Time to Rethink Prudent Investor Laws?

Apr 20, 2010 Jeffrey Cooper

Jeffrey Cooper

With the stock market of recent years dashing so many hopes and dreams, investors are all asking the same questions:  How could we have let this happen?  How can we be sure it won’t happen again?  Included among those asking these questions are the beneficiaries of countless trusts who have witnessed significant declines in the value of their trust portfolios.  In his article “Rethinking Trust Law Reform: How Prudent is Modern Prudent Investor Doctrine?,” Professor Stewart E. Sterk joins this search for answers, ultimately concluding that modern prudent investor laws fail to adequately protect trust beneficiaries in troubled economic times.

Professor Sterk’s article consists of three major Parts.  In Part I, Professor Sterk lays the historical framework for his analysis by summarizing the evolution of laws governing trust investment management.  In particular, he explores how two widely-accepted economic theories regarding the behavior of financial markets, modern portfolio theory (“MPT”) and the efficient capital market hypothesis (“ECMH”), came to influence trust investment law.  Sterk chronicles how both the Restatement (Third) of Trusts and the Uniform Prudent Investor Act wholeheartedly embraced MPT and ECMH in a quest to encourage the investment of trust funds in the manner these theories suggested would maximize the economic interests of trust beneficairies.

Unfortunately, argues Professor Sterk, the economic history of the past decade revealed that modern investment law placed too much faith in MPT and ECHM.  As the stock market endured a boom and bust cycle over the past ten years, most equity investors endured a gut-wrenching emotional roller-coaster but generated no net investment returns.  Modern trust investment laws exposed trust beneficiaries to this same tragic scenario, leaving many longing for the “good old days” of boring, stable, safe trust investments.

In Part II of his article, Professor Sterk explores the shortcomings of modern portfolio theory as the basis for trust investment law and questions several of the core principles of MPT and ECMH.  In particular, Sterk questions the widely-accepted notion that since risk-averse investors will demand a higher return from risky investments, invisible market forces ensure that riskier investments (e.g., common stocks) will provide superior returns to less risky investments (e.g., bonds).  Sterk suggests that modern investors may be far less risk-averse than the ECHM presumes, and thus far more likely to overvalue investments in common stocks–a phenomenon compounded by investors misperceiving the true risks inherent in such investments.  Sterk also contends that investor behavior may be less rational than MPT envisions, offering the ‘dot.com bubble’ of the late 1990s as a case in point.

In Part III, Professor Sterk considers the trust investment law implications of the past decade of experience.  In particular, Sterk concerns himself here with the agency costs which result from modern trust law misaligning beneficiaries’ economic interests with those of trustees.  The crux of this perceived agency cost problem lies in the way trustees market their own services.  Drawing in part on the work of Melanie Leslie and Rob Sitkoff, Sterk suggests that market forces and the battle for trust business drove trust companies and other professional fiduciaries to focus more on generating higher investment returns (which they hoped to “advertise” as a means of gaining additional market share) and worry less about the risks taken to secure those returns.  Professional trust companies thus sought out riskier investments as a means to generate additional business, yet trust beneficiaries bore the true financial risk of these decisions.  Rather than lead to the optimal investment of trust funds, prudent investor laws misaligned the interests of professional trustees and the beneficiaries they were supposed to be serving.

Professor Sterk’s article leads us in one of two possible directions.  If, as he suggests, the fundamentals of investment management have truly changed such that riskier investments no longer compensate investors with higher returns, we might need a new regime that more effectively aligns the interests of trustees and beneficiaries and encourages more appropriate risk-taking by fiduciaries.  Sterk sketches out what such a regime might look like, suggesting that prudent investor laws should offer trustees more precise investment guidelines–including “safe harbors” from liability designed to channel trustees towards more appropriate asset allocations for trust portfolios.  Alternatively, however, the market may simply be doing what markets have always done–cycling, correcting, and recentering to a new baseline from which it will soon move forward.  If the latter is true, then Professor Sterk’s proposal might lead us to do the very thing he now suggests prudent investor laws may have done–create a new investment regime which would have worked brilliantly in the previous market cycle but which is ill-suited to the current one.

Professor Sterk seemingly concedes this final point.  By his own admission, he offers his article not as a complete solution but merely as a means to begin a dialogue about the investment experience of the last decade and its implications for laws governing the investment of trust funds.  This is a crucial dialogue and Professor Sterk has made an extremely valuable opening comment.  There is much more to be said, and written, on this topic, and many, including myself, ultimately might disagree with some of Professor Sterk’s viewpoints.  That doesn’t make Professor Sterk’s article less valuable.  Indeed, to the contrary, the more fervent the dissent and discussion which ensues, the more we will have to thank Professor Sterk for focusing scholarly attention on a crucial emerging issue in the field of trust investment law.

Saving Us From Ourselves: Reforming the Fiduciary Duty of Loyalty

Mar 30, 2010 Julia Belian

Julia Belian

In the wake of disaster, we as a species invariably reach out with untold generosity, donating vast amounts of cash and supplies to assist the victims.  And, just as invariably, at least some of the charitable organizations through which most of us funnel our compassion will drop the ball through some form of mismanagement.  In the past twenty years, the relief efforts following almost every major disaster – spring flooding in the Midwest, mudslides and wildfires on the West Coast, hurricanes throughout the Gulf of Mexico, tsunamis in the South Pacific, and, most famously, Katrina – have been plagued by reports of mismanagement ranging from lack of meaningful oversight to outright embezzlement.

Which should mean that right now, as the world struggles to come to the aid of a ravaged and overwhelmed Haiti, would be a prime time to consider meaningful reform of the standards by which such charities conduct their critical business.  For several years, Prof. Melanie B. Leslie of Cardozo School of Law has offered a clarion call for reform of the rules governing fiduciary conflicts of interest, especially within the nonprofit sector.  In the wake of the catastrophic earthquake January 12, the arguments and suggestions in her article The Wisdom of Crowds? Groupthink and Nonprofit Governance deserve serious attention.

Leslie’s article, currently available as a working paper on SSRN, succinctly and clearly lays out the dilemma that lies at the heart of nonprofit management:  With no principal readily available to monitor, and no market to correct, nonprofit boards of directors are uniquely vulnerable to the phenomenon of “groupthink,” a process by which the desired advantages of information exchange are subverted by interpersonal group dynamics.  When a board of directors lacks clear external standards or monitoring, Leslie argues, information asymmetries among the members of the group are more likely to be resolved, not by forthright questioning and discussion, but by confirmation bias and ingroup bias, both of which are further fueled by the desire for group cohesion which is arguably more powerful in the nonprofit sector than in a business setting.  Current law governing fiduciary duties – both state law and the federal law governing tax exempt organizations – not only fails to correct this inherent problem, it actually exacerbates it by setting forth “fuzzy” standards rather than clear rules.  “Fuzzy” standards necessarily require interpretation, and in a setting already prone to cognitive errors, that process of interpretation itself actually increases the board’s tendency to overestimate its own objectivity, to overestimate a proposed deal’s fairness, to under-investigate the true market conditions, and to discourage confrontation among its members.

Leslie proposes two options for correcting the problem of “fuzzy” fiduciary standards, both of them based on her preference for rules.  Rules, she argues, communicate more clearly what the norms of behavior are in a given context and thereby reduce parties’ overestimation of their own compliance, and she offers empirical evidence to support her contention that clearly demarcated rules do more strongly determine parties’ behaviors.  Her first suggestion – and clearly her own personal preference – is to prohibit all self-dealing, period.  She argues that a blanket prohibition on self-dealing would not have to have the dire consequences often predicted, especially for smaller or rural nonprofits, but she also concedes that popular opinion tends to strongly oppose such a bright-line rule.  Her second proposal relies on a set of lower-order rules that, taken together, would not absolutely prohibit self-dealing, but would, I think, get us nearly there anyway, simply by making the process of approving such a transaction more trouble than it would usually be worth to most nonprofit boards.  That is, after all, exactly what Leslie is trying to suggest:  So long as the standards governing self-dealing transactions make engaging in such transactions no more onerous than engaging in non-self-dealing transactions, those standards quietly convey a message to nonprofit managers that such transactions are legally and morally equivalent.  Leslie’s goal is to upend this applecart and, instead, to make clear to nonprofit directors that self-dealing transactions should be presumed impermissible, whether rebuttably or irrebuttably.

It is hard to see how Leslie’s suggestions could be taken amiss.  This “hard” version of the fiduciary duty of loyalty is, at the least, the starting point for learning the concept (or, at least, it is when I teach it), with such ideas as the business judgment rule coming later as particular exceptions to the general duty, exceptions justified in the business world by the availability of shareholder monitoring and self-correcting markets.  Granted, any nonprofit director more accustomed to the rules for business decision-making will likely feel that such strictures hobble their efforts to get things done quickly and thereby provide more benefit to those in need.  But recent history and my own personal experience serving on nonprofit boards tell me that Leslie is right:  Those things we do in the name of beneficence are not always most beneficial for those we serve.  In one of the numbers in the Broadway musical “Avenue Q,” the characters encourage the audience that “When you help others, you can’t help helping yourself,” but that’s precisely the problem.  In the wake of disaster, we as a species do invariably reach out with untold generosity – but we also invariably overestimate our ability to do so in the impartial and objective way required of fiduciaries.  Leslie’s suggested rules would “build a fence” around our benevolence and thereby help us protect our generous impulses from our own short-sighted selves.

The 101 Biggest Estate Planning Mistakes

Mar 25, 2010 Gerry W. Beyer

Gerry W. Beyer

What fun!  That was my first reaction to this new book by Herbert Nass, the famous New York attorney who has worked on the estate plans of countless celebrities.  By using the wills of the rich, famous, and infamous as examples, Nass guides readers though the most common and significant mistakes individuals and their attorneys make during the estate planning process.

In the span of eleven chapters, Nass sets out his top 101 missteps which individuals and their attorneys are prone to take when planning an estate.  A good way to get a flavor of the scope of his coverage is to peruse the titles of his chapters:

• The Single Biggest Mistake is Not Planning for the One Certainty in Life … Death
• Mistakes Involving Tangible Personal Property
• Mistakes Involving Real Estate
• Mistakes Involving Executors and/or Trustees
• Mistakes Involving Guardians, Minors, or Step-Children
• Mistakes Involving Prior Marriages, Prenuptial Agreements, and Significant Others
• Estate Planning Mistakes Involving Tax and Copyright Issues
• Estate Planning Mistakes Involving Disgruntled Friends and Family
• Mistakes Involving Funerals, Burials, or Cremation
• One-of-a-Kind Mistakes by Celebrities and Icons
• Rookie or Boneheaded Mistakes

Perhaps the best feature of this book is the inclusion of real-life examples for most of the mistakes which often include reproductions of the actual wills or other documents which contain the errors.  Significant to note is that most of these are not from the wills typically reproduced such as those of Elvis, President Kennedy, and Anna Nicole Smith.  See Wills of Famous and Influential People. Here are some examples showing the novelty and diversity of the samples reproduced: Jackie Gleason, Phil Silvers, W.C. Fields, Mae West, Rock Hudson, Gloria Swanson, James Morrison, and John Cassavetes,

Not only is Biggest Mistakes an entertaining read for its intended lay audience, it also serves as a useful resource for practitioners and a learning tool for law students.

Although most practitioners will not learn anything earthshaking, the examples serve as reminders of what happens if they do not exercise proper care in each step of planning an estate.  I predict, however, that almost every estate planner will come away with something previously unconsidered.  Here is one of the insights I gained.  I consistently warn my students not to unstaple a will once it is stapled together because contestants use multiple staple holes as evidence of fraudulent page substitution.  I had not thought of what to do once removal is done – how does one “unring the bell.”  Nass provides a wonderful suggestion – obtain an affidavit from the person who removed the staples which explains the circumstances behind that removal.  He even includes a sample affidavit.

For law students, this book brings to life many of the key pitfalls typically discussed by their professors such as executing documents improperly, naming an even number of co-fiduciaries, and failing to plan for out-of-state real property.  One important warning, however, is in order.  In Nass’s attempt to make the book accessible to a wide audience, he often generalizes legal rules.  These overstatements may be confusing at times such as the admonition that serving as a witness to a will in which the witness is a beneficiary would void the gift.  Although still true in many states, students who study primarily the Uniform Probate Code which provides in § 2-505(b) that this fact is irrelevant may be left wondering “what’s going on here?”

Learning from your own mistakes is good, learning from the mistakes of others is better, and not making mistakes in the first place is best.  Biggest Mistakes helps readers avoid making the mistakes themselves by learning from the errors of others in both an informative and engaging manner.  Definitely, a good deal!

Intrafamily Loans and Tangible Property

Mar 25, 2010 Wendy Gerzog

Wendy Gerzog

The article Revisiting Dickman: Are Loans of Tangible Property Gifts? by Joseph M. Dodge, recently posted on SSRN, exhaustively covers this central question left unanswered by the Supreme Court in its 1984 Dickman decision. Dodge describes a common scenario in wealthy families: informally, parents allow their adult child to use their vacation home rent-free for an unspecified time. The piece then delves into the query about whether or not that familiar occurrence is a taxable gift. To answer that question, the article takes the reader into a wide-ranging discussion that includes property interests, imputed income, psychic benefits, Internal Revenue Code section 7872 (dealing with gift tax and income tax consequences of below-market interest loans of money), revocable transfers, and the estate tax consequences of the retained enjoyment of property.

Dodge argues against subjecting tangible personal use property to the gift tax. After all, he suggests, when you swim in a neighbor’s pool, that neighbor has not transferred a property interest to you. The permission to use property does not create a property interest in the user because it implicitly includes the power to revoke that permission.  Dodge analyzes Dickman, criticizing the court’s minimizing the real problem of cost-free loans of personal-use tangible property when it stated that the IRS was not interested in taxing such neighborly or familial gifts. The court too easily dismisses the issue by saying that, in any event, the annual exclusion and credit exemptions would shelter those transactions from any transfer tax. He critiques the court’s overgeneralizations and explains that the gift tax is not a tax on foregone economic opportunities but a tax on wealth transfers. Moreover, he states that the annual exclusion would not be available if a transaction was characterized as forming a tenancy at will plus a reversion, because there would be no ascertainable present value of the child’s interest.   After examining the case under different transfer tax principles, Dodge concludes that Dickman was doctrinally confused and wrongly decided.

Indeed, Dodge wishes that the court had not chosen to decide Dickman, because Congress was already working on Internal Revenue Code section 7872, which provides a statutory imputed cross payment approach. Dodge considers that provision to be the best unified solution to both the gift and income tax issues in the case; in addition, he contends that it correctly does not apply to the rent-free use of tangible personal-use property. Dodge does not believe that Dickman should be extended to his hypothetical scenario because in allowing such cost-free personal use of the parents’ vacation home, there is no property transfer (generally such event would not constitute even a tenancy at will); alternatively, if there is a property transfer, the transfer is incomplete because of the retained power to revoke. Further, it lacks value and has no tax avoidance potential.

When Dodge focuses on the policy issue of whether or not such loaned use of personal use property can have the effect of transfer tax avoidance, he asks whether or not by making their vacation home available to their adult child, the parents are diminishing their estate and he concludes that they are not. It is axiomatic that a gift of services is not subject to transfer tax because there is no diminution of the transferor’s estate. According to Dodge, a loan of tangible personal use property likewise does not result in a transfer of wealth. While the recipient receives something of value, the property owner has not thereby reduced his assets.

Moreover, although the gift tax is sometimes described as a backup to the income tax, according to Dodge, there is no danger of income tax abuse by shifting income to the property owner’s child. In this factual setting, the child would lack the right to rent the property to another so that any rental income derived by illegally renting the property would belong to the owner. Dodge acknowledges that it is reasonable for the income tax, an annual tax incorporating the concept of realization, to tax interest-free loans of money. However, he considers it unsound for the gift tax to tax a child’s rent-free use of a vacation home because the gift tax is imposed once, only at the time of a completed gift of a property interest.

Dodge concludes by distinguishing between a gift term loan of tangible property and gift demand loan of similar property in a non-commercial context. He explains that a gift term loan is a taxable gift that should be taxed and valued under the applicable Code section depending on whether the gift is made to a family member, to a non-related individual, or to a charity. A gift demand loan to an individual, by contrast, should not be subject to gift tax because there is no property transfer, there is an incomplete gift, Dickman does not provide a basis to extend its holding to this activity, or it represents only a consumption or quasi-support benefit given to third parties.

Dodge’s article is imaginative, insightful, and very well written. It is a must read. How often you find an article that teaches you an incredible amount about transfer taxes, and at the same time provides a piercing review of one of the most revolutionary and recent Supreme Court pronouncements in the gift tax and income tax areas?

Whose Trust is It?

Mar 13, 2010 Thomas Gallanis

Thomas Gallanis

There is a central tension in the law of trusts between the rights of the settlor and of the beneficiaries.  On the one hand, the organizing principle of the law of donative transfers, as stated in Section 10.1 of the Restatement 3d of Property (Wills and Other Donative Transfers), is that the “donor’s intention is given effect to the maximum extent allowed by law.”  On the other hand, the Restatement 3d of Trusts emphasizes in Section 27(2) that “a private trust, its terms, and its administration must be for the benefit of its beneficiaries.”  A similar benefit-the-beneficiaries rule is codified in Section 404 of the Uniform Trust Code (UTC) and made mandatory in UTC Section 105.

This essay, Burn the Rembrandt?  Trust Law’s Limits on the Settlor’s Power to Direct Investments, by one of America’s leading scholars of trust law, Professor John Langbein of the Yale Law School, explores the limits that trust law places on the power of the settlor, as the author of the trust’s terms, to direct the trustee’s investment decisions.  The essay is a response to an earlier article in the Boston University Law Review by Professor Jeffrey Cooper, in which Professor Cooper criticized the benefit-the-beneficiaries rule, instead proposing greater deference to the intentions of the settlor, for example where the settlor “intentionally and thoughtfully impaired beneficiaries’ economic rights.” See Jeffrey A. Cooper, Empty Promises: Settlor’s Intent, the Uniform Trust Code, and the Future of Trust Investment Law, 88 B.U. L. Rev. 1165, 1166 (2008).

Professor Langbein’s response begins with an “arresting example” (p. 378) provided several years earlier by Professor Gareth Jones of Cambridge University: “A settlor may destroy his own Rembrandt. But he cannot establish a trust and order his trustees to destroy it.”  See Gareth H. Jones, The Dead Hand and the law of Trusts, in Death, Taxes and Family Property 119, 126 (Edward C. Halbach, Jr., ed, 1977).  Using this example, Professor Langbein explores the reasons why trust law limits the “unilateral dominion” (p. 379) of the settlor.  He points to the need for dead hand control and also for the recognition and enforcement of the equitable property rights of the beneficiaries (and the corresponding fiduciary duties of the trustee).  As he explains, “A transferor who chooses to use the trust form . . . must accept that minimum regime of fiduciary obligation that defines a trust” (p. 380).

One of the many innovations of the UTC, promulgated in 2000 and amended in subsequent years, was to organize in one place—Section 105—the rules of trust law that are mandatory.  These rules apply irrespective of the settlor’s contrary intent.  As Professor Langbein rightly emphasizes, however, the content of the mandatory rule that the trust must be for the benefit of the beneficiaries is not much of an innovation.  Trust law has long insisted that the settlor cannot “countermand the trustee’s duty to act in good faith” (p. 383).  There is an “irreducible core,” as Professor David Hayton has written, to the trustee’s fiduciary duty.  See David Hayton, The Irreducible Core Content of Trusteeship, in Trends in Contemporary Trust Law 47, 48-49 (A.J. Oakley ed. 1996).  I have explored this irreducible core with respect to the trustee’s duty to keep beneficiaries informed of the trust and its administration.  See Thomas Gallanis, The Trustee’s Duty to Inform, 85 N.C. L Rev. 1595 (2007).  In this Essay, Professor Langbein explores the irreducible core of prudent investment.

The Restatement 3d of Trusts has much to say about the duty of prudent investing, as does the Uniform Prudent Investor Act, incorporated into the UTC as Article 9.  Relying on the economic insights of modern portfolio theory, the duty of prudent investment is, for the most part, default law.  The settlor is given great latitude to use the terms of the trust to direct the trustee’s investment decisions.  There is an outer limit to the settlor’s power, however.  As with other core duties of the trustee, the duty of prudent investment cannot be eliminated entirely.   This idea, in a related context, is expressed well in the Comment to UTC Section 412(b), on the modification of the trust’s administrative terms where “continuation of the trusts on its existing terms would be impractical or wasteful or impair the trust’s administration.”  The Comment states in pertinent part: “Although the settlor is granted considerable latitude in defining the purposes of a trust, the principle that a trust have a purpose which is for the benefit of its beneficiaries precludes unreasonable restrictions on the use of trust property. An owner’s freedom to be capricious about the use of the owner’s property ends when the property is impressed with a trust for the benefit of others.” (Emphasis added.)

In this Essay, Professor Langbein explains why the benefit-the-beneficiaries rule appropriately places an outer limit on the settlor’s authority to direct investments, and he responds to Professor Cooper’s concerns that this limit will adversely affect settlor or trustee behavior or increase litigation.

The Essay is well worth reading, and I commend it highly.

A Good Time to Die: Family-Based Objections to Inheritance Taxation

Feb 8, 2010 Bridget Crawford

Bridget Crawford

Now is a good time to die.  Congress’s failure to take action on the extension of the estate tax caused it to “expire” on December 31, 2009.   This repeal is scheduled to last for only one year, and Congress likely will enact some form of estate tax before then.  So only those who die soon will be able to transmit wealth entirely tax-free.  In the meantime, questions about the economics, fairness, morality of inheritance taxation–broadly defined–will figure prominently in political and social debates.  Anne Alstott’s essay, Family Values, Inheritance Law, and Inheritance Taxation, forthcoming in the Tax Law Review, will help ground these discussions.

Alstott’s argument is that taxing inheritance can be consistent with valuing families; it all depends on what view of the “family” one takes.  Alstott begins by locating her work in the academic debate about inheritance tax (the umbrella term she uses to refer to wealth transfer taxation generally, acknowledging that there is no federal inheritance tax per se).  She launches her analysis on the springboard of Tom Nagel’s argument that “the right to use one’s resources to benefit one’s family” [1] is at odds with inheritance taxation.  Alstott evaluates this claim using three perspectives on the family – she calls them the liberal, conventional, and functional views.   She synthesizes these from a careful reading of Jens Beckert’s historical study, Inherited Wealth (2008).  Roughly characterized, the liberal view approaches the family as a private sphere within which individuals should have freedom to choose their beneficiaries.  The conventional view construes the family as a privileged unit of economic and social organization that transmits identity and values from generation to generation.  A functional view emphasizes the family’s socio-economic welfare role–i.e., providing needed financial and other assistance to its members.

Each of these views of the family comports with an inheritance tax, Alstott argues clearly and persuasively.  She explains, in the first instance, that classic liberalism’s embrace of individual freedom includes a role for the state “to structure the conditions in which individuals properly exercise their freedom.”  An inheritance tax is an acceptable structured condition, she argues.  Alstott deftly detangles liberalism from libertarianism.  It is the latter, she explains, that elevates individual freedom (including freedom of testation) above state authority (imposition of taxes).  Alstott thus exposes arguments against “death taxes” as (perhaps selective) objections to government regulation.

Alstott turns her attention to tax preferences for family farms and other small businesses.  She asks whether these assets receive favorable treatment because they are linked to (or transmitted in connection with) intangible assets such as reputation, community and personal values.  If so, how can the law make logical and fair distinctions between “identity”-linked property (like a family farm) and generic property (like marketable securities)?  What happens when a right to transmit, or even receive, “identity”-type assets conflicts with the right of testation?  Inheritance taxation concerns could be accommodated through increased exemptions or other tax benefits, Alstott explains, but the other problems are not as easy to solve.

In the final part of the essay, Alstott makes quick work of the family-as-social insurer argument. She points out that a legal system deeply committed to that particular theory likely would need to adopt forced heirship rules (almost unknown in the United States) or a requirement that heirs show financial need as a condition of inheritance.  Furthermore, Alstott argues, with exemptions set at an appropriate level, the family can fulfill insurance function in a taxable environment.  In other words, the law could permit tax-free transfers of sufficient wealth to meet heirs’ needs, but perhaps not all of their desires.

Alstott’s essay brings a measured tone and a broad perspective to a debate that often takes on a feverish pitch.  Ironically, her careful application of theoretical perspectives on the family allows her to show that the inheritance tax debate is not (much) about the “family” at all.  Anti-tax arguments instead arise out of “a particular conception of the individual and the state and relatively little to do with the family and the relief of financial distress,” as Alstott says.  This essay is a clear, well-reasoned and insightful analysis that should appeal to all who are interested in the politics and practicalities of good governance.

[1] Thomas Nagel, Liberal Democracy and Hereditary Inequality, 87 Tax L. Rev. (forthcoming 2009).

Meet the Editors

Jan 5, 2010 Michael Froomkin

Section Editors

The Section Editors choose the Contributing Editors and exercise editorial control over their section. In addition, each Section Editor will write at least one contribution (“jot”) per year. Questions about contributing to a section ought usually to be addressed to the section editors.

Professor Bridget J. Crawford
Pace Law School

Professor William LaPiana
Rita and Joseph Solomon Professor of Wills, Trusts, and Estates; Director, Estate Planning, Graduate Tax Program, New York Law School

Contributing Editors

Contributing Editors agree to write at least one jot for Jotwell each year.

Professor Julia Belian
Detroit Mercy School of Law

Professor Gerry W. Beyer
Governor Preston E. Smith Regents Professor of Law, 2005, Texas Tech University School of Law

Professor Alfred Brophy
Reef C. Ivey II Professor of Law, University of North Carolina School of Law

Professor Jeffrey A. Cooper
Quinnipiac University School of Law

Professor Alyssa DiRusso
Cumberland School of Law

Professor Thomas Gallanis
N. William Hines Professor of Law Professor of History, University of Iowa College of Law

Professor Mitchell Gans
Hofstra University School of Law

Professor Wendy Gerzog
University of Baltimore School of Law

Professor Iris Goodwin
University of Tennessee School of Law

Professor Joanna Grossman
Professor of Law and John DeWitt Gregory Research Scholar, Hofstra University School of Law

Professor Melanie Leslie
Benjamin N. Cardozo School of Law

Professor Browne C. Lewis
Cleveland-Marshall College of Law

Professor María Pabón López
Indiana University School of Law-Indianapolis

Professor Ray D. Madoff
Boston College Law School

Professor Solangel Maldonado
Seton Hall University School of Law

Professor Paula Monopoli
Professor of Law, Marbury Research Professor and Founding Director, Women Leadership & Equality Program, University of Maryland School of Law

Professor Laura Rosenbury
Washington University School of Law

Professor Randall Roth
The William S. Richardson School of Law at the University of Hawai‘i at Mānoa

Professor Robert Sitkoff
John L. Gray Professor of Law, Harvard Law School

Professor Stewart Sterk
H. Bert and Ruth Mack Professor of Real Estate Law, Benjamin N. Cardozo School of Law

Professor Joshua C. Tate
SMU Dedman School of Law

Professor Lee-ford Tritt
Director, Center for Estate and Elder Law Planning; Director, Estates & Trusts Practice Certificate Program;  Associate Director, Center on Children and Families, University of Florida Levin College of Law

Professor Michael Yu
California Western School of Law

Call for Papers

Jan 5, 2010 Michael Froomkin

Jotwell: The Journal of Things We Like (Lots) seeks short reviews of (very) recent scholarship related to the law that the reviewer likes and thinks deserves a wide audience. The ideal Jotwell review will not merely celebrate scholarly achievement, but situate it in the context of other scholarship in a manner that explains to both specialists and non-specialists why the work is important.

Although critique is welcome, reviewers should choose the subjects they write about with an eye toward identifying and celebrating work that makes an original contribution, and that will be of interest to others. Please see the Jotwell Mission Statement for more details.

Reviews need not be written in a particularly formal manner. Contributors should feel free to write in a manner that will be understandable to scholars, practitioners, and even non-lawyers.

Ordinarily, a Jotwell contribution will

• be between 500-1000 words;
• focus on one work, ideally a recent article, but a discussion of a recent book is also welcome;
• begin with a hyperlink to the original work — in order to make the conversation as inclusive as possible, there is a strong preference for reviews to focus on scholarly works that can be found online without using a subscription service such as Westlaw or Lexis. That said, reviews of articles that are not freely available online, and also of very recent books, are also welcome.

Initially, Jotwell particularly seeks contributions relating to:

• Administrative Law
• Constitutional Law
• Corporate Law
• Criminal Law
• Cyberlaw
• Intellectual Property Law
• Jurisprudence
• Legal Profession
• Tax Law
• Trusts & Estates
• Worklaw

We intend to add more sections in the coming months.

References

Authors are responsible for the content and cite-checking of their own articles. Jotwell editors and staff may make editorial suggestions, and may alter the formatting to conform to the house style, but the author remains the final authority on content appearing under his or her name.

• Please keep citations to a minimum.
• Please include a hyperlink, if possible, to any works referenced.
• Textual citations are preferred. Endnotes, with hyperlinks, are allowed if your HTML skills extend that far.
• Authors are welcome to follow The Bluebook: A Uniform System of Citation (18th ed. 2005), or the The Redbook: A Manual on Legal Style (2d Ed.) or indeed to adopt any other citation form which makes it easy to find the work cited.

Technical

Jotwell publishes in HTML, which is a very simple text format and which does not lend itself to footnotes; textual citations are much preferred.

Contributors should email their article, in plain text, in HTML, or in a common wordprocessor format (Open Office, WordPerfect, or Word) to ed.jotwell@gmail.com and we will forward the article to the appropriate Section Editors. Or you may, if you prefer, contact the appropriate Section Editors directly.

Jotwell Mission Statement

Jan 5, 2010 Michael Froomkin

The Journal of Things We Like (Lots)–JOTWELL–invites you to join us in filling a telling gap in legal scholarship by creating a space where legal academics will go to identify, celebrate, and discuss the best new legal scholarship. Currently there are about 350 law reviews in North America, not to mention relevant journals in related disciplines, foreign publications, and new online pre-print services such as SSRN and BePress. Never in legal publishing have so many written so much, and never has it been harder to figure out what to read, both inside and especially outside one’s own specialization. Perhaps if legal academics were more given to writing (and valuing) review essays, this problem would be less serious. But that is not, in the main, our style.

We in the legal academy value originality. We celebrate the new. And, whether we admit it or not, we also value incisiveness. An essay deconstructing, distinguishing, or even dismembering another’s theory is much more likely to be published, not to mention valued, than one which focuses mainly on praising the work of others. Books may be reviewed, but articles are responded to; and any writer of a response understands that his job is to do more than simply agree.

Most of us are able to keep abreast of our fields, but it is increasingly hard to know what we should be reading in related areas. It is nearly impossible to situate oneself in other fields that may be of interest but cannot be the major focus of our attention.

A small number of major law journals once served as the gatekeepers of legitimacy and, in so doing, signaled what was important. To be published in Harvard or Yale or other comparable journals was to enjoy an imprimatur that commanded attention; to read, or at least scan, those journals was due diligence that one was keeping up with developments in legal thinking and theory. The elite journals still have importance – something in Harvard is likely to get it and its author noticed. However, a focus on those few most-cited journals alone was never enough, and it certainly is not adequate today. Great articles appear in relatively obscure places. (And odd things sometimes find their way into major journals.) Plus, legal publishing has been both fragmented and democratized: specialty journals, faculty peer reviewed journals, interdisciplinary journals, all now play important roles in the intellectual ecology.

The Michigan Law Review publishes a useful annual review of new law books, but there’s nothing comparable for legal articles, some of which are almost as long as books (or are future books). Today, new intermediaries, notably subject-oriented legal blogs, provide useful if sometimes erratic notices and observations regarding the very latest scholarship. But there’s still a gap: other than asking the right person, there’s no easy and obvious way to find out what’s new, important, and interesting in most areas of the law.

Jotwell will help fill that gap. We will not be afraid to be laudatory, nor will we give points for scoring them. Rather, we will challenge ourselves and our colleagues to share their wisdom and be generous with their praise. We will be positive without apology.

Tell us what we ought to read!

How It Works

Jotwell will be organized in sections, each reflecting a subject area of legal specialization. Each section, with its own url of the form sectionname.jotwell.com, will be managed by a pair of Section Editors who will have independent editorial control over that section. The Section Editors will also be responsible for selecting a team of ten or more Contributing Editors. Each of these editors will commit to writing at least one Jotwell essay of 500-1000 words per year in which they identify and explain the significance of one or more significant recent works – preferably an article accessible online, but we won’t be doctrinaire about it. Our aim is to have at least one contribution appear in each section on a fixed day every month, although we won’t object to more. Section Editors will also be responsible for approving unsolicited essays for publication. Our initial sections will cover administrative law, constitutional law, corporate law, criminal law, cyberlaw, intellectual property law, legal profession, and tax law — and we intend to add new sections when there is interest in doing so.

For the legal omnivore, the ‘front page’ at Jotwell.com will contain the first part of every essay appearing elsewhere on the site. Links will take you to the full version in the individual sections. There, articles will be open to comments from readers.

The Details

Learn more about Jotwell:

• Style guide
• Acceptable use policy
• Copyright Policy
• Privacy policy