Best Business Books for Law Students:

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 from a few years back also, which was a nice look inside the business side of venture capital and the 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.

Eh Nonymous (mail) (www):
Not my area, but:

Donald Trump?

How about the books here: Business and the Holocaust - that may be a bit more controversial. Despite most of it being nonfiction.
7.15.2005 3:21pm
Geoff (mail):
I like Po Bronsons's satirical take on the Bonds industry and high tech startups, respectively, in Bombadiers and The first $20 million is always the hardest.
7.15.2005 3:24pm
Den of Thieves.
7.15.2005 3:45pm
jallgor (mail):
Tombstones: A Lawyer's Tales from the Takeover Decades (by Larry Lederman)
7.15.2005 3:48pm
alkali (mail):
I second Tombstones. Arthur Liman's posthumously-published memoir Lawyer covers some similar subject matter in the same period and is also good.


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)
7.15.2005 4:25pm
William Henderson (www):
Here are three very good books:

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.
7.15.2005 4:35pm
Edward Whitford (mail):
Well, I am law student with degrees in history and English; and I enjoyed taking classes such as business organizations and corporate finance this last year.

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).
7.15.2005 5:28pm
Daniel Palmer (mail):
Power, Greed and Glory on Wall Street, the Fall of Lehman Brothers. Out of Print, but a good read if you can find it. also

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
7.15.2005 5:50pm
I'm surprised no one so far has recommended the terrific "The Smartest Guys in the Room" - an outstanding book about the rise and fall of Enron. It's a real page turner.
7.15.2005 5:57pm
Jeff Sherman (mail) (www):
I am a securities/M&A lawyer. The two publications that would recommend are Anatomy of a Merger by James Fruend and letter from Warren Buffett included in any Berkshire Hathaway annual report (they are almost like an MBA in 20 pages).
7.15.2005 6:01pm
Cheburashka (mail):
I would wait before adding Enron books to the mix; its still too early to know what actually happened. But I'd add to the list:

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.
7.15.2005 7:02pm
Stephen Aslett (mail):
I recommend The Terrible Truth About Lawyers by late Yale law alumnus and CEO Mark McCormack

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.
7.15.2005 7:44pm
I worked at Moody's and now work in hedge funds. Ben Stein is a funny, smart man. But his diatribe against Milken in Licence to Steal is just wrong. His thesis was that junk bonds (aka high yield, or non-investment grade bonds) were a swindle. Milken argued they offered above market returns. Neither were correct. From 1988-present, junk bonds offered a marginal premium to investment grade bonds. A bad risk-return trade, but not a swindle.
7.15.2005 9:13pm
Re: Bankruptcy-related books

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"
7.15.2005 9:53pm
alkali (mail):
I will second Liar's Poker and add Frank Partnoy's Fiasco (a critical look at the derivatives business by a Yale Law grad and former trader).

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.)
7.16.2005 2:07pm
TCO (mail):
BURN RATE by Micheal Wolfe. It is a gripping account of a dotcom startup in 1997 deaththrows trying to get someone else to put up the sucker money. I read it in 1998 and it confirmed all my doubts about vaporcompanies being touted by idiots at Goldman Sachs and McKinsey.

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.
7.16.2005 10:35pm
Jeff Hobart (mail):
Follow up to Professor Henderson:
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.
7.16.2005 10:42pm
Stephen Bundy (mail):
Milton Regan, Eat What You Kill is a great account of a bankruptcy case, the fall of a young Wall Street partner, and the dark side of Larry Lederman, much praised in prior poats.

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.
7.16.2005 11:47pm
Hal Hopp (mail):
I second Alkali's recommendations--particularly Indecent Exposure (which my corporations professor assigned back in the 80's) and Den of Theives. But regardless of which books you choose, the main point of having law students get a real business world perspective before graduation is an excellent one.
7.17.2005 9:21am
Robert Schwartz (mail):
efalken: I disagree with you assessment of Stein's take on Miliken. Back in the day, I was involved enough in enough deals to have seen many of the practices that Stein condemns. To me he had the best overall understanding of what Miliken did and why it was wrong.

I used to make young associates read the Fruend book on mergers, but it is a bit much for a student.
7.18.2005 2:47am
TCO (mail):
I love Brealey and Myers (all the little sidebars and such). But you have to be a bit of a geek to like that.
7.18.2005 5:24pm