The twin structural changes of the last few decades—globalization and the emergence of a web-based platform for economic activity--have transformed the economic demand for law. The market for law, however, has struggled to keep up with these changes, showing few signs of the kind of innovation that we see in many other sectors of the new economy. Even our most sophisticated and innovative corporations report difficulty in finding lawyers with the kinds of risk-attuned and creative problem-solving skills that they need (Hadfield 2011). Some large corporate clients have gone so far as to refuse to hire new law firm associates, finding the value they deliver too far below the hourly rate they are charged for their services. There are many causes of the growing mismatch between what clients want from law and what law delivers, and no silver bullet to solve the growing discontent in the market. But the stagnant nature of legal education clearly plays a role. In this paper, I discuss my experiences with problem-based teaching methods in a mainstay of the traditional law school curriculum: contracts. These experiences both demonstrate how much we need to do to bring legal education into the 21st century, and suggest some concrete changes we can make in how we teach to nurture the development of a new generation of innovators in law.