Practical Skills in an Academic Setting: Suggestions for Educating Lawyers for the 21st Century
Article Date: Tuesday, June 28, 2011
Written By: Sean M. Jones & David L. Batty
We met with Dean Raymond Pierce shortly after he became Dean of the North Carolina Central University School of Law in 2005 to discuss the business law aspects of the law school's curriculum. We attended law school in the late 1980s and early 1990s when there was little focus on skills-based training for transactional lawyers and told Dean Pierce we believed this lack of attention to transactional skills in law schools was a continuing problem. In response to this critique, Dean Pierce challenged us to develop a practical skills course to prepare law students for a transactional practice following graduation. This led to our creating an upper-level seminar course – Business Transactions for Lawyers – that is designed to expose students to a number of common business transactions and give them the practical skills necessary to manage these transactions upon graduation.
We taught our first Business Transactions for Lawyers course in the fall of 2006 at the North Carolina Central University School of Law and one or both of us have continued to teach the course at NCCU since then. In 2010 David left private practice and joined the faculty of the Charlotte School of Law. He introduced the Business Transactions for Lawyers course to the Charlotte School of Law under the name Advanced Business Transactions, and we taught the course at both law schools during the fall of 2010. Transactional skills courses like Business Transactions for Lawyers and Advanced Business Transactions are part of a growing trend in law schools in which students are given improved opportunities to learn how to become transactional lawyers.
Our course has developed over time and is based on a series of modules designed to expose students to a variety of transactions that many business entities face as they grow. Although our approach is interactive, we do not follow the traditional Socratic method of instruction. For example, students begin by discussing the basic building blocks of contracts – definitions, the operative business terms, representations and warranties, conditions precedent, covenants, indemnification, and the "boilerplate" section. We help the students work with these building blocks by having them analyze an employment agreement from the employee's perspective and then advise their hypothetical employee client on the legal and practical issues implicated by a number of different factual scenarios. Next, the students are required to complete all of the documentation necessary to form a corporation in North Carolina. As a part of this exercise, the students must verify the availability of their corporation's name and ensure the articles of incorporation are in proper form for filing with the North Carolina Department of the Secretary of State. Finally, the students are responsible for preparing a memorandum outlining all of the steps necessary to file the articles of incorporation – including identifying the proper amount of the filing fee.
Once the students have completed these basic foundational modules, they work through the business background and legal structure of complex transactions such as venture capital investments, different types of debt financing arrangements, and M&A transactions. We focus not only on the legal documents associated with these transactions but also the business and economic issues that shape the agreements and the parties' negotiations. We assist the students in understanding these business and economic issues so they will be better able to understand their clients' goals and objectives once they graduate and begin practicing. While our students come from a variety of backgrounds ranging from the typical undergraduate liberal arts major with no work experience to students with professional backgrounds in finance or accounting, we find they all need help putting the transactional documents in context. In short, we seek to help the students understand not just what the documents say but why the documents say what they do.
Our goal is for the students to learn about transactions by actually doing transactional work. As a result, we have included in our course a number of drafting and negotiating exercises that give students the opportunity to apply in practice the concepts discussed in class. For example, in addition to the employment agreement module discussed above, students negotiate and draft a letter of intent for an acquisition transaction based on a hypothetical fact pattern. The fact patterns for these exercises are complex and often drawn from our experiences with clients over the years. We find the students enjoy putting the skills they learn in class to work through these drafting and negotiating exercises. While our students sometimes stray from the expected results in these exercises, we have nonetheless found many of their ideas and perspectives to be refreshing, enabling us to consider familiar issues in new ways.
In light of our experience both as transactional lawyers and classroom instructors, we offer the following insights and suggestions as to how law schools can do a better job of preparing students to do transactional work. In particular, law schools should teach students interested in a transactional practice how to do the following:
• Think Like Business Lawyers. Law schools traditionally have taught students to think like litigators. As a supplement to being taught how to "think like lawyers" through the traditional case method, law students embarking upon a transactional practice should be taught how to "think like business lawyers." To that end, law schools should assist students in learning how to work collaboratively and solve problems in the context of negotiating and closing transactions.
• Understand Commercial Transactions. Many students graduate from law school with little or no understanding of the business world or basic commercial transactions. Law schools should work with business schools to give students the opportunity to take courses in business administration and finance so that new transactional lawyers have a rudimentary understanding of business organizations and commercial transactions. All law students interested in a transactional practice should also be taught the fundamentals of corporate finance and M&A transactions. Finally, all new transactional lawyers should understand the typical transaction process from due diligence through closing.
• Read Financial Statements. All transactional lawyers need to have an understanding of the fundamental principles of financial statements and accounting. While transactional lawyers need not be accountants, law students interested in a transactional practice should be taught the basic accounting concepts associated with income statements and balance sheets. An understanding of these concepts is necessary for a transactional lawyer called upon to perform routine tasks such as drafting a working capital adjustment in an acquisition agreement, a financial covenant in a loan agreement, and the "Management's Discussion and Analysis" section in a securities filing. Law schools should provide students with the opportunity to take courses (whether or not in the law school) to build these basic financial and accounting skills.
• Analyze and Draft Contracts. Law students interested in a transactional practice should be given the opportunity to analyze and draft contracts. New transactional lawyers need to be familiar with the structure and basic building blocks of contracts. Law schools should give students the opportunity to negotiate and memorialize business arrangements in contracts they draft. While law schools currently provide students with many opportunities to write persuasively by preparing briefs and similar documents in the litigation context, they typically do not provide students the opportunity to engage in the rigorous and precise drafting necessary to prepare contracts. While both types of writing skills are critically important to young lawyers, they are nonetheless very different and need significant focus in our law schools.
• Negotiate. Law schools should provide students with opportunities to role play and engage in mock negotiation sessions. While most experienced transactional lawyers take these skills for granted, young transactional lawyers must develop their own styles and learn how to negotiate. Law schools currently provide these opportunities to litigators through moot court and oral advocacy programs and should provide similar opportunities to students interested in a transactional practice.
While we believe there are a number of things law schools can do better in training law students to become transactional lawyers, the responsibility for educating these students does not end there. Practicing transactional lawyers should identify the skills young lawyers need to be successful and work with law schools to help students develop those skills. Experienced transactional lawyers can easily find ways to get involved with our law schools in North Carolina to help educate students interested in becoming transactional lawyers. While this involvement can be as significant as becoming an adjunct professor and working directly with students in the classroom, there are many other meaningful opportunities for transactional lawyers to be involved even if they do not have the time or resources to commit to teaching a course. Law schools welcome the involvement of practicing lawyers in the education of law students in many different ways such as by attending seminars and events sponsored by student groups, advising student groups focused on business law, and mentoring students interested in transactional work. Working together, our law schools and the transactional bar can and should do a better job of preparing law students for careers as transactional lawyers.
Jones is a partner with K&L Gates LLP in Charlotte in its corporate and transactional section. Batty is an assistant professor at Charlotte School of Law and formerly practiced with Winston & Strawn LLP and Kennedy Covington Lobdell & Hickman LLP.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.