In Defense of Corporate Lawyering and Making a Lot of Money

In my essay, Reflections on Twenty Years of Law Teaching: Remarks at the Rutter Award Ceremony, I took advantage of the captive audience at the award ceremony to argue that:

Legal education pervasively sends law students the message that corporate lawyering is a less moral and socially desirable career path than so-called “public interest” lawyering.  The corporate world is viewed as essentially corrupting and alienating, while true self-actualization is possible only in a Legal Aid office.

Our students get these messages not only in law school, of course, but also in the media. Films like “A Civil Action” or “Erin Brockovich” illustrate the general ill repute in which corporations—and corporate lawyers—are held, at least here in Hollywood.

In my teaching, I have chosen to unabashedly embrace a competing view. I tell my students about Nicholas Murray Butler, president of Columbia University and winner of the Nobel Peace Prize, who wrote that: “The limited liability corporation is the greatest single discovery of modern times. Even steam and electricity are less important than the limited liability company.”

I tell them about journalists John Micklethwait and Adrian Wooldridge, whose magnificent history, The Company, contends that the corporation is “the basis of the prosperity of the West and the best hope for the future of the rest of the world.” ...

The rise of the corporate form thus has “improved the living standards of millions of ordinary people, putting the luxuries of the rich within the reach of the man in the street.” The rising prosperity made possible by the tremendous new wealth created by industrial corporations was a major factor in destroying arbitrary class distinctions, enhancing personal and social mobility. Many of the wealthiest businessman of the latter half of the 19th Century and the 20th Century began their careers as laborers rather than as scions of coupon-clipping plutocrats.

And so I put it to my students this way: You want to help make society a better place? You want to eliminate poverty? Become a corporate lawyer. Help businesses grow, so that they can create jobs and provide goods and services that make people’s lives better.

The goal isn’t just to make my students feel better about themselves. I firmly believe that too many of our students, when they get out in practice, may be more willing to act in ways that are ethically gray—to act as facilitators rather than gatekeepers—if they’ve been told repeatedly that they’ve already “sold out.” If more legal academics were to celebrate the pro-social aspects of corporate practice, perhaps our students would be better gatekeepers once they get out in practice.

In the LA Times, PJ O’Rourke visited some of the same themes in his inimitable way:

1. Go out and make a bunch of money!

Here we are living in the world’s most prosperous country, surrounded by all the comforts, conveniences and security that money can provide. Yet no American political, intellectual or cultural leader ever says to young people, “Go out and make a bunch of money.” Instead, they tell you that money can’t buy happiness. Maybe, but money can rent it.

There’s nothing the matter with honest moneymaking. Wealth is not a pizza, where if I have too many slices you have to eat the Domino’s box. In a free society, with the rule of law and property rights, no one loses when someone else gets rich.

2. Don’t be an idealist!

Don’t chain yourself to a redwood tree. Instead, be a corporate lawyer and make $500,000 a year. No matter how much you cheat the IRS, you’ll still end up paying $100,000 in property, sales and excise taxes. That’s $100,000 to schools, sewers, roads, firefighters and police. You’ll be doing good for society. Does chaining yourself to a redwood tree do society $100,000 worth of good?

Idealists are also bullies. The idealist says, “I care more about the redwood trees than you do. I care so much I can’t eat. I can’t sleep. It broke up my marriage. And because I care more than you do, I’m a better person. And because I’m the better person, I have the right to boss you around.”

Get a pair of bolt cutters and liberate that tree.

Who does more for the redwoods and society anyway—the guy chained to a tree or the guy who founds the “Green Travel Redwood Tree-Hug Tour Company” and makes a million by turning redwoods into a tourist destination, a valuable resource that people will pay just to go look at?

So make your contribution by getting rich. Don’t be an idealist.

Here’s the video of my speech:

Posted on Thursday, May 08 2008 | Permalink

Interesting. Is there any data showing that corporate lawyers add value to their corporations? As president of my corporation it seems I seldom make any decisions w/o consulting a lawyer (mild exaggeration). I would guess that about 3/4 of this is aimed at avoiding suits by the competition, employees, customers and whatever. About 1/4 to avoid government hassles, especially pension issues. Pension laws drive me nuts TBH. It seems to me I am mostly paying my lawyers to avoid negative consequences being visited upon me by other lawyers.

If we just got rid of all our lawyers could we go back to trial by combat? Jousting would be so much more entertaining than depositions. (this last is tongue in cheek)

Steve

Posted by  on  05/08  at  03:05 PM

I agree with Prof. Bainbridge.  Incidentally, in my opinion, the Erin Brockovitch case was one of the bigger frauds of more recent times.

Posted by  on  05/08  at  09:26 PM

I agree with Prof. Bainbridge’s thoughts about what is actually socially worthwhile, but I think one should consider that most students regard their professors with mild contempt.  Professorial advocacy of public interest law probably dissuades more students than it attracts.

Regarding Steve’s point, most of my time as a lawyer is spent documenting transactions, dealing with all the things that can go wrong.  It’s sort of like engineering.  What if the borrower doesn’t have the required debt service coverage next year?  Is that an automatic default?  Can he post additional collateral?  The borrower told us how great his business was at the meeting; is he willing to give us certified financials every year?  And so on, often for a hundred pages.  If men were angels, none of this would be necessary.

Posted by  on  05/08  at  10:48 PM

I think corporate lawyers are largely a necessary evil - real business innovation, growth, new products that improve lives are never the result of a lawyer.  They preserve and protect corporate value - which is certainly important - but do almost nothing to create value (except for themselves). 

This does not mean that corporate lawyers are bad people, nor do I wish to imply that the Professor’s point regarding corporate lawyering being socially superior to public interest lawyering is wrong.  I agree with that (generally speaking).  I just think there is a real ceiling on the societal value of lawyering (corporate, public interest, or otherwise).

Corporate lawyering certainly pays well, but for an office job, what a nasty environment in which to work (many, many hours).

If you really want to make the world a better place, don’t become a lawyer, be an entrepreneur!  And yes, I am (thankfully) a former lawyer.

Posted by  on  05/09  at  09:42 AM

I’ve think you give Hollywood too much credit in that underdog stories sell, and toxically and obviously negligent, (usually criminally so), Evil Enormous Company v. indigent individual and scrappy interest lawyer is the easiest no-brainer legal plot for Hollywood script wriers to come up with.  Lets face it, that’s about as intricate of a plot that most moviegoers are going to ask for, particularly when you throw in a marquee star like Julia Roberts. 

I think “Harold and Kumar go to Court” would be a great movie where the two heroes open up a small business and innocently run a foul of massive govt agencies like the IRS and OSHA, and activist groups like PETA, the ACLU, etc..  Then our two favorite potheads hire an unemployed, down on his luck corporate lawyer to defeat the evil giants in the upset of the century.  It would be a nice twist on the typical underdog legal movie plot that would appeal to a bunch of small business owners that I know.

Posted by wcz  on  05/09  at  01:58 PM

wcz, I would definitely see that movie.  I don’t know if I would invest in it, though.

Posted by M. Hodak  on  05/09  at  02:30 PM

http://www.nationalinterest.org/Article.aspx?id=17008

Amazing article!

Posted by  on  05/10  at  12:58 AM

Disappointing guys. Is there really no evidence for lawyers adding value? Is there any evidence that lack of legal consultation leads to corporate loss? I have clearly seen this anecdotally but has anyone ever tried to quantify this?

Joe- Interesting article. I guess it could be pointed out that the Russians tried the pure thug approach in Afghanistan approach and that did not work very well. Also, that Princeton pansy (Ivy League school elite) Petraeus not only talked with the enemy, he actually paid them.

Steve

Posted by  on  05/10  at  07:51 AM

Professor Bainbridge,

On your recommendation, I have purchased two books: Old Man’s War by Scalzi and the Corporation, both of which have been fantastic!

Regarding the Corporation, I think that it has been an effective counter to the left-wing teachers at my universities, particularly those in the marxist/ post-modernist mode.  While I consider the authors to be a bit too enthusiastic for corporations (perhaps), corporations should certainly be seen in a more positive light than the treatment that was given them at my university.

Posted by  on  05/12  at  09:39 PM
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