In early March, I met with one of the second-year students I mentor at a Boston-area law school. She was deciding on her third-year courses and, as is my habit as volunteer career adviser, I was practically begging her to take an accounting and finance course. She’d heard me vent on this topic before: “Listen, really…,” I began, “I can’t tell you how critical it was for me, often the only woman on a deal negotiation, to speak the language of the business people at the table. It leveled the playing field, especially when I was a senior associate and young partner. No one forgot this about me, and….”
Her eyes were glassing over. I hurried on to quote Above the Law’s summary of a recent poll of BigLaw partners who’d recommended unanimously that law students take accounting and learn to read financial statements, when she smiled brightly and exclaimed: “So, I don’t know anything about animal law. Maybe I should take that—it’s my last chance to study random, interesting subjects, you know…”
“That could be fun…”, I cautiously observed, with particular due deference to the dogs, cats, and birds who make life worth living.
“Or,” she went on, sensing my concern, “I could instead take Law and Psychology….”
Just the opening I needed: “Yes, but if you’re willing to take one of those ‘Law and…’ electives, how about we compromise and settle on something that might inform your legal work, like Law and Economics?”
We could do worse, I thought, mentally congratulating myself on a compelling coaching moment. But then my beloved mentee—one of the most promising students I’ve coached over the years, looked at me tolerantly and said: “Oh, no, no. I was a history major. Numbers are not my thing.” [Pause] “I’ve got it! How about Law and Modernist Art instead?”
BUSINESS FLUENCY IS NO LONGER OPTIONAL
Fifteen or 20 years ago, I might have encouraged the one-last-intellectual-hurrah approach to the third year of law school, perhaps even for a student (like my brilliant mentee) saddled with crushing student loan debt. I might have trusted her to learn business fundamentals and industry context on the job and to advance in her firm on the strength of her intelligence, charisma, and drive—despite a stunning lack of practical skills.
Not so now.
Why? Let’s start with a few givens, in the context of private practice:
- Law firms and clients alike complain constantly about young (even not-so-young) lawyers who can’t follow a simple corporate balance sheet or accurately translate business terms into legalese. (And they’re not especially happy about your billing rate, either.)
- Every client worth having wants a lawyer who understands his business, one who’s studied the industry and markets in which her company competes, and one who speaks the language of business, whether in contract negotiations or the courtroom.
- Virtually all your clients and prospects are players in the world of commerce. No lawyer can presume to represent them without achieving a solid understanding of that world.
- In simplest terms, almost every client who engages you or your firm needs your help with a pending, existing, or deteriorating business agreement. You’ll be asked to research, negotiate, and draft it; to explain, interpret, and amend it; or to dispute, litigate, or settle it. Or you may be hired to sort out and resolve a regulatory dilemma impairing the client’s business, the validity of its contracts, or its profits and prospects.
Whether you’re a corporate lawyer or a litigator and whether you have a general or niche practice, you must understand the business terms of your client’s material contracts; the statutory constraints within which it conducts its business; the interests and concerns that drive it and its partners, suppliers and competitors;and the world of commerce in which it does business.
If you don’t learn to speak your client’s language, then someone else will, and it won’t be long before your receivables are falling off and your competition is gaining ground.
YOU’RE NOT ALONE
“Am I the only one who can’t understand anything in The Wall Street Journal other than the page-one World News column?”
Most law students, then and now, majored in the humanities in college (put me down for anthro and history). Few have undergraduate business degrees. Fewer still have pursued joint JD/MBA programs. Accounting and finance are foreign to most entering 1Ls and to many graduating 3Ls, as well. For many, law school is a tale of “numbers” feared and “numbers” avoided.
If you’re one of us, please know you’re not alone. Calm any worries provoked so far and get started on the solution. Unfortunately, most of you won’t have the luxury of learning business fundamentals on the job, as did my colleagues and I. The world is moving too fast for that, and the legal work you’ll be called upon to handle is far more complex now than it was when I was a pup (an affectionate term widely used at the time by the more avuncular of our firm’s partners). In any event, the “school of life” normally offers slow and spotty training, and few firms or in-house legal departments prioritize business training, despite its proven benefits. You’ll need to get on this yourself, while still in school or in the first year of practice.
HERE’S THE GOOD NEWS
Don’t be discouraged. Law schools are taking steps to offer better instruction in finance and other business skills.
Law schools serving the millennial generation have vastly more course offerings, both basic and advanced, in the fundamentals of accounting and finance and in doctrinal business electives, than did mine. They boast more faculty members with experience in corporate practice and offer better advice and clinical opportunities for those not sold on a future as a litigator. And they’re listening to the many alums and employers begging for business-competent JDs.
The trend toward business-skills training in law schools is a sensible response to pressures on tuition, enrollment, and reputation borne of disappointing hiring results (the critical statistic underlying the U.S. News & World Report rankings, of course, being “employed upon graduation”).
Needless to say, the law school that launches graduates on a faster track to productivity will distinguish itself from the competition. With impeccable brands and high post-graduate employment rates, the elite schools have only recently begun to demonstrate adequate leadership in this area. Over the past year, however, the prestige law school cohort active in finance skills instruction has reached critical mass. Business training is here to stay.
So, though no school has added accounting and finance to its mandated core curriculum (the resulting political firestorm likely too frightening even to imagine), financial literacy has never been more accessible to law students than it is now.
YOUR PATH TO FINANCIAL LITERACY
The very best advice I can offer you? Start now. Make and implement a plan. Stick to it.
You’ll catch up. I promise. In fact, since I spend large amounts of time trying to persuade my young mentees to consider Business Strategies as a viable alternative to other electives, here are some ways to make your path to business fluency a good deal smoother:
1. Business skills courses: Are you applying your tuition dollars wisely?
- Identify your school’s basic accounting, financial reporting, and finance courses, as well as the specialized classes in corporate finance, mergers and acquisitions, securities, bankruptcy, venture capital, business strategies, and other areas for which business fundamentals are a prerequisite.
- If your school has a transactional law concentration, read the available written materials and sign up for an informational interview with the academic director about required courses and electives, whether or not you wish to enroll in the formal program.
- Take the contract drafting and other corporate writing courses your school offers. Remember, even if you plan to be a business litigator, you’ll have to understand how corporate contracts are constructed and interpreted if you want to deliver superior service.
- If you already have a job waiting for you at graduation, call or email your mentors at that firm or company to ask their advice in selecting business courses. They’ll likely be pleased and impressed you asked, and their advice could prove to be critical.
2. Experiential learning: Prioritize role-playing, simulations, and business-law clinics.
- Enroll in one or more of your school’s transactional law simulation or role-playing programs—on site or via cross-registration with another school.
- Enroll in your school’s negotiations course or clinic.
- Find out whether your school enters teams in any of the available transactional competitions and consider whether you might participate. These competitions are the practical equivalents of moot court for students who hope, in their first few years of practice, to negotiate or dispute business agreements —in lieu of writing and arguing briefs in state or federal appellate courts.
- Worth a look: A good number of law schools have expanded their clinical offerings to include not-for-profit and other corporate-client service.These could be of interest.
3. Online and on your own time: Internet courses, podcasts, and webinars.
- You can also supplement your business knowledge and skills on your own time, during the summer between your second and third year, before the bar, and after you start work—via online courses, webinars, and podcasts. Research and sign up.
- Once you start practice, work with the firm’s librarians and professional development staff to identify the appropriate continuing legal education and other courses your firm will finance (such as “Financial Statements for Lawyers”), and take advantage of bar association webinars and other programs offering training in business and finance skills for lawyers. Order the materials; read the books; and plug in your headphones on the way to work so you can listen to the podcasts. Whatever your learning style, you should be able to find resources that suit you, in most cases at moderate cost.
- Consider enrolling in one or two free business fundamentals courses offered by or Coursera (coursera.org) or edX (edx.org) and taught by faculty from prestigious business schools.
4. Build good habits and adopt a practical mindset.
- First and foremost: If you’re one of the many card-carrying “numbers-averse” JDs (male and female, young and old, business lawyers and litigators) who claim to be business lawyers—I offer you the following advice, uttered with both compassion (been there, done that, got the T-shirt) and urgency (you can’t afford to occupy a place of weakness in an uneven economy and a highly competitive profession).
PULL YOURSELF TOGETHER
Shake off the irrational, self-defeating mindset so many of us carry around inside a well-worn, standard-issue imposter complex.
Never, ever, say, “I’m afraid of [not good with] numbers” aloud again, not even to your mother. Just as professionals who proudly refuse to use LinkedIn and other Internet tools are no longer charmingly eccentric, those who dismiss accounting and finance as the province of “bean counters” risk losing the respect of colleagues and prospective clients alike. (Never lose sight of the huge and powerful impact of first impressions: There are many clients and prospective clients, and just as many senior associates, partners and other colleagues, who’ll happily write you off as a mere “technician” [or worse] based on one such lapse and who may never give you a chance to fix that.)
When your resolve fails you, look in the mirror and observe: “This is not rocket science.” Repeat until you regain your footing.
Once you’ve changed your mindset, go forth with gusto, and meet the challenge. Teach yourself about the world of business: the global and national economies, the vagaries of the capital markets, the range of industry sectors served by corporate law firms—even the business of law.
Start now and build good habits: Every day, if possible, read interesting pieces in The Wall Street Journal, Financial Times, The New York Times financial pages, Bloomberg, or a combination thereof. Consider the variety of ways you can follow these news sources—via headline emails and Google Alerts or, my favorite, your Twitter feeds.
When you begin practicing, be certain to explore the businesses and business sectors served by your practice group. Understand the business deal, the business dispute, and the business dilemma. Research, read, discuss, question, observe, and apply. And if you do nothing else, learn the jargon and the buzzwords. With their help, and a wise mixture of caution and bravado, you’ll often manage to wing it until you get up to speed.
As you gain confidence, let your new knowledge inform your legal work. Also, find ways to demonstrate your knowledge to colleagues, mentors, prospects, and clients alike—they’ll pass along word of your range and your informed and practical approach.
5. Develop clients and generate business.
So we come to the true end game.
True fact: No one in the current economy builds a robust business-law practice without demonstrating business acumen and basic financial skills. Gaining a reputation as a business-savvy lawyer will offer you a substantial competitive edge as you begin to develop a professional network and build a solid, memorable brand in the legal and business communities.
No one will forget the new lawyer encountered at a networking event—however inexperienced he may be, who asks intelligent questions about a new contact’s business or industry, listens hard to the answers, then poses smart follow-ups. They won’t forget the recent law graduate who can keep up with—even participate in—a lunch-hour conversation with the client as it ranges into areas of interest to the businesspeople present.
The challenge: Lawyers in private practice in today’s competitive market, from solo to BigLaw practice, require a business education if they’re to understand their clients, the businesses and markets in which they compete, and the non-legal challenges they face, in each case as early in their careers as possible. Without this essential training, even a law student who graduated at the top of the class may struggle to achieve “trusted adviser” status—a profoundly rewarding rapport with one’s client—and the business lawyer’s holy grail.
Even absent law school instruction in business fundamentals, any student or new lawyer can take steps to achieve financial literacy and lay the groundwork for a self-sustaining practice.
Start now, read broadly, be curious, be creative, practice self-discipline, and manage your time with care. You can do all this by yourself if need be. But do it you must.