An Interview with Stephen J. Schulte
Stephen J. Schulte is a founding partner of Schulte Roth & Zabel LLP, where he has a broad-range securities practice (with Internet emphasis), including public offerings and private placements, mergers, acquisitions, and other corporate reorganizations and securitized transactions. He is vice chairman of the Cardozo Board of Directors, chairman of its nominating committee, and a member of its executive committee. He is chairman of the City Bar Association's Task Force on Securities Law and the Internet and a member of that organization's Committee on Securities Regulation. He is a member of the ABA Committee on Federal Regulation of Securities, and the Subcommittee on Internet and Securities Law; a member of the NY State Bar Association's Committee on Securities Regulation; and a member of the PLI Corporate and Securities Law Advisory Committee. He has been an adjunct professor at Cardozo since 1992 and also teaches at Fordham Law School. Professor Schulte is a graduate of Columbia Law School and Brown University. In a recent interview with Cardozo Life editor Susan Davis, he discussed the Law School from his vantage point as a member of the practicing bar as well as Cardozo's Board and faculty.
Davis: How did you first get involved with Cardozo?
Schulte: I first learned about Cardozo approximately 14 years ago, when my wife, Patsy, left the New York City Comptroller's Office, where she was deputy controller of finance, and announced to me that she wanted to go to law school. She applied to several law schools and was accepted to them.
At that time, I was on the recruiting committee of my firm and when she asked which school I thought she should go to, I suggested a school other than Cardozo. However, I thought that before she made a decision, we should speak with a good friend of ours who was a senior professor at another law school here in the city. So we sat down with this person, who said, "Without question, Patsy should go to Cardozo." We asked why, and he said, "Because it is a school on the rise, fast-moving, with an outstanding intellectual faculty, and it will only be a short time before Cardozo is considered among the very top law schools." That did it; she chose Cardozo.
After Patsy graduated, I determined that I would like to try teaching. I prepared a course, and two law schools invited me to teach it -- one of them Cardozo. This gave me my first real opportunity to see the School and its workings from the inside. After serving as an adjunct professor for some time, I was invited to become a member of the Board of Directors. I am now a vice chairman of the Board.
Davis: Given that you wear so many hats at Cardozo -- professor, board member, spouse of an alum, and now cochair of the new Friends committee -- what would you say Cardozo's greatest strengths are?
Schulte: I would start with the faculty, which has a national reputation among academics and the practicing bar. I have come to know a number of members of the faculty and find them, collectively, an extremely positive, enthusiastic group -- very supportive of the School. It is general knowledge that their individual academic achievements are outstanding. Interestingly, Cardozo's faculty is also known for its teaching. It is obvious that they enjoy the classroom experience, which is extremely important in making for a great law school.
Davis: On the other hand, what do you feel needs the most improvement at Cardozo?
Schulte: Cardozo's main weakness is that it is only 21 years old. Therefore, there is not yet a broad network of graduates who can bring an awareness of the School's qualities to the firms, agencies, and other businesses with which graduates are associated. Only now are graduates of the earliest c 1000 lasses getting to a point in their careers where they have hiring responsibilities. Because of its youth, Cardozo cannot benefit from the name recognition and general reputation that schools decades older enjoy. All this will correct itself in time.
The thing that can be corrected sooner is the physical plant. Cardozo is a much finer law school than is reflected in its bricks and mortar. The stronger the physical plant, including housing facilities, the easier it will be to recruit students, and the better the morale will be. Cardozo needs to raise a lot of money to address that issue.
Davis: This brings me to the reorganization of the Friends of Cardozo. You and your wife are cochairs of this group, which I believe is composed primarily of parents of current students and has been put together to help raise those funds.
Schulte: When an institution builds a development program, it must do so from the bottom up. It takes a long time to develop your graduates to a point where they understand the needs of their school. Combine that with the pride that comes from success, and graduates will come back and give -- not only in a financial way, but in other respects: counseling students, participating in symposia, acting as mentors.
Friends of Cardozo is a very important component of development -- one of the essential building blocks. It is a means by which parents and others affiliated with students and graduates learn about the School and its programs, giving us feedback and ideas. It also provides an opportunity to develop their involvement and identify individuals with the interest and energy to support the School.
Davis: You and Patsy hosted a recent Friends of Cardozo event. Was it successful?
Schulte: I think the event was a very good kick-off. In the course of talking with various parents, I was quite impressed to learn that some had traveled in from outside New York City; a few even came from out-of-state for this event. That's a pretty clear demonstration of interest in the School that their children are attending.
Davis: In this issue of Cardozo Life, we are featuring some of our adjunct professors. We have asked several to tell us of a celebrated moment in their careers -- either a case or a client or an event that stands out as a high point. Would you like to share one of these moments with us as well?
Schulte: One of the most important lessons that I ever learned in the practice of law -- and it applies to many other disciplines as well as to day-to-day interactions with people in our society -- is to take responsibility when you have not succeeded or have made a mistake. I learned that lesson when I was an associate. I was working in a large law firm on a securities project with a senior partner. The two of us had prepared a disclosure document and found, before it was distributed but after it was printed, that we needed to make a correction.
I sat in the partner's office as he called the client and heard him say -- obviously in response to the question, How can this have happened? -- "Because we made a mistake. We take responsibility for that mistake and we will correct it. I'm sorry."
That was a very important lesson for me that I have tried to convey to associates and share with students. People respect people who step up and say, "That was my fault, I'll correct it."
I want to add something about which I am concerned regarding the legal profession. Its reputation is close to being at its nadir. I think that attorneys, law schools, and bar associations have a very important responsibility to emphasize ethics, morality, and responsibility to society, and to rebuild the reputation that the legal profession once had.
When I entered the law, I was ve 1000 ry proud to say that I was an attorney. Today that statement no longer has that special ring. I think the rehabilitation of the profession's reputation is critical, and I am committed to working with this law school as well as with the practicing bar in resurrecting it.
Davis: Can you tell me briefly what you cover in the course you teach, Initial Public Offerings?
Schulte: As an associate, I did a lot of work in the area of initial public offerings (IPOs). This was during an era when partners, by and large, did not explain to associates why they were doing certain tasks. Later, it was apparent to me that associates would be able to work more effectively and with more enthusiasm if they had an overview of the project and understood the IPO process better. As we were building our own law firm, we put a short piece on IPOs into the in-house educational program. Then it occurred to me that this subject was a natural for a larger seminar -- the course I now teach.
I begin from the point at which a company determines it would like to raise capital through a public offering, and cover structuring the offering, preparing the prospectus, and negotiating the underwriting agreement. The course incorporates many real-life scenarios and focuses on how to counsel the client.
It is interesting to note that students in the first couple of years were primarily men. Now the mix has grown close to being equal between men and women. I'm very pleased, because what this says to me is that women feel comfortable working in the commercial, financial, and securities areas, and I think that is a good sign.
Davis: I understand that several Cardozo grads work at Schulte Roth & Zabel.
Schulte: Quite frankly, I wish we could hire even more. At our law firm, almost 10 percent of the associates are Cardozo graduates, a number of whom have been my former students. To me, one of the hidden goldmines of talent is Cardozo Law School. Not only is the general curriculum very strong; areas of specialty provide students with an excellent basis for entering the practice. For instance, the recent initiatives in Intellectual Property are extremely exciting. In my area, the enhancements brought to the corporate curriculum by The Heyman Center are very impressive. By supplementing the core curriculum with symposia, clinical programs, and externship opportunities, Cardozo offers its students a broad perspective on the practicalities of the law. There are a number of students here that our firm would be very happy to have.
Davis: This fall, the dean invited hiring partners from major and midsize firms to a luncheon at which there was general conversation about how to train law students better for the practice of law. I was curious as to whether you thought law students were being trained properly.
Schulte: That's an interesting and complicated issue. I think over the years, there has been a certain tension between the academic approach of faculties, where the emphasis is on intellectual challenge and teaching a way to think and to break down and analyze cases, and increasing pressure from the ABA to include clinics and practical courses in the curriculum.
I went to law school at a time when there were not a lot of clinics, and courses did not emphasize the practical aspects of the profession. As a practicing attorney, I believe that if you get bright people who are interested in a field and you stimulate them intellectually, teach them the basics of the law -- whether contracts, torts, constitutional law, intellectual property, securities regulation, or the like, you will lay the foundation for good practitioners.
There is no question, however, that clinics, legal writing, and other practical courses are critical to the development of law students. They need to learn how to deal with day-to-day issues, including how to communicate and write.
Davis: Was Patsy's experience at Cardozo a favorable one?
Schulte: Patsy's experienc d86 e was outstanding. Perhaps, in part, because she started law school as a more mature person having business experience, she was very receptive to the course material. She really respected her professors.
There was another aspect that we found interesting as well. We assumed that because Patsy was an experienced businesswoman, she could approach law school like a nine-to-six job. We learned quickly that that was not the way to get through law school if you wanted to do a good job. So I spent three years cooking dinner and acting as the social secretary. I was given a schedule that permitted us to make, at most, two social commitments a week. We even spent some of our leisure time listening to a substantial number of CLE-type tapes on civil procedure and the like.
Davis: Does Patsy now work in commercial law also?
Schulte: Patsy graduated, studied for the bar, became -- like many students going through that process -- extremely nervous as to whether she was or wasn't going to pass. I told her she had only one shot at it because I was not going to cook for another three months. Fortunately, she passed. Then she promptly went into education, joining a foundation that supports a model school in the City system.
I think her real objective in getting the law degree was to understand something about how lawyers think. She had spent her career retaining and working with lawyers, and really wanted to understand the legal process better. Once she had her degree, however, she decided that she did not want to invest seven or eight years as an associate in a law firm.
Davis: How do you see your role as a board member and vice chair of the Board?
Schulte: An institution that is growing the way Cardozo is needs the direct involvement and investment of the directors. The Board must focus on the School's needs: a capital campaign, improving the physical facilities, and more scholarship money. The members must come to understand the School better; they cannot be passive. I feel a responsibility to share with the Board what the Law School is all about; to be honest in its shortcomings as well as its strengths; to identify new people who can become strong, involved directors -- not necessarily because they are going to give money but because they are going to be people who are farsighted and understand what it takes to build an institution and programs. As one of the vice chairs, I feel a responsibility to take initiatives, with other board members, in all those areas.
Davis: Are there any events that stand out or a special person who stands out in Cardozo's short history as particularly important to the School?
Schulte: Without doubt, there are a number of special people and events that come to mind, but rather than single out particular individuals, I want to focus on one event: the successful search for and hiring of a new dean. This is a critical period for Cardozo. It has the support of Yeshiva University. It has an outstanding faculty. It has experienced an exciting period of growth in admissions in the last few years. The Board recognizes the School's development needs and will soon announce a capital campaign. All this would be of no avail if Cardozo didn't have its new dean, Paul Verkuil, who, I have every reason to believe, will be able to unite the School's various constituencies and efforts.0