The Business and Law Practice Exam Explained
To pass the New York bar, there’s one test that you must take: the business and law practice exam. This is not strictly a law exam, but one that’s designed to help you understand how to deal with business matters and practice issues as a lawyer.
The format of this test is a 100 question true-false/multiple choice exam. Each question gives you four options to choose from, but obviously only one answer is ultimately correct. The computer grading system is designed to understand the specific words that are used and focus directly on the content covered in the questions. The questions on the business and law practice exam are based on New York law, but other than that they are straightforward questions. If you are up on your New York law, the exam should be easy to pass. For each answer that is incorrect , there’s a penalty of −1.75 points. The grading rubric allows you to ‘pass’ the exam if you score at least 65. No other minimum scores are given. This is not an objective grading scale; rather, it is a tester of basic knowledge. This exam is very similar to the so-called ‘bar’ question that you are used to answering. Okay, there are 99 bar exams given to future law graduates, but they are grouped into two separate days. Passing this exam is important, as it’s the only way to pass the New York State Bar. Students who already have job offers from a New York employer are eager to pass this test so that they can get their license to practice law as soon as possible. Therefore, students may enroll in a specialized New York bar review course so that they are adequately prepared; they may also study independently.
Topics To Focus On
Typically, with each preparation course I lead, there are a handful of core topics that most examinees—if they had a choice—would prefer not to delve into. In the following, I have highlighted those areas that every examinee must master in order to pass. However, the corresponding information does not directly align with the practice exam and is in no way the opinion of Kaplan. Furthermore, in the event of a conflict, always do what the question is asking you to do.
Taxes and the IRS – The United States Internal Revenue Service (IRS) was formed to help administer and collect federal taxes. Which taxes are administered, the purpose of each, as well as the forms associated are all fair game. You may see a question such as, which IRS form would be used to amend a deceased clients’ tax return? In this case, understanding the difference between the short form 1040-SR and the long form 1040 is critical.
Captive Insurance – One of the biggest challenges in hosting a captive insurance company is understanding state laws that affect that captive. For example, there are 35 states that have adopted the Uniform Certificate of Authority Act. Understanding what that is and why it matters is critical. This act allows captive insurers to file a single application to operate in all participating states, instead of filing a separate application with each state.
Corporate Structure – There are four common business formation types, C Corporations, S Corporations, Limited Liability Partnerships, and Limited Liability Companies. Each of these structures has advantages and disadvantages, from taxation to personal liability, etc. The key is not only to understand those advantages and disadvantages, but to understand when one structure may be superior over another based on the client’s business goals.
International Business Law – While applying all of the same concepts as domestic business law, international business law adds a layer of foreign laws and regulations. Dozens of foreign countries have their own distinct laws pertaining to business operations, consumer protections, taxation, employee rights, etc. Within the world of international law, is the concept of foreign banking. Just like domestic banking, foreign banks have their own set of laws, regulations, restrictions, and protections that must be considered when conducting both personal and commercial transactions abroad.
How To Study
There are several study techniques and resources that are recommended for the business and law practice exam. First and foremost, one should begin studying as early as possible. The exam can be daunting because of the wide range of topics it covers, but by starting early and breaking down the chapters into smaller parts, you will find that the topics within the chapters are easier to digest and study.
The best way to begin your studying is by getting a hold of practice exams. This will give you a sense of what you have to master in order to pass the exam. Practice exams also provide you with the ability to study just like you’ll take the test – question by question, as opposed to chapter by chapter. This means that the practice exams will usually make you switch back and forth between chapters while the real test will only go in one direction (but not necessarily in order). The practice exams are available on the CD with every book/post or upon request with each book. Here are CSRA’s books for the business and law practice exam:
• Business Organization & Operation Law
• CA Contracts & Uniform Commercial Code
• Real Estate
• CPA Professional Responsibilities and Statutory Liability
• General Accounting Principles (for Non-CPAs)
• Fired: Crash Course in Bankruptcy Law
• Introductory Financial Accounting
• Inter-Company Accounting
• Taxation of Businesses
• Taxation of Individuals
• Independent Auditor Responsibilities
Another great study resource are online seminars. In addition to the monthly live seminar given in February, there is an online seminar available that not only helps you prepare, but also gives you a money back guarantee if you pass on your first attempt. Authors of the study guides often give online seminars as well, but all of these are delivered by experts who work daily with the Inspections Division to maintain the quality of the material and what is the most relevant material to the exam.
If you want to pass, and you want to save your time in the process, use the recommended resources to save time and pass on your first attempt. Remember, the sooner you start the better, and stay focused on doing a little every day to break up the material and improve your memory of the material.
Common Issues And How To Overcome Them
Candidates often encounter common barriers during the business and law practice exam. While it is unlikely that you will be able to prepare for all of the possible issues, you should still be equipped with solutions to the following.
Struggling to Manage Your Time
The first common barrier encountered is failing to manage time effectively. If you are not able to finish testing in the allotted time, you likely have difficulty managing time. The best way to combat these time management issues is through practice tests. That is the best way to build your pacing skills. Be sure to work on half tests and timed sections. Then review your test for questions that should have been easy but where you lost focus. Look at the explanations for the questions that you missed to determine whether you missed because you took too long considering other options. Were the other answer options logical and fairly likely based on what the question is asking?
Difficulties with Managing Stress
Another common barrier is stress. The best solution is to simply be prepared. In addition to taking practice exams and achieving a passing score, you should plan for any issues that may arise . This includes planning a back up test location in case a close location closes or the exam is unexpectedly canceled. You should also ensure that you have adequate forms of ID for your selected test-attendance location, check public transport routes, and even have a plan for the worst-case scenario going in. If you have planned for every scenario, your mind can be free of worry about unexpected barriers. Remind yourself of this when you are feeling worried or anxious.
Taking a Test with Intellectual Property Concerns
This is not as common as the prior two but it is still worth mentioning. Some candidates might be concerned about taking a test on an intellectual property issue. If you are concerned about this, simply speak frankly with your testing agency. When all else fails, their point of contact should be able to work with you and your employer. This is a semi-common issue and the testing agency already understands the importance of working candidates and employers through this processes. If the issue of testing on an IP matter comes up, simply ask to reschedule the exam in a month.
The Legal And Ethical Aspects
Mastering the Business and Law Practice Exam is a critical component to successfully navigating the rigors of law school and passing the bar exam. Aside from helping law students understand how to learn like a lawyer, there are ethical standards that are tested. These ethics considerations focus on the practice of business law. As you may recall, much of business law includes contract law, which has its own series of statutes, rules, and regulations. Beyond the scope of contracts, there are major federal laws that affect business practices and international trade considerations. Business law practice can intersect with antitrust law, insurance, real estate, transportation, and public utilities.
Why studied as a separate topic? The Law Practice and Business exam tests on business according to the law school curriculum. Since the curriculum does not separate out international law, intellectual property, tax law, bankruptcy, and so forth, these areas are not covered on the exam. The business law curriculum would likely change if not for the fact that the bar exam does not test those topics.
It is important for business law professionals to study ethics. Ethics are not just passing the bar exam. Understanding how to navigate the business law practice when it comes to ethical issues helps law professionals serve businesses and their clients in a more effective manner. It is good to know the legal ethical codes of conduct when working with the practice of business law. The American Bar Association and the state bar all have guidelines to follow for lawyers. Likewise, in-house lawyers must follow certain court rules, understand privilege, confidentiality, and so forth. Not only are there ethical concerns for lawyers in business law practice, there are special rules for accountants, engineers, and other licensed professionals.
Career Paths After The Exam
The business and law practice exam paves the way for a multitude of professional and personal prospects. After obtaining a passing score, the exam can lead to diverse opportunities in both the business and legal fields.
Within the business realm, candidates with a passing score on the practice exam may find roles as corporate trainers, business consultants, or organizational leaders. These individuals, armed with their expertise and a solid understanding of business law principles, can help businesses navigate complex legal landscapes. They may also assist corporations with contract negotiations, compliance issues, merger and acquisition agreements, and other transactional matters.
In the legal domain , a passing score on the business and law exam serves as a strong foundation for those seeking to enter law school or legal practice. Many law schools consider the practice exam as an indicator of an applicant’s potential for success. Their performance can provide insights into their understanding of business law principles and can highlight their commitment to the field of law. For candidates who are interested in becoming attorneys, this part of the exam is an opportunity to showcase their knowledge and abilities to legal schools or hiring companies.
Overall, the practice exam provides a valuable opportunity for expanding professional networks, pursuing academic ambitions, or furthering personal interests within the business and law landscape.