ABA Section of Business Law

It was November 1995 and David Schizer's first week as a lawyer in the tax department of the New York firm Davis Polk and Wardwell. He got his first assignment: to mark up a stock purchase agreement.

Schizer, who graduated in 1993 from Yale Law School in New Haven, Conn., had served as executive editor of his school's law journal. In the two years before joining Davis Polk, he clerked for Alex Kozinski of the U.S. Court of Appeals for the Ninth Circuit and U.S. Supreme Court Justice Ruth Bader Ginsburg.

But all of that experience helped precious little to prepare Schizer for the task ahead, which at the time seemed about as familiar to him as Mandarin Chinese.

"I said, 'I'd be happy to do it, but I have two questions: What's a stock purchase agreement, and when you say mark it up, what do you mean?'" Schizer recalled with a laugh. "Aside from that, I was perfectly prepared for the assignment."

Eleven years later, as dean of Columbia Law School in New York, Schizer is working to ensure that his graduates are more equipped than he was to start a career in business law. In 2003, Schizer created Columbia's transactional studies program, which allows budding business lawyers to study patterns in deal making and then apply their knowledge to hands-on negotiation experience in the classroom.

The practical approach to cultivating business lawyers that has been implemented at Columbia is also taking off at a growing number of law schools nationwide.

From Yale to UCLA, professors are stepping outside of law schools' traditional theoretical boundaries and allowing students to get concrete experience with transactional law. Small-business clinics, externships and courses teaching skills from contract drafting to accounting appease the rising demand that law schools produce graduates more ready for the work force.

"There's a growing recognition among law schools that we need to revolutionize what we do," Schizer said.

For decades, the dominant teaching method at law schools has been the Socratic method. Students read and discuss cases to develop analytical skills and a theoretical basis for practicing law. As the saying goes, they learn to "think like lawyers."

The movement toward bringing a hands-on approach to law schooling began with teaching trial practice, which emerged in the classroom at schools like Harvard as early as the 1950s, said David Binder, who teaches civil procedure and deposition at the University of California at Los Angeles. In the past decade, though, law school administrators also have seen the growing need to apply this method to transactional practice.

A survey of curricula at ABA-approved schools by the ABA's Section of Legal Education and Admissions to the Bar shows the growth in practical transactional teaching from 1992 to 2002.

Of 127 schools surveyed, the number offering transactional clinics rose 400 percent, from five schools in 1992 to 25 in 2002. There was also a 93.3 percent rise in schools that offer at least one upper-level course in contract drafting. Of 136 schools, 58 offered such courses in 2002, compared with 30 schools in 1992.

Among externship programs, placements in corporate counsel offices saw the sharpest increase, with a 79.3 percent rise between 1992 and 2002, compared with a 29.8 percent average rise in the number of placements at large.

"Law schools are trying to adapt their teaching to the 21st century," said Kenneth Klee, a UCLA transactional law professor, who in 2003 surveyed the number of ABA-approved law schools that teach transactional law. Though only 40 of 193 universities responded to his survey, representatives from 38 of the schools said they offer such courses.

Growth within programs at individual universities also shows the move toward practical transactional curriculums.

At Vanderbilt University Law School in Nashville, Tenn., the Law and Business Program brings together students pursuing their law degree and those pursuing their MBA in courses co-taught by members of law and business school faculty. In 2000, the program's pilot class had about 25 students. Now in its seventh year, the entering class has about 45.

In Chicago, Northwestern University School of Law's Small Business Opportunity Center has seen similar growth. The program gives students transactional experience helping clients that otherwise couldn't afford legal assistance with their small-business matters, said Thomas Morsch, the program's director.

When Northwestern launched the clinic in 1998, it consisted of Morsch, four students and no clients. Today, it has three full-time faculty members, 75 clients and between 200 and 300 on the waiting list. Each semester, students enter a lottery system to vie for one of 18 coveted spots in the program.

Morsch said at least 25 schools nationwide have transactional clinics like Northwestern's or will be pursuing them by September.

"It's an idea whose time has come," Morsch said. "For quite a few years, we've gotten pretty good at teaching trial practice. Now we're trying to do the same thing with how do you set up a corporation, how do you register a trademark, how do you find out if something is copyrighted."

Some say the push for more hands-on learning was launched after the 1992 ABA-issued MacCrate Report, which emphasized the need for law schools to prepare students for the legal profession, rather than just for the bar exam.

Standard 302 of the ABA's Standards for Approval of Law Schools has stated that all law schools should offer skills-based training since at least 1980, as far back as records were available.

Over the years, the Council of ABA's Section of Legal Education and Admissions to the Bar, which approves law school accreditation standards, has made Standard 302 more demanding. Since February 2005, the standard has read that law schools should not only offer professional training, but administrators should require each student to get substantial amounts of it.

"We're all hearing the same thing," said Victor Flatt, associate dean at University of Houston Law Center, where skills courses were implemented in 2004.

Student demand is helping to fuel the increase in skills-based training. Some evidence has shown a rise in the number of students pursuing business law.

In 1995, American Bar Foundation researchers compared in-depth surveys of 800 Chicago lawyers to a similar study done in 1975. In that year, 53 percent of lawyers worked in the corporate client sector. By 1995, that number had risen to 64 percent.

The pattern is also evident at some law schools. Among Columbia's graduates, at least half go into business law, compared with about 5 percent that do appellate litigation, Schizer said.

Within these growing numbers of business lawyers are many who feel the need — today more than ever before — to be prepared. Traditionally, law firms have borne the responsibility of training their newly hired lawyers. But in an increasingly fast-paced professional climate, experts say it becomes more difficult for firms to meet that need.

Susan Irion, a former Northwestern law professor who now oversees lawyer training and development programs for DLA Piper in Chicago, said faster technology and competition for clients among lawyers has made the law profession more demanding in the past 20 years.

"Law is more of a business now than it used to be," Irion said. "Lawyers have to sell themselves in a way that they didn't used to. More than ever before, young lawyers need to hit the ground running."

In a lofty law school classroom overlooking Chicago's Lakeshore Drive, 11 Northwestern students sat around three old wooden tables, arranged like a triangle.

The students were role playing a meeting among corporate managers and legal counsel. The four executives sat at the back table, with the four members of their inside and outside counsel seated at the table to their left. At the table on their right were three lawyers hired from an outside firm.

Both sides bounced arguments back and forth about whether the company, which had been sued, should go to court or settle.

"We think settling could destroy your business model just as easily as going to trial could," a student posing as a member of the outside firm argued.

Adjunct Professor Pete Wentz, a former general counsel and current strategic communications company executive who leads the weekly session, sat at a table facing the students, sometimes smiling at the exchange and jumping in occasionally to steer them with questions.

For students like Maureen Lane, who, like all of her peers in the class, is starting her second year in Northwestern's three-year JD-MBA program, the simulation is perfect preparation for her future career. Lane, 25, eventually wants to become an in-house lawyer.

"These issues are things that are really going to come up in practice, that aren't going to be in a textbook," Lane said. "You can at any time learn the legal precedents."

Academics who subscribe to the concept of practical training are making similar arguments. Kenneth Adams, a former corporate lawyer who now is a consultant and speaker on contract drafting, said the classroom provides the best place for skills-based training.

Adams, who teaches a contract-drafting course at the University of Pennsylvania Law School in Philadelphia, said junior lawyers typically model their contracts after previous ones when left to learn drafting in a law firm. Because most contracts aren't drafted perfectly to begin with, young lawyers never really learn the craft. In contrast, Adams said the classroom allows students to establish drafting skills without the pressure and deadlines imposed at law firms.

"When they're in the real world, they'll know what the ideal is," Adams said. "They'll be under severe constraints, but they'll be able to better judge what works and what doesn't work."

Randall Thomas, director of Vanderbilt's Law and Business Program, said among the benefits of classroom business law training is the interface among budding business lawyers and MBA students. In the curriculum, which allows students to graduate with a law degree and a law and business certificate, law and business school students work together in groups to analyze business problems in which legal issues are highlighted. Each week, they're evaluated on their solutions to the problems.

"We felt students were graduating from law school without being sufficiently trained in the language of finance," Thomas said. "In order to interact, you really have to learn the other person's language."

Some evidence underlines the effectiveness of learning by doing.

Robert Nelson, a Northwestern sociology and law professor and director of the American Bar Foundation, is heading up a project to track the lives of 4,500 lawyers in their first 10 years out after law school.

In the study, "After the JD," young lawyers rank aspects of law school in preparing them for a law career on a scale of one, not at all helpful, to seven, very helpful. Results show that the strongest scorer is legal employment during the summer, which ranked 5.5. The lowest are the more theoretical classes taught in the first-year curriculum, which ranked 3.81.

Nelson said this suggests that experience is the most helpful type of learning in beginning phases of practice. "It's the closest to what they're doing when they get into practice," Nelson said. "In some respects, the more theoretical orientation and theory fade into the background."

Despite its apparent success, experts say incorporation of the hands-on approach to training business lawyers is gradual.

Richard Neumann, a professor at Hofstra University in Hempstead, N.Y., just finished his third term on the ABA committee that proposes amendments for law school accreditation standards. Neumann said that even though the ABA demands increasingly rigid standards for universities to require professional training, most law students still only graduate with one skills course.

"There's a big difference between requiring that skills are the standard and schools actually doing a great deal about it," Neumann said.

One challenge is that law schools also have to prepare students to pass the bar exam. Irion of DLA Piper said for law schools to fully equip students with skills training is difficult because they need to provide a broad basis of knowledge for the bar.

Funding for the programs can be difficult, too. Because of the small student-faculty ratio in these types of programs — many have fewer than 20 students — they're simply more expensive than the larger lecture classes.

And many schools don't have enough faculty members who are equipped to teach business law through a practical approach. Most law school professors have been trained as litigators and have little real-world experience in transactional law. Some schools hire adjunct faculty to fill the gap, but both legal academics and practicing lawyers say adjuncts as a group still aren't widely accepted among universities.

"It's not unusual for a law school to have no full-time staff with transactional skills," Neumann said. "When lawyers write contracts, for the most part, they're doing something most law professors don't do."

Still, many proponents of hands-on curriculum say logistical hindrances can be overcome. The bigger challenge is the ideological opposition among a school of academics who still contend that teaching should be theory-based.

"There's a large snob element at a lot of the bigger, more traditional law schools that, 'We're not a trade school; students learn it in practice,'" said Klee, the UCLA professor. "You wouldn't send somebody out of medical school who had never operated on a cadaver. Why law school would be any different, I don't know."

John Coffee, a Columbia law professor and director of the school's Center on Corporate Governance, said law schools' long-term goal in training business lawyers should not be hands-on learning. Rather, schools should focus on forming closer relationships with business schools so that more students interested in business law can enroll in JD-MBA programs.

"The problem with skills training is that it's just duplicating what law firms do in their own apprenticeship programs, and that is teaching (young lawyers) to do the deals that type of firm specializes in," Coffee said.

Instead of teaching skills, some say law schools should be providing a solid knowledge of the theory that students won't be able to learn once they've entered the field.

Deborah DeMott, a law professor who teaches courses in agency law, corporate finance, business associations and corporate representation at Duke Law School in Durham, N.C., said because the business world changes so quickly, information that is too specific can be short-lived.

"The most important things students can get out of law school are a deep appreciation of legal institutions and methodology and the importance of being able to work with complex text or language," DeMott said. "The best kind of legal education enables students to cope in an environment that changes dramatically."

The debate continues over how much control law schools some day will have — and how much they should have — over providing skills training. Even supporters of hands-on transactional training acknowledge that at some schools, practical training doesn't survive in the intellectual climate.

In the medical realm, professionals got serious about skills training within a decade after scientific breakthroughs encouraged them to evaluate their teaching methods. Neumann said law schools have taken a slower course because there isn't a public health concern involved with law, as there was with medicine in the dawn of the 20th century.

But even in the absence of strong popular pressure, some experts say all law schools, like medical schools, will eventually have to use practical teaching in conjunction with the theoretical model.

Morsch, of Northwestern's transactional clinic, said in 10 years all schools that can afford to have the clinics will. The ones that don't, he said, will use courses to teach transactional skills.

"Law schools have to say, 'Where do we want to invest our limited resources?'" Morsch said. "We will see an increase in all the fields of law toward a more practical education — less theory, more practice."

Even schools typically deemed traditional have begun to adapt. Yale has implemented what Deputy Dean and Professor Jonathan Macey, who teaches corporate law, corporate finance and securities law, calls a "three-pronged approach" to teaching business skills. Accounting, corporate finance and statistics make up its basic components. The school also offers business school-style courses for those interested in transactional work.

"In the last couple of years, we've taken a very sharp look at our curriculum and taken a look at these skills as things that are useful," Macey said.But he emphasized that although Yale is incorporating skills into its curriculum, the school won't abandon the theoretical approach.

In fact, no one seems to be calling for an end to the concept of "thinking like a lawyer." Even the staunchest supporters of experience-based training advocate that skills can't be taught without an academic framework.

Jonathan Lipson, an associate professor at Temple Law School in Philadelphia, leads a transactional law workshop in which students role play as both lawyers and clients in the formation of a high-tech business. With limited information, students are responsible for planning, investigating, negotiating and drafting the deal.

Though the class is meant to simulate real-life transactional experience, Lipson also incorporates a theoretical model for the course. He pushes his students to reflect on issues such as how they're managing the information in the problem and whether they've obtained adequate data to complete the transaction. He also has them think about the decisions they're making and what motivates their actions.

"The best thing you can do as a law professor is to link theory and practice," Lipson said. "Clients pay lawyers to answer the question 'how;' they don't pay them to answer 'why.' The best lawyers understand the relationship between both answers."

And even as schools play a bigger role in fostering such an understanding, they won't take the task of teaching skills entirely out of law firms' hands.

Irion said firms like hers are combating today's impersonal workplace by reviving mentoring programs to offer one-on-one advice from senior to junior lawyers. Her firm also provides various types of training, such as seminars, instructional programs in the basics of transactional and trial practice, group retreats and Web-based educational curriculums.

"Law schools and law firms are now realizing that they both have to contribute to the apprenticeship of a lawyer," Irion said. "It has to be a partnership."

There's no certainty about how strong a role law schools eventually will play in the partnership. Among those who support academia gaining more leverage in the process, though, there is a clear consensus: Schools that provide transactional experience produce better-prepared transactional lawyers.

Columbia's Schizer discovered that more than a decade ago. And if he has anything to do with it, in another decade or so, other graduates won't have to make the same discovery.

"We're trying to do our part to promote this style of teaching everywhere," Schizer said. "This is the wave of the future."