Newsflash: Lawyers Need To Know Math

Financials

Want a Job? Better Learn Finance and Statistics

 

So you want to make the big bucks, huh? Do you imagine yourself strutting around a high rise, decked out in custom classics or killer heels? Well, you’ll send the right message by looking the part. But the whole façade will crumble if you can’t master today’s basics: reading a balance sheet and unraveling derivatives.

That’s the main lesson from a recent survey of 124 Harvard Law alumni at 11 big law firms, including big league players like Latham & Watkins LLP, Kirkland & Ellis LLP, and Ropes & Gray LLP. The survey, conducted by Harvard Law, used a 1-5 scale on most questions to rank the value of various Harvard courses, with 5 being “extremely useful” and 1 being “not at all useful.”

When asked to list the three most valuable business methods courses, 83% of HBS graduates chose Accounting and Financial Reporting, while 68% answered Corporate Finance. Those responses were followed by Negotiation Workshop (46%), Business Strategy for Lawyers (41%), and Analytical Methods for Lawyers (32%).  

Regarding the best knowledge bases and skills for associates, Harvard respondents chose Accounting and Financial Statement Analysis at a 4.30 clip, trailed closely by Teamwork (4.28). Other key skills included Financial Markets and Products (4.0), Negotiations (3.85), Business Strategy and Industry Analysis (3.68), Statistical and Quantitative Analysis (2.96), and Legal Services Industry (2.85).

In the area of Business Organizations, respondents gave Corporations the highest marks for value at a 4.61 average. This was followed by Mergers and Acquisitions (4.33), Securities and Regulation (4.22), Capital Market Regulation (3.92), Securities Litigation (3.89), and Corporate Taxation (3.83).

Outside of business law, survey participants chose Evidence and Intellectual Property as the best electives at 3.57 and 3.55 respectively. Federal Courts (3.50), Administrative Law (3.44), and Patent Law (3.23) also made relatively strong showings.

You could argue that this survey is derived from a small sample with similar backgrounds. However, it also reflects the increasing importance of technical business knowledge in representing clients. Eric Posner, a practicing attorney and professor at the University of Chicago Law School, says it best:

“This chimes with my experience. I tell students that they should take as many finance-related courses as possible, including advanced courses in the business school. Math-anxious law students normally shy away from classes like these, only to find that they are expected to understand what a collateralized debt obligation or credit default swap is on the first day of practice. And, unlike the case of, say, antitrust, a good understanding of finance is not something one can pick up from practice. One might learn to fake it, but one needs a deep understanding. Every other big case these days seems to have a large finance component, and lawyers who are comfortable with finance can contribute more than those who aren’t.”

To read Above the Law’s list of the best classes for solo practitioners to take, click here.

Source: Washington Post, Taxprof, Wall Street Journal, Eric Posner