JD-MBA Programs and the Shortcomings of Business Law Education

While I'm being a player-hater (one of my favorite occupations), let me dump a bit on joint JD-MBA programs.  I don't think there's a lot of value in the joint degree.  Consider the cost-benefit trade off.  Students have to pay an extra year of tuition and forego an extra year of earnings.  That's probably around a $250K cost for top-tier joint degree programs.  My guess is that the cost alone means that primarily students of means do JD-MBAs. 

What are the benefits of the joint degree?  I don't think it helps much on the takhlis front.  Students end up focusing on one or the other and then entering careers that utilize one skill set or the other.  Students either go into business careers or law careers.  They don't go into joint careers.  Having an MBA doesn't help much as a junior associate at a firm and having a JD doesn't help much for entry-level business positions.  Law firms don't hire people because they have MBAs, and my guess is that businesses don't hire people for non-legal positions because they have JDs (and don't hire them for legal positions absent practice experience).   I don't think it helps a lot in terms of credentialing; maybe on the margins, but one has to be good enough to compete for the job anyhow.  Perhaps the joint degree provides some extra status vis-a-vis peers in whichever field one goes into, but is that worth $250K?  In any job, it would be years before one could significantly utilize both degrees and if one goes on the business track, having some legal training years ago isn't going to be particularly helpful and vice-versa. 

I'd be curious to see the earnings of JD-MBAs compared with pure JDs and pure MBAs.  My guess is that those who pursue law are indistinguishable from their pure-JD peers and those who pursue business are indistinguishable from their pure-MBA peers.  Empirical research anyone?

It could be that the value of a JD-MBA is in the substantive knowledge acquired. But there is relatively little required substantive knowledge in either type of program. No one is hired for a law or business job because of the specific substance they learned in their program. Maybe the value is in the networking? But business people have little trouble finding lawyers, if they can pay, and it will be a while before MBA classmates are dishing out legal work (and that is probably a job reserved for the business's GC, a lawyer).

Perhaps the value of a JD-MBA is its androgeneity. Maybe it opens doors and allows a mid-career switch. One of my JD-MBA friends went from being a professionally unhappy i-banker to being a professionally unhappy corporate lawyer. The joint degree gave him some job security when things went bad for him on the street, but I think that was because he was relatively junior, only a few years out of school. He was still young and fresh enough that a law firm would take him as a junior associate and give him a year of extra standing for his banking experience. If he had been 10 years out, I don't know what law firm would hire him; certainly none would at anything close to the salary or responsibility that a lawyer with 10-years of experience could command. Lawyers go to business all the time after a few years in practice, so the MBA is hardly necessary to move in that direction. It seems to me, then that other than allowing a career shift shortly after graduation from business to law, there is little value to the JD-MBA.

[At my alma mater, she-who-shall-not-be-named, cognoscenti recognize that acceptance into the JD program opens the door to admission in the MBA program for students without business experience. Thus the JD-MBA there might be financially worthwhile since it allows the student to get MBA earning potential without putting in 2-3 years of entry-level business work before the MBA.]

I suspect that a fair number of JD-MBA students do the program because they are genuinely interested in both law and business and want to get an education in both. I don't know if they are aware that they will really have to choose one path or the other, at least initially. But law schools could perhaps satisfy some of the JD-MBA demand simply by offering better business educations to their students. Indeed, I think that a basic business education is pretty important for being a good lawyer. By this I mean fluency in the vocabulary of business, fluency in common deal documents and concepts, and a grounding in finance and accounting. (I shudder to think of law schools trying to teach the leadership and teamwork skills emphasized in some business programs.) Basic business vocabulary and concepts are not only useful for transactional attorneys; a lot of litigation practice involves understanding business issues.

For starters, law schools should really take teaching accounting much, much more seriously. It's like broccoli and Brussels sprouts, and I'm happy to play Mom and not let students have dessert (Icelandic Epics and the Law) until they've eaten a healthy dinner. Let me gore some oxen and state that its importance is far greater than Constitutional law for many lawyers' practices. There, I said it. Most attorneys are more likely to encounter an accounting issue than a first amendment issue. Going beyond that, law schools need to do a much better job of teaching students about common (and complex) business transactions and financial products, but more about that in a separate post.

Some schools have started teaching basic analytical methods courses to introduce students to basic concepts in economics and statistics, etc. I think that's great, although I wonder how much can be taught about any particular subject when only 2-4 class sessions are spent on it. A few other schools have a basic introductory finance/accounting class. That's a model that should really be expanded and required. (I'm not a big fan of the choose-your-own adventure model of legal education. Education is a setting where paternalism is quite appropriate, in part because students often don't know enough to make great choices, and often choose courses for the wrong reasons, e.g, class meeting times or ability to use laptops. But this is a much larger topic that I can address in this post.)

A required intro finance/accounting class allows more sophisticated and advanced teaching in upper level classes and ensures that students who don't take advance business law classes learn at least the basic business law concepts and skills. As much as I love UCC Article 9, I don't think it is important for most students to know its nitty-gritty details. But I think it is shameful that law schools send students into practice who do not know the difference between secured and unsecured debt and the importance of perfection. Likewise, students should be able to easily find and read 10-Ks, including the financials. And students should know that when a banker talks about drawing down on a revolver, he's probably not talking about cocking a six-gun.

Enough ranting. I'm sure I've stepped on enough toes here to open up a lively discussion. For full disclosure, I'm a pure JD and haven't taken any MBA courses and am happy to be proven wrong about the value of a joint degree. Also, my school doesn't have an analytical methods or basic business course, so I try to teach pieces of basic business in my bankruptcy and commercial law courses.