To:  Professor Eric Ramanathan  Professor David Wilkins 

 To: Professor Eric Ramanathan Professor David Wilkins From: Professor Tina L. Stark (Emory University School of Law) Professor Eric Chaffee (University of Dayton School of Law) Date: September 1, 2010 Re: Proposal ‐ A Transactional Skills Curriculum for a New Century: The Need to Incorporate Practical Business and Transactional Skills Training into the Curricula of America’s Law Schools THE PROPOSAL This proposal advocates that American law schools enhance their curricula by incorporating more mandatory and elective offerings focusing on practical business and transactional skills training. The recommendations in this proposal are designed to prepare students better for a transactional practice and to expand the pool of job opportunities for law school graduates. THE NEED The current law school model is not sustainable. In years past, the legal academy could count on practicing lawyers to train and mentor newly‐minted graduates to ease their transition into practice. Because of mounting pressure from clients for efficiency, law firms are finding it ever harder to bill the time of untrained junior lawyers. The result is a “sink or swim” environment. Firms simply cast aside a junior lawyer unable to meet clients’ needs and replace that lawyer with another junior lawyer. The situation is especially dire in the area of transactional law where students arrive at jobs without any practical skills. The current law school model focuses on training students to the meet the challenges of litigation, while almost completely ignoring the practical business and transactional skills training that is necessary for students to thrive and survive in transactional practices. Although some law school faculties and law school faculty members are pursuing innovative approaches, the case method still dominates in most transactionally‐oriented courses. The existence of this “sink or swim” environment for newly‐minted lawyers also highlights that America’s law schools are producing a glut of graduates. With the number of ABA approved law schools continuing to increase, each year larger numbers of graduates enter the job market. In good times, this would mean increasing competition among these graduates. In the wake of the Great Recession, however, the situation is especially grim. The pool of available opportunities for these graduates has decreased, leaving many graduates without employment opportunities and saddled with law school debt. THE IDEAL Ideally, American law schools should enhance, refocus, and balance their curricula to incorporate more mandatory and elective offerings focusing on practical business and transactional skills training. Although the proposed mandatory courses are particularly crucial for transactional lawyers, the courses would also advantage litigators because so much of their work is the litigation of business cases. This 1 enhanced training will equip new graduates with the skills to be immediately productive and expand their pool of opportunities by making them more attractive to a greater number of employers. To implement this proposal, the following courses should be mandatory at American law schools: •
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Transactional Drafting Business Basics The addition of a course in transactional drafting is critical because the ability to draft agreements is among the most basic skills needed by a lawyer. Requiring a transactional drafting course would create a balance to the mandatory legal writing curricula offered at most law schools, which substantially focus on the writing of litigation briefs and memoranda. But balance alone is not a reason to require all students to take a course. Transactional drafting not only includes contract drafting but touches most, if not all, areas of the law. For example, litigators often litigate contract matters and use their transactional drafting skills in negotiating and crafting settlement agreements. In the area of estate planning, lawyers draft wills and trust agreements that must withstand future scrutiny, and in the area of family law, transactional drafting skills are necessary to draft divorce and separation agreements. All of these examples demonstrate that failing to require a course in transactional drafting leaves students ill‐equipped to enter practice. As stated, Business Basics should also be mandatory. Practice in virtually any area of the law requires an understanding of the modern business world. For example, lawyers who work for non‐profit and for‐
profit business entities must comprehend how their clients function; lawyers who draft wills and trust agreements must often understand their clients’ businesses to draft documents that will withstand future judicial scrutiny; and litigators must understand how businesses work to effectively litigate matters involving business entities. Possible components of this course include units on financial statements, valuation, how companies are managed (strategic planning, marketing, risk management), investment banking, capital markets, insurance concepts, interest rates, time value of money, a history of modern business, and business ethics. This information will provide students with insight into how their clients’ businesses function and the business environment within which they function. An understanding of law without an understanding of business limits a lawyer’s ability to effectively counsel clients. To implement this proposal further, American law schools should offer ‐‐ as electives ‐‐ the following courses, which would build upon the mandatory courses: •
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Transactional Skills Workshops Transaction Simulation Courses Transactional Clinics Finally, the more traditional business electives (e.g., Business Associations, Securities Regulation, and Corporate Finance) should include experiential learning and transactional drafting. EMORY UNIVERSITY SCHOOL OF LAW – A STEP IN THE RIGHT DIRECTION In addition to offering a robust collection of upper level business‐related courses, Emory University of School of Law has taken the innovative step of incorporating practical business and transactional skills training into its curricula. The Emory experience can serve as a case study for schools contemplating adopting a similar approach to legal education. 2 Emory’s curriculum offers students extensive training in transactional and business skills. The first course in the skills curriculum is Contract Drafting. In this course, students learn more than how to write in plain English and avoid ambiguity. They learn, among other things, •
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how to translate the business deal into contract concepts; how to incorporate the business deal into the contract, while protecting the client against risk and advancing its interests; how to look at a contract from the client’s business perspective; how to analyze risks in the business deal; how to problem solve through drafting; and how to analyze contracts. The second course in the integrated transactional skills curriculum is Deal Skills, which teaches students to do the work, other than drafting, that deal lawyers do. Students learn, entirely through simulations, how to perform due diligence and how to draft resolutions, third‐party opinion letters and closing documents—tasks commonly assigned to junior associates. Students also study letters of intent and five risk reduction agreements that appear in so many different types of deals: indemnities, guaranties, escrows, pledge agreements and security agreements. Finally, students learn about transaction management, how to interview and counsel clients and how to negotiate a contract. The third and final component of the transactional skills curriculum is the capstone course. Each capstone course is a semester‐long simulation in which students role‐play the lawyer in a transaction. Each course focuses on a different transaction. Recent capstone courses include Mergers & Acquisitions, Private Equity, Venture Capital, Complex Restructurings and Distressed Acquisitions, Intellectual Property Practice, Negotiated Corporate Transactions, and Commercial Real Estate Transactions. The hypotheticals in these courses are quite sophisticated because students are not performing tasks and learning skills for the first time. Instead, students use the capstone courses to hone and master what they have previously learned. THE PATH FORWARD Refocusing the curricula of American law schools will be a difficult and complicated task. Over the next year, the following three initiatives will be taken to move the proposal forward: First, a survey will be conducted of all of Professor Stark’s and Emory’s former students who can be located and who participated in her transactional drafting and deal skills courses to determine whether the transactional skills that were taught proved useful in the practice of law. The goal of this study is to test empirically the hypothesis that teaching practical business and transactional skills to law students helps to better prepare them for practice. We will also approach other schools with transactional skills courses and attempt to survey their students. Second, a survey will be conducted of all law schools requiring transactional drafting courses to get a sense of why these courses were made mandatory. The goal of this study is to understand what conditions and justifications are necessary to convince law school faculties to adopt these types of courses into their mandatory curricula. 3 Third, a survey will be conducted of all law schools with business law or transactional concentrations to determine content and scope of these concentrations. The goal of this study is to understand existing trends relating to the incorporation of practical business and transactional skills training into law school curricula. CONSTITUENCIES SUPPORTING THIS PROPOSAL Because adoption of this proposal will help to prepare students better for a transactional practice and to expand the pool of job opportunities for law school graduates, numerous constituencies should support its implementation. Specific support for this proposal has already been gained from the following individuals: Deans ‐
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Dennis Honabach, Salmon P. Chase College of Law, Northern Kentucky University Lisa Kloppenberg, University of Dayton School of Law David Partlett, Emory University School of Law Practitioners ‐
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C. William Baxley, Partner, King & Spalding LLP ([email protected]) Mike DiTano, Chief Counsel, J.M. Huber Corporation ([email protected]) Mark Duedall, Counsel, Hunton & Williams LLP ([email protected]) George Fox, Partner, Fox & Mattson, P.C. ([email protected]) Jonathan Golden, Chairman, Arnall Golden Gregory LLP ([email protected]) Walter E. Jospin, Partner and former Chair of the Atlanta Corporate Department, Paul, Hastings, Janofsky & Walker LLP ([email protected]) Kenneth F. Khoury, Executive Vice President and General Counsel, Beazer Homes USA, Inc. ([email protected]) David Lowance, Partner, Alston+Bird LLP ([email protected]) Gary W. Marsh, Partner, McKenna Long & Aldridge LLP ([email protected]) Carol Newman, (Retired partner Powell Goldstein LLP) ([email protected]) Robert D. Pannell, Law Offices of Robert D. Pannell LLC ([email protected]) Rusty Pickering, Partner, Nelson Mullins Riley & Scarborough LLP ([email protected]) David S. Phillips, Partner, Jones Day LLP ([email protected]) Robert Robinson, Partner, Arnall Golden Gregory LLP ([email protected]) Robert E. Saudek, Partner and former Managing Partner, Morris, Manning & Martin, LLP ([email protected]) F. Lawrence Street, Partner, Morris, Manning & Martin, LLP ([email protected]) Students ‐
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Justin Barton, Emory University School of Law and Goizueta Business School ([email protected]) Stephen Bielecki, Emory University School of Law ([email protected]) Rob Ellis, Emory University School of Law ([email protected]) Ingu Hwang, Emory University School of Law ([email protected]) Amir Shenaq, Emory University School of Law ([email protected]) 4 ‐
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Ruth Ott, Emory University School of Law ([email protected]) David Weingarten, Emory University School of Law ([email protected]) STATEMENTS IN SUPPORT OF THIS PROPOSAL Student comments "Also ‐ I meant to tell you that Contract Drafting even ended up being extremely useful in an assignment I had reviewing a subpoena for general litigation. Go figure!" "The transactional courses made me shine at work!" Comment from partner supervising an Emory student summer associate “You did a great job on the shareholder agreement. I have addressed your various comments on the attached. Generally, for a baby company, I would use a simpler form, but I think this is great and will pass along to the client. Thanks for your help.” Comment from an Atlanta practitioner about our proposal “The need for the Business [Basics] course is illustrated by this incident: A new lawyer joined my old firm’s Corporate and Securities Department. We represented banks, among others. One day, there was a discussion about a bank client offering a new kind of CD, one tied to the return on the S&P 500. The new lawyer was totally flummoxed‐‐‐finally he asked why a bank was selling CDs, and what was on them? Music? Or data? He had never heard of a Certificate of Deposit, but knew a lot about Compact Discs. Can you imagine if we had said tying the return to a stock index was expected to compete well against CDs tied to LIBOR?” 5