Educating Russia's future lawyers - any role for the United States?

• Author: Picker, Jane M.

ABSTRACT

In the wake of the devaluation of the Russian ruble in 1998 and the resulting flight of foreign investment, which was exacerbated by allegations of massive corruption and capital flight at the highest levels of government in 1999, the question of an appropriate role for the United States in helping Russia to establish an environment able to attract and retain foreign and domestic capital, to maintain a viable globally integrated market-based economic system, and to create a stable civil society, is under discussion.

The authors believe that a viable market economy will not flourish in Russia until a more stable legal environment, based on the rule of law, is in place. No fully developed economy currently exists that is not firmly rooted in the rule of law. However, the focus of U.S. aid should support the rule of law not merely as a necessary, indeed essential, support to business, but also as a pre-condition to the development of a civil society.

In recent years, United States law-based assistance to Russia has been based principally on the training of judges and the provision of computer technology through various aid programs. The United States has also made scholarships available to Russian lawyers, enabling them to pursue Master of Laws' degrees in the United States. When and if these lawyers return home, most practice law in Western law firms or are employed in international joint ventures. An increasing number have begun to seek employment outside Russia as that country's economy spirals downward. By 2000 virtually no programs provide the opportunity for undergraduate law students those who, unlike Russian lawyers, must return in order to complete their legal education and obtain their credentials to study in the United States.

But are these endeavors enough? The core building block of the rule of law rests not so much on the legal profession as on legal education. While legal education must include a continuing process of curricular and methodological review, it necessarily rests on its teachers who impart legal values to future members of the profession.

While there is now a compelling unmet need to address Russia's legal infrastructure in a fundamental way, this article proposes that attention be focused immediately on the training of Russia's future law teachers. Current U.S. government programs do not address this need. Few of the judges or lawyers trained under existing exchange programs become taw teaches in Russia. A U.S. Master of Laws degree, while it may be excellent preparation for those wishing to practice law with a Western law firm, is not considered adequate preparation for a law teaching career in Russia. A small number of U.S. government university partnership grants do provide funds for a handful of Russian law teachers--for whom the rule of law undoubtedly was an alien concept during, their legal training--to visit law schools in the United States. No program, however, focuses on the need to nurture, develop, and train Russia's future law teachers by introducing them, through legal education in the United States, to American concepts of the rule of law, including its importance both to a market economy and to the development of civil society.

This article takes note of Russia's unmet need for well-trained lawyers who fully understand the critical importance of the rule of law to the development of Russia's economic system and civil society. The article also describes Russia's system of legal education and university governance, as well as those few U.S. programs that have brought Russian law teachers and law students to the United States for training. It then proposes development of a partnership of law schools, foundations, and corporations, together with the U.S. government, to train a meaningful number of Russian law students in the United States in preparation for their postgraduate study and academic-based careers in Russia.

1. INTRODUCTION

   Since the breakup of the Soviet Union in 1991, the U.S. Government has pointed to the need for economic aid to provide assistance to Russia to modernize its economy and institutions and to bring the "rule of law" to Russia. In the post-Soviet era, the International Bank for Reconstruction and Development (World Bank), the International Monetary Fund (IMF), and the U.S. Government have provided billions of dollars in economic assistance to the Russian Federation.(1) Private organizations and individuals have also provided aid.

   A well-developed legal system based on the rule of law underlies and supports every post-modern, sophisticated, fully developed state in the world. Russia's business environment, however, has consistently been characterized as one in which U.S. businesses fear to venture, in large measure because of a perceived uncertainty of legal protection for their investments. In 1996, the Report of the Stanley Foundation's Thirty-Seventh Strategy for Peace Conference noted that the lack of adequate tax and legal regimes is a major impediment to business investments.(2) This report elaborated on the need to encourage legal reform in Russia:

   Adequate business investment, equitable and transparent ownership, and joint ventures will not happen in Russia until tax codes, customs agreements, commercial codes, and production-sharing agreements are not only decreed but ratified and implemented. The picture in these realms is still discouraging, and while such reforms must be effected by Russians themselves, the U.S. government can reinforce its efforts to help the process along. Moreover, it is wise for the United States to cultivate values, legal structures, and management styles that are compatible with our own.(3) This advice was neither the earliest nor the most recent publicizing the need for law. Earlier, the Russian Ambassador to Washington, Yuri Vorontsov, addressing the American Bar Association's (ABA) Standing Committee on National Security Law on November 28, 1995, had invited the American legal profession to assist Russia in the refurbishing of its legal system, stating:

   We have made progress with respect to freedom of the press, and political parties, but there has been no progress in the juridical system--the thinking is the old way, and practices are terrible old ones--we need serious help in all aspects of juridical change.(4) Some within the Russian legal academy have also recognized the need for a valid and stable regulatory basis to promote foreign investment.(5) Well-known Russians in various fields have also commented on the problem. Alexsandr Solzhenitsyn has asked, "What kind of `democracy' is this?," answering that neither a free market nor democracy has as yet been established in Russia.(6) Boris Berezovsky, after recently receiving an arrest warrant, contemptuously stated that he "thinks that the law in the West is much stronger than in Russia."(7) Even the Auditor of the Account Chamber of the Russian Federation admits that Russia doesn't have a "normal" legal system.(8) Indeed, Russia's present legal system has been described as "incapable of checking government."(9) Most recently, after stating that Yeltsin's government was uninterested in enforcing Russia's laws protecting shareholders, the head of its Federal Securities Commission resigned.(10)

   In the West, George Soros refers to Russia's current economic system as that of "robber capitalism,"(11) while Robert Conquest, noting Russia's market size as equivalent to that of Denmark, has called it "pre-capitalist."(12) George Selgin, viewing Russia's economic system as a phony form of free markets, calls it "Potemkin capitalism."(13) Alan Greenspan, Chairman of the U.S. Federal Reserve Bank, has pointed out that, without establishment of the rule of law, the disappearance of the U.S.S.R.'s central planning does not, a priori, lead to democratic capitalism.(14) According to World Bank Senior Vice President and Chief Economist Joseph Stiglitz, "issues of legal infrastructure ... are absolutely central" to the development of market economies.(15) Indeed, the popular press recognizes the problem,(16) and the link between government corruption and the lack of a rule of law is now taken as a given.(17)

   Businessmen participating in joint ventures in Russia are all well aware that the rule of law is far from established. David Reuben, Chairman of the Trans-World Group, has argued that renationalization of companies that have invested in Russia is threatened under the guise of national security "aimed at confiscating certain foreign investments and facilities without due process."(18) Tales of the trampling of rights of shareholders include share dilution schemes,(19) extortion of shareholder rights of foreign investors,(20) and accounts of the inability of minority shareholders to receive enforceable judicial protection.(21) The Russian Government has cancelled contracts with joint ventures,(22) and a St. Petersburg court has ordered renationalization of a company in which U. S. Investors had acquired a majority stake.(23) Bankruptcy proceedings in Russia allegedly have been used "more often to strip assets rather than to rework debt and pay creditors."(24) Provisions of Russia's new Civil Code have been viewed as inadequate, at least in some respects, to promote foreign investment.(25) Anders Aslund notes that "tax legislation is contradictory and full of loopholes, and many collectors work beyond the law.... [F]undamental tax reform has been urgently needed for years.(26)

   Jeffrey Sachs, the economist who directs Harvard's Institute for International Development (HIID) and who has served as an advisor to the Russian Government, has succinctly stated, "Russia doesn't need economists. It needs lawyers."(27)

   Although Russian institutions are addressing the need to train more lawyers, they are doing so in somewhat unexpected ways. As a shadow economy has developed in business,(28) an educational system parallel to the traditional state university...