Contemporary Business Law Courses: An Exploratory Study of Undergraduate Textbook Content and Pedagogical Planning

Abstract

What should be covered in a business law textbook for undergraduate business students? The question seems deceptively simple on first pass and yet, as it is further considered, a variety of additional questions give rise to considerations that have an impact on the answer. Some of those new questions are highly subjective and defy a simple quantitative approach to a satisfactory answer. For example, one possible answer is “whatever the major publishers believe should be included for marketability's sake,” since the top five publishers in the United States control an estimated 80% of the academic textbook market.1 Yet another answer is “everything that is relevant and can be made to fit,” and this “fitting” has become easier in the era of the online e-textbook, the term I will use in this work to refer to a variety of book forms that are produced and sold as digital copies with or without a paper-printed version. Solid cases have been made in both peer-review and journalistic literature for a litany of specialized approaches and topics, with most literature reflecting prerogatives and specializations of the author(s). All of these previous articles and essays make complete sense in the ideal course in an ideal world with unrestrained time, faculty expertise, student enthusiasm, and pedagogical horizons.

The quite un-ideal course in the real and un-ideal world, however, counsels caution about such an inclusive approach for a variety of reasons. Paramount among these reasons is the inconvenient fact that in American colleges and schools of business or management utilizing a traditional semester calendar, there are fifteen weeks (give or take and subject to institutional rules and peculiarities) in which an entire core course in business law—inclusive of its two popular monikers, “Legal and Regulatory Environment of Business” or simply “Legal Environment of Business”—must be taught from start to finish. In just over 87% of business schools accredited by the Association to Advance Collegiate Schools of Business (AACSB), a single three-hour course in business law is all that is required of undergraduate students for graduation.2 Even then, although I will use “business law” for purposes of parsimony to include all varieties of approaches to the class, it is important to recognize changes in the discipline of business and management that have changed attitudes among faculty and deans over the past fifty-plus years that may counsel for more than a one-size-fits-all approach. Traditional “business law,” which was significantly more quasi-law-schoolish in its approach and in particular satisfied colleagues in accounting-related disciplines, was a boon for that purpose. As businesses changed over the years and business/management schools kept pace with those changes, an honest debate developed over whether a more public policy-oriented approach was more useful to students. This debate continues to simmer today.3

Also noteworthy is the fact that business majors, like their peers in other disciplines, typically take between fifteen-to-eighteen credit hours’ worth of three-hour courses in a given semester, so a professor teaching any course—much less the business students’ often-feared, foul and foreign “required law course”—must tread with caution in setting expectations of breadth and depth in the material that is a passion to the instructor with a J.D. and several bar memberships but not to most of the students who are doing lots of case studies and group work in marketing, human resources, supply chain and the like. Save for economics, which may or may not be in the business school at all at University X, no common business major is typically in the top ten undergraduate majors of law school applicants year after year, and this was certainly true again in 2020–21 according to Law School Admissions Council (LSAC) data.4 Business students are often too eager to take higher-than-mean starting salaries straight out of their undergraduate studies, or have options like the ubiquitous M.B.A. program tempting them with promises of higher academic credentials and possibly even higher salaries and work status, if they opt for that path of graduate or professional education.5 And, of course, even in a world of e-publishing, larger and more inclusive textbooks come with larger price tags—even if a publisher is able to forgo traditional expenses of more paper, thicker binding, and other materials in the production of a book, there are still marketing costs, expanded layout, editing, and production costs; perhaps intellectual property or other licensing expenses; and the like. These factors drive up the cost of an excessively large book to the end user. This fact may be lost on some subset of undergraduate business law textbook author-attorneys, themselves used to the law school norm of one-semester, one-class casebooks of several hundred dollars each, a thousand-plus pages, and a comprehensiveness that is highly suitable for the professional study of law, but for undergraduate one-semester business students, not so much.

These observations are merely the tip of a very large iceberg intended to start the process of thinking about and discussing the initial questions that a considerable review of the scholarly literature suggests have not been widely or directly addressed in that medium since 19846—what of significance is or is not in the most widely used business law textbooks today? What should be in an undergraduate business law textbook at its core? What should not necessarily be for the sake of efficiency of actual utilization, teachability, or a reasonable balance of breadth and depth of subject matter? There is a widespread understanding that most business undergraduates will need some exposure to the law to maximize their opportunities to succeed as businesspeople or managers, but the extent of that exposure could easily become overkill if we lose sight of the fact that these are not law students we are teaching. They are business undergraduate students who may have no further interest in legal education. My purpose in this article is to provide an exploratory study and some possible answers—or at least lines of development for future research into more satisfying answers—into these and related questions.

In a broader scope, the significance of the one-semester (or introductory) core course in business law at a curricular minimum is well established. AACSB lists business law as a “commonly observed business discipline” with numerous references in its interpretive guidance for program accreditation.7 Several surveys have identified legal knowledge as one of the most relevant subjects for business executives. In one study, 902 senior business managers taking part in a graduate-level executive education program at the University of Michigan were asked to rank the importance of widely recognized business subfields to their respective careers.8 Law was identified as at or near the top of the list.9 In a similarly sized study of business graduates who were then in the developing stages of their careers, 71% replied that their business law undergraduate courses were helpful to them in making business decisions, 67% responded that these courses were as helpful as other non-law courses, a majority indicated that they had regular business dealings with lawyers, and more than 88% declared they were “comfortable” working with lawyers as a result of their undergraduate training.10 Taking the legal education–business leadership connection one step further, a Harvard Business Review analysis of litigation risks in 70,000 cases between 1992 and 2012 determined that businesses with an attorney as a Chief Executive Officer experienced up to 74% less litigation and spent considerably less on legal matters than non-lawyer-run companies, with subsets of high-growth and high-litigation risk companies actually producing higher firm value over time.11

The appropriate title for and content of a core “business law” class generally have received fair coverage in the literature as well, with one well-documented and engaging study from Carol J. Miller and Susan J. Crain pointing out that questions of both what to do in these classes and what to call them have been around in professional education circles since the 1950s, with some inquiries being registered as early as the turn of the twentieth century.12 Among other useful observations from their research, these scholars make the point that there is a content difference between courses labeled “Business Law” and “Legal Environment” (or alternatively “Legal and Regulatory Environment”) among AACSB-accredited schools. The former typically tends to place much more emphasis on formal rules and procedures of the law with a substantially heavier emphasis on contracts and sales while the latter more commonly stresses the interplay of law, public policy, and regulatory factors in overall business decision-making.13 Perhaps another dimension of the inquiries posed in this research is that a rose by any other name could be one of several types, each with its own necessities for proper care and feeding. If that is the case, however, are authors or publishers of longer and more formalistic, inclusive works giving due consideration to titles of those works prior to using labels such as “legal and regulatory environment” or “legal environment”? Does the distinction still matter in business law publishing of the 2020s, or are we now comfortable with using any of these labels interchangeably? Given the ease with which the weightiest sixty-chapter book can now be custom-reduced to, say, fifteen chapters in digital or loose-leaf formatting by publishers, perhaps the distinctions are less meaningful than they once certainly were.

The questions of orientation and goals of these courses raise a somewhat more nuanced issue than the one regarding types of textbooks Donnell described in his 1984 study. At that point in time and after developing from what essentially were very short and simple guides directed at a lay audience of businesspeople to drive sales, the first academic business law books tended to be one of several forms: (1) devoted to the functional (problem-centered) approach, tailored in narrative to business professionals; (2) the legal casebook, written by lawyers who were often attached to law schools and therefore who believed that approach was also appropriate for business students; and (3) a hybrid of functional and case law-inclusive works that attempted to be a sort of “law school lite” approach straddling those disciplines.14 James E. Holloway has argued that a hybrid approach is preferable because such an approach does not lose sight of the need for the business analytic, while simultaneously emphasizing a legal mindset.15 A functionalist understanding of key public policy goals generally is essential to a good, albeit fuzzy, grounding in the subjects covered. Legal cases can then illustrate the way in which precedents are used (or changed) and allow for application of the rules of law to real-life conflicts. By learning to read and understand these cases, students may acquire a more practical or applied sense of the course content.16

On a review of the best-selling, contemporary, undergraduate business law textbooks, I discovered that the casebook approach was clearly left behind at the law school's doors in favor of another format, typically what Donnell identifies as a hybrid approach. The typical emphasis in major undergraduate business law textbooks is largely functional for business managers, albeit with cases amply used in many titles for the purpose of providing exemplars that bridge the gap between business and law. Given that in many other business subfields the “case study method” is a popular pedagogy for teaching and student discussion or written reports, one might argue that the same method is also a natural fit for business law. Instructors of business law, however, must be aware that the lawyer's case study is quite a different creature from the business case study, and both attorneys and businesspeople review their own kind for quite different takeaways. Lawyers review cases because of the significance of stare decisis and the establishment of rules of law, exceptions to those rules, or limiting/expanding language applied to existing doctrines by certain courts. There is typically little gray area between the black and white of what lawyers take away from their case studies; the major discussable points, typically laden with specialized procedural questions, revolve around issues of reversible error and points of appeal. Business case studies, on the other hand, and there is no shortage of them provided by many outstanding internet support services for non-law business professors (and comparatively few for business law professors), are designed to provoke thought about an actor faced with a situation and how they freely chose to resolve it or ride it out. Non-legal business case studies facilitate student discussion about crisis management, board of directors’ decisions and actions, and other subjective issues of the like involving autonomous actors who did something well or not-so-well and then faced consequences for their processes or deliberations.17

Certainly, the case study approach could be adapted to a legal environment classroom as well, particularly in dealing with tort risk management,18 contract negotiations, and related issues. But business students take a myriad of classes in various subfields that use the same intellectual toolkit for the presentation of, and resolution to, “the case study.” Learning how to read and extract important content from a human resources case study may not be that intellectually different from doing so in organizational behavior, supply chain, or entrepreneurship. In a standard one-course presentation of business law, however, the toolkit usually has to include an appreciation for the different approaches and takeaways that legal professionals require to make use of the legal case study. More precious time, space, and effort must be devoted, therefore, to adding specialized tools to facilitate student comprehension of why “all these cases” appear in between the bullet points and simple textual descriptions of a business law text. For a professor who incorporates significant case law into their curriculum, the task of lecturing on and discussing the case citations within the confines of the typical semester is daunting, at the very least.

To return to the central questions of this article and develop enough information to offer a reasonably informed discussion about their resolution, it is useful to think about some of the major variables that would move toward that end. Certainly, at least a basic analysis of the content of most-popular business law textbooks is a good start down that road. Additionally, a look at how faculty are actually teaching the courses using these books as reflected in a collection of course syllabi is also worthwhile. Some indication of the pedagogy utilized in these courses would be helpful, which might also be extracted from the syllabi. Finally, are the subjects offered in the books and also taught in lecture- or discussion-based (e.g., “flipped”) business law classrooms the ones that newly minted businesspeople and managers will actually encounter in the conduct of their businesses most frequently? What data are available to allow us to make informed and reasonable judgments about the answer(s)?

One of the most interesting aspects of reviewing major business law textbooks and their content coverage for this project was a revelation that the best-selling titles are almost uniformly long, weighty, and seemingly overinclusive in the amount of content that an average professor would be able to assign within the bounds of reason in a single one-semester, three-credit-hour business law course. The average textbook, as noted above, is a mean of 1,007 pages long. In a standard fifteen-week academic semester, that number of pages read in their entirety would equal assignments of just over sixty-seven textbook pages per week. Yet one analysis of undergraduate reading rates where major new concepts are expected to be retained, as often is the case in business law classes for business students completely new to legal content, suggests single-page read rates for only one pass should equal about five pages per hour, which would equal 13.4 hours per week for only that one reading.39 Multiple readings and constant referring-back are almost always necessary throughout the process to comprehend and utilize new content adequately.40 For a large proportion of undergraduate students examined in one large-scale study with an eye toward answering the question of whether students are actually learning anything or retaining what is covered, the answer is a clear “no” in at least the first two years of attendance for almost half the cohort under study, with ongoing problems most specifically attributable to workload and amount of content assigned across all classes attempted in a given semester.41

At the high end of the chapter range, if undergraduate business law students were assigned every chapter in a fifty-four-chapter textbook to read throughout a fifteen-week semester, they would be responsible for 3.6 chapters’ worth of content per week, which would presumably be adequately covered in the usual three-hour course credit's 150 (or thereabout) minutes of classroom instruction per week. It seems unlikely that many business law professors would regularly assign this much of new and challenging content to be read, much less adequately explain or followed up in a limited number of class meetings, with a meaningful expectation of broad student retention. Reviews of course syllabi contained and discussed later in this study bear out this assumption. With limited exceptions, most professors prefer to cover one and occasionally two topics per week, rarely venturing beyond those limits. It is a challenging-enough task to explain sufficient basics of tort law in one week's time, for example, if the professor wants students not only to have a sufficient grasp of the difference between intentional torts and those of negligence before moving deftly on to the subject of product liability, but also to appreciate meaningful doctrinal content such as joint and several liability of partnerships or the concept of the “reasonable person” generally to wrap up the week.42 If, on top of that, the task at hand was to teach the whole of torts along with, say, administrative law or basics of civil procedure, the depth and sufficiency of coverage become concerning very quickly. What this means in turn for business law textbooks with higher chapter and page counts, on grounds of comprehensiveness of topics, is that the overall percentage of utilization of the book in a single semester in any given class where it is assigned should be expected to be significantly lower than 100%. In turn, this appears to counsel publishers in their enthusiasm for large, expensive, comprehensive readers of forty or fifty discrete topics (as individual chapters) should the desire reign to make more of their titles used in a greater number of undergraduate business law classes. The alternative, which appears to be the structure of some such volumes, is to make many chapters very short in terms of page count. This in turn leads to the countervailing problems, however, of depth of coverage and sufficiency of the brief chapter.

There are additional caveats to the analysis of potential problems here, however. First, many publishers over time and using new and more flexible publishing tools now offer “customized” versions of their full textbooks for college faculty. If the full forty-chapter textbook simply is not acceptable for a single-semester class for want of time or sanity of students at the end of the semester, a twenty-chapter “customized textbook” can be produced in digital or loose-leaf (or similar unbound) format for use in that class at that institution. Next, the presentation and discussion of descriptive statistics on business law courses in this work so far have relied on the finding that most colleges or schools of business will have only one required or otherwise central business law course within its entire curriculum, or that additional courses in the subject will not be related to the first. For some schools of business and management, this may not be true. Business law course offerings may be designed in “I” and “II” versions to cover an entire academic year of study. Within a multi-semester framework where even a fifty-chapter textbook can be parsed into two, twenty-five-chapter units, it may be more efficient and sensible to assign students one book that will be used across both semesters of such an offering. Finally, textbook publishers ever-attuned to the changing nature of their markets have responded in the past decade with the production of “essentials” or “basics” titles that are typically pared-down versions of meatier flagship business law textbooks or new titles commissioned solely for the purpose of bringing shorter and less expensive textbooks to the marketplace. In conjunction with digital books that are rentable online, which also provides additional layers of copyright protection and dampens the resale potential of physical textbooks to the delight of publishers, the market may already be responding adequately to the types of concerns and issues raised in this work. If so, however, this belies the earlier finding that the larger flagship titles with their gloriously inclusive excess remain among the most popular titles in the business law market today.

In one strategy for reducing the size and cost of textbooks, some business law publishers have combined core subjects such as torts and administrative law, or abbreviated the size of core subject chapters so as to make room for specialized topics such as wills and estates, environmental law, advanced taxation issues (which is often and perhaps more appropriately handled in an upper-level accounting course with its own dedicated materials), and the like. This may be, to some degree, a cutting-off of the academic nose cutting-off of the academic nose despite the face if a reasonable argument can be made, as I believe it should be, that the focus of introductory or core business law classes is to provide a certain breadth and meaningful but not overwhelming depth to the most basic core topics across the practice of law from which more advanced and specialized electives may later be taken. Wills and trusts, for example, bloom out of a rudimentary understanding of the common law of property, while environmental law will not make sense to most undergraduates who do not adequately understand the fundamentals of administrative rulemaking and adjudications beforehand. Even with respect to how and why the government has the ability to legislate on most issues and sometimes not others related to business, a healthy dose of federalism, the general police power, and development of the commerce clause with background within the ambit of a chapter on constitutional law seem advisable.43 As such and given the earlier findings that a tort, for example, commands so much real-life time and attention in business matters as well as importance attached to it by business attorneys in addition to its increasing importance in product liability cases that are seemingly the mother fuel of federal diversity cases featuring business organizations, why would we seek to combine it in a more constrained chapter with anything else? Would it not be better to exclude a more arcane topic that more traditionally reflects content from an upper-level law school elective and rededicate that space to an expansion of torts so that it is treated on a par with the all-important expanded coverage of contracts in our courses?

While this exploratory essay has attempted to be inclusive and helpful with respect to identifying what the questions should be in a contemporary rethinking of undergraduate business law textbook (and perhaps course) content and to use a variety of informed sources to signal us as to what we should consider our critical core topics, it cannot, nor is it intended to, attempt to prescribe by fiat some form of mandatory content in every textbook controlled by strict pricing or page limits. There are simply too many variables in even the starter questions raised within this work, and additional respect and consideration are due to the placing of trust in skilled and experienced academicians teaching the courses to determine for themselves what is best for their students in their particular curricular environment. The most accurate empirical finding to the question “what should business law professors require in materials for their classes?” is therefore “whatever they decide in their judgment will best advance meaningful exposure, learning and advancement of business and life skills in their students.” Hopefully, these decisions are always based on observational evidence and open-mindedness in thinking about actual class results term after term more so than they are about major publisher marketing campaigns or other variables that are less significant to satisfactory learning outcomes for their students.

Considering both the state and federal court statistics and the business attorney “most important” lists provided on public websites presented earlier in this exploratory work, I would propose one short list of “must have” topics of meaningful length and depth in an ideal undergraduate business law textbook that most major titles, in fact, already have. They would be, borrowing and slightly modifying the ordinal ranking from the legal practitioners, (1) contracts (probably multiple chapters); (2) torts; (3) business organizations with an emphasis on fundamentals of organization, incorporation, fiduciary duties, and governance documents; both (4) real property and (5) intellectual property, in one larger chapter or multiple smaller ones; and (6) administrative law and regulation. In this core list, I think one would also make a strong case for (7) issues of fraud, which may be a later chapter including aspects of contract, tort, and criminal law or included in one of these chapters earlier in the work; and (8) agency/employment, which again draws so heavily on some combination of tort, contract, and administrative law that it may befit its own chapter. From there, should time allow and professorial prerogative wish to expand, additional popular topics from the syllabi and textbooks reviewed for this study suggest that business ethics, constitutional law, and criminal law are sort of a second-line list of preferred subjects.44 A very long list of possible iterations on these topics’ ordering, depth and emphasis is of course possible at this juncture.

Essentially, however, this essay concludes by suggesting that textbook publishers consider the utilization rates of the textbooks they are actually selling, and undergraduate business law professors consider the utilization rates of the books they are actually adopting, with an eye toward increasing overall utilization, relevance toward basic goals of their course, and depth of student understanding. What is chosen as the text for an undergraduate business law course should be based on a careful consideration of what legal skills business students are most likely to need to understand postgraduation, but with a healthy dose of thought about how much time we have to go into how much appropriate depth in a cognate area of the law in any given week or on any given day. Particularly at the junior or senior level of instruction, our books should facilitate and support instruction to a degree that is greater than simply rote memorization of basic definitions without deeper understanding. But neither are undergraduate business law professors required or advised to saddle undergraduate business students with the full depth of the law school experience. We are generalists, doing broad overviews of what are essentially all or most of the first-year curriculum of an ABA-accredited school of law (and perhaps selective parts of the second) to just enough of a degree to arm our students with the knowledge and skill to look out for themselves at a basic level of legal education. We facilitate their working with company counsel meaningfully in areas where they are most likely to need those skills, and hopefully give the entrepreneurs among our students enough information to be aware of simple legal risks and traps that a well-educated businessperson should be able to avoid. A host of other non-lawyer jobs in business such as draft agreement reviewers, negotiators, estate managers, factory risk managers and the like would also be within credible reach of a well-trained business law undergraduate. We should also be mindful, of course, of the need to reduce student expense, waste of instructional material, and arcane content that goes un- or underdeveloped in our weekly class plans. The rapid movement toward e-books and customizable volumes, in addition to the proliferation of shorter “Essentials” titles in undergraduate business law textbooks, is an empirical testament to the significance of this trend in modern higher education.

Hopefully, this exploration of variables and pedagogy has breathed a little new life into the ongoing discussion about what we use to teach undergraduate business law, what we teach in those classes, and just as importantly what we choose not to teach in them. This discussion can guide and inform us in the structuring of what is, in most AACSB schools and for many of our majors, a one-shot chance to be precise but demanding in our breadth and depth of coverage that will result in better-trained graduates who feel better prepared for their postgraduate challenges. In an ideal academic world, the idealistic disciplinarian in virtually any college or university department would jump at the chance to develop a new course, expand the curriculum, and provide new offerings in their field of specialization to their students. Academic realities of the modern day, particularly the drive to greater assessment, measurement, and objectification of vocational skills over the traditional importance we have placed on more subjective horizon-broadening and critical thinking,45 do not often make for fulfillment of such lofty goals. What our textbooks contain, what we use of them, and what and how deeply we teach in integrating them into our business law undergraduate courses may have never before been as important a series of questions as American higher education continues to settle into this new paradigm of expectations in the digital age.