“Does anyone know how a zero coupon bond works?”
Blank stares from a group of three-dozen sharply dressed young attorneys provided an answer to the question being posed by professional financial trainer Marisa Mackey at the New York offices of Cleary Gottlieb Steen & Hamilton on September 12.
The group of new associates had joined the firm just three days earlier, but was already being asked to recall how to calculate the time value of money and internal rates of return.
Fortunately, no clients were being billed as the group spent the next few hours muddling through a lesson plan that was part of a new, two-week training program Cleary calls its “mini-MBA.”
Cleary partner Michael Ryan says that between the money spent developing the program and the billable hours lost by having 116 first-year associates from New York and Washington, D.C., sit in a room sans BlackBerrys for 10 work days, the initiative is costing the firm an estimated $2.5 million. “This was not entirely uncontroversial within our firm,” he says. “The first reaction was to say, ‘$2.5 million? What are we getting for it? Yes, its a great idea, but . . .’ “
Ryan, a New Yorkbased corporate lawyer, helped persuade the dissenters that the program is indeed worthwhile. The agendato be repeated two more times this year as new batches of associates arriveincludes a mix of speakers and training sessions led by Cleary attorneys and staff; firm clients at JPMorgan Chase & Co. and investment firm TPG; professors, economists, and consultants; and finance-industry trainers from Adkins Matchett & Toy and Training the Street. Topics covered range from basic tax and accounting principles to analyzing recent examples of securities fraud and financial meltdowns.
“It sort of got started because clients are increasingly annoyed about the fact that in their view, they are paying hundreds of dollars an hour to train first-years who are really liberal arts grads who dont have a clue,” says Ryan, who adds that “theres an element of fairness to what theyre saying. . . . They dont necessarily arrive having this deeply ingrained, intuitive sense of how business works.”
Cleary is not the first law firm to realize that newly hired lawyers need to know more about the business and finance concepts that are critical to their clients. Debevoise & Plimpton and Skadden, Arps, Slate, Meagher & Flom debuted their own “mini-MBA” programs for first-year associates in 2011, both by bringing in trainers from The Fullbridge Program to run a several week case-based training. Milbank, Tweed, Hadley & McCloy announced last year that it would begin sending midlevel associates to Harvard Law School for eight-day training sessions focused on business principles. And this year, Andrews Kurth is enlisting its nine incoming associates in a program with Massachusetts-based Fullbridge. Morrison & Foerster is also testing out Fullbridge with a portion of its newcomers.
For its part, Debevoise is altering its program this year by using a more customized approach similar to Cleary’s rather than hiring Fullbridge. Robert Quaintance, a corporate partner in Debevoise’s New York office, says the firm’s incoming class of 58 associates will attend three-week sessions this fall led by Columbia Business School professors and trainers from Training the Street. Debevoise lawyers will add input to tie the lessons into the firm’s practice. “It’s clear to us we can serve our clients better if we understand their business better,” says Quaintance.
Cleary’s Ryan says the cost of the program will be a worthwhile expense if even a handful of clients recognize that the young attorneys working on their matters really understand the business at handand send additional assignments to Cleary as a result. In addition to the initial crash course, the “kids,” as Ryan calls them, will continue to discuss business concepts in the monthly “Wall Street lunches” the firm has held for 20 years. “We go through articles from The New York Times and the The Wall Street Journal, and we put them in baby talk,” Ryan explains.
Some are skeptical about the benefit of such programs. Jennifer Greiner, a legal consultant focused on attorney career development, says that while she recognizes the value in learning the concepts covered during mini-MBA programs, she questions how much can really be retained from a few weeks of classes. “I think we have to wait to see how effective they are,” she says.
Nonetheless, Greiner says, such initiatives serve the purpose of instilling associates with the concept that they “have an ongoing responsibility to get educated about the clients and the lines of business, and it starts here.”
The move by law firms to beef up their young lawyers’ business acumen dovetails with a trend that has begun to take hold at some law schools, where more classes focused on practical skills and advanced business knowledge are finding their way into curricula that still remain largely devoted to broad-based legal theory.
