The law schools were caught by surprise by the financial crisis of last September and the ensuing descent into what, realistically, must be regarded as the first depression (as distinct from merely a recession) since the Great Depression of the 1930s. (This is not--so far, at any rate, a repeat of the Great Depression--but it is a depression.) When I say they were "caught by surprise" I mean first of all that the training and research of academic lawyers have not been oriented toward macroeconomic issues or even issues of financial structure. There are many able professors of bankruptcy law, secured transactions law, and the legal regulation of securities (including futures contracts and other derivatives), but very few who study financial intermediation as a whole, and almost none who combine a deep knowledge of the financial system with an understanding of the economics of the business cycle, important as the financial system is to the cycle, as we now know.
To these limitations of knowledge must be added a career structure in academic law today that is inimical to research oriented to practical solutions to current problems. This limitation has two aspects. First, recruitment of academics from practice has declined, as academic law has become progressively "academified" and specialized. Increasingly, in imitation of more conventional academic disciplines, legal academics are expected to focus the research component of their work (and this inevitably influences the teaching component) on specialized research the results of which are publishable in academic journals read mainly by other academics in the author's specialized subfield. The preparatiion and publication of such research are time-consuming endeavors and therefore are ill adapted to responding constructively to rapidly evolving current issues, especially ones that cross disciplinary and subdisciplinary boundaries.