What is the best preparation for law school? I’d suggest it is a liberal arts education.

I am often asked what type of undergraduate education best prepares a student for law school. Most of my life I’ve been completely baffled by the question. It never occurred to me that my very Classical liberal arts education — I double majored in Ancient Greek and Latin — would be something to recommend, and while I have always been a huge supporter of liberal arts education, I never felt confident in recommending it as preparation for law school. But neither was I ever persuaded that my students who had thought long and hard about choosing the “right” major to prepare for law school — and ended up thereby majoring in political science, business, or economics — were any better prepared than those students who had not chosen an undergraduate major based on a desire to “prepare” for law school.

I was reminded of this question in reading Rebecca Mead’s commentary on the views of certain economists that an undergraduate degree is not an economically wise way of earning a living. As Mead explains, this conclusion is based in part on the fact that the greatest opportunities to earn money in the near future are in fields in which a college degree is not required:

Economics majors aren’t doing badly . . . : their starting salary averages about fifty thousand a year, rising to a mid-career median of a hundred and one thousand. Special note should be taken of the fact that if you have an economics degree you can, eventually, make a living proposing that other people shouldn’t bother going to college. This, at least, is the approach of Professor Richard K. Vedder, of Ohio University, who is the founder of the Center for College Affordability and Productivity. According to the Times, eight out of the ten job categories that will add the most employees during the next decade—including home-health aide, customer-service representative, and store clerk—can be performed by someone without a college degree. “Professor Vedder likes to ask why fifteen percent of mail carriers have bachelor’s degrees,” the paper reported.

In addition, “[a]nother economist, Professor Robert I. Lerman, of American University (Ph.D., M.I.T.), told the Times that high schools, rather than readying all students for college, should focus on the acquisition of skills appropriate to the workplace. According to the Times, these include the ability to ‘solve problems and make decisions,’ ‘resolve conflict and negotiate,’ ‘coöperate with others,’ and’listen actively.’”

These opinions awoke in me a gnawing feeling that has been building in me the past couple of years — the feeling that the best educational preparation for being a lawyer is a liberal arts education.

One particular moment in the last 2 years stands out form me in considering this question. I was reviewing an exam with a student and explaining a clever argument another student had come up with in connection with the interpretation of ambiguous contract language. The contract called for the supply of sweetener to the manufacturer of a soda being marketed to the types of buyers who would be interested in “healthier” alternatives to mass market sodas. The contract provided for the supply of “sugar,” and the dispute arose when the supplier substituted high fructose corn syrup for granulated sugar as the sweetener. The other students argument was based on the greater attractiveness of granulated sugar to the buyers the soda manufacturer was targeting to argue in favor of an interpretation that would limit “sugar” to granulated sugar even though high fructose corn syrup is also, chemically, a “sugar.”  The student with whom I was meeting thought about this point, realized the argument was a good one and one she herself had not come up with, but still felt my point was objectionable because the argument was grounded in facts about the world she didn’t know. So she told me, “You’re not testing us on Contracts. You’re testing us on what we know about the world!”

I smiled, and I explained: if you don’t know about the world, you can’t understand law. Law doesn’t supply answers that exist independent of the world it answers questions about. In contract interpretation, courts are asked to determine, based on the available evidence, what they believe people  intended contracts to mean. The “rules” that govern those interpretive acts don’t work like mathematical formulas — they constitute a structured way of approaching the question of what people intended, nothing more, and therefore don’t provide any way out of answering the question; what do you think the people entering this contract intended? While the rules might limit the scope of evidence that can be considered, within that scope anything that persuades the court about the intended meaning is fair game for the court to consider. So, in the question I was considering with my student, the attractiveness of granulated sugar to the  manufacturer’s target market was a very relevant consideration — if you could show that both the supplier and the manufacturer knew and understood the marketing strategy, you could argue persuasively that they both intended “sugar” in the contract to mean only “granulated sugar” and not to include high fructose corn syrup.

And so, more and more often I have found myself telling my students that in addition to studying law they should be learning everything they possibly can about everything. I hate to be that vague, but, at the same time, I am quite serious. Would a better education in “decision making” have helped BP decision makers planning for offshore oil drilling than an education grounded in Greek Tragedy? I don’t think so.

Why would a mail carrier consider an undergraduate education worthwhile even if the tuition is economically out of balance with his earnings as a mail carrier? I hate to say it — because I hate the thought it needs to be said — but the education might make him a happier person and the money he will earn is not the only measure of his happiness.

And what should you learn to prepare for law school? Anything and everything, but learn it well.

Why do we enforce contract promises?

Over the course of my professional career, Law and Economics has grown from one school of thought among many to one so dominant that many of its postulates have virtually become unquestioned premises from which legal reasoning begins. The Law and Economics school of thought is wide-ranging, but might fairly be described the way Wikipedia puts it: Law and Economics is an “approach to legal theory that applies methods of economics to law. It includes the use of economic concepts to explain the effects of laws, to assess which legal rules are economically efficient, and to predict which legal rules will be promulgated.”

One of the most influential premises of Law and Economics is that contractual promises are enforced purely because of their capacity to maximize the society-wide allocation of resources. Thus, it is said that the contractual promise has no moral value over and above its economic value. This view both explains why typically someone suing for breach of contract can recover only the financial equivalent of the benefit they would have received had the contract been performed. There is no additional quantum of damages added to provide an incentive not to breach.

Thus, it is said, a contractual promise is in fact a promise either to fulfill the promise or to pay the damages that result from breach. This view, it is argued, has long been the view of the common law, as exemplified by Oliver Wendell Holmes’ late 19th Century statement that “the duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it, and nothing else.” Thus, the thinking goes, if someone who has made a contractual promise can make out better by breaking the promise, paying damages for breach, and entering a different deal, that result is not merely tolerable — it is to be desired. Such a breach of promise is known as an “efficient breach” because it theoretically results in an increase in overall resources: the party injured by the breach is supposed to get everything he was supposed to get under the contract, the breaching party is getting something better, and the new party with whom the breaching party contracts is getting a deal he would not otherwise have gotten.

The Law and Economics view is by no means the only one current in the theorizing about the basis for enforcing contractual promises (and the interpretation Law and Economics devotees put on Holmes’ statement is disputed). As a contracts professor and litigator, though, my experience is that the idea that the contract promise has no moral value over and above its economic value is a very, very influential one.

It is a view, too, that is of a piece with the rise to virtual unquestioned dogma that unregulated free markets always result in the highest social good. One problem, though, is that unregulated free markets entrench the power of the wealthiest. So people bound by promises (the “promisor”) can force the person to whom they are bound (the “promisee”) to change the terms of the promises if the promisor has greater financial ability to force the promisee into a legal resolution that is unacceptable to the promisee.

The disparity in economic power the theory of efficient breach does not account for is on display in the power corporations hold to renegotiate employment contracts.  Since an employee can only recover for breach whatever damages are available to him through law, the threat of being limited to that remedy can be a powerful one. Thus, as the New York Times pointed out last week,

Contracts everywhere are under assault.

The depth of the recession and the use of taxpayer dollars to bail out companies have made it politically acceptable for overseers to tinker with employment agreements.

But, as David Skeel, a law professor from the University of Pennsylvania quoted in the article points out,

We run roughshod over some contracts and not over others. . . . Right now, employment contracts seem to be the type of contract that is viewed as eminently rewritable.

So we have Larry Summers, President Obama’s Chief Economic Adviser, arguing in connection with the bonuses paid to AIG employees that the contractual promises are too sacred under the law to undo: “”We are a country of law. . . There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.” On the other hand, the UAW’s agreement to give up rights under its contract with the auto companies was required by the government as a condition of the federal monies the automakers received.

So, are contractual promises “sacred” in some way, or are they only worth whatever the parties to them can extract given their relative financial strength and political influence? I don’t think I know.