Available at SSRN: https://ssrn.com/abstract=6615598
Abstract:
The American Bar Association's Commercial Law Education Task Force was formed to bring renewed attention to the importance of commercial law in legal education. There has been a significant decline in commercial law course offerings at U.S. law schools, and we write to law schools to ask them to prioritize and encourage commercial law offerings.
Commercial law cuts across disciplines and includes selling, leasing, lending, investing, and payments. Commercial law concepts appear regularly and substantially in a variety of practices, including not only transactional and business litigation fields but also practices focused on consumer law, family law, bankruptcy, and criminal law. Commercial law forms the basis for understanding our existing systems of finance and trade and informs developing systems such as cryptocurrency.
Despite its significance, commercial law is disappearing from law school curricula. In addition, Secured Transactions will no longer be directly tested on the NextGen Uniform Bar Exam.
We are a robust community of more than 100 law professors and practitioners who are dedicated to ensuring that commercial law classes remain in law school curricula. We urge law schools to make it a priority to offer these courses, including those covering secured transactions, sales and leases of goods, payment systems, bankruptcy, or some combination of these, plus additional courses in transactional skills, cryptocurrencies and other digital assets, international trade, consumer finance, and the like. Of these classes, retaining and promoting Secured Transactions is our priority.
Summary:
An open letter signed by more than 100 professors, practitioners, and commercial law scholars warns that commercial law education is quietly disappearing from American law schools, even though commercial law issues permeate nearly every area of practice. The letter, organized through the American Bar Association’s Commercial Law Education Task Force, specifically highlights the decline in courses involving secured transactions, payment systems, bankruptcy, sales, leasing, consumer finance, and digital assets.
The authors stress that commercial law is not merely “business law” for future Wall Street attorneys. Instead, they emphasize that commercial law concepts arise constantly in consumer law, family law, criminal law, and bankruptcy practice. They point to examples ranging from trust-account overdrafts to foreclosure failures during the Great Recession, all rooted in lawyers not understanding negotiable instruments, perfection of security interests, or payment systems.
The letter also warns that the removal of Secured Transactions from direct testing on the NextGen Bar Exam may accelerate the decline in course offerings, despite secured credit systems forming the backbone of modern lending and bankruptcy practice. The signatories argue that law schools should continue offering robust commercial law curricula regardless of bar exam incentives.
Notably, the list of signatories includes many of the leading scholars in bankruptcy and consumer finance.
Commentary:
This open letter identifies a problem that consumer bankruptcy attorneys have seen developing for years: law schools increasingly treat bankruptcy and commercial law as niche electives rather than foundational components of legal education.
Having had the opportunity to speak with law students at several law schools about consumer bankruptcy practice, there is plainly a real hunger for these courses. Students consistently express surprise that bankruptcy intersects with family law, consumer protection, housing, student loans, tax disputes, foreclosure defense, business reorganizations, and even criminal matters. Many also discover—often far too late—that bankruptcy courts are among the busiest federal courts in the country.
Yet bankruptcy education has long been undercut by one structural problem: the almost complete exclusion of meaningful bankruptcy questions from bar examinations. Once bar-tested status became the primary determinant of curricular priority, bankruptcy and secured transactions were placed at a disadvantage. The removal of Secured Transactions from direct testing on the NextGen Uniform Bar Exam only risks accelerating that decline.
That is unfortunate because secured transactions and bankruptcy are not obscure specialties. They are the operating system of the American credit economy. A lawyer who does not understand attachment, perfection, priority, negotiability, payment systems, or the automatic stay is missing core knowledge necessary for modern practice.
Just as importantly, the decline in commercial law and bankruptcy education also ignores the enormous body of consumer protection law that now overlays nearly every credit transaction. Modern consumer practice requires not merely understanding security interests and negotiable instruments, but also the interaction of those doctrines with statutes such as the Fair Debt Collection Practices Act (“FDCPA”), the Fair Credit Reporting Act (“FCRA”), the Real Estate Settlement Procedures Act (“RESPA”), the Telephone Consumer Protection Act (“TCPA”), and state unfair and deceptive trade practice statutes. When these subjects disappear from law school curricula, the result is not neutrality; it is the gradual devaluation of consumer protections in the eyes of new lawyers who never meaningfully study them. And because many of those lawyers will eventually become judges, the long-term effect is a judiciary increasingly unfamiliar with the statutory and remedial frameworks that govern modern consumer finance and debt collection.
The irony is that bankruptcy may well be the most common type of federal court proceeding many Americans will ever encounter. As discussed in the excellent book Debt’s Grip: Risk and Consumer Bankruptcy by Pamela Foohey, Robert M. Lawless, and Deborah Thorne, consumer debt and bankruptcy are deeply woven into ordinary American life. Bankruptcy is not peripheral to the legal system—it is central to it.
The examples discussed in the letter themselves demonstrate why bankruptcy education matters. The foreclosure crisis exposed widespread confusion over negotiable mortgage notes and custody requirements. Consumer bankruptcy attorneys spent years litigating standing, note ownership, lost-note affidavits, and securitization defects that many lawyers—and judges—were poorly prepared to understand. Likewise, understanding consignments under Article 9 or the status of stablecoin reserves are not merely academic curiosities; they are questions of ownership, priority, and creditor rights that increasingly appear in bankruptcy courts.
There is also a deeper irony here. Even bankruptcy courts themselves sometimes undervalue specialized bankruptcy expertise despite Congress expressly recognizing its importance in compensation decisions. Under 11\ U.S.C.\ §\ 330(a)(3)(E), courts are directed to consider “whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field” when evaluating compensation.
Yet many courts continue to set flat or “no look” Chapter 13 fees without materially accounting for attorney expertise, specialization, or board certification. That creates exactly the wrong incentive structure. If law schools reduce bankruptcy education, and courts simultaneously fail to recognize expertise economically, the pipeline of highly trained consumer bankruptcy attorneys inevitably shrinks.
There are, however, notable exceptions. The Middle District of Tennessee Bankruptcy Court, the United States Bankruptcy Court for the Western District of Michigan, and the United States Bankruptcy Court for the Middle District of North Carolina have all, in different ways, shown greater willingness to recognize the value of bankruptcy specialization and expertise in setting presumptive compensation structures.
Ultimately, this letter is less about preserving an academic niche than preserving competence in the American legal system itself. A legal profession that does not understand secured lending, consumer finance, payment systems, and bankruptcy will struggle to represent ordinary Americans in the places where financial distress most directly intersects with the law.
To read a copy of the transcript, please see:
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