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10/30/91

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Lecturer leavens business law with humor, humanity

STANFORD -- What do you have when you have a lawyer up to her neck in sand? Not enough sand.

There goes Connie Bagley again, telling lawyer jokes in class. It's OK though; Bagley's the teacher and a lawyer.

The lecturer in management at the Stanford Graduate School of Business is a member of the bar in New York and California, former partner in a prestigious San Francisco law firm, and author of the book on law for managers. Besides being entitled, Bagley has good reason for her seeming frivolity.

"I believe it's important, up front, to confront the hostility that most business people feel toward lawyers," Bagley said. "Besides, if I act so learned, as if law is so complicated, my students will believe there's no way they could understand it. If I poke fun at myself at the beginning, everyone relaxes and is more willing to take risks with the material."

Once that happens, Bagley is all business. Now beginning her fourth year as a lecturer at the Business School, she teaches Managers and the Legal Environment, a general course in law for managers; Legal Aspects of Funding Businesses, a guide for potential entrepreneurs and investment bankers; and Corporate Governance, Power and Responsibility, a seminar she introduced last spring for budding directors, investors or anyone else concerned with corporate structure.

In the midst of course preparation and teaching, Bagley managed to research and write a 667-page, 3-pound, 10 1/2-ounce tome, Managers and the Legal Environment: Strategies for the 21st Century, which was published this year. More than three years in the making, the book's 26 chapters cover almost everything a manager would want to know about the law.

Managers outlines the fine points of financing start-ups and offering securities, explains the small print on contracts and lending transactions, and casts a disapproving judicial eye on securities fraud and insider trading. Case studies are as current as book publishing allows. The most recent citation is a Wall Street Journal article from December 1990 - a mere two months before publication.

The book begins with a chapter devoted to "Ethics and the Law." Throughout the book, Bagley highlights ethical considerations, including at least one ethics question or problem at the end of every chapter.

"I believe that there's a strong link between law and ethics," Bagley said. "I tell my students, 'Trust your gut instincts. If you think you're doing something wrong, chances are a clever lawyer will find a legal way to prove you are. And what about waking up and facing yourself in the mirror every morning? Ask yourself, What kind of a manager are you? What kind of entrepreneur do you want to be? What kind of company do you want to build?' "

Bagley emphasizes social responsibility in all her courses. She asks her students in Corporate Governance, "If the board's not doing the right thing, what can you, as a manager, or as a shareholder, do about it?"

A visiting speaker, general counsel for the California Public Employees' Retirement System, gave them one answer. He explained how the the giant, $65-billion pension fund uses its clout to influence recalcitrant boards of directors.

Later in the quarter, students considered the effects of leveraged buyouts and restructurings on a firm and its employees. They read and role-played Barbarians at the Gate: The Rise and Fall of RJR Nabisco; spent an evening in San Francisco at Other People's Money, a play about the takeover and dismantling of a firm; and watched the video of Roger and Me, which centers around General Motors' closing of a plant in Flint, Mich..

"I thought it was important for them to think about how they, personally, would feel putting 30,000 people out of work," Bagley said. "Would they be comfortable saying, 'As long as it helps the bottom line that's all I need to think about?' Is Milton Friedman right when he says the only thing a company should be doing is maximizing profits? I think the students left the course with an awareness that this obsession with quarterly numbers is not in the long-term interest of the United States."

Clearly, Bagley's subject matter has branched out from straight business law, covering not only the legal aspects of corporate governance but comparative management systems as well. As for her legal practice?

"I feel like I've done the law biz," she said. "I've practiced for 14 years now and been a partner for seven. At this point, I'd like to dedicate myself to teaching and do some consulting on the side - mainly with CEOs and board members, so that the experience will enrich my presentation in the classroom and not just be collateral to it."

Why do they bury lawyers 12 feet under? Because deep down, lawyers aren't so bad after all.

-jz-

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