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Kellogg Faculty Research: Stephen Presser, Management & Strategy

Tort in a storm

Business law scholar Stephen Presser keeps the 'dogs' at bay by helping managers and lawyers understand each other

By Rebecca Lindell

Stephen Presser paces his classroom, stalking the curious, the inquisitive, the rapt.

His students in the Kellogg School's Executive MBA Program sit attentively, watching Presser's every move. He gestures smartly as his dramatic voice fills the room.

Presser is setting a scene: A man has suffered a heart attack after returning home to find his house in flames. The man wants to sue the company that manufactured a hair dryer that ignited.

"He's not dead, but he's a shell of his former self," Presser declares, pausing for effect. "Can he recover? Will he win?"  Suddenly he points to a student in the third row. "David, what do you think?"

Anyone who happens to be in the classroom is fair game. "You're an outside observer," he's been known to ask surprised visitors. "What's your point of view?"

Presser isn't so much in pursuit of students' hides as he is of their ideas. He wants their opinions, even if he disagrees. The Raoul Berger Professor of Legal History is not afraid to take a controversial stance.

Presser has testified on Capitol Hill in favor of a constitutional amendment to ban flag burning, advocated for the impeachment of former President Bill Clinton and has been a vocal supporter of U.S. Supreme Court Justice Clarence Thomas.

He is a prolific author of books and articles about constitutional law and legal history. He has appeared frequently on television to discuss legal and political issues, and his op-eds and book reviews are published regularly in newspapers and magazines.

He is also a top-rated teacher at Kellogg and the Northwestern University School of Law, an expert on shareholder liability for corporate debts and a frequent witness before U.S. Senate and House committees on matters of constitutional law.

So it shouldn't be surprising that a class taught by Stephen Presser is engaging and full of healthy debate. "One of the thrills of teaching classes in business law is that everyone expects them to be hideously boring," says Presser, who first aspired to an acting career before deciding to attend law school.

"If you can address the ideological questions that are involved, it becomes much more exciting. When you're exploring legal and economic issues, you're talking philosophy and ethics and deep human questions. The law is a seamless web."

At Kellogg, Presser also teaches business law in the full- and part-time programs. His course Law and the Manager is required in the executive MBA curriculum. He also teaches legal and constitutional history at Northwestern's Weinberg College of Arts and Sciences, while at the law school he teaches American legal history and jurisprudence.

"I still use the Socratic method," Presser says. "I teach all my students the way I was taught 35 years ago. They're all scared out of their wits when I start. But I think that by the end of the term, they understand that I'm not trying to inflict any permanent tissue damage," he adds with a laugh. 

Far from it. Presser's former Kellogg students describe his classes as "totally stimulating," "incredibly interactive" and even "an experience that made me wish I'd gone to law school." He has won numerous teaching awards, including the Executive MBA Program's top professor nine times.

"He is an enormously talented teacher," says former student Sean Carmody '05, an investment banker at JPMorgan in New York. "He can take something that appears to be really dry and make it part of a broader story that's very interesting. He can take characters that seem to have just two dimensions and make it clear that they are three-dimensional. He has outstanding stage presence, and he's also funny — hysterically funny."

That all serves Presser's greater goal: to help managers and lawyers understand each other.

"One of the qualities of a good manager is to know how to work with lawyers," Presser says. "There's a need for every manager to appreciate legal analysis. The standard business law program tries to teach managers a smattering of legal doctrines — torts, that sort of thing. I'm not interested in that. I want to teach them to think like lawyers, so that they can better comprehend the advice their lawyers are giving."

At the law school, he is just as engaged in helping law students think through issues from a manager's perspective. "Lawyers often don't understand business," he remarks. "Marketing, finance and teamwork — these are things that you learn instinctively as a manager and in business school, but that sometimes lawyers never learn."

As a result,  "the lawyers don't trust the managers, the managers don't know how to talk to lawyers, and it leads to some very interesting interactions," he says. "What you have is several groups of dogs, circling around and sniffing at each other."

And when these lawyers who don't understand business become lawmakers, they make laws that can undermine the U.S. economy, Presser says.

As an example, he cites the Sarbanes-Oxley Act, which Congress passed in 2002 in response to corporate accounting scandals. "It generates too much information and it doesn't eliminate bad practices," Presser says.  "All it does is make accountants richer. There were ways to correct the problems of Andersen and WorldCom and Enron without over-regulating businesses."

Such intervention is something Presser believes has larger implications.

"The U.S. is the envy of the world because we are so incredibly productive and innovative and a big reason for that is the country's great business leadership," he says. "Instead of respecting that, our lawmakers react to excesses with things like Sarbanes-Oxley. We shouldn't kill the goose that lays the golden egg."

In his writings and Congressional testimony, Presser espouses a deep respect for natural law and defends a strong role for courts in striking down government action. While vocal on behalf of those ideas outside the classroom, Presser says he doesn't let politics intrude on his teaching.

"When you're interpreting the Constitution, it matters whether you're a conservative or a liberal, but when you're talking about insider trading and federal securities laws, it recedes into the background," he says. 

But what's irrepressible is Presser's passion for making business law come to life, especially at Kellogg, a place where he feels at home. "I love Kellogg," Presser says. "It's a complete joy to be able to move back and forth between Kellogg and the law school and break down the stereotypical walls that divide lawyers and managers."

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