The question posed in the title of this post—why is business law education so bad?—was first asked in a famous and provocative 1984 paper by Stanford law professor Ronald Gilson, Value Creation by Lawyers.
That paper is best known for developing a micro-economic answer to a different—but ultimately related—question: Why would anybody pay for business transactional lawyering? And, if no one would (or should) pay for those services, why should anyone pay (or be paid) to learn (or teach) them?
Although the questions are not new, they have become more important as technology and markets transform the practice and study of law.
Gilson argued that there was an economic explanation: lawyers produce and verify information that brings the deal price closer to a hypothetical “true” market value.
Although this question—and Gilson’s answer—have received the most attention, Gilson also had important observations about legal education. Boiled down, he suggested that law schools should: (1) expose students to the actual transactions in which they were likely to participate; and (2) teach them a legal theory that would help to explain both why these transactions occurred, and why (and how) lawyers would add value by performing services in them.
When Gilson wrote this, law schools struggled with both because, among other things, most legal academics had little transactional experience. In the more than thirty years since Value Creation, however, law schools have exploded with courses that achieve the first goal, exposure. It would be difficult today to find a law school that did not offer some form of skills training to prepare law students for careers as business lawyers. A large and growing literature describes in exquisite detail how to design and teach these courses.
Yet, so far as I can tell, neither the courses nor the literature engage the second half of the problem as Gilson framed it, legal theory. (I put to one side clinics, which have their own literature, as well as skills supplements for traditional classes). Rather, they focus on “transactional skills” qua skills, such as drafting and negotiating—admittedly vital functions—without considering how legal theory might explain, explore, enhance or critique them. They have taken half of Gilson’s recommendation and declared victory.
This is a problem for two reasons. First, it seems indifferent (perhaps hostile) to the role that legal theory and scholarship could play here. Transactional skills literature reads as a series of “recipes,” how-to-get-to-yes-guides insensible to the possibility that, in many deals, “no” may be better the answer. Read More