Business Organizations: A Misguided Requirement

Tajja Isen (3L)

The history of corporate law can be summed up in three simple propositions. First, a small group of white men want to hold onto their absurd amounts of money. Second, this goes wrong and some cases make it to the courts, which then say, “Maybe you guys should be a little more socially responsible with that money.” Third, that small group gets angry, writes articles about why the courts are wrong, oh so wrong, and ultimately decides that the money can be pried from their cold, dead hands.

This is what I learned in Business Organizations (or, in the vernacular, “Biz Org,” a phrase that sounds like some kind of appropriately transactional loveless climax). Correction: this is what I learned while teaching myself the course content on the eve of the exam. Nobody shines a light on the dark heart of a belief system right up front. That’s not how ideology works. Nor, for that matter, does law school pedagogy (more on that later).

“That’s all it is,” I said, lunging across the kitchen table at my partner. “This is what people build their whole lives around. This is why people have heart attacks at their desks in corner offices.” He, far less blinkered from not having been swimming in the material, characteristically had more perspective: “It’s also why bad things happen in the world.”

Business Organizations, along with Administrative Law, Legal Ethics, and a smattering of socially inclined Perspective courses, is a required upper-year course at U of T Law. That the other three are mandatory makes sense to me. Every administrative action is subject to judicial review. Every advocate has a duty to be ethical. Every student should spend twenty-four hours marathon-writing a paper that makes it look like they’ve spent a semester thinking critically about social issues. But not everyone is going to make a career out of finding ways to maximize shareholder wealth. Nor should they be sent the message that doing so is one of the core elements of being a lawyer.

A brief note on ethics: it was illuminating, if cognitively dissonant, to be concurrently enrolled in Business Organizations and Legal Ethics. The latter hammers home the idea that, as you’re going to be an officer of the court, you must respect the decisions of that court and are bound by a duty to uphold them—a little hard to digest after spending four hours a week being told that Supreme Court may have their theories, but no one really follows them in practice.

Many people  come to U of T Law because of its physical and ideological proximity to Bay Street. I was one of them, although my idea of Bay Street comprised steel and glass, cutthroat litigation, and one good bookstore, namely Ben McNally Books. I didn’t know a lick about corporate law, nor did I care to, but I did know that it meant jobs. Bay Street is held up as the goal before you even formulate a prospective career arc that aligns with your interests and politics. It’s part of our law school culture.

It’s hard not to see recent law school policies as an attempt to cut against this — a combination of necessity (e.g., declining Bay Street hiring rates, rising tuition) and conscious change (e.g., trumpeting a more holistic admissions process, rolling out the unfortunately named “Lawyers Doing Cool Things with their Law Degrees”). The school is sensitive to its image and seeks to remind its students that other options exist. Leaving aside efficacy or motive, I see it making some attempts to change and, amidst such changes, I want to advance a proposition of my own: Business Organizations should no longer be taught exclusively as a mandatory semester-long course at U of T Law.

I’m not proposing that we do away with it altogether. The Federation of Law Societies of Canada makes knowledge of commercial law, in some form or another, mandatory for admission to the bar. According to s. 3.3(b) of the Federation’s requirements, applicants to the bar must demonstrate “an understanding of the principles that apply to private relationships,” which includes “legal and fiduciary concepts in commercial relationships.”

There are, however, a number of different ways in which an institution could impart such knowledge: a discrete unit in first-year contracts, for example, or Osgoode’s brilliant substitute of an option to take a class, “Fiduciary Relationships in Commercial Context,” as a not-for-credit online module. The title alone speaks volumes: while most other Canadian law schools name their course some variation on “Business Associations” or “Corporate Law” (a thin veil for propositions one through three), Osgoode instead emphasizes the fiduciary relationship, a duty predicated on vulnerability and discretion, and arguably the most essential component of what it means to be an advocate. U of T is fine with endorsing the Federation’s ethics requirement as less important—students can fast-track it through a week-long intensive rather than taking the half-year course—so why not do the same for corporate law?

The answer is, probably, because the school is unwilling to take the hit this would represent to its marketability. As an essential hoop through which students must leap on their journey to the bar, the Faculty is invested in producing the most desirable candidates for the job market. But it is artificial to continue selling these ideas as a way for the law school to safeguard its relationship to the profession. No law school needs to do that really—self-regulation has guaranteed that the the law school and the Law Society are interlocked till death do them part—especially not U of T, with its proximity to the corporate legal market’s beating heart. It doesn’t matter how statistically likely it is that students, motivated by debt and profit (and some, of course, by genuine interest), are going to gravitate to the Seven Sisters anyway. Such an endorsement by the school of corporate culture—its ethics, its motivations, its myriad blind spots—overshadows any real commitment to encouraging students to do “Cool Things” (and might I take this opportunity to suggest a name change?).

I realize that an administrative overhaul of this scale would require considerable time and agitation. So, acknowledging that Business Organizations is not likely going anywhere soon, I instead submit a more viable short-term goal: that the subject be taught in a way that is more attuned to social responsibility. A more critical approach, of course, is contraposed to mainstream law school pedagogy: here is the pudding, stick in your thumb and pull out the plum. The plum might be rotten, but we feed it to the guy in the next case anyway. But that doesn’t mean that there is no room for social engagement—it’s impossible to teach something like criminal law or ethics without it. Legal education can be responsive and sensitive to context while still observing the principle of precedent.

Full disclosure: I have only taken one section of the course and have not sat in on others. Maybe certain instructors do teach the class in a way that allows scope for a broader range of issues than simply maximizing shareholder wealth. Mine did not. My instructor staged a debate with the students—us versus him—about why shareholder primacy (see proposition number one) is the best and only model, Supreme Court be damned. As we were forewarned, I chose not to attend that day. One of my marginal notes from a class I did attend reads: “I really need my prof to stop assuming his entire class reads The Economist and the business pages, because until that happens, he is failing to teach me by assuming a very specific audience with very specific knowledge (to say nothing of the tasteless jokes about Muskoka cottages).” This is corporate culture.

You want to be the best law school in Canada? Look around you. Acknowledge that a world exists outside the boardroom. Hire someone attuned to that fact. We’ve seen what happens to social responsibility when our leaders are trained to say, “You’re fired.”