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The ivory and peach terrazzo floor in the Great Hall of the Law School tempts professor Edward B. Rock L'83. All business suit and shiny shoes, he enters the hall with economist Michael L.Wachter and takes a quick, running skid across the newly restored marble. "We should hold Penn Law Ballroom Dance events here," Rock says. As Wachter quietly observes his colleague, a smile pulls at the corners of his mouth. "If we have a Ballroom Dance troupe," he replies wryly. "If not, we should start one," Rock says, at once serious and jovial. He collects himself and the pair fall into step, continuing on their way.

Together Wachter, the William B. Johnson Professor of Law and Economics, and Rock, Professor of Law, direct Penn's Institute for Law and Economics. The ILE is a joint research center of the Law School, the Wharton School, and the Department of Economics in the School of Arts and Sciences. With this assembly of expertise on one campus, Wachter says, Penn has "one of the strongest groups in law and economics in the U.S." Since its inception in 1980, the ILE has brought those strengths together to create a nationally regarded academic think tank for areas at the intersection of law and economics - such as corporate law, labor law, tort reform, environmental issues, and real estate.

"What law and economics has done is show how much of the common law comports with very straightforward concepts of economic efficiency," Wachter said in the ILE's 1997-98 annual report. "There is a body of writing that says why the common law would gravitate toward economic efficiency even without the judges and jurists thinking consciously of it."

The ILE has been under Wachter's leadership since 1984, with Rock named as co-director in 1998, when Wachter served as the University's interim provost. Under their joint direction, the ILE is a hub of activity. At conferences and roundtable discussions (which Wachter calls "our pride and joy"), the Institute brings together scholars, attorneys, and leaders in the public and private sectors. "We really do believe that everyone learns best from each other," Wachter says.

A case in point was the ILE's Roundtable on Corporate Law in May. In his welcome to guests at the roundtable, Law School Dean Michael A. Fitts put it this way: "The ILE has brought together the bar and academe in extraordinarily interesting ways."

At the roundtable, Rock and Wachter presented the most recent of their seven joint papers, "Islands of Conscious Power: Law, Norms, and the Self-Governing Corporation." The paper examines the relationship between legally and non-legally enforceable rules and standards in the governance of corporations. Among the attendees at the roundtable were members of both the Delaware Supreme Court and the Delaware Chancery Court, general counsels of Fortune 500 corporations, venture capitalists, and leading corporate law practitioners and academics from around the country.