The First US Law School Course on Compliance: Its Origins and Evolution

This essay traces the origin and development of the first dedicated law school course on corporate compliance and ethics programs in the United States. Responding to legal and practice developments over the last two decades, the course evolved from a traditional law-focused course into a practice-oriented seminar that reflects the interdisciplinary nature of compliance. In that time, the course has also grown alongside the field of compliance, preparing students to meet the challenges faced by modern compliance professionals. 

Origins and Inspiration

In Spring 2003, I taught what I believe was the first American law school course dedicated solely to the topic of corporate compliance and ethics programs. While such programs had previously been discussed in courses like white collar crime or antitrust, this was the first course centered entirely on the legal and practical dimensions of compliance.

My path to teaching the course was shaped more by timing and serendipity than by design. First, during my final year of law school, the U.S. Sentencing Commission’s  Organizational Sentencing Guidelines went into effect in November 1991. This document provided the first comprehensive legal incentive for companies to develop and operate effective compliance programs. In-house counsel across the country took notice, as the Guidelines promised leniency to organizations that could demonstrate such efforts.

Second, one of those in-house attorneys was my father, who worked in the legal department at JCPenney, Inc. He was assigned to assess the company’s response to the Guidelines and shared his research and insights with me. As a result, I gained early exposure to a topic that was still largely unknown within legal academia.

Last, interest in compliance programs intensified after the 1996 decision in In re Caremark International Inc. Derivative Litigation, in which the Delaware Chancery Court recognized a board of directors’ fiduciary duty to oversee the company’s compliance efforts. The threat of civil liability motivated corporate boards to invest time and money in developing, implementing, and operating effective compliance and ethics programs.

Early Compliance Teaching and Curriculum

In fall 1998, shortly after I began teaching at South Texas College of Law in Houston, I worked with Texas A&M University’s Mays Business School as they launched their Executive MBA Program. I was asked to design and teach the business ethics course, which needed to serve working professionals. To meet this goal, I combined traditional theories of ethics with a practical introduction to corporate compliance and ethics programs. I taught the first version of this course in August 1999 and have continued teaching it ever since.

So, my first exposure to teaching compliance was in a business school context. In hindsight, this made sense: the compliance function draws on competencies traditionally taught in business schools, including management, communication, internal controls, and audit. Law schools, by contrast, tended to emphasize corporate governance at the board level and paid less attention to the day-to-day operation of compliance programs.

 Along Came Enron and Sarbanes-Oxley

Everything changed in December 2001 with the collapse of Enron Corporation. As its misconduct came to light, Congress responded with the Sarbanes-Oxley Act of 2002, which, among other mandates, required public companies to implement anonymous reporting channels for financial misconduct. This legislation effectively imposed one element of a compliance program—a reporting line—on public companies regardless of industry and required public companies to disclose whether they had a “code of ethics” for “senior financial officers”.

In Spring 2002, with Enron’s scandal unfolding across town, I proposed a new law school course focused entirely on corporate compliance and ethics programs. The timing was right. As public discussion shifted from asking “How could this happen?” to “How can we keep this from happening again?” the profile of compliance programs rose. The law school course was quickly approved and first offered in Spring 2003.

 Course Evolution: From Law to Skills

The initial version of the course emphasized legal doctrine: Eight of twelve weeks covered topics like criminal and civil liability, legal incentives for compliance programs, attorney-client privilege, and laws such as the U.S. Foreign Corrupt Practices Act and antitrust. Only four weeks addressed practical aspects of building and operating a compliance program. This allocation reflected traditional expectations that law school courses be rooted in legal doctrine.

Over the years, however, as the American Bar Association pushed law schools to provide more skills training, my course evolved to emphasize practical competencies. In the most recent iteration, the first two weeks introduce the function and purpose of compliance programs. Each of the next ten weeks covers a core component of an effective compliance program, such as risk assessment, codes of ethics, training, auditing and monitoring, hotlines and helplines, discipline and incentives, and board oversight.

Today, the course materials reflect this practice-based approach. Students read Carole Basri’s excellent Corporate Compliance casebook, which contains practical chapters on each element of a compliance program. We also analyze the U.S. Department of Justice Criminal Division’s latest guidance on evaluating corporate compliance programs, and also review other agency guidance, including documents from the DOJ’s Antitrust Division and the U.S. Department of Health and Human Services.

Throughout the semester, we apply these materials to a Harvard Business School case study on how AB InBev restructured its compliance function to address foreign bribery and antitrust issues. Students integrate the course content by writing a final paper critiquing the compliance program of an organization of their choice.

 Conclusion: Compliance (and My Course) Come of Age

The evolution of this course parallels the maturation of corporate compliance as a professional discipline. What began as a niche topic is now a core component of corporate legal practice. Student interest has increased accordingly. In 2003, few students had even heard of compliance programs. Last spring, nearly half of the class had prior compliance experience or career plans in the field. The course now has a waitlist, signaling its relevance and value.

As compliance guidance and best practices continue to evolve, so too will the course. Its enduring success suggests that law schools have a role to play in training future leaders in corporate compliance and ethics.