What a Transactional Lawyer Needs to Know: Identifying and Implementing Competencies for Transactional Lawyers
Lisa Penland*
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I. Introduction
While many law schools are beginning to teach transactional skills to train transactional lawyers for the practice of law,1 a gap remains between the minimal transactional skills a young lawyer should have and those that the recent law school graduate actually possesses.2 The primary purpose of this article is to identify basic transactional competencies for transactional lawyers and provide resources and direction for obtaining those transactional competencies. The article will take a brief look at the history of formal transactional training in law school; identify basic transactional skills necessary to prepare a lawyer for transactional practice; and provide insight into attaining transactional competency.
This article assumes that transactional competency is necessary for new lawyers. At least half, if not more, of all attorneys engage in transactional practice.3 Accordingly, this assumption not only makes sense, it is supported by statistical and anecdotal information.
The MacCrate Report, published in 1992 by an American Bar Association task force, was unique because it focused on legal education not from the perspective of the legal academy, but from a practitioner’s perspective.4 That is, it examined what American lawyers need to know to practice law.5 That Report is well known for its emphasis on setting a baseline of skills and values necessary for law practitioners and urging law schools to provide those baseline skills and values.6 Because it focused on “skills,” it was not well received by some in the legal academy.7 Having fought hard against the perception of legal education as a “trade school,” many law school academics did not welcome the Report’s emphasis on skills.8 However, regardless of its reception, the MacCrate Report recognized that in the forty years preceding the Report there had been a marked growth in demand for legal services in the business community because, during that time, “economic activity vastly expanded, new business enterprises multiplied [,] and the number of transactions in every segment of the economy proliferated.”9 That is, the Report illustrated the growth in the business sector of the economy and the concomitant growth in the need for lawyers skilled in business and transactional law.10
Likewise, a 2000 survey of the Young Lawyers Division of the American Bar Association supports the premise that a significant number of attorneys are engaged in transactional practice.11 In a survey to which 850 young lawyers responded, half of the respondents indicated that the greatest percentage of their
work time was spent in the areas of general corporate law, commercial law, and personal injury defense.12 Between 25 percent and 49 percent of respondents indicated that the greatest percentage of their time was devoted to general corporate law and commercial law.13 Thus, both the MacCrate Report and available statistics support the assertion that transactional practice is more than alive and well; it is equal and perhaps dominant to litigation practice. Additionally, even those litigation attorneys who proclaim they have never engaged in transactional practice have undoubtedly drafted the most basic of transactional documents — a settlement agreement. So, indeed, transactional competency is a must. However, while law schools are beginning to meet this real need, there is still a gap between what a transactional lawyer needs to know and what a law student learns in law school.14
II. History of Transactional Training
For various reasons, law schools emphasize the role of lawyer as litigator and provide legal training accordingly.15 The casebook method is the primary method of teaching in the first year of law school.16 That method focuses on appellate court cases in which litigation has already occurred. The casebook method continues as the major teaching method beyond the first-year curriculum.17 By emphasizing “cases” through the casebook teaching method,law school depicts the typical lawyer as a litigator, rather than as a transactional attorney.18 Whether the law school subject is a litigation-related subject, such as torts, or a transactional subject, such as contracts, the casebook method is the pedagogy of choice.19 Legal Writing and Analysis, also a first-year course, focuses primarily on litigation analysis and writing skills.20 Throughout the three years of law school, course offerings lean primarily toward litigation-oriented subjects.21 As in the first year of law school, transactional subjects continue to be taught from casebooks.22 Admittedly, the number of law schools offering contract drafting has risen markedly,23 as have the transactional clinics and transactional externships24; however, most extracurricular and clinical opportunities are litigation oriented.25
Thus, while more than half of lawyers likely practice transactional law (and undoubtedly a greater percentage are called upon to use transactional skills at some juncture in their practice), law schools fail to adequately train attorneys for transactional practice.26 The two challenges for law students, young lawyers, and law firms are identifying minimum competencies for transactional practice and identifying how young lawyers might acquire those competencies.
* © Lisa Penland 2008. Associate Professor of Law, Drake University Law School. I would like to thank Drake University Law School for its financial support of my scholarship.
1 See e.g. Columbia L. Sch., Transactional Studies Program, http://www.law.columbia.edu/ center_program/deals (last accessed June 1, 2008); U. of Mich. L. Sch., Urban Communities Clinic, http://www.law.umich.edu/centersandprograms/clinical/ucc/Pages/default .aspx (last accessed May 31, 2008); Va. Law, The Law & Business Program, http:/www.law.virginia.edu/html/academics/ lawbusiness.htm (last accessed June 1, 2008); Washburn U. Sch. of L., Business and Transactional Law Center, http://washburnlaw.edu/centers/transactional/ (last accessed June 1, 2008). Emory Law School recently established a new Transactional Law Center as well. Emory Law Establishes Transactional Law Center, Appoints Executive Director, http://www.law.emory.edu/index .php?id=292&no_cache=1&tx_ ttnews%5btt_news%5d=547 (May 5, 2007).
2 In a previous article, I outlined this gap and made suggestions for change in law school curricula to fill the gap. Lisa Penland, The Hypothetical Lawyer: Warrior, Wiseman or Hybrid? 6 Appalachian J. L. 73 (2006).
3 Daniel B. Bogart, The Right Way to Teach Transactional Lawyers: Commercial Leasing and the Forgotten “Dirt Lawyer”, 62 U. Pitt. L. Rev. 335, 335-36 (2000); Nancy B. Rapoport, Is “Thinking Like a Lawyer” Really What We Want to Teach? 1 J. ALWD 91, 103 (2002); David V. Snyder, Closing the Deal in Contracts: Introducing Transactional Skills in the First Year, 34 U. Toledo L. Rev. 689, 689 (2003); Bruce J. Winick, Using Therapeutic Jurisprudence in Teaching Lawyering Skills: Meeting the Challenge of the New ABA Standards, 17 St. Thomas L. Rev. 429, 430 (2005).
4 See ABA Sec. Leg. Educ. & Admis. to the B., Legal Education and Professional Development — An Educational Continuum, Report of The Task Force on Law Schools and the Profession: Narrowing the Gap 3-8, 11 (ABA 1992) [hereinafter MacCrate Report (the chair of the task force was Robert MacCrate)].
5 Id. at 7.
6 Id. at 135-221. The Report developed a Statement of Skills and Values (“SSV”) which identified lawyering skills and professional values necessary to effectively practice law. Id. The idea was that the SSV would serve as learning objectives for law schools. Id. at 128.
7 See Russell Engler, The MacCrate Report Turns 10: Assessing Its Impact and Identifying the Gaps We Should Seek to Narrow, 8 Clin. L. Rev. 109, 116-24 (2001).
8 Some couched their objections to the MacCrate Report objectives in the economic burden of clinical and skills education, see e.g. John G. Costonis, The MacCrate Report: Of Loaves, Fishes, and the Future of the American Legal Education, 43 J. Leg. Educ. 157 (1993). Russell Engler suggested that the heart of the objections was not economic, but more basic concerns with skills-based training. Engler, supra n. 7, at 118-19.
9 MacCrate Report, supra n. 4, at 17.
10 Id. The Report also noted that private corporations generated more than half of the legal business in the United States and the rapid increase in demand for legal services within the business sector. Id. at 82, 88. Further support for the growth in demand for business legal services is illustrated by the Report’s citation to the increased number of in-house counsel for corporations, and its citation to a study finding that more than half of the Chicago Bar members were working in the corporate client sector. Id. at 31, 34.
11 ABA Young Lawyers Div., Career Satisfaction Survey 1, http://www.abanet.org/yld/ satisfaction_800.doc (Nov. 7, 2000).
12 Id. at 13.
13 Id.
14 There is an ongoing struggle in legal education between theoretical legal analytical learning and practical skills-based learning. This conflict is noted by the authors of the recent report of the Carnegie Foundation evaluating the current state of legal education. William M. Sullivan et al., Educating Lawyers: Preparation for the Profession of Law 8 (Jossey-Bass 2007) [hereinafter Carnegie Report because the study was undertaken by The Carnegie Found. for the Advancement of Teaching]. The report notes the importance of both theory and practice and suggests not merely a détente, but a partnership between the two. Id. at 12-14. There truly does seem to be an evolution in legal education that recognizes and promotes the best of both “thinking like a lawyer” and “doing” like a lawyer. Educating Lawyers adds one more essential element to educating young lawyers — “professional identity” which recognizes that “professionalism, social responsibility, and ethics” are as integral to a lawyer’s job as analytical thought and skills competency. Id. at 14.
15 For a fuller discussion, see generally Penland, supra note 2; Kenneth N. Klee, Teaching Transactional Law 5-7 (UCLA School of Law Research Paper No. 03-17, 2003) (available at http://ssrn.com/ abstract=445823); Gerald Korngold, Legal Education for Non-Litigators: The Role of the Law Schools and the Practicing Bar, 30 N.Y. L. Sch. L. Rev. 621 (1985).
16 Law professors who responded to a nationwide survey indicated that an overwhelming percentage (97 percent) of the first-year curriculum for doctrinal subjects is taught using the case method approach; a significant majority (two-thirds) of class time in the first year is devoted to case method teaching. Steven I. Friedland, How We Teach: A Survey of Teaching Techniques in American Law Schools, 20 Seattle U. L. Rev. 1, 27 (1996); see also Kurt M. Saunders & Linda Levine, Learning to Think Like a Lawyer, 29 U.S.F. L. Rev. 121, 128-29 (1994); Carnegie Report, supra n. 14, at 3; Phillip C. Kissam, The Discipline of Law Schools: The Making of Modern Lawyers 18 (Carolina Academic Press 2003).
17 See Carnegie Report, supra n. 14, at 3; Friedland, supra n. 16, at 27.
18 See Korngold, supra n. 15, at 622. The casebook method is often criticized not only for its adherence to a litigation orientation, but for many other reasons as well. The Best Practices project initiated by the Clinical Legal Education Association criticizes the case method approach because abuse of the method “contribute[s] to the damage that the law school experience unnecessarily inflicts on many students.” Roy Stuckey et al., Best Practices for Legal Education: A Vision and A Road Map 139 (Clin. Leg. Educ. Assn. 2007) (available at http://www.cleaweb.org/documents/ Best_Practices_ For_Legal_Education_7_x_10_ pg_10_pt.pdf). It has also been criticized for viewing cases from the limited perspective of the appellate court and omitting the perspectives of clients, attorneys, and others. Carnegie Report, supra n. 14, at 57 (citing P.C. Davis & E.E. Steinglass, A Dialogue About Socratic Teaching, 23 N.Y.U. Rev. L. & Soc. Change 249, 275 (1997)). Further, the case method approach has been criticized as an ineffective teaching method. See e.g. W. David Slawson, Changing How We Teach: A Critique of the Case Method, 74 S. Cal. L. Rev. 343 (2000). For a more extensive discussion of the casebook method of teaching, see Penland, supra n. 2, at 77-80.
19 See Friedland, supra n. 16, at 15-23.
20 This is illustrated by commonly used Legal Writing textbooks. See e.g. Charles R. Calleros, Legal Method and Writing (5th ed., Aspen Publishers 2006); Linda H. Edwards, Legal Writing: Process, Analysis, and Organization (4th ed., Aspen Publishers 2006); Laurel Currie Oates & Anne Enquist, The Legal Writing Handbook: Analysis, Research, and Writing (4th ed., Aspen Publishers 2006); Robin S. Wellford Slocum, Legal Reasoning, Writing, and Persuasive Argument (2d ed., LexisNexis 2006).
21 ABA Sec. Leg. Educ. & Admis. to the B., A Survey of Law School Curricula: 1992-2002, 16- 17, 25-26, 34-36 (ABA 2004) [hereinafter Survey of Law School Curricula]. See also Penland, supra n. 2, at 83 (summarizing and explaining the statistical information disclosed by the Survey of Law School Curricula).
22 See Carnegie Report, supra n. 14, at 3. A quick look at the textbooks in any law school bookstore reveals the predominance of casebook teaching in all law school courses.
23 Survey of Law School Curricula, supra n. 21, at 36 fig. 10 (of the 152 schools surveyed, the number offering contract drafting increased from 30 in 1992 to 58 in 2002).
24 Id. at 35 fig. 8 (among the schools surveyed, transactional clinic offerings increased 400 percent).
25 Id. at 34-36. Litigation-oriented clinics make up the majority of clinics offered. Additionally, in spite of an increase in corporate counsel externships, these externships are still few and far between. Professor Kenneth Klee concludes that transactional courses have penetrated the legal curriculum; however, his conclusion is based upon the survey responses of only forty law schools. Klee, supra n. 15.
26 Indeed, the Best Practices report concludes that law schools fail to adequately train attorneys for practice at all, be it transactional or litigation. Stuckey et al., supra n. 18, at 16-29. Similarly, the Carnegie Foundation report suggests that the case-dialogue method of teaching misses two necessary dimensions: experience with clients and the connection between students’ sense of justice and their understanding of legal procedure and doctrine. Carnegie Report, supra n. 14, at 56-58.