In Part 4 of the WordRake series How to Write the Perfect Memorandum, we looked at the Advisory Memorandum, the backbone of a transactional practice. This week, we parse the most complex of memoranda—the Issue Memorandum, which assesses the strength of a client's case.
The Issue Memorandum
Now you are looking back; the story has already taken place. Your client has been sued or has sued someone else. From the story, what issues arise, and how strong is your client’s position on these issues? Open your Issue Memorandum by clearly stating the Issue(s).
Many litigators have graduated from law school not knowing how to frame an issue properly. They usually leave out salient facts, which would provide context for the law: without these facts, there can be no issue.
Although the assigning lawyer knows far more about the case than you do, you must include facts when you design the issue, or the assigning lawyer cannot assess your understanding of the question she needs answered. Including facts in the way you express the issue also establishes context for those who might refer to your memorandum months or even years later.
Note the difference between the two following “Issues,” the first of which is typical, the second of which is desirable:
The following provides an overview of the legal research performed on the issue of whether the Statute of Frauds will bar Fidelity’s claim for breach of contract against Ballard in the above-referenced action.
Where an oral promise to assume debt was made only to the debtor, can the creditor defeat a Statute of Frauds defense by the promisor?
Some partners prefer the names of the parties to the more general approach above:
Where Ballard orally promised ProStat he would assume ProStat’s obligation to Fidelity, can Fidelity later defeat Ballard’s Statute of Frauds defense?
Either way, present the issue succinctly and as a question. It must stand alone and incorporate enough broad facts that the assigning lawyer never has to read the fact section to put the issue into context. As you research and understand more, you likely will refine the issue. Note that properly framing the issue above lets the reader know your client is the creditor Fidelity.
Follow the Issue with a Short Answer, which should be tight but include your reasoning. Often you will write the Short Answer only after you have finished writing your Discussion. The Short Answer will be much more succinct than the Conclusion:
Maybe. The cases applying California’s Statute of Frauds hold that promises to answer for the debt of another must be in writing; but the cases are old and involve promises made directly to the creditor. To argue that the statute does not apply to oral promises made directly to the debtor will require a short, but logical, leap.
Assigning lawyers often have little time to discuss all of the facts with the associate, or they assume the associate does not need to know all of the facts. But facts are extremely important because law does not arise in a vacuum. By presenting the facts, you accomplish three things:
- you clarify the foundation for your research;
- you let the assigning lawyer know the story on which you base your analysis;
- you provide context for anyone reading your memorandum later.
Write the Facts as a narrative, and include only relevant facts; but don’t be afraid to sketch a little background to establish the context.
In the fall of 2015, angel investor Jamie Ballard agreed to buy ProStat for an undisclosed amount of cash. In his letter of intent, Ballard anticipated that his lenders would require an audit of ProStat and its subsidiaries. The letter contained this sentence: “We are willing to pay for the audit so long as costs are capped at $100,000, which we believe is the approximate fair market cost.” The letter was not signed and was never sent. Drafts of a Recapitalization and Stock Purchase also mention . . . .
After you have framed the Issue, stated the Short Answer, and presented the Facts, you now offer the research and analysis that led you to the Short Answer. Argue pro and con; challenge both sides of the Issue—this is what distinguishes a memorandum from a brief. As you summarize case law and statutes, be objective and comprehensive, but explain how you might use that law to support your client’s position. If you assume anything, tell the assigning lawyer.
California’s Statute of Frauds, California Stat. Ann. §26.922(1)(b), states that certain categories of agreements are void unless written and signed by the party to be charged. One of those categories is “A special promise to answer for the debt, default, or misdoings of another person.” But all courts addressing the matter hold that the statute includes only those promises made by the defendant to the creditor. See Sacramento Traction Co. v. Cole, 258 F. 169, 172 (9th Cir. 1959). Out of dozens of cases citing the statute, not one involves a promise like Ballard’s, made directly to the debtor . . . .
The Conclusion in the Issue Memorandum parallels that in the Advisory Memorandum. It is more detailed than the Short Answer, and you clarify your reasoning to the assigning lawyer. When assigning lawyers read your conclusion, they should understand the strengths and weaknesses of the client's position.
Fidelity might be able to defeat Ballard’s Statute of Frauds defense, but only with a short leap from case law to logic.
California’s Statute of Frauds requires that certain categories of agreements be written. If an agreement in one of these categories is oral, it cannot be enforced. One of these categories is “A special promise to answer for the debt, default, or misdoings of another person.” The statute, however, does not specify to whom the promise must be made. Every case citing the statute involves a promise made to the creditor, and . . . .
Next week, in Part 6 of the WordRake series How to Write the Perfect Memorandum, we will explain how to keep clients happy and informed by properly introducing a memorandum to a client.