Law and business: A marriage of convenience

As businesses have become ever more inter­national in focus and reach, the law firms and lawyers who work for them have adopted a more global approach to ­ensure they are equipped to cope with complex cross-border deals and provide advice across jurisdictions.

That is feeding through to the ­institutions that train the lawyers of the future: law schools are placing increasing emphasis on commercial law and business knowledge, often through innovative joint ventures with business schools.

Of the law schools participating in this year’s FT Innovative Law Schools’ listing of Master of Laws (LLM) programmes, about 40 per cent co-operate with a business school to deliver jointly taught courses.

In the US, the University of Chicago has ­pioneered the application of economics to the study and practice of law. Last month its law school launched its “Law and Economics 2.0 Initiative”. At the heart of the initiative is the Institute for Law and Economics, which brings ­together 34 faculty members with the aim of ­being a catalyst for strengthened inter­disciplinary research between the law school, the department of economics and the university’s Booth School of Business. Among the five economists participating in the institute, two – Gary Becker and Ronald Cause – are Nobel Prize winners.

Michael Schill, dean of University of ­Chicago Law School, says that through training ­international students the school seeks to ­export insights of law and economics developed in ­Chicago to other countries’ legal systems. This is not grounded in ideology, he says, but necessity. Noting that ill-conceived regulation and insufficient oversight were fundamental to the financial crisis, he says: “At a time when the insights of economics are more important than ever, it is irresponsible to establish law without understanding economic costs.”

The link between good law and good business is also behind initiatives at the UK’s University of Reading.

“It is evident that commercial and corporate law issues are irrevocably linked to financial issues,” says Ioannis Kokkoris, executive director of the Centre for Commercial Law and Financial Regulation. Governed jointly by Reading University Law School and Henley Business School – which became part of the university in 2008 – the centre was founded this year with the mandate of promoting interdisciplinary research.

While the centre is devoted to research, ­collaboration has been simultaneously extended to teaching. Three LLM programmes – international commercial law, international corporate finance and international financial regulation – were launched in September 2011, each taught in conjunction with Henley Business School.

Students take modules from both schools, in what Prof Kokkoris refers to as “truly joint” LLM programmes. “It is difficult to underestimate the importance of law students being in a business school environment,” he says, critical of the “silo thinking” that can prevail within disciplines.

The aim of the new programmes is to bridge the artificial divide between law and business, and for students to acquire legal and financial perspectives of commercial and corporate law issues.

Emphasis in Reading’s new LLMs has also shifted to shorter, more diverse modules, prioritising practical application. The aim is to give students as much choice as possible, Prof Kokkoris says, “and to differentiate ourselves, and themselves, in a competitive market”.

As part of his ambition to broaden student ­exposure to the global commercial world, the school is planning exchange programmes with schools outside the UK. “I cannot imagine a ­successful international career without inter­national exposure,” he says.

International experience is very much the ­essence of a distinctive part-time programme at the University of St Gallen in Switzerland. Designed for mid-career legal and business professionals, the Executive Master of European and International Business Law comprises nine one-week modules, taught over 18 months. Each module is taught in a different location, taking students to eight countries on three continents.

According to Carl Baudenbacher, programme director, the idea is to provide students with ­access to world-class specialists. Conceding that the extensive travel involved is a novel attraction, Prof Baudenbacher also highlights “the sheer value of exposure to cultural differences”. This value is particularly acute, he notes, in the case of modules concerning business and law in China and Japan, each taught in the respective country.

Conflict resolution, he adds, is one area where “on-the-spot study has no substitute”. The nine modules cover a wide area of international ­business law, including mergers and acquisitions, taught in Frankfurt, and energy law, taught in Texas. “The key to success today lies in generalist education, not specialisation,” Prof Baudenbacher says. “The focus must be on methodology, as the ability to solve complex problems is becoming more important.”

It is the development of critical thinking skills, and their application to international commercial law, that has the biggest impact on students’ diverse careers, Prof Baudenbacher says. “As the age of deregulation is being challenged, it is increasingly important for businesses to have a knowledge of law,” he says.