Academic

I am much better at making New Year?s resolutions for others than for myself. (For my two year old daughter: you will be potty trained by the time you turn three). But here is a personal resolution I?m making that perhaps other scholars might also consider: keep part of my scholarship tied to practice.

To assist in resolution interpretation and enforcement, here is the legislative history. By ?tied to practice,? I don?t necessarily mean drafting more treatises or practitioner materials. What I do mean is to keep abreast of the cutting edge developments by practitioners in securities and financial institution regulation. I left practice before the financial crisis struck, and was surprised how much of what I had seen in daily work was relevant. The crisis showed that I still had much to learn, but my time in practice gave me a framework to understand how securitization, credit derivatives, repos, and various species of financial institutions contributed to the storm.

Now almost five years out, I know my link to the cutting edge of practice is becoming more and more attenuated. Yet financial and legal innovation comes from the private sector ? both financial institutions and their counsel. If you want to spot the Next Big Risk, you need to understand what sophisticated practitioners are working on today.

So what to do?

Any decent resolution must be broken down into some concrete steps. One thing I will do is join an ABA section this year. Another is (once I finish my book) to move some of my research involving practitioner interviews to higher in the queue. But aside from reading law firm alert memos on Securities Mosaic and perhaps attending more conferences with practitioner, what else can be done?

A sabbatical in practice?

I?m not interested in returning to practice. Yet other academics might consider a ?sabbatical in practice.? Many legal scholars spend stints in government, which is undoubtedly personally rewarding. However, again, financial innovation comes from the private sector. Might a short stint back in a law firm or financial institution make sense for an academic?

There are obstacles that must be hurdled. The first is whether a law firm would want to hire an academic? Would they have the skills and temperament to go back to the shop? There may be a niche for academics too. Scholars like Robert Scott, Mitu Gulati, Larry Ribstein, and George Triantis have all wondered why law firms don?t invest more in research and development. The right kind of legal scholar might be able to help firms develop the next poison pill or perhaps even help clients do the kind of big thinking about emerging financial risks that was sorely lacking in the last decade.

These roles of course pose their own risks for the legal academy. One is that fat pay checks might mean fewer academics return. There are examples of law professors who?ve left the ivory tower to become law firm partners (I continue to be a little baffled by this type of move). The more subtle risk is that time a sabbatical in practice might sharpen the experience of scholars but dull their critical edge. Armchair critics have attributed Larry Summers? shift since the late 1980s towards favoring financial deregulation in part to the time he spent at a hedge fund. The fear is a subtle form of capture by whatever name: soft, cognitive, ideological, intellectual.

So let me stop before I out-think myself of a New Year?s resolution just made. Simple steps are all I can take anyway given all of last year?s resolutions I still need to finish.