, bed sheets and a popular cartoon series soon followed. By 1991, Eastman estimates he was grossing $50 million a year.

3/12/2014

15


The Role of Business Lawyers

• Legal Adviser• Navigating complex regulations

• Drafter• Crafting complex deal documentation

• Negotiator• Securing the best deal for the client

• Investigator• Due Diligence and Background Checks

• Lobbyist• Applying for approvals


Legal Expertise

• Sound knowledge of law and regulations• Track record of past transactions• Relevant Combinations of legal knowledge• Teams and cross border expertise• Depth and breadth of legal knowledge and expertise

3/12/2014

16


Legal Skills

• Legal Analysis• Counseling Skills• Drafting skills• Negotiating skills• Deal Management• Team Management


Clearing Obstacles

• Identifying / defining the problem• cause v symptoms• core v peripheral issues

• Problem Solving• avoid postbox approach• avoid only stating the law• provide strategic solutions• don’t state the problem, solve it

3/12/2014

17


Deal Management

• Accomplishing the transaction• deal making v deal breaking• the problem of over lawyering• advise the client, let him decide

• Speed• management by deadline• turnaround time• team support and backup (“Pit Crews”)


Intellectual Capital

• Specialist Knowledge • past experience• war chest of solutions

• Market Knowledge• Insider’s view• minefields, pitfalls, opportunities

3/12/2014

18


Non-Legal Skills

• Independence and objectivity• Honest, detached point of view

• Perspective• Big Picture thinking• Frame and prioritize issues• Draw clients away from micro details

• Judgment• Assist to make difficult decisions


Value Adding

• Unexpected problem solving• Innovative solutions• Thinking out of the box

• Connection• Connect clients to useful people• Connect clients to valuable information

• Deal making• Sifting deals • Bringing deals to clients

3/12/2014

19


Re-Emerging Trends in Innovative Legal Services

MULTIDISCIPLINARY PRACTICES• Began in the 1940s but resisted by Bar associations around the

world on issues of conflict of interest• Momentum picked up in the 1990s when big accounting firms

reached their natural growth limits.» Accounting, auditing and tax services could generate

only a finite amount of revenue for the accountingfirms.

» The Big 4’s concept was simple: use the extensive listof clients to market non-traditional accountingservices such as legal, recruitment, risk management,technology consulting, employment services etc.



» Financial Supermarket and One Stop Shop» Problem of revenue sharing between lawyers and

accountants» Conflicts of interest of auditors, Fall of Arthur

Andersen, ENRON and Sarbanes Oxley concerns• Re-emergence in recent years in Europe and now in

Malaysia, Singapore and Indonesia• Multidisciplinary network model was transformed to

account for the issues. If the member firms were themselvesindependent, there was no prohibition on having amultidisciplinary network.

3/12/2014

20


New Trends in Legal Services

LAW FIRM IPOs ! Slater & Gordon and the world’s first publicly traded law

firm in Australia in 2007! Access to public funds and investment by non-lawyers! Scrutiny of public investor shareholders and stock

exchange regulators! Insurance claims specialists! Rapid expansion by M&A! Recent entry into the UK Legal Services Market


New Trends in Legal Services (Cont’d)

LAW FIRM IPOs • Slater & Gordon flags this concern in the “risk factors” section

of the prospectus:Lawyers have a primary duty to the courts and a secondary duty to their clients. These duties are paramount given the nature of the Company’s business as an Incorporated Legal Practice. There could be circumstances in which the lawyers of Slater & Gordon are required to act in accordance with these duties and contrary to other corporate responsibilities and against the interests of Shareholders or the short-term profitability of the Company.

3/12/2014

21



• ZICO Holdings Inc. (“ZICO”) officially listed on the Catalist board of Singapore’s stock market on 11 November 2014, placing 48 million shares at 30 cents each.

• ZICO is a MDP with 3 divisions (spun off from Zicolaw) covering:-" Advisory and transactional services" Management and support services" Licensing services

• ZICO established as Zaid Ibrahim & Co. in Kuala Lumpur in 1987. ZICO Holdings Inc. was previously known as ZI Holdings Inc., and was set up to mainly serve the customers of Zaid Ibrahim & Co..



• Given the rules against non-lawyer investors in law firms, law firms in these circumstances would usually seek capital from its own partners, or getting a bank loan.

• To guarantee the independence of the rest of the Zicolaw network, the managing partner of Zicolaw’s Malaysian member firm Zaid Ibrahim & Co., the regional managing partner of Zicolaw and the managing director of Zico Holdings, must give up legal practice to manage Zico Holdings under the terms of the IPO.

• Zico Holdings and Zicolaw are separate legal entities with the relationship between the two being that of service provider and client.o Zico Holdings providing management and support services and

licensing services to the law firm.

3/12/2014

22

A clearer look at the key business segments and services of ZicoHoldings Inc.



TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES (ABS) ! UK Legal Services Act 2007 and in operation since 2011! allows law firms to seek outside investment (or operate under

external ownership)! companies that are not legal firms to offer legal services! ABSs can be corporate bodies such as bank subsidiaries or

insurers and may even be foreign registered.! ‘Tesco law’ was coined to describe the idea that buying legal

services would be as easy as supermarket shopping! Approved ABS Licences include

! Co-Operative Group supermarket chain! British Telecom for motor claims services

! changes have been introduced to improve competition, flexibility, and choice for consumers

3/12/2014

23



TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES • Reserved activities and Non-Reserved activities• The reserved activities are:

• advocacy • conducting litigation• Conveyancing• Probate• notarial activities• the administration of oaths

• Reserved activities can only be carried out by barristers or solicitors, whereas non-reserved activities can be provided by anyone, with or without a law degree

• Expected to shake up legal services market in UK and around the world and inject entrepreneurship and innovation in legal services.


Q & A

Discussion

3/12/2014

24


Contact:[email protected]

3/12/2014

1


ECONO LEGAL STUDIES INLEGAL PRACTICE

Speaker: Jeff Leong (Senior Partner)Messrs Jeff Leong, Poon & Wong

MALAYSIA

3/12/2014

2

INTERDISCIPLINARY

! Enhancing problem-solving skills.! Value creation.

* People who are able to cross, interpret and communicate between different disciplines are valuable. *

A STRATEGIC INTERDISCIPLINARY& CROSS-CULTURAL APPROACH

CROSS-CULTURAL

* Culture crossers who are able to study, learn and move in and out of

different cultures are invaluable. *


Introduction

• Law and Economics or Econo Legal Studies an integral and realistic part of legal practice todayo Geopolitics, business and lawo The price of oil and its impact on businesses and the economyo China’s 21st Century Maritime Silk Road, the new Asian

Infrastructure Investment Bank• Global business trends and their impact lawyers and the

delivery of legal services• The work of business lawyers in Asia• Attributes of good business lawyers• The Role of Business Lawyers• Re-emerging Trends in Legal Services

3/12/2014

3


Global Business Trends and their impact on lawyers


The Work of Business Lawyers

• Guiding businesses through birth, growth, expansion and death cycles• Setting Up Companies & Businesses• Joint Ventures• Mergers & Acquisitions (Buying & Selling Companies)• Expansion Abroad• Commercial Agreements – Licensing Agreements, Agencies,

Distributorships, Tenancies, Franchising• Employment & HR Issues• Venture Capital• Initial Public Offerings• Corporate Finance & Capital Market transactions• Disputes & Litigation• Reorganisation, Insolvency & Dissolution

3/12/2014

4

The Attributes of Good Business Lawyers

Commercial

Good Business Sense

Practical

Problem Solver

Brilliant

Sound Mind

Level headed

Astute judgment

Creative

Innovative

Responsive

Industry knowledge

Proactive

Helpful

Groundbreaking

Cutting edge

Do complex deals

Technical Skills

Talented

Versatile

Dealmaker

Well connected

Lead/dominant

player

Strong

Performer

Experienced

Knowledgeable

Value for money

Proven track

record

Effective

Insightful

Reliable

Thorough


The Attributes of Good Business Lawyers (Cont’d)

• Attributes based on research with inhouse counsels and corporations

• Attributes highly rated and sought after when appointing lawyers to work on transactions

• Attributes not taught in Law School• A good business lawyer knows law thoroughly and MORE!• Other skills are needed to create value • Commercial, good business sense, industry knowledge

and expertise requires years of legal practice to acquire and learn

3/12/2014

5


Research On Value Creation

• In collaboration with CDAMS, Kobe University, Japano Based on popular Deals Course in Columbia University, New York, USAo Application of transaction costs economics to understanding the

central role of lawyers in business transactionso Developing transferable concepts and ideas for the training of lawyers

regardless of whether common law or civil law legal traditiono Finding a way to train business lawyers faster by focusing on business

transactionso If entrepreneurs and business people are the “heart” of wealth

creation, then transactions are the lifeblood of economic developmento Well trained lawyers can play a key and important role in facilitating

business transactions


Research On Value Creation (Cont’d)

• Legal Dynamics and the idea of living lawo Law is a living thing, and it interacts with the circumstances and

situations around us in the world of businesso Business lawyers need to find practical solutions to legal

problems to enable parties to do their business deals within the confines of laws and regulations.

o Interdisciplinary and Cross cultural approach needed

3/12/2014

6


• Wealth Creation

Econo Legal Analysis of Transactions

• John R Commons in 1932: “the ultimate unit of activity… contain in itself the three principles of conflict, mutuality, and order. This unit is a transaction.”

• Oliver Williamson, Nobel Laureate for Economics 2009 named it the Commons Triple.

• Lewellyn in 1981, postulate “contract as a framework” as opposed to legal rules tradition in contract

• Galanter in 1981 on Legal Realism“Most disputes including many that under current rules could be brought to a court, are resolved through self avoidance, self-help, and the like…. in many instances the participants can devise more satisfactory solutions to their disputes than can professionals constrained to apply general rules on the basis of limited knowledge of the dispute”


Transaction as a Unit of Analysis

• Commons Triple (named by Oliver Williamson)

Mutuality Conflicts

Order

3/12/2014

7


Specialization, Exchange and Surplus Value


Conflict

• Zero-Sum Game as to the Sharing of Surplus Value

$50.

$70.

$45 or more. $75 or less.ZOPA:

$45~$75

+$5. +$25.

+$25. +$5.

3/12/2014

8


• Wealth Creation

Transaction is the Central Process for realising and distributing Surplus Values produced by the

Specialization of Labour


Classical Common Law Theory Of Contract

• Formation of ContractoOffer and Acceptanceo Intention to create legal relationsoConsideration

• Provided parties freely consent to contract, are competent to contract, for a lawful consideration and with lawful object

oOnce signed, Contract is legally binding and enforceable according to its terms, no matter how onerous

3/12/2014

9


• Wealth CreationAlternative Views Of Contract

• Is there an Asian view of Contracts?• Many different types of Contract, no “one size fit all”

contract• Impossible to know everything in the future at the time

of Contract• Transaction Costs Economics View

• Two Prototypes of TransactionsoDiscreteoRelational

• Lewellyn’s “contract as framework” approach


Contracts: Discrete and Relational

Two Prototypes of Transactions or Business Models

Discrete Relational

3/12/2014

10


Discrete Contracts

• Market Based Contractso Exchange of Money and Commodity (Credible Exchange)o Minimum Contact between Parties (Low Friction)o Payment to be made in exchange for the delivery of good

(Reduction of Opportunistic Behaviour)o Price automatically adapted according to Demands and Supplies

(Fair Distribution of Surplus Value)

• Low Transaction Costo still Social Co-operative Behaviour


Relational Contracts

• Ronald Coarse suggest thato due to the impossibility of forecasting needs far

into the future, long term contracts are of necessity incomplete. This incompleteness of long term contracts implies that they require periodic monitoring and direction.

• Individuality and Matching Based Contractso More Complex Transactions for seeking High

Surplus Valueo Longer Negotiation and Detailed Contracting

Processo Usually with Relation Specific Investmento Long Term Contractual Relationshipo High Incompletenesso Sophisticated Management of Mutual Relationship

is to be required.

3/12/2014

11


Relational Contracts (Cont’d)

• High Transaction Costo Needs for Relation Specific Safeguardso Continuous Necessity of Renegotiationo Risks for Lock In and Holed Up

• Relational Contracts are usually usedo in High Risk High Return Business or o for stabilising a business in highly contingent setting


• Contractual Practices and the Law of Contract

Each Transaction

Standard Form Contracts

Law of Contract

ÅiCodes, Principle sÅj

Dispute Resolution General Provisions

Uniform Rules Cases and Precedents

3/12/2014

12


‘Hardship’ from UNIDROIT Principles

• Article 6.2.1 (Contract to be observed)

“Where the performance of a contract becomes more onerous for one of the parties, that party is nevertheless bound to perform its obligations subject to the following provisions on hardship.”

• Article 6.2.2 (Definition of hardship)

“There is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party's performance has increased or because the value of the performance a party receives has diminished, and (a) the events occur or become known to the disadvantaged party after the conclusion of the contract; (b) the events could not reasonably have been taken into account by the disadvantaged party at the time of the conclusion of the contract; (c) the events are beyond the control of the disadvantaged party; and (d) the risk of the events was not assumed by the disadvantaged party.”


‘Hardship’ from UNIDROIT Principles (Cont’d)

• Article 6.2.3 (Effects of hardship)(1) In case of hardship the disadvantaged party is entitled

to request renegotiations. The request shall be made without undue delay and shall indicate the grounds on which it is based.

(2) The request for renegotiation does not in itself entitle the disadvantaged party to withhold performance.

(3) Upon failure to reach agreement within a reasonable time either party may resort to the court.

(4) If the court finds hardship it may, if reasonable, (a) terminate the contract at a date and on terms to be

fixed; or (b) adapt the contract with a view to restoring

its equilibrium

3/12/2014

13


Mystery of the 3 Pages Japanese Contract

Why are Japanese Contracts so short?• Japanese companies strive to achieve long-term business relationships based

on the spirit of wa.

• Friendship, trust and respect are the fundamentals of a long-term business relationship.

• The strength of the relationship and the goodwill that supports the relationship should resolve conflicts should they arise in the future.

• To preserve wa, Japanese prefer to resolve problems by negotiating with another party and achieve a mutual agreement originating from trust, rather than through litigation.

• Japanese contracts are relational in nature.


Warren Buffet’s One Page Contract

• In 1983, Warren Buffett walked into Nebraska Furniture Mart, the multi-million dollar furniture retailer built from scratch by Rose Blumpkin.

• Speaking to Mrs. B, as local residents called her, Buffett asked if she would be interested in selling the store to Berkshire Hathaway. Blumpkin's answer was a simple "yes", to which she responded she would part for "$60 million".

• The deal was sealed on a handshake and one page contract was pulled up. The Russian-born immigrant merely folded the check without looking at it when she received it days later.

3/12/2014

14


Teenage Mutant Ninja Turtles’ Napkin Contract

Did the creators really sign their first licensing deal on a napkin?

• It’s true. After the comic became a hit, Eastman and Laird were approached by various agents looking to license their creation.

• In 1986, Surge Licensing president Mark Freedman asked the artists if he could meet with them. Freedman, wearing an expensive suit, arrived in Northampton to find Eastman and Laird wearing shorts and covered in paint, in the process of painting their apartment.


Teenage Mutant Ninja Turtles’ Napkin Contract (Cont’d)

Did the creators really sign their first licensing deal on a napkin? (Cont’d)

• The agent promised to make themmillions. A sceptical Eastman andLaird reached for a napkin and drewup a non-exclusive, 30-day contract.

• Within a month, Freedman had a commitment from Playmates Toys. Action figures, candy, tote bags, bed sheets and a popular cartoon series soon followed. By 1991, Eastman estimates he was grossing $50 million a year.

3/12/2014

15


The Role of Business Lawyers

• Legal Adviser• Navigating complex regulations

• Drafter• Crafting complex deal documentation

• Negotiator• Securing the best deal for the client

• Investigator• Due Diligence and Background Checks

• Lobbyist• Applying for approvals


Legal Expertise

• Sound knowledge of law and regulations• Track record of past transactions• Relevant Combinations of legal knowledge• Teams and cross border expertise• Depth and breadth of legal knowledge and expertise

3/12/2014

16


Legal Skills

• Legal Analysis• Counseling Skills• Drafting skills• Negotiating skills• Deal Management• Team Management


Clearing Obstacles

• Identifying / defining the problem• cause v symptoms• core v peripheral issues

• Problem Solving• avoid postbox approach• avoid only stating the law• provide strategic solutions• don’t state the problem, solve it

3/12/2014

17


Deal Management

• Accomplishing the transaction• deal making v deal breaking• the problem of over lawyering• advise the client, let him decide

• Speed• management by deadline• turnaround time• team support and backup (“Pit Crews”)


Intellectual Capital

• Specialist Knowledge • past experience• war chest of solutions

• Market Knowledge• Insider’s view• minefields, pitfalls, opportunities

3/12/2014

18


Non-Legal Skills

• Independence and objectivity• Honest, detached point of view

• Perspective• Big Picture thinking• Frame and prioritize issues• Draw clients away from micro details

• Judgment• Assist to make difficult decisions


Value Adding

• Unexpected problem solving• Innovative solutions• Thinking out of the box

• Connection• Connect clients to useful people• Connect clients to valuable information

• Deal making• Sifting deals • Bringing deals to clients

3/12/2014

19



MULTIDISCIPLINARY PRACTICES• Began in the 1940s but resisted by Bar associations around the

world on issues of conflict of interest• Momentum picked up in the 1990s when big accounting firms

reached their natural growth limits.» Accounting, auditing and tax services could generate

only a finite amount of revenue for the accountingfirms.

» The Big 4’s concept was simple: use the extensive listof clients to market non-traditional accountingservices such as legal, recruitment, risk management,technology consulting, employment services etc.



» Financial Supermarket and One Stop Shop» Problem of revenue sharing between lawyers and

accountants» Conflicts of interest of auditors, Fall of Arthur

Andersen, ENRON and Sarbanes Oxley concerns• Re-emergence in recent years in Europe and now in

Malaysia, Singapore and Indonesia• Multidisciplinary network model was transformed to

account for the issues. If the member firms were themselvesindependent, there was no prohibition on having amultidisciplinary network.

3/12/2014

20


New Trends in Legal Services

LAW FIRM IPOs ! Slater & Gordon and the world’s first publicly traded law

firm in Australia in 2007! Access to public funds and investment by non-lawyers! Scrutiny of public investor shareholders and stock

exchange regulators! Insurance claims specialists! Rapid expansion by M&A! Recent entry into the UK Legal Services Market



LAW FIRM IPOs • Slater & Gordon flags this concern in the “risk factors” section

of the prospectus:Lawyers have a primary duty to the courts and a secondary duty to their clients. These duties are paramount given the nature of the Company’s business as an Incorporated Legal Practice. There could be circumstances in which the lawyers of Slater & Gordon are required to act in accordance with these duties and contrary to other corporate responsibilities and against the interests of Shareholders or the short-term profitability of the Company.

3/12/2014

21



• ZICO Holdings Inc. (“ZICO”) officially listed on the Catalist board of Singapore’s stock market on 11 November 2014, placing 48 million shares at 30 cents each.

• ZICO is a MDP with 3 divisions (spun off from Zicolaw) covering:-" Advisory and transactional services" Management and support services" Licensing services

• ZICO established as Zaid Ibrahim & Co. in Kuala Lumpur in 1987. ZICO Holdings Inc. was previously known as ZI Holdings Inc., and was set up to mainly serve the customers of Zaid Ibrahim & Co..



• Given the rules against non-lawyer investors in law firms, law firms in these circumstances would usually seek capital from its own partners, or getting a bank loan.

• To guarantee the independence of the rest of the Zicolaw network, the managing partner of Zicolaw’s Malaysian member firm Zaid Ibrahim & Co., the regional managing partner of Zicolaw and the managing director of Zico Holdings, must give up legal practice to manage Zico Holdings under the terms of the IPO.

• Zico Holdings and Zicolaw are separate legal entities with the relationship between the two being that of service provider and client.o Zico Holdings providing management and support services and

licensing services to the law firm.

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A clearer look at the key business segments and services of ZicoHoldings Inc.



TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES (ABS) ! UK Legal Services Act 2007 and in operation since 2011! allows law firms to seek outside investment (or operate under

external ownership)! companies that are not legal firms to offer legal services! ABSs can be corporate bodies such as bank subsidiaries or

insurers and may even be foreign registered.! ‘Tesco law’ was coined to describe the idea that buying legal

services would be as easy as supermarket shopping! Approved ABS Licences include

! Co-Operative Group supermarket chain! British Telecom for motor claims services

! changes have been introduced to improve competition, flexibility, and choice for consumers

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TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES • Reserved activities and Non-Reserved activities• The reserved activities are:

• advocacy • conducting litigation• Conveyancing• Probate• notarial activities• the administration of oaths

• Reserved activities can only be carried out by barristers or solicitors, whereas non-reserved activities can be provided by anyone, with or without a law degree

• Expected to shake up legal services market in UK and around the world and inject entrepreneurship and innovation in legal services.


Q & A

Discussion

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Documents

Econo Legal Studies in Legal Practice (Final) [Read-Only] Legal... · Research On Value Creation (Cont’d) • Legal Dynamics and the idea of living law oLaw is a living thing, and