Teaching Law Students Business Skills

1. Teaching Law Students Business Skills Robert Eli Rosen University of Miami April 2011

2. Why teach law students business skills? - - - Why not? • In the 1960’s, nearly half of Michigan’s law graduates began with no long-term plan at all. By the 1990’s far fewer didn’t have a plan and most expected to practice law. (In 2000-2001, 32% planned to work in a public service setting). Law students increasingly seek a technical education. • By the 1990’s, corporate lawyers had retreated into their technology and cast themselves as mere providers of specialized expertise and lobbyists for business interests. Lawyers have come to depend on technical lawyering delivering monopoly rents. • Lawyers (arrogantly?) think business skills can be learned by osmosis.

3. Law Student Career Paths 1: Out of Law • Between 1/3rd and 1/6th of US law graduates will become businessmen and women. • 30-40% of English law graduates don’t even try to qualify. • In Australia in 1991, more than 40% of those with legal qualifications were not working as lawyers.

4. The most successful business lawyers were always masters of business (Cravath). Today, firms teach business skills to retain lawyers and help chart their career progress. Firms are themselves businesses. Those who fight businesses need to understand the organization, constraints and business of their adversaries. P’ai nan chieh fen – lawyers must clear obstacles, solve problems and settle disputes; doing so requires understanding those with whom one works (the interests of Wei). Career Paths 2: In Law

5. The Big Picture • The emergence of project team management (the flattening of the corporation) places lawyers on the team and requires them to contribute to the team project: “We’re all consultants now” -adding value to corporate clients. Those who fail to understand how to add value to the business will not be successful.

6. Team’s don’t respect the law-business divide • “Throughout much of the economy, and especially among new firms, hierarchies are flatter, headquarters staff smaller . . . and people’s careers increasingly span business units and firms.” Employees experience “less secure internal labor markets, more fluid job definitions, and more ambiguous reporting relationships” instead of “the rules of clarity and commitment” of bureaucratic organizations. “ • “Fired up, highly cohesive” teams regulate professional work. Those assigned to project teams “develop a network of relationships that reach across functions,” “plan and implement ideas that transcend their functions,” and “practice strategic thinking.” Teams “de-couple” functional specialists, like lawyers, from their specialization, thus reducing bases for conflict. Lawyers on multidisciplinary teams no longer have the privilege to say, “This is the legal department’s (or my law firm’s) position on this issue.”

7. Lawyers on teams need managerial skills • Lawyers working on and for teams need to develop the skills that once were associated with managers’ jobs. Like managers, such lawyers are involved in developing business strategies, enabling their company “to do something better than the competition.” Like managers, lawyers playing on teams have to learn to take other team members’ “concerns and needs into consideration,” as they compete with them for resources and power. In so doing, these lawyers, like managers, learn “that their function exists to support overall business objectives.” They learn to think like a businessperson, not a functional specialist. They “must make the shift from ‘can we do this?’ to ‘will we make money if we do this?’” They have to learn that “adding value” is the basis of concern. When lawyers act like consultants, their applications of legal skills are done in the managerial frame. For the redesigned company, the opposite of a consultant is a mere technician, not a carrier of independent professional judgment.

8. Corporate lawyers are consultants now • “We’re All Consultants Now” means that corporate legal services are changing because corporate clients are organized to use lawyers as they use any consultant. Lawyers may continue to supply specialized technical services, but that work will be integrated into the company’s decision-making as a consulting service. To the company, the legal department becomes just one internal consulting group among others and outside law firms become just one type of professional service firm. “We’re All Consultants Now” also means that legal departments and law firms are re-organizing themselves to supply what corporations seek from consultants. For the largest law departments and firms, this means imitating the consulting divisions that have been attached to the large accounting firms. Smaller law departments and firms will organize themselves on the model of other consulting firms. • (from “We’re All Consultants Now”: How Change in Client Organizational Strategies Influences Change in the Organization of Corporate Legal Services, 44 Ariz. L. Rev. 637 (2002))

9. “Educating Law Students to be Business Leaders” 9 Int. J. Legal Prof. 27 (2002) • Survey of 500 top executives who had a J.D. (In 1970, more JDs than MBAs were CEOs of Fortune 500 companies). • Individuals with an advanced degree in addition to J.D. were excluded. CLOs and members of the legal department were excluded. • 56% had first practiced law. • Their median age (2011) would be 67. (Law school class of 1965). • Job titles: President, CEO, CFO, COO, VP Marketing, VP HR, etc.

10. Skills Important to Business Success

11. Transferable Skills ? • “Recognizing when more information is needed;” “Engaging in dispassionate analysis;” “Managing multiple perspectives;” “Absorbing and distilling a great deal of information”– analytical skills – transferable in opinion of respondents • “Decisiveness;” “understanding precedents;” “anticipating problems;” “solution generating;” “understanding promise and commitment;” but lawyers are “overly cautious;” “poor evaluators of risk;” “able to argue positions, but not choose an imperfect result” – problem solving – partially transferable

12. “Displaying credibility, knowledge, communication and the clarity of the underlying justification” – these were said to be the skills of professionalism. Surprisingly, law school was said to aidonlyin developing communication skills. • business leadership – less than 1 in 10 thought that law school developed any of the aspects of business leadership: the abilities to manage, motivate and empower people. (“Lawyers are undiplomatic, with tremendous egos, and unable to work in teams”) • law merchant – 9 in 10 thought law school taught how to “follow rules.” “Treating others impartially” and “wanting equity for others” only 3 in 10 thought was developed in law school or legal practice. • The respondents’ legal education (and practice, to a lesser extent) did not develop these skills. Does today’s legal education? Tomorrow’s?

13. Their advice to Law Schools