Alumni Drive Need for Intensive Business
Business Advisory Council Instrumental in Creating New Program
|"The ability to analyze and communicate using numbers as well as words, and to combine legal analysis with an understanding of a client's goals and obstacles, will make for stronger lawyers."|
by Cullen Couch and Denise Forster
The mega-failure of Enron rocked the business world. It revealed corporate charlatans who wove a fraudulent web of shadow deals meant to deceive almost everyone. Clearly, the lawyers involved either didn't understand the complexities unfolding before them, or they did or should have understood and were guilty of misconduct or negligence. With an uncanny prescience and long before the scandals seriously weakened investor confidence in the integrity of U.S. corporations, the Law School had been quietly building a program under the leadership of Dean John Jeffries '73 that will ensure that Virginia graduates do, indeed, understand.
Seven years ago, recruiting of alumni began for a Business Advisory Council that could help the school develop instruction in the crossover areas of law and business. Seeking alumni active as CEOs, general counsels, finance professionals, and business executives, former Dean Robert S. Scott and Foundation Director David Ibbeken '71 knew the Law School could reap long-term benefits from the collective experience and expertise of such alumni.
Since the first of its many meetings in Charlottesville, the Council has urged extended instruction in business basics for Law School students. Members have spoken out about what they wished they had learned in law school and about the skills and knowledge they would like to see in young alumni.
Law School is very grateful to those listed below who have
provided initial support for the Law & Business Program.
Sincerest thanks to Thomas A. Saunders III (Darden '67) for
agreeing to provide significant seed money to fund the Darden
faculty members who will teach in the program.
Ernest E. Monrad '56
This view was confirmed in 2001 at the Law School's 175th Anniversary Conference on "Law Schools, Lawyers, and the Future of American Law." Many constituencies, including judges, managing partners, law school deans, and clients, discussed the future of legal education in this country. According to Dean John Jeffries '73, "The conference helped the Law School set an agenda for the next ten years of legal education." It explored how legal education trains students to think like a lawyer and endorsed the Council's belief that better business instruction will make Virginia alumni even better lawyers.
Academic Associate Dean Paul Mahoney couldn't agree more. "The ability to analyze and communicate using numbers as well as words, and to combine legal analysis with an understanding of a client's goals and obstacles, will make for stronger lawyers."
Mahoney notes that when transactional lawyers lack a basic understanding of accounting and finance, they miss opportunities to add value by designing better transactional structures. Equally important, they may also fail to play their role in preventing the types of corporate misbehavior that have generated so much recent attention. "If the lawyer can't figure out that a transaction has the effect of hiding losses or diverting cash to a corporate officer, that lawyer can't help the corporate client avoid ethical lapses," he says.
Mahoney has served as faculty liaison to the Council from its inception and has been a strong supporter of expanding the Law School's offerings in business. As the Brokaw Professor of Corporate Law and Albert C. BeVier Research Professor, his publications and academic endeavors demonstrate expertise in corporations, corporate finance, financial regulation, quantitative methods, and contracts. In his years of practice prior to joining the faculty, he experienced first-hand the relevance and overlap of these two areas. "Successful lawyers don't just advise on the law. They help their clients structure and negotiate transactions," he said.
Formal Proposal Sets Stage
Early in 2001, acting on suggestions from both the Business Advisory Council and participants of the 175th Conference, Jeffries proposed a Law & Business Program. He circulated for comments a working paper that set out the fundamental structure, objectives, and funding needs of the programperhaps the most important curricular innovation in Law School history. He received valuable input from many alumni and the Law School formally launched the program in this academic year.
Students electing the Law & Business Program begin with instruction in accounting and finance. Taught by senior faculty from the University, such as Kenneth M. Eades, Professor of Business Administration at Darden and O. Whitfield Broome, the Frank S. Kaulback, Jr. Professor at the McIntire School of Commerce, these foundational courses provide critical skills for new lawyers and introduce students to business fundamentals to set the stage for business law courses.
"To interact effectively with the business world, students need to learn about the fundamental issues facing managers and how they go about solving these problems," says Eades. "In corporate finance, for example, we consider how a manager can enhance firm value through the choice of financing, or the debt/equity mix, and through the choice of capital investments, or discounted cash flow analysis. By the end of the course, students are able to apply the analytical techniques to estimate the value of the firm for purposes of a merger."
Instruction in the core business law subjects, such as Corporations, Securities Regulation, and Bankruptcy will then build on the students' accounting and finance background. "For the student who wants to be prepared at the highest level, the Law & Business Program offers an unparalleled opportunity," says Mahoney.
In addition to these introductory business law courses, the school offers advanced training, including intensive seminars such as this spring's Constructing the Deal taught by Council member Mike Ross '77, former General Counsel for Safeway, Inc.
"Students who take the opportunity to learn how legal principles fit into the planning, structuring, and negotiation of transactions will have a head start toward becoming effective business lawyers. Even a short seminar gives students an understanding of some of the terms used, and issues often confronted, by their future clients and colleagues. The emphasis on business realities should enhance students' ability to make difficult decisions and give practical legal advice," said Ross.
According to Jeffries, alumni bring special skills to the classroom. "They bring a level of sophistication and knowledge and a wealth of practical experience that no academic can hope to match. Equally important, they bring to the classroom the perspective of the senior lawyer or client. Few young lawyers have an immediate and intuitive grasp of the art of serving the client."
The final phase of the Law & Business Program will offer joint classes for Law and Darden students, jointly taught by both Law and Darden faculty. The courses will be case-based and team-intensive.
As the Law School builds on the program, Council members will leaven it with their expertise and breadth of experience, ensuring that the school stays abreast of the current business climate and that the program remains relevant. Successful business lawyers necessarily learn the language of business over time, but the Law & Business Program will give Virginia students an important head start.