Boston University is banking on its new program in financial law
Boston University has struck a gusher with its new graduate program in banking law. ``It's the hottest area in law today,'' says Prof. Dennis S. Aronowitz, director of BU's Morin Center for Banking Law Studies, part of the university's School of Law.
Professor Aronowitz has tapped this reservoir of professional demand with its graduate program -- the first offered by an American law school.
``The thing that has surprised us enormously is the numbers applying,'' he says.
The law center's first class started last September with 27 full-time students and 42 part-timers. They studied a full range of banking law subjects and economic and managerial aspects of the financial services industry. Next September Professor Aronowitz expects 40 to 50 full-timers and some 20 new part-timers, plus nearly 50 part-timers from the just-concluded school year.
An initial graduating class of 19 students got, as Professor Aronowitz says, ``out of the gate'' in mid-May, receiving their diplomas for having successfully completed the one-year multi disciplinary program.
The source of the boom in banking law, Professor Aronowitz figures, is the deregulation of the banking business, plus technological advances. This has resulted in a rapidly changing economic scene for the bankers as both international and interstate banking spreads and banks (and their competitors in the securities, insurance, or other industries) move into new financial areas.
``It has made tremendous opportunities for lawyers,'' he says.
However, many lawyers are unprepared to give their banking clients good advice, Professor Aronowitz says. When bankers have asked about the possibility of moving into a new financial market, too often their lawyers simply held it couldn't be done. With more understanding of the changing banking scene, they might be better able to suggest ways and means for accomplishing the goals of the bankers and at the same time not getting fouled up by the law or regulations.
The academic noted: ``To be an effective lawyer, you have to get some rudiments of economics and management of the financial system.''
The original financial backer of the banking center was Charles H. Morin, a partner with the Washington law firm of Dickstein, Shapiro, & Morin, and a member of the board of advisers to the center. Chairman of that 18-man board is United States Rep. Fernand J. St Germain, who chairs the House Committee on Banking, Finance, and Urban Affairs.
Mr. Morin hopes the school will help restore a greater sense of ``fiduciary responsibility'' in the banking community. ``The faculty is attuned to that,'' he says. Most bank failures nowadays, he maintains, involve ``outright dishonesty or criminal negligence.''
The program's first class of full-timers and part-timers came from 15 states and held law degrees from 30 American universities. The class also included some foreign lawyers from Japan, Peru, the Philippines, Singa-pore, Taiwan, and Venezuela.
Most of the new graduates already have positions in law firms or banks, said Professor Aronowitz. But there has been no survey to determine their salaries, whether these are large enough to justify the $9,500 tuition (over $10,000 next year) and other costs for the extra year at school. But he adds: ``None of them seem to be sad about their salaries.''
The fall class will include students from West Germany, Switzerland, Canada, and three from Japan (instead of one last year). Last year's Japanese student joked about how the number of Japanese students will multiply over coming years -- ``just like Hondas'' -- because Japanese banks and securities firms are expanding their operations in the US. Other foreign applicants include lawyers from Pakistan, India, Brazil, and Taiwan.
``The interest of foreign lawyers in the program is the biggest surprise,'' says Professor Aronowitz.
The faculty consists of 19 professionals. Seven of them are full-time Boston University faculty, four from the School of Law and three from the School of Management. The 12 part-time faculty members are experts drawn from law firms and financial institutions in Boston, New York, Washington, and Pittsburgh.
``Such lecturers,'' admits Professor Aronowitz, ``normally teach for the pleasure of it,'' rather than for the stipends the school grants them.
To get their LLM degree in Banking Law Studies, the students must take five required courses and five elective courses. Three of the required courses cover fundamental banking law subjects: government regulation of banking, interbank relationships and the collection and payment process, and commercial loan and lease transactions. The fourth is a course in the economics of banking specially designed for lawyers and taught by faculty of the School of Management.
The fifth required course is a joint problem seminar for LLM candidates and MBA students specializing in banking studies. This course is team-taught by law and management faculty and requires the completion of a major project that ``teaches lawyers and bankers to work together,'' says Professor Aronowitz.