Teaching Business Fundamentals of the Legal Marketplace
Madhav: Hello Silvia, did you read the article "What Law Students Aren't Learning, and Why It Matters" in the New York Law Journal published in April of this year? The authors, Joy Martini and Nancy Rowe, argue how critical it is, given the current challenges in the legal industry, for law students to understand the business fundamentals of the legal marketplace, including law firm economics and management?
Silvia: Yes, I did and couldn't agree more.
Madhav: It is surprising that only a handful of law schools—I think they mention Penn, Berkeley and Stanford—offer courses which focus on the practical aspects for practicing professionals!
Silvia: Martini and Rowe contend that if we are serious about training young associates to be successful lawyers, we need to train them in more than the theoretical side of the law. They need to understand the business fundamentals of the legal marketplace, including law firm economics and management, business development, business writing, pubic speaking and media training to name but a few. And these are important points for law schools to take into consideration as they design course offerings.
Madhav: In the article, they recommend law students to study cases, you know, much like MBA students. There are plenty of law firm case studies which can help better understand different management structures and fee arrangements and other aspects of management. They can closely examine examples of what works, how it works, when it works and when it doesn't. Rowe and Martini pose interesting questions to study: What happened to Dewey? What are the connections between compensation structures and client development? Does the leverage model work? How do you calculate PPP and does it matter? And it appears to us that not much formal teaching is available on these subjects.
Silvia: Absolutely. In this context, it seems like the new course on Law Firm Financial Management we are co-teaching for the first time this fall semester at Columbia Law School meets many of their criteria. We designed this course for law students who want to work in major law firms or aspire to become general counsel.
Madhav: Yes, we want to provide students with a strong and comprehensive understanding of the business side of the legal industry, in particular financial management. These students will sooner or later need to make critical business decisions for profitable growth. They will need clarity about the financial implications of their actions on their teams, practice groups and firms. They will need to understand and effectively respond to both macro and micro events which influence the future of their law firms.
Silvia: Understanding how law firms and the legal industry operate will equip them with skills and frameworks to effectively navigate through the changing legal industry landscape. It's interesting that while some schools now teach law practice management aspects, we did not come across a single law school course which focuses on the financial fundamentals at this required depth.
Madhav: Our course covers all aspects of law firm financial management and explores fundamental financial processes with an aim to provide students a structure for understanding and analyzing law firms and management and legal industry dynamics, tools to interpret the financial implication of managerial actions, and frameworks that can serve them practically and substantially well into their careers. Owing to the lack of any similar courses, we had to design the curriculum, content and structure almost from scratch.
Silvia: I know—it is a lot of work designing a course from scratch. I did it twice for my courses at Fordham Law School: the management course "The Law Firm as Business" I teach in the fall and the law firm marketing/business development course I teach in the spring. We are happy that second and third-year J.D. students as well as LL.M. students understand the importance of the topic and signed up even though the course is new at Columbia.