Friday, August 15, 2008

Playbook for Institution Building

[posted by Bill Henderson]

With all the discussion we have been having on institution building (Henderson, Lipshaw I, Chen, Madison, Caron, Smith, Lipshaw II, and Ribstein), it should not go unnoticed that one of the truly great deans of our generation, Richard Matasar (New York Law School), has posted his entire playbook on SSRN, entitled "Defining our Responsibilities:  Becoming Academic Fiduciaries." 

Two of Rick's most recent accomplishments are selling his school's "air rights" in the Tribeca neighborhood of Manhattan, which financed a new building and created a large NYLS endowment, and implementation of a data-driven curriculum over the last five years that resulted in a 2007 NY first-time bar passage rate of 90.2%, which is 1 point below Cornell and 1 point above Fordham. See this NYLJ story

Incidentally, Rick's article is in the same volume of Law & Contemporary Issues as Clayton Gillette's "Law School Faculty as Free Agents" essay.

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Tracked on Nov 21, 2008 6:24:22 AM


Thanks again, Bill. I haven't yet read Dean Matasar's article, but here's the abstract:

"Legal education is evolving from a traditional model of shared governance focused on teaching, scholarship, and service to concerns about our stakeholders: students, graduates, donors, regulators, etc. Market sensitivity may indeed be a superior metaphor to organize us than one relying solely on the faculty-centered holy trinity of teaching, scholarship, and service.

"But the market metaphor fails to embrace the spirit and nature of higher education. The market conjures up too deep a commitment to selfish ends. This essay suggests another metaphor that may more comfortably fit our schools. I argue that the next step is to delineate our responsibilities as academic fiduciaries - a definition more closely comporting to the way we must act than either as self-interested governors or market actors. First, I discuss the move from faculty centered enterprises, to commercial enterprises, to an emerging trust model. I then define this trust and the consequences of a fiduciary model for every beneficiary of the trust. Next I turn to what a new law school culture might look like and the various forms it might take. This is not merely a question of metaphor, or of nebulous institutional culture. The essay suggest a variety of practical ways that a law school - its faculty and administration - can be successful as fiduciaries: advancing the legitimate ambitions of the school and its faculty through a spirit of trusteeship rather than of self-dealing. Finally, I argue that this model may be the only way for our schools to continue to prosper in the years to come - and the risk to our futures if we persist along the current path."

I'd simply observe that firms - i.e. more than one actor combined to produce a joint output - have the same fiduciary problem Dean Matasar describes. The goal is to align the interest of the agents of the firm (with their attendant fiduciary obligations to the principal, which is the firm) to the interests of the firm. It's not a given that those within the firm "act selfishly" a la free agents - the question is whether there's a perception there's a benefit to cooperation at all. One of the ironies I used to observe after having moved from a very democratic law firm partnership to a putatively hierarchical (but evolving to modern leadership versus management style) corporation was that there was more spirit of partnership in the corporation than there was in the partnership. And no matter where we are, we're all volunteers.

Posted by: Jeff Lipshaw | Aug 15, 2008 4:42:44 PM

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