January 30, 2012 12:19 am

Financial judgment

legal papers

“Lawyers are scared of numbers,” says Stephen Presser, a US legal historian who teaches both law and business at Northwestern University, near Chicago. After graduating in law, “your brain is rewired and you can no longer do simple arithmetic”.

His humorous caricature contains an uncomfortable grain of truth: law doctorate – juris doctor (JD) – programmes traditionally focus on legal systems, case histories and language-based skills, providing little scope for developing the analytical proficiency in maths required for MBA degrees.

As the border between law and business becomes increasingly blurred, a bridge between the two worlds is being provided by joint law and MBA programmes, which aim to equip graduates with the capacity to steer businesses, based on knowledge of complex legal and regulatory environments.

“Success in business today requires the ability to navigate through this landscape,” says Thomas Robertson, dean of the Wharton business school at the University of Pennsylvania.

“Leaders must be able to integrate financial, legal, political and cultural issues like never before,” adds Michael Fitts, dean of the University of Pennsylvania Law School.

The JD/MBA programme run by these two schools is representative of the dual degrees being offered by a growing number of business and law school pairings across the US and Canada to meet increasing student interest in the intersection of the two spheres.

“JD/MBAs are trained to read balance sheets, understand income statements and do other sophisticated things with numbers, so that they are increasingly valuable in the real world,” says Prof Presser. “I sometimes believe that in 50 years we will not have separate business and law schools, but combine them.”

Some combined departments have already begun to emerge at European business schools and universities, including Esade business school in Barcelona and the universities of Portsmouth and Surrey in the UK.

In the US and Canada, JD/MBAs are typically four-year programmes, in which students spend their first year taking foundation courses in law and the second studying core MBA units, focusing for the remaining two years on elective units split between both schools.

“The concurrent nature allows students to develop and integrate their management and legal knowledge and skills more effectively than if the degrees were obtained sequentially,” says Elise Anderson, director of media relations at the UCLA Anderson School of Management in Los Angeles, which runs such a programme with the UCLA School of Law.

Creative culture

“In business school, you learn very fast that nobody has all the knowledge,” says Dezsö Horváth, dean of the Schulich School of Business in Toronto.

The JD/MBA programme run with the Osgoode Hall Law School seeks to combine business teamwork with the more individual focus of legal education in what he calls a “creative culture clash”.

Work such as mergers and acquisitions requires a blend of legal and financial analysis, human interaction and hard-core negotiating skills. “That’s the combination you get with a law and business degree,” says Prof Horváth.

It also saves students a year compared with taking a traditional US three-year JD and a two-year MBA one after the other. In addition to the income lost by full-time students, another year at school can cost more than $100,000 in tuition fees and living expenses.

In this context, a growing number of schools are offering accelerated JD/MBA degrees that can be completed in just three years. Northwestern launched a three-year programme 15 years ago. Penn Law and Wharton’s three-year JD/MBA is in its third year.

Other top law and business schools at the universities of Yale, New York, Columbia and Indiana are now also offering accelerated programmes, with a combined three-year JD/MBA programme typically adding about a third to the cost of a traditional three-year JD degree. Accelerated programmes are generally shortened by eliminating summer vacations.

“The disadvantage [of three-year programmes] is that it cuts down on your ability to do summer internships, and for many law firms that’s an important part of the hiring process,” says Randall Thomas, director of the law and business programme at Vanderbilt Law School in Nashville.

Interest in combined law and business qualifications is being driven by changes in the demand for legal services as well as an increasing overlap between the two worlds, says Jim Bradford, dean of the Owen Graduate School of Management at Vanderbilt University.

“Law graduates are no longer recruited just by law firms and government agencies,” he says. “More and more private equity firms, hedge funds and big banks are looking for people who want to do something different with their law degrees. At the same time, the big drop in merger and acquisition activity means law firms are hiring fewer people and students have started looking elsewhere for jobs.”

In addition to a four-year joint JD/MBA, Vanderbilt offers an accelerated three-year law and business programme designed to produce lawyers who also understand corporate governance, finance and accounting. As well as a JD degree, graduates receive a certificate of specialisation in law and business.

In Europe, the growing demand for combining law and business studies is largely being met through an increasing number of LLM (master of laws) degrees – one-year courses specialising in business for qualified lawyers. The School of Business and Economics at Universidade Católica in Lisbon, for example, offers a masters in law and business, taught in partnership with the university’s law school.

Most JD/MBA graduates tend to gravitate towards business rather than legal careers, says Prof Bradford at Owen. “Business can be more exciting as it deals with exogenous events over which you have no control, such as the sub-prime debt crisis in the US or the sovereign debt crisis in Europe. It also tends, ultimately, to be more lucrative.”

Prof Thomas at Vanderbilt warns a JD/MBA degree is “definitely perceived by US law firms as a signal that a graduate, while having the advantage of an additional year of training in accounting, finance and other business-related skills, may not seriously be intending to become a long-term partner”.

Getting on to a JD/MBA programme is not easy. Students typically have to qualify for the law as well as the business school, requiring practical maths and more theoretical text-based skills.

Prof Bradford notes, however, that the narrow band of students who have strong enough credentials to be admitted, emerge from these programmes with a combination of legal and business skills that is “very highly sought after”.

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