April 22, 2010
Minding Our Own Business: Thanks!
Posted by Usha Rodrigues

On behalf of the Glom, I'd like to thank the Masters for making our Minding Our Business Forum such a success.  Our goal was to focus on "how changes in the business of law might affect law schools and what law professors should be doing about it." We certainly engaged in a robust conversation, which you can read in its entirety here.   Please keep an eye out for future Masters Fora at the Glom!

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Minding our own business: more on legal entrepreneurs and legal education
Posted by Account Deleted

My last word in this interesting forum.

I suggested that we should think about how to select and train legal entrepreneurs to deal with the "creative ddestruction" that is sweeping through our industry. Gordon and Usha responded in various ways that this isn't a good approach to turning out transactional lawyers. 

I need to clarify. My comment was not part of the extensive debate on how law schools can do a better job of turning out lawyers for the current version of law practice, particularly including how to make them ready for practice on day one, rather than leaving this training to law firms.  My reference to "creative destruction" referred to the coming new world of conveying legal knowledge that I discuss in my article. In this world, law-trained people will use their expertise in ways we're only beginning to glimpse, including business consulting, creation of legal products, research and development, more sophisticated legal software, etc.  The common thread is that all this is outside the box of lawyers giving customized advice to individual clients. 

I'm not suggesting this is what all law practice will be in the future.  But I am suggesting this is where the growth is likely to come, while traditional forms of customized-advice practice shrink.  I understand that we'll have to change some of the existing professional rules to get there.  My article discusses some reasons why that is likely to happen.

Because we don't know what the future will look like, we should improve but not abandon the current model.  However, we have to remember that we're preparing our students for a future that is very unlikely to look anything like the present. 

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April 21, 2010
Minding Our Own Business: In Praise of Doctrine
Posted by Bob Lawless

Because I am coming late to the forum, I won't rehash many of the fine points that already have been made. The market will reward law schools who do a better job of training lawyers in transactional work as well as in fundamental skills from "adjacent" disciplines like economics, finance, accounting, and statistics. In recent years, however, I have become increasingly concerned that our students are leaving law school with less and less knowledge about basic legal doctrines, by which I mean the rules judges and lawyers expressly state they are using when resolving legal claims. My concern over doctrinal training may be a little bit of a heretical position given the overall theme of this forum, but knowing legal doctrine is much of a practical skill as any that have mentioned in the forum.

There are at least three reasons why I think students are leaving law school with less knowledge about legal doctrine than their recent predecessors. First, I am counseling more students who come to me not having taken fundamental classes in areas like administrative law, business organizations, and commercial law (to name a few). Not every student, of course, can take every class, but my sense is that there is a greater tendency for core courses to be skipped than was true even ten years ago. Second, in my classrooms, students seem to be displaying a greater ignorance of doctrines or rules they should have learned in other courses. Third, when students talk to me about the bar exam, there seems to be more gaps between what they took in law school and what gets covered on the bar exam. As someone who cares a lot about making sure we get our facts right, I am sorry to say that I don't have any solid measures to prove I'm right. My reaction is based just on what I have seen.

If I'm right, why does it matter that students perhaps leave law school without a solid ground in various legal doctrines? Effective lawyering requires many different skills, but knowing the rules of the game is surely one of them. A student who knows how to draft a merger agreement but does not understand the difference between an asset sale and a corporate merger--an example that comes from a very recent experience--is surely just as dangerous as one cannot draft the document at all. Moreover, teaching doctrine is one thing that law schools can actually do pretty well.

The danger with this point is to be misheard. To paraphrase Gordon from an earlier post, I trust no one is questioning my bona fides on the importance of interdisciplinary work and on the importance of getting that perspective into a classroom. And, I am not contending we need fewer clinical or simulation experiences for students. My own courses feature pedagogical experiences as arguing motions and drafting security agreements. As with many things, I am more complaint than solution. There may be some self-correction. I sense there is a small amount of pressure from employers for students to take more traditional law school courses, which in turn will end up pressuring the students to demand that their law schools give them a basic knowledge set before leaving law school.

But, if law faculty are honest with themselves, course offerings are just part of the issue. In the classes we do offer, we teach less doctrine than we used to because we are increasingly removed from the professional lives of lawyers. When we cover cases, we often ask the students how they would have ruled instead of focusing on what the court actually did rule. Complex statutes perhaps don't get the time they deserve because they're difficult to teach or intellectually uninteresting. At an individual level, there is perhaps one suggestion I would make to any law faculty member. If you don't already do so, try to attend or, better yet, get on the program for a CLE or another professional meeting for practicing attorneys. And, try to do it annually if not more regularly. Stay for the whole event and listen to the problems the attorneys discuss and then bring that discussion back into your classroom. (And, I bet the non-academics reading this post will be surprised to learn how many law professors are not already doing this.)

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Minding Our Own Business: Whom should we be admitting?
Posted by Usha Rodrigues

I'm an entrepreneurship fan myself, yet I admit I share some of Gordon's skepticism on the front of using entrepreneurship as a law school admissions criterion.  Christine hypothesizes that law schools "encourage the risk-averse."  I'd say it stronger than that: law schools attract the risk averse.  Traditional legal education reinforces risk aversion by training lawyers to spot problems without providing solutions.  This is why businesspeople don't like lawyers.  Targeting entrepreneurs to come to law school sounds to me like the inverse of that apocryphal Sinclair Lewis story.  Good entrepreneurs are already out there entrepreneuring.

Larry suggests giving a lot of extra points to applicants who have started, or at least worked in, a business, or shown equivalent initiative.  But these to me are two very different categories.  Those who start a business or invent something are true entrepreneurs--but they seem to me relatively unlikely to want to go to law school to learn to be business lawyers.They're already out there doing their entrepreneurial thing.  On the other hand, I heartily agree with favoring applicants from the second category.  Students who have worked, in a business setting, teaching ESL--honestly doing anything at all--bring a lot to the table in terms of maturity and "client-readiness," simply by virtue of having worked in the real world.

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Minding Our Own Business: Artifacts of Assessment
Posted by Anna Gelpern

I have not been at Our Business long enough to hold forth on curricular reform, but did want to share a recent experience that surprised me.  I got a strong group of students in my banking class this term, and was able to arrange a research project with an outside institutional "client," more or less on a whim.  Students opt into a 10-pp paper, and get to present it at the end of the term to one or more in-house lawyers at the institution.  There is no formal arrangement, just agreement on a topic, a moral commitment to read, and a visit.  I have only worked through about a third of the drafts so far, and the jury is very much out on the caper as a whole.  That said, I have been startled by my own attitude in reading the papers.  I find myself shaping a palpably different product from either the old student research paper or even the Big Law associate memo.  With an "external" product, the substantive filter is different, the standard is different,  the group dynamics are different.  The paramount goal appears to be right, useful, efficient -- somewhat distinct from learned, original, comprehensive. 

Surely this is old news for clinicians, among others.  Just as surely, I am not leaping to turn all my doctrine and theory classes into client memo exercises; more likely I will add this to negotiating and policy exercises in my menu of non-standard assessment options for small to medium-size classes.  But the experiment so far has reinforced my view that there are manageable ways to transmit the culture of practice in our industry's current un(radically)reformed state.  Giving students a chance to work the diverse artifacts of practice, and periodically adopting an assessment filter geared to the production of such artifacts, in turn helps bridge some discontinuities within and among teaching, theory, and practice. 

And I do think that it is in good part a matter of culture, which we carry along with skills and knowledge, to make our students "client-ready."  As Gordon's post might imply, this may be more subtle and challenging than fixing the course mix.

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Minding Our Own Business: Against Legal Entrepreneurship as a Unifying Principle of Legal Education
Posted by Gordon Smith

During this Masters Forum, both Christine and Larry have endorsed the notion of training legal entrepreneurs. I trust that my bona fides on the study of law and entrepreneurship is unquestioned, but I do not believe that "legal entrepreneurship" is a viable business model for law schools.

For one thing, there is the fundamental question whether entrepreneurs are born or made. I assume we could all agree that law schools are capable of teaching skills that are useful to entrepreneurs -- such as basic accounting and finance (see below) -- but I think we would also all agree that these skills are not the essence of entrepreneurship. Understanding this, Christine and Larry both emphasize the need to recruit students who have a demonstrated entrepreneurial inclination. I would happily add "entrepreneurial proclivity" to the list of plus factors to be considered by the Admissions Committee, and I suspect this is the extent of what Christine and Larry are proposing with respect to admissions.

But surely there must be more to the idea of producing legal entrepreneurs than selecting entrepreneurial students. If legal entrepreneurs are desirable graduates but we can't train legal entrepreneurs, then shifting the business model of a law school to legal entrepreneurship merely results in a search for rare talent, much like the current search for high-LSAT candidates.

Christine and Larry both seem to recognize this and implicitly assume that training is an important step in the creation of legal entrepreneurs. But what sort of training?

Christine is hiding the ball: "I would posit that the law school of the future should position themselves as the school that can identify, recruit and train law graduates that will have the confidence and personality to be 'client-ready' at graduation."

Larry attempts to fill in some gaps:

Offer a course in legal entrepreneurship. I envision that as starting with but going beyond "law office management" to conceiving of “law practice” as fundamentally the conveyance of legal knowledge, and then considering alternatives to conventional law practice that fit this model.

Ensure that all law students have basic business knowledge. I’m not talking about a semester traipsing laboriously through the Delaware fiduciary law cases (which could be an elective). I mean elements of accounting, finance, and possibly how to construct a viable business model.

Larry's first idea appeals to me. Law schools should do a better job at presenting students with varied ideas about what they could do with their legal training. We over-emphasize litigation and under-emphasize transactional work, and we should go beyond those two categories. I wouldn't package these messages in a course that most students would never take, but attempt to integrate these ideas into mainstream courses or make them part of a first-year lecture series, as we have done to some degree at BYU.

Larry's second idea seems simultaneously too ambitious ('all law students") and too weak ("elements of accounting, finance, and possibly how to construct a viable business model"). I encourage all prospective law students to take an accounting class and to learn some economics and finance, mainly because I think they are good life skills, but plenty of lawyers will continue to make a good living without these skills. And more to the point of this post, teaching the elements of accounting, finance, and business planning will not produce legal entrepreneurs. The primary value of teaching these subjects in a law school is to equip graduates with the understanding necessary to employ their legal skills in a business setting. So I would argue that Larry's idea is too weak if it is not married with meaningful transactional training.

Joan is headed in the same direction: "I think many of us, as legal educators, need to focus on an intermediate goal first: providing law students with the legal skills that they need to do meaningful work early on." She is talking about planning and drafting legal documents, which is a good thing, but I believe that she discounts the importance of non-legal knowledge when she writes: "before we focus on teaching and supporting non-lawyering skills in legal education, we should ensure that every law school student engages in meaningful planning and drafting before leaving law school." 

My aspiration for law schools is that we marry the teaching of accounting, finance, and business planning with the teaching of lawyering skills and an understanding of the theories of private ordering. We won't be creating legal entrepreneurs, but we will be creating graduates with a valuable combination of basic skills that will be useful to them, whether Big Law lives or dies.

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April 20, 2010
Minding Our Own Business: No Big Law, No Big Law Faculty Salary?
Posted by Usha Rodrigues

I've been skeptical about Larry's Death of Big Law point for two reasons: 1) Big Law seems a pretty resilient beast, and reports of its death may well be exaggerated, and 2) as I posted a while back, flagship state law schools like Georgia may well emerge the big winners from the death or dislocation of the Big Law model.  The WSJ Law Blog linked to Christine's post yesterday, and many comments amounted to: "Unless you go to a Top X law school, a law degree is just not worth the money."  Depending on your elitism quotient, X is a number between 3 and 14.  An unsurprising view, given the presumed readership of the WSJ Blog, but parochial.  Georgia graduates incur relatively little debt, get a decent education, and still have a pretty good shot at getting a job that will get them out of debt.  Fewer 2010 grads will wind up at Big Law, but our model was never built on that. 

So I was feeling pretty good about my place in the world.  Then I read Brett's provocative post.  More skills classes mean more adjunct hiring?  Check, already doing that here at Georgia.  My transactional skills are already 5 years out of date, and leveraging the expertise of enthusiastic alums has been key to our Business Law and Ethics Program.  Distance learning?  We're not doing that, but it's fine by me.  Reduced salaries...What? 

Brett posits that

On the demand side, reduced revenue for law schools will reduce the ability of schools to pay for faculty.  On the supply side, a major reason for the high salaries that law faculty earn is opportunity costs--most faculty could be earning a lot more at a big law firm.  If those opportunity costs shrink with the decline of Big Law, that should make faculty available at a lower price.  Both the demand and supply shift point to a lower price for this particular commodity. 

I'm not sure I agree with either of Brett's premises.  As far as demand goes, students seem to be flocking to law schools to wait out the recession.  Long term he might be right, at least for schools that face higher ranked competition in their market space.  As far as supply goes, I'm skeptical that opportunity costs are what drive law faculty salaries. I think it has a lot more to do with the increased fluidity on the lateral market.  More legal scholars are moving schools, and moving earlier, and deans, keeping a wary eye on those pesky US News peer assessments, are willing to raise salaries to retain and recruit faculty. 

But that's just my gut feeling. And Brett, an associate dean, is  probably way more knowledgeable than I am, so maybe my salary is in jeopardy.  Furthermore, even Pollyannas like me understand that the depth of dean's pockets is a product of donations from Big Law and Big Law partners and associates, and that there's a whole lot less money sloshing around the system these days.  I guess I'll be holding onto my 12-year old cream-colored Caddy, for a few more years at least.

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Minding Our Own Business Forum: Are Law Faculty Qualified and Up To the Challenge?
Posted by joanheminway

In her posting, Michelle Harner writes about the "value-add" of transactional lawyers.  This reminds me of a portion of Steve Bainbridge's Mergers and Acquisitions book, replicated here, from here, that I share with my Corporate Finance students each semester.  For those of you who haven't read the book or the postings, here is the nub.

. . . People hire transactional lawyers because they add value to the deal. . . . The lawyer makes everybody better off by increasing the size of the pie. . . .  Hence, while there is little substantive economic difference between an asset sale and a merger, there is a significant legal difference.  By selecting one form over another, the transactional lawyer ensures that the deal is done at the lowest possible cost.

The full commentary is well worth reading.  Steve, like Larry, Michelle, and me, comes out advocating training in business, finance, and economics in addition to legal doctrine.  As you already know, I add lawyering (drafting and document review, oral presentation, etc.) skills to the mix.  Even assuming we can adjust the curriculum to our satisfaction, however, there are issues relating to human resources.

Brett raises cost issues and suggests adjuncts as one possible solution.  Adjuncts are valuable (truly essential) in skills training, but they do not solve our problem--my problem--in this area.  I am worried about finding faculty with the expertise and aptitude to teach this next generation of business lawyers--faculty who can connect theory to practice through doctrine and related legal and non-legal skills.  These faculty members would have both practical and academic experience and would need to

  • know what it is that transactional lawyers do, preferably through first-hand experience;
  • be well-versed in
business law,
legal drafting,
oral expression, presentation, and advocacy,
basic economics, and
communication and database technologies;
  • understand and synthesize underlying theory and policy; and
  • be accomplished teachers--skilled at effectively imparting knowledge to others.

Truthfully, not many of us fit this mold precisely or even approximately.  Of course, each of us would not necessarily have to have all of these attributes, if colleagues in the relevant curriculum help supply what's needed in a coordinated fashion.  However, this overall picture, if accurate, indicates that we may be increasingly looking for faculty members to teach transactional law classes (cost permitting) that are different from those we have searched for in the past--or that we may be retraining and retooling ourselves for the task at hand--or both.  Personally, I am ready for the retraining/retooling mission.  Are you?

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April 19, 2010
Minding Our Business Forum: The “Value-Add” of Big Law and Transactional Lawyers Generally
Posted by Michelle Harner

I first want to commend those who have already posted on this interesting and very timely topic. I think everyone has raised valid issues, and I thank Larry not only for linking us to his thoughtful piece that is forthcoming in the Wisconsin Law Review, but also for distilling this complicated topic into three key points for legal education. I want to focus on Larry’s second point in the context of what transactional lawyers do and who should be responsible for developing that product.

Like Brett, I am less pessimistic about the future of Big Law. (In the interests of full disclosure, I should note that I worked at Big Law for over ten years and thoroughly enjoyed my colleagues, clients and practice.) I think Big Law and the demand for high-quality transactional lawyers will continue. I do, however, think that Big Law, its clients and law schools need to reflect on the “value-add” of lawyers in complex legal representations and to re-evaluate their expectations and responsibilities with respect to that legal product.

To illustrate my point, let me start by observing that most clients do not hire Big Law (or lawyers at any firm for any complex transactional matters) to perform routine legal services that can be outsourced or otherwise “unbundled.” I think unbundled legal services have an important role to play in the legal profession, particularly with respect to the underserved and underrepresented. (See here and here.) Nevertheless, I do not think that unbundling serves the best interests of sophisticated clients with complex legal needs. In complex transactional matters, neither the client nor the lawyer can anticipate fully the relevant issues, the direction of negotiations or even the parties who might show up at the negotiating table. Clients in those matters should be hiring lawyers who are great thinkers, problem-solvers and technicians—i.e., lawyers who can find or develop solutions beyond those in form books and treatises.

That is an example of how transactional lawyers add value. It is that type of value that Big Law should showcase and for which clients should be willing to pay. Law schools, in turn, need to consider that legal product in curriculum choices and transactional offerings. Those offerings need to balance theory, doctrine and skills and include interdisciplinary and global components; easier said than done. (Joan’s post does a wonderful job of highlighting the value of skills training. Also, to the extent that Big Law wants to or does provide commodity-type services, it needs to adjust its model for delivering and pricing those legal products. Larry’s Wisconsin article does an excellent job of identifying the challenges for Big Law in this respect and offers possible solutions.)

So is this daunting training solely the responsibility of law schools? In my opinion, it is not. I think law schools, Big Law and even clients each have a role to play. (Rest assured that I have not been out of practice so long as to think that clients will pay for this training—as discussed below, that is not my suggestion.)

Training lawyers for today’s transactional practice should be a collaborative endeavor between law schools, law firms and clients. I agree with those who suggest some type of apprenticeship model for legal training (see here and here), but also support less extreme, interim steps in that direction. For example, coordinating workshops, internships or even one-credit modules at law schools with practitioners and their clients would help socialize law students to the practice and inculcate often lacking soft skills. What would motivate the parties to participate? Perhaps law schools facilitate the programs in return for law firms selecting new hires from the programs in return for clients continuing to hire and support those law firms. I do not mean to suggest that this model would work or solve the current issues facing Big Law and the profession, but I offer it solely as an example of the multiple structures we can and should explore to strengthen the role of legal education in the marketplace and the legal services ultimately delivered to clients.

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Minding our own business forum: selecting and training legal entreprenuers
Posted by Account Deleted

Christine says:

I would posit that the law school of the future should position themselves as the school that can identify, recruit and train law graduates that will have the confidence and personality to be "client-ready" at graduation.  This may require changes in how we do law school, and also on how we do admissions.

Yes, absolutely.  We are going through a period of creative destruction.  How do you train people who will succeed in that environment?

First, as Christine says, you select for that: start giving a lot of extra points to applicants who have started, or at least worked, in a business, or shown equivalent initiative (e.g., started a non-profit, invented something or just figured out a new way to solve a problem).    

Second, offer a course in legal entrepreneurship.  I envision that as starting with but going beyond "law office management" to conceiving of “law practice” as fundamentally the conveyance of legal knowledge, and then considering alternatives to conventional law practice that fit this model.

Third, ensure that all law students have basic business knowledge.  I’m not talking about a semester traipsing laboriously through the Delaware fiduciary law cases (which could be an elective).  I mean elements of accounting, finance, and possibly how to construct a viable business model.

This is at least a start toward prepare students for the new world.

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Minding Our Own Business Forum: Legal Entrepreneurs
Posted by Christine Hurt

Here at the Glom (and elsewhere about once a year), my co-bloggers and I like to talk about Law & Entrepreneurship.  Lately, though, I've been thinking about entrepreneurship and legal education.  The legal world is generally filled with non-entrepreneurs, so when someone comes along with an innovative business model for a law firm or a law school, we take notice.  So how do we instill a sense of entrepreneurism into our graduates?

What made me think of this was the NYT's interview Sunday with Bill Carter, partner and founder of Fuse, a marketing agency that markets to teens and that great 18-24 demographic.  (And probably tweens and toddlers too, but they wouldn't put that on the website.)  He characterizes the people that he hires in relation to their not being like the people that succeed so well in law school:

Their expectation is not necessarily like a junior lawyer who is satisfied to maybe be at the bottom rung and work their way up in a corporate law firm over many years. The expectation of all of the young people in our office is that they’re professionals in their field right now, and that they’re going to have input right now, they’re going to have communication with clients right now, and they’re going to be involved in decision-making across the company.

Ouch. Even when the interviewer tries to push back and suggest that some young people might have confidence or expectations beyond their capabilities, Carter tends to be more sanguine, saying that in the end success depends on being "client-ready," not working the most hours. He would rather take the risk of mistakes and hire confident people that demand to add value now, not later.

In some ways, law schools encourage the risk-averse.  For a long time, if smart people went to law school and did very well, then the most they had to assert themselves to do well was turn their c.v. into career services on time.  The machine picked up at that point and sorted everyone.  But that machine seems to be gone now, and may never return.  So law students are being told to "beat the bushes," but with not much guidance on how to do that.  And to be honest, I would have been the first to say, "That's not why I came to law school.  If I had wanted to cold call people like Bud Fox, I would have gone a different path."  I came to be a professional in this gentlemanly profession we call the law.  But I think that profession is changing.

So, I would posit that the law school of the future should position themselves as the school that can identify, recruit and train law graduates that will have the confidence and personality to be "client-ready" at graduation.  This may require changes in how we do law school, and also on how we do admissions.

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Minding Our Own Business Forum: Yes to Skills Training, but Lawyering Skills First (or at Least Simultaneously)
Posted by joanheminway

Thanks to Usha, Larry, and Christine for getting this conversation started.  I agree, for the most part, with Larry's assessment.  As a faculty member at an institution that does not have a big role in feeding Big Law, however, I have a slightly different perspective on the relationship of legal education to firm practice.  Most of our students--over 60%--do move into private firm practice after graduation, but they most often work with regional and small firms.  These firms (especially the small ones) typically do not provide--and have never provided--significant formal legal skills training, which led us (and some other similarly situated law schools) to begin to implement broad-based legal skills training a number of years ago.

With that in mind, I want to focus here on Larry's third point from my perspective.  He raises some nice ideas about providing law students with a stronger business and technology skills background.  I agree.  This is important for Big Law practice and for other employment opportunities that our students will have.  But I think many of us, as legal educators, need to focus on an intermediate goal first: providing law students with the legal skills that they need to do meaningful work early on.  My students tell me, based on their summer positions and first-year experiences in practice, that many law students leave law school without having drafted a contract or litigation document.  Focusing on business law, they also note that students have not been exposed to a business entity chartering document (certificate or articles of incorporation, articles of organization for an LLC, etc.) or other governance documents (corporate bylaws, shareholder agreements, LLC operating agreements, etc.).  I admit that I find their observations somewhat astonishing.  I thought we had come further than that in legal education.  I know some of us have.  But we have a long way to go.

In my view (and at the risk of prompting accusations that I am limiting my colleagues' freedom to teach what they want), before we focus on teaching and supporting non-lawyering skills in legal education, we should ensure that every law school student engages in meaningful planning and drafting before leaving law school and (for us business law professors) that Business Associations or Corporations classes expose students to relevant documents and discuss real-life drafting questions and choices.  Business law students should know what board resolutions are--what they do, what they look like, and how they are structured.  Moreover, upper division students in specialized classes like Securities Regulation should be looking at actual registration statements and other filing forms (e.g., Form D); and students in Corporate Finance and Mergers & Acquisitions classes should be exposed to and drafting provisions for debt and equity instruments, merger agreements, and related documents.  Students should be in a position to work with these documents as they enter private practice.  (I am forced to recall here that my first assignment as a Big Law associate back in 1985 was to review and revise board resolutions for an M&A transaction . . . .  Luckily, I had been a legal assistant in the corporate law department of another private firm for the last two years of law school; I did not learn how to draft board resolutions in law school.)

It may be that the business and technology skills Larry mentions can be taught alongside the lawyering skills I touch on here.  I accept that as a possible solution.  Law schools can adopt these kinds of changes and innovate curriculum in different ways and still be successful in educating practicing lawyers.  There are models out there to look at, and more emerge each year.  But we are too slow to change.  Although I try to do many of the things I mention above in my courses, I have to pick and choose, since I have only 3-4 credit-hours in each course to cover theory, doctrine, and skills.  I do cut doctrinal coverage (depth and breadth) to cover some skills.  I find some of these choices uncomfortable.  Truthfully, a broader change in curriculum is needed to fully realize the benefits of the approach I advocate here.  We need to engage in that kind of change.

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Minding Our Own Business Forum: Bubbles, Student Loans and Sub-Prime Debt
Posted by Christine Hurt

Thanks to my colleague Larry for getting us off to a great start on the topic of the future of lawyering and legal education.  For the past few years, I've been having conversations with various colleagues, including David Hyman, about the parallels between the subprime mortgage crisis and the proliferation of law school debt.  Bear with me.

For a couple of decades now (and until a few years ago), the conventional wisdom was that real estate would always rise in value and that the world would always need lawyers.  Home ownership at whatever cost, particularly with tax-deductible interest rates, was better than alternatives such as renting; financing a law degree with student loans, some of which was low-interest and tax-deductible, was an equally good investment given the value of the law degree.  Just as something about home ownership seemed intrinsically good, so did getting a law degree, from any law school.  Strangely, most law school educations were priced similarly.  Law schools with lower employment rates charged more money than some schools with higher employment rates.  Price was not a clear signal of quality.  Anyway, more and larger houses were built; more and larger law schools were built.  Then, as if on a dime, the world changed and all of a sudden lots of people with law degrees were getting laid off, deferred, ignored.  The legal market was shrinking or changing in a seemingly semi-permanent way.  We found out from Bill Henderson that the market for graduates was not what the "mean" employment statistics seemed to be touting.  But more students came, financing the journey with student loans premised on promised salaries that have de-materialized before our eyes.  (See Forbes; see NYT.)

I have generally been sanguine about the disruption in the legal services market.  After all, I went to law school from 1990-1993, which was a time of cancelled summer programs, fired associates and 50% offers to summer recruits.  But I think the biggest difference is the debt burden.  Law school tuition is much higher now, even at public schools where state money has all but disappeared.  How can someone write off $100,000 or $200,000 in student loans as a bad call?  Many of these loans aren't federal loans -- they are from private lenders at high rates.  And, unlike homeowners, law students don't have a "put" option -- they can't tell lenders to take their law degrees and quit calling them.

So, what's the future of law school pricing?  Will someone create an affordable model that doesn't depend on third-party financing?  Will some law schools start to look like culinary schools or technical institutes that provide financing of $40,000 a year for a law degree few employers are looking for?  Or will law schools pride themselves not on inputs (LSAT, GPAs, you know -- USNews stuff) and on outputs (where our graduates actually end up working, and how much they make).

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The death of big law and the future of legal education
Posted by Account Deleted

Since Usha was kind enough to kick this off with a reference to The Death of Big LawI thought I'd start with the conclusion of the current version of the article (forthcoming in Wisconsin Law Review, footnotes omitted) in which I speculate on the death's implications for the future of legal education:

First, a major shift in market demand for law graduates ultimately will affect the demand for and price of legal education. Big Law’s inverted pyramid, by which law firms can bill out even entry-level associate time at high hourly rates, has created a high demand and escalating pay for top law students. The pressures on Big Law discussed throughout this Article are ending this era with layoffs, deferrals, pay reductions, and merit-based pay. Although law school applications appear to be holding up through the end of 2009, as the recession still affects overall employment, this may not continue if the general economy improves but the demand for Big Law does not. Law schools will have to find education models that are more cost-effective and that address employer demands in the new market for law graduates discussed in this Part.

Second, law schools will have to undertake much of the training that they traditionally have delegated to Big Law and other employers. Because client pressure is likely to push fees to better reflect associates’ level of training and experience, law firms will have to do more of the training. The increasing instability of large law firms and their lack of any device, such as non-competition agreements, for binding trained lawyers to the firm make it unlikely this investment will pay off. Moreover, the decline of the tournament model of Big Law hiring means that law graduates no longer can expect to benefit from the multi-year training and screening period the tournament used to offer.

Third, Big Law’s death poses difficult questions for law schools as to what they should train their students to do. The use of law in finance, the increasing importance of in-house counsel, lawyers’ increasing roles within businesses, and the combination of law with other types of expertise, among other developments, create a demand for lawyers who can function within business rather than just delivering technical legal advice from the outside. Law school therefore may need to offer more business background in both advanced seminars and basic courses like business associations, securities regulation, antitrust, and bankruptcy. Also, the development of legal products and the increasing use of technology in law practice require technical training that enables lawyers to do more than just litigate and give individualized advice. Richard Susskind imagines a world in which much of what is now regarded as law practice has been taken over by information technologists and other specialists. Thus, Susskind suggests that law students will need to be able to engineer legal knowledge.

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April 18, 2010
Masters Forum: Minding Our Own Business
Posted by Usha Rodrigues

I'm pleased to announce a new Masters Forum, born of some recent discussion amongst the Masters about the future of law schools given what Master and Friend-of-Glom Larry Ribstein has termed the death of Big Law.  Our topic is "Minding our own business: How changes in the business of law might affect law schools and what law professors should be doing about it."  

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