Climbing Above the Culture Clash

“Eighty people signed up in August,
on the hottest day of the year with a
hurricane brewing off the coast,” said
Hurley. “That tells you something
about the need for this. This is our
effort to put the crisis in perspective.
We do it, not here in the Ivory
Tower, but at downtown law firms
where this will all play out.”
While Hurley’s plethora of outreach
programs hits its stride, the center’s
graduate program continues to thrive
with more than 70 students and two
dozen adjunct faculty — each one
of whom is an active practitioner in
his or her field of expertise. Hurley
said this adjunct arrangement is in
keeping with the school’s philosophy of
providing a practical legal education.
“That’s where the expertise is — in
the marketplace,” said Hurley, who
previously served as general counsel
for Shawmut Bank, as a partner in a
financial services consulting group,
and as assistant general counsel
to the Federal Reserve Board in
Washington, D.C., as it was crafting the
International Banking Act of 1978.
“The J.D. program is superb at
teaching the theory of law, but as you
become more focused the need for
practitioners increases. The graduate
program’s faculty consists of law
partners, leaders in key government
agencies, and senior corporate counsel.
With obvious pride, Hurley observes,
“They are in the real world dealing with
the issues as they come up and share
that experience with our students.”
The stakes couldn’t be higher,
according to Hurley.
“I think we are in the process of
fundamentally changing capitalism,”
he said. “How we play this out will say
a lot about ourselves. This goes beyond
beleaguered banks. We have thrown a
federal safety net under the entire system.
As we remove elements of that safety
net, it will determine what we become.”
Hurley is hopeful but not optimistic,
based on what he has seen so far.
“The Fed has said quite explicitly that 19
banks — those with assets of more than
$100 billion — will not fail,” he said. “I
think that the safety net just puts off the
day of reckoning. I don’t think we can
afford NOT to let some of them fail.”
“
The ‘Ivory Tower’ has become a pejorative
term these days, but the Ivory Tower is not
such a bad perch for assessing what we’re
going through right now.
”
The savings and loan crisis of the
1980s provides an excellent illustration,
according to Hurley. The government
propped up those dysfunctional
institutions for years based on the belief
that, with some help, they would be able
to work themselves out of trouble.”
“But they just got themselves
into deeper trouble,” he said.
The reason is that the bailout gave
the banks no incentive to change
the behavior that got them in
trouble in the first place — and
Hurley sees no indication that this
bailout will be any different.
“These 19 banks are hampering the
economic recovery,” he said. “They
have been reluctant to lend, they have
not changed their risk management
practices in any significant way, and
we know now that they are back to
their old compensation practices.”
“My concern is that three years down
the road, we will think that things
are better — but nothing will have
changed. We will be just as susceptible
to systemic collapse as we were a year
ago when AIG almost went under.”
As the crisis continues, Hurley
is constantly on the lookout for
ways to bolster the Morin Center’s
position as a thought leader.
“Boston University is a big place,
so in addition to reaching out to
external resources, we need to tap into
the wealth of University resources
we haven’t leveraged yet,” he said,
adding that finding the solution will
require a cross-disciplinary approach.
For example, the issue of outrageous
executive compensation packages is
one of organizational development
and governance — so he would like
to call upon James Post, an expert
on corporate governance at the BU
School of Management. He also
hopes to tap such people as Laurence
Kotlikoff in the Economics Department
and Zvi Bodie, also of the School
of Management, who are nationally
recognized figures in the areas of
retirement and investment management.
“If we only come at this problem with
lawyers, it will be like the old saying,
‘To a man with a hammer, every
problem looks like a nail,” said Hurley.
University President Robert Brown has
articulated a vision that encourages
multidisciplinary activities at all levels
of the University. Hurley and the
Morin Center are realizing that vision
and enhancing the law school and the
University experience in the process. •
For a schedule of upcoming “The Buck Starts Here”
lectures, go to www.bu.edu/law/morincenter. The sessions
are open to the public, but preregistration is required.
12 | Boston University School of Law | www.bu.edu/law