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Teaching Transactional Law Skills in Law School: Is More Really Better?

by Professor Stefan Padfield on July 9, 2009

in Business,Securities Regulation,Stefan Padfield

When I attended the AALS's midyear meeting focusing on business law this past June, I was struck by Michael Woronoff's response to the question of whether law schools were teaching students adequate transactional skills.  The reason his remarks caught my attention was because it was the first time I had heard someone seriously challenge the notion that law schools should spend more of their resources teaching practice skills.  Since that time, he has posted a draft of his remarks and I would like to add some of my own thoughts here.

Woronoff divides the skills necessary to be a good transactional lawyer into three types: (1) substantive knowledge, (2) practical skills such as contract drafting and negotiation, and (3) expertise that comes from "real world" (my words, not his) experience.  He argues that while law schools have a comparative advantage over law firms in teaching substantive knowledge, and while they have the ability to teach practical skills, the comparative advantage when it comes to developing expertise resides with the law firms.  Furthermore, he believes law schools still have significant room for improvement in conveying the substantive knowledge and practical skills necessary to be a good transactional lawyer.  Thus, he concludes that rather than devoting already limited resources to areas where they lack the comparative advantage, law schools should seek to improve themselves in the area where they already have the advantage (or at least a realistic ability to add value): conveying substantive knowledge  and developing practical skills.  Specifically, he suggests that attempts by law schools to increase the amount of exposure they give students to "real world" transactional practice–whether via simulations or legal clinics–is time that would be better spent focusing on the first two types of skills he describes.

I have to admit that I have a bias here.  At the Akron School of Law we have a fantastic New Business Legal Clinic that the students rave about.  One consideration I would add to Mr. Woronoff's analysis is the possibility that the choice for at least some students may not be between the business legal clinic or my Securities Regulation course, but rather between the clinic and some other non-transactional related course/activity.  In other words, providing simulations and clinics provides an alternative way of increasing a student's exposure to transactional law and this is important in light of our seemingly ever-increasing awareness of how differently students learn.  I'm not sure if this additional consideration would tip the scales of the argument, but it does seem worth mentioning.

By the way, speaking of Securities Regulation, I can't help but add the following plugs from Woronoff . . .

If you have a sophisticated corporate transactional practice, you need to have a deep understanding of the securities laws. . . . Law firms simply cannot teach securities law the way a law school can (if at all). . . . [I]n todayâs world, law school training is necessary (even though not sufficient) to ultimately master this subject.

and Usha Rodrigues (also commenting on the midyear meeting–the "Blogger note" is hers):

Several speakers stressed the importance of taking Securities Regulation. [Blogger note: I cannot echo this enough. My students know that I am adamant on this point. My spiel goes like this: âyou canât learn everything in law school, but you should take classes that it would be difficult to pick up on the fly. Securities Regulation is just such a class.â]

One thing I am definitely going to change personally is the advice I give to students who come to me with a desire to practice transactional law but uncertain as to what courses are best to advance that goal.  I used to advise them that they would have time (and indeed be expected to) learn the specific law of their particular area of practice once they started working and that they should use law school as an opportunity (perhaps the last) to study as many different areas of the law as interest them.  After reading and hearing Michael Woronoff's views (he is a partner at Proskauer Rose LLP, in addition to being an adjunct professor at UCLA School of Law) I think I will share with them his perspective that the following is a problem:

[I]tâs not just securitiesâaccounting, administrative law, antitrust, bankruptcy, commercial transactions, corporate finance, entity taxation, IP and a host of others. Time and time again I talk to students who KNOW they want to practice transactional law and yet they have not taken, and have no plans to take, courses that contain information that is very important to their careers.

itâs not just securitiesâaccounting, administrative
law, antitrust, bankruptcy, commercial transactions, corporate
finance, entity taxation, IP and a host of others. Time and time
again I talk to students who KNOW they want to practice
transactional law and yet they have not taken, and have no plans to
take, courses that contain information that is very important to
their careers.

{ 10 comments }

MAW July 9, 2009 at 9:00 pm

SP-

Thanks for the publicity–I appreciate it greatly.

It is not that I am totally against transactional clinics; and I certainly agree that I would rather have a student work in a small business clinic than take, say, Law and the Sea. My concern is just that, given

(i) the limitation on the legal services provided by most transaction law clinics to only the simplest of matters,

(ii) the vastly different nature of the clients,

(iii) the limited time commitment of the students, and

(iv) the fact that, due to the very low student faculty ratio required, very few students can participate in any one semester,

these clinics have limited value in addressing the perceived problem that the critics are raising.

(By the way, I'm curious, the web site says that your NBLC is among the largest small business clinics in the country. How many students participate per semester?)

As for simulations and similar type courses, I'm a big supporter. After all, I teach a course bases on business school cases myself, and I spoke on the subject at Emory's conference on teaching transaction skills held last year (remarks available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1292477).

My concerns are:

First, the focus on skills training is leading too many to erroneously conclude that it is not important to teach substantive law (thus calls for things like one year of substantive training and two years of clinics and externships). But skills training is not a substitute for substantive training.

Second, too many people believe that law schools can actually teach expertise rather than practical skills–they can't.

Anyway, from your post I can tell your students are in good hands, so I'm not worried for them.

MAW

Jon July 9, 2009 at 10:47 pm

Professor Padfield,

I wholeheartedly agree with your assessment that a class on securities law should be taught to anyone considering a career as a transactional lawyer. However, having never taken your Securities class, I am curious if you teach it in a more traditional law school manner (i.e. review of cases and statutes) or if you incorporate more practical knowledge. The reason I ask is because of a point Mr. Woronoff (a far more knowledgeable individual than myself) makes. He says law schools cannot teach practical skills. I would respectfully disagree with that point, at least in regard to certain aspects of Securities law. For example, I would think it would be very easy to have a student rule check a 10-K or 8-K. I would also think there would be a way of providing students some kind of agreement and instruct them to draft an 8-K that included the material information. Exercises such as these would teach the students the substantive Securities law while at the same time teaching them some of the skills a young transactional lawyer must quickly learn such as determining what rules actually apply and how to properly draft something to be filed with the SEC. Any thoughts?

Professor Stefan Padfield July 10, 2009 at 10:06 am

MAW-

Thanks for the clarifications (and the compliment). I am very much in agreement that we need to spend a lot more time thinking about opportunity cost when it comes to increasing the amount of time we spend teaching practice skills. As you say, it is not that any of the proposals are inherently flawed–it is rather that if we rush headlong to implement them we may well do so at the expense of substantive instruction, which is something I agree we really can't afford to do.

I am checking into the student numbers of our clinic and expect to post them shortly. As an aside, another benefit of the clinics that I see is that they provide a service to the community. Again, that is not directly responsive to your concerns–just another part of the mix.

SP

Professor Stefan Padfield July 10, 2009 at 10:25 am

Jon-

I currently teach Sec Reg in the traditional law school manner, though I do try to relate my own practical experience as much as possible. Part of the reason for that is that there is already too little time to do justice to the subject matter in a 3 hour course (for example, I have yet to have found the time to cover the Investment Advisers Act) and while one could definitely teach the substantive law via practical exercises, I have not found any exercises that don't take more time to do that than the traditional approach (though I remain on the lookout). Also, I should note that Mr. Woronoff argues that law schools can teach practical skills like you describe–it's just that they should do so in separate courses focused on developing those skills, for the very reason I cite. What he argues is that law schools lack the comparative advantage when it comes to teaching "expertise" (i.e., providing "real world" experience via clinics and simulations). There is also the additional point that it takes a lot of time to develop and fine-tune worthwhile practical exercises, and while law profs are generally well aware of how great a gig they have–hours of time lying around for additional projects is not one of the benefits.

Thanks for the comment, and please contact me directly at spadfie@uakron.edu if you have some training materials you think could convey the substantive law and practical skills in an efficient manner. As I say, I am always on the lookout for those.

SP

Professor Stefan Padfield July 10, 2009 at 12:45 pm

After thinking about it some more, I don't think it is correct for me to lump a 10-K review in with contract drafting and negotiation. In other words, that may well be a better example of trying to develop expertise rather than basic skills. However, you still have the opportunity cost problem.

Professor Stefan Padfield July 10, 2009 at 3:49 pm

Prof. Stephen Cook, Director of our New Business Legal Clinic ( http://www.uakron.edu/law/lawfaculty/cook.php ) provides the following info:

We average from 4 to 5 students a semester. Each student will be responsible for between 30-45 clients. I have had as many as 9 students in one semester. But, with the current economy, it's tough to get new clients for students to work with.

MAW July 10, 2009 at 5:09 pm

Thanks for the info. The numbers sort of make my point. One of the largest small business clinics in the country averages 4-5 (and takes at most 9) students per semester. Even if we assume clinics are an effective way to transmit skills, they aren't scaleable enough to make a difference. That doesn't mean we should eliminate them, just that we should recognize their limitations.

MAW

Jon July 10, 2009 at 5:30 pm

Prof. Padfield,

Thank you again for all your insight. Very helpful.

I agree with you the time costs associated with creating something along the lines of my suggestion could be extremely difficult in overcoming. Just thinking off the top of my head, I suppose the easiest place to start would be an exercise requiring the student to submit a draft of an 8-K based off a vanilla contract given to them in class. The drafting would require the student to go to look at the SEC rules governing an 8-K as well as the Form document. It would also require the student to study the contract to know its terms. Finally it would force the student to search EDGAR and look at some other 8-Ks filed in order to have an example for what they should draft. Such an exercise would have the advantage of familizaring the student with Edgar, the SEC website, SEC rules and regulations, the form documents, etc..

Again the time costs of constructing the contract could be quite large and I also think it would be something difficult to grade for a number of different reasons. However, I do think if the time costs could be overcome it would be an invaluable tool of in teaching students to do "real lawyer work."

As a quick note, the first thought I have on reducing the time costs would be to take an old contract from a random company already posted on EDGAR and tweak it so that the students could not easily copy it.

Thanks again for the interesting posts.

MAW July 10, 2009 at 6:46 pm

Jon,

As Prof. Padfield mentioned, he teaches a 3 hour course. My guesss is, that's the length of the securities course at most schools. He can't fit in all the substantive stuff he needs to fit in as it is. So if you want to add exercises of the type you mentioned (which I think are great) you either need to expand the hours in the existing course or offer a separate securities skills course.

I do know this–if you want to keep the course at 3 hours and I have to choose between substantive law or skills, I can teach my associates how to look stuff up on EDGAR or draft an 8-K. I can't give them a deep understanding of the securities laws the way a law school course can.

MAW

Eliot Bernstein July 11, 2009 at 8:28 am

To those asking what happened to the auditor at Stanford, he was found dead, perhaps Stanford et al. including their lawyers Proskauer and Thomas Sjoblom should be investigated for murder as well.
SPECIAL REPORTS
Another Stanford Group associate died without much notice in January
By Wayne Madsen Online Journal Contributing Writer Mar 5, 2009, 00:19(WMR) — On February 27, WMR reported on the death in January of this year of Charlesworth Shelley Hewlett, the accountant who audited the books of Stanford International Bank from a small office between fish and chips shops in north London. Hewlett was 73 and his lawyers said only that he died “peacefully.” WMR has learned from a state government source in the United States that Hewlett’s death was “unusual,” however, little more is known about the circumstances of Hewlett’s death

Thomas Sjoblom of Proskauer Rose is pointed to in both the SEC and FBI filings as the man behind the scenes, directing employees to lie to the SEC re the financial condition of the companies. Why was Proskauer and Sjoblom not directly named by the FBI and SEC to give the victims full disclosure of how the scheme was worked with the SEC former enforcement dude Sjoblom. Holt has sued Proskauer and Sjoblom but why has the receiver not seized their assets and firm, how can the firm continue to operate with liability insurance unless their carrier is unaware and Proskauer failed to notify them of their integral part and massive pending liabilities??? The FBI and SEC investigators should formally charge Proskauer and the victims should demand Proskauer to fully disclose their role in ripping off their money.
Proskauer also represents Willis Group Holdings who has also been sued in the Stanford mess for aiding and abetting the Stanford scam.

MADOFF + STANFORD + DREIER + BAYOU GROUP (SAMUEL ISRAEL) + SATYAM + FISERV + ALBERT HU + The 1031 Tax Group LLC – Edward H. Okun = PROSKAUER ROSE & FOLEY & LARDNER
Foley & Lardner partner Patricia J. (Trish) Lane represented FISERV, sue Foley, read on.
Investors who have been burned in these scams should start to seek redress from the lawyers who were involved with these scams. I personally have been trying to notify regulators and authorities of a ONE TRILLION DOLLAR scam that is putting states like New York and Florida at huge risk, as well as, companies like Intel, Lockheed, SGI and IBM. The states and companies involved in the fraud fail to acknowledge the risk exposing shareholders and citizens to impending liabilities. Investigators, courts and federal agents ignoring the crimes and evidence, including a car-bombing attempt on my life. I know how Harry Markopolos felt trying to expose Madoff in a world without regulation.
Did I hear Proskauer Rose is involved in Madoff (involved many clients too) and acted as Allen Stanford's attorney. Investors who lost money in these scams should start looking at the law firm Proskauer's assets for recovery. First, Proskauer partner Gregg Mashberg claims Madoff is a financial 9/11 for their clients, if they directed you to Madoff sue them. The most interesting point in the Madoff Proskauer linkage is that Jacqueline Wood a former SEC enforcement head was given a report in 2004 showing that Madoff was a scam by Walker-Lightfoot a SEC lawyer which Wood then buried and then was hired by, you guessed it, Proskauer Rose.
Proskauer also hired the lawyers involved in the Bayou Hedge fund scam of Samuel Israel, the guy who faked his airplane death to evade prosecution.
Then, Proskauer partner Thomas Sjoblom former enforcement dude for SEC and Allen Stanford attorney, declares PARTY IS OVER to Stanford employees and advises them to PRAY, this two days before SEC hearings. Then at hearings, he lies with Holt to SEC saying she only prepared with him but fails to mention Miami meeting at airport hanger. Then Sjoblom resigns after SEC begins investigation and sends note to SEC disaffirming all statements made by him and Proskauer, his butt on fire. If you were burned in Stanford sue Proskauer.
Proskauer Rose and Foley & Lardner are also in a TRILLION dollar FEDERAL LAWSUIT legally related to a WHISTLEBLOWER CASE also in FEDERAL COURT. Marc S. Dreier, brought in through Raymond A. Joao of Meltzer Lippe after putting 90+ patents of mine in his own name, is also a defendant in the Federal Case.
The Trillion Dollar suit according to Judge Shira Scheindlin is one of PATENT THEFT, MURDER & A CAR BOMBING. For graphics on the car bombing visit http://www.iviewit.tv.
The Federal Court cases
United States Court of Appeals for the Second Circuit Docket 08-4873-cv – Bernstein, et al. v Appellate Division First Department Disciplinary Committee, et al. – TRILLION DOLLAR LAWSUIT
Cases @ US District Court – Southern District NY
(07cv09599) Anderson v The State of New York, et al. – WHISTLEBLOWER LAWSUIT
(07cv11196) Bernstein, et al. v Appellate Division First Department Disciplinary Committee, et al.
(07cv11612) Esposito v The State of New York, et al.,
(08cv00526) Capogrosso v New York State Commission on Judicial Conduct, et al.,
(08cv02391) McKeown v The State of New York, et al.,
(08cv02852) Galison v The State of New York, et al.,
(08cv03305) Carvel v The State of New York, et al., and,
(08cv4053) Gizella Weisshaus v The State of New York, et al.
(08cv4438) Suzanne McCormick v The State of New York, et al.
( ) John L. Petrec-Tolino v. The State of New York

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