Friday, September 1, 2017

Judge Posner to retire from the 7th Circuit

We are looking forward to seeing more of him around the Law School!

For the story of his appointment by President Reagan and confirmation in 1981, see pages 1614-1615 of this article.  President Reagan, who probably would be expelled for insufficient "conservativism" (whatever that is anymore) from today's Republican Party, surely did not know the legal force of nature he had unleashed when he appointed Posner.

On Judge Posner's jurisprudential significance, readers might also find this essay relevant.

And back in 2005, Judge Posner was a guest-blogger at my philosophy blog!

Dick Posner has always embodied the intellectual ideal of academic life at the University of Chicago:  always willing to engage all views, unforgiving in argument, and never confusing intellectual warfare with personal animosity.  It will be nice to see more of him.

 

September 1, 2017 in Faculty News, Legal Profession, Of Academic Interest | Permalink

Wednesday, August 30, 2017

Hiring committees and their curricular priorities can be announced...

In Memoriam: J. Dickson Phillips, Jr. (1922-2017)

Before becoming a distinguished and influential federal judge, Phillips served on the law faculty at the University of North Carolina, Chapel Hill, where he was also Dean.  There is a lovely memorial notice for Judge Phillips here.

(Thanks to Mitch Berman, who clerked for Judge Phillips, for the pointer.)

August 30, 2017 in Memorial Notices | Permalink

Monday, August 28, 2017

Eight lateral moves that made people "stop and take note" in 2016-17

 Here are eight lateral moves from the 2016-17 list that, judging from my in-box and what I've heard other ways, made members of the academic community stop and take notice:

  

*Richard R.W. Brooks (contracts, business organizations, law & economics, law & social norms) from Columbia University to New York University.  Brooks only moved to Columbia from Yale a couple of years ago, but he's now joined a long list of faculty who have decamped downtown over the last dozen years from Morningside Heights:  Jose Alvarez, Cynthia Estlund, Scott Hemphill, Samuel Issacharoff, Trevor Morrison (who moved to become Dean), Catherine Sharkey, and Jeremy Waldron.  No faculty member has moved from NYU to Columbia in over 25 years, which is a remarkable transformation in the relative academic position of the two schools from a generation ago.  (Columbia has done plenty of lateral recruitment of its own, to be sure, poaching faculty from Yale, Chicago, and Virginia, among other places.  Interestingly, Columbia graduates continue to dominate NYU graduates in the job market for new lawyers, though that gap has narrowed from a generation ago.)

 

*Eleanor Brown (property, immigration and migration law, law & development) from George Washington University to Pennsylvania State University, University Park.  A scholar of migration and the role of property rights in migrant success, she takes up a joint appointment with both the law school and the school of international affairs, both of which will now be led by Hari Osofky, recruited from the University of Minnesota to be Dean of both.  It's always a good sign when a school is able to recruit established scholars from currently higher-ranked institutions.

 

*Erwin Chemerinsky (constitutional law, civil procedure) from the University of California, Irvine to the University of California, Berkeley (to become Dean).  One of the most influential (and most-cited) public law scholars in the United States, his move to Berkeley would have made news even if he weren't also becoming Dean.

 

*Brett Frischmann (intellectual property, Cyberlaw) from Cardozo Law School/Yeshiva University to Villanova University.  A leading scholar in these areas, Frischmann was recruited by Villanova with a new endowed University professorship.  A big pick-up for Villanova.

 

*Herbert Hovenkamp (antitrust, intellectual property, legal history) from the University of Iowa to the University of Pennsylvania.  The leading figure in antitrust in the United States, he spent roughly the last thirty years at the University of Iowa, turning down offers from Columbia and Chicago during that time.  But now he's joining Penn as a Penn-Integrates-Knowledge (PIK) University Professor, with appointments in the Law School and the Wharton School.  That's the second really eye-catching senior appointment for Penn recently; the year before, Penn recruited Beth Simmons, the eminent human rights scholar, from Harvard, also with a PIK University Professorship, and appointments in both the Law School and Political Science department.

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August 28, 2017 in Faculty News | Permalink

Friday, August 25, 2017

Todd Henderson (Chicago): Lawyers make better CEOs in industries with high litigation risk (and worse CEOs elsewhere) (Michael Simkovic)

Professor Henderson finds that: "CEOs with legal expertise are effective at managing litigation risk by, in part, setting more risk-averse firm policies. Second, these actions enhance value only when firms operate in an environment with high litigation risk or high compliance requirements. Otherwise, these actions could actually hurt the firm."

The full article is here.  A summary in the Harvard Business Review is here.

August 25, 2017 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Legal Profession, Professional Advice, Science, Weblogs | Permalink

Monday, August 21, 2017

Should the government raid university endowments? (Michael Simkovic)

Vanderbilt Tax Professor Herwig Schlunk wants the federal government to tax university endowments, preferably out of existence.  He writes:  “In the best of all possible worlds, the federal government could and probably should . . . confiscate[e] all private university endowments . . .”

Toward that end, Schlunk recycles arguments that were discredited years ago.

Professor Schlunk is famous for asserting that law school is a bad investment.  Schlunk’s bold claim—based on back of the envelope calculations and highly unscientific website surveys—was popularized by the Wall Street Journal and echoed by sympathetic media outlets.  Peer reviewed research by labor economist Frank McIntyre and me—using high quality nationally representative government data and well-established econometric techniques—subsequently demonstrated that Schlunk was mistaken. (See here and here).

This post critiques Schlunk’s recent work on endowments for misuse of discount rates, overlooking the importance of educational quality, mismeasuring student earnings and higher education expenditures, selectively targeting higher education, supporting policies that undermine economic growth, and overlooking stark differences between popular votes and political power.

Misuse of discount rates

To arrive at his headline-grabbing law school result, Schlunk relied on some spectacularly unrealistic assumptions.  As Frank McIntyre and I explained four years ago:

“Professor Schlunk’s analysis assumes astronomical discount rates, low earnings growth rates, and zero inflation for thirty-five years. None of these assumptions are empirically or theoretically justifiable.

 

Most studies [of higher education] by economists have generally used a discount rate between 2.5% and 3%. . . . Compared with the 3% discount rates applied in labor market studies by economists and suggested by the real (net-inflation) costs of financing a law degree . . .  Professor Schlunk applies real discount rates of between 8% and 27%. 

 

If Professor Schlunk had used comparable assumptions about discount rates to evaluate the value of a college degree compared to a high school diploma, he would have reached the conclusion that few should go to college. Indeed, given a 30% nominal discount rate, whether it makes financial sense to complete high school might be debatable.”

 

Undeterred, Professor Schlunk once again relies on unrealistically high discount rates and overlooks differences in completion rates, this time to argue that private non-profit universities provide little value when compared to leanly funded, politically vulnerable public universities.  Based on this analysis, he concludes that the federal government should tax universities more heavily than it already does.  Higher discount rates mean that future cash flows have a lower present value.  Thus the value of a lifetime of higher earnings from higher quality education is diminished by choosing a higher discount rate.

Schlunk’s justification for using such high discount rates is that higher education “puts me in mind of income streams I confronted when advising investors in the private equity sector [where] discount rates of as high as 30% were generally applied.”[1]

For the record, peer reviewed research generally finds that private equity returns net of fees are close to or less than those that can be found in the stock market—not remotely close to the 30 percent returns assumed by Schlunk.  (In addition, discount rates are supposed to reflect the weighted average cost of capital, NOT the (higher) returns to equity).[2]  If P.E. investors were applying high discount rates to cash flow projections, this likely means that investors believed that P.E. cash flow projections were over-optimistic.

Overlooking college completion rates

In his latest critique of higher education, Schlunk also overlooks large differences in completion rates.  Four-year completion rates for bachelor’s degrees are almost twice as high at private non-profit universities as at their more leanly funded public counterparts. If one accepts Schlunk’s assumptions of extremely high discount rates, even a modest delay in completion would have a dramatic impact on value.

Overlooking effects of increased educational expenditures and educational quality

Peer reviewed studies that control for differences in student characteristics consistently find that higher expenditures per student lead to significant increases in student earnings and likely contribute to higher completion rates.  (For brief reviews of the literature, see The Knowledge Tax and Populist Outrage, Reckless Empirics; See also here). 

Professor Schlunk overlooks these studies.  

Mis-measuring student earnings and educational expenditures

Schlunk overestimates the difference in expenditures and resources at elite public and private universities, which leads him to over-estimate the earnings premiums necessary for more resource-intensive private education to be worthwhile.  Schlunk assumes incorrectly that all students at elite flagship state universities pay low in-state tuition, when many students at these institutions pay much higher out-of-state or international student tuition.  He overlooks the extent to which expenditures per student at elite public universities exceed in-state tuition because of state subsidies and cross-subsidies from out-of-state students.  He overlooks the extent to which differences in financial aid affect net-tuition—and therefore educational resources and expenditures—at different universities.

The elite public universities that Schlunk presents as controls that he sees as similar to private universities, but without endowments, actually have larger endowments than many private universities.  

Continue reading

August 21, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Ludicrous Hyperbole Watch, Of Academic Interest, Religion, Science, Student Advice | Permalink

Tuesday, August 15, 2017

Charlotte Law School officially closes

Local news item here.  We've now seen three law schools close:  in addition to Charlotte, also Whittier and Indiana Tech, all victims of the collapse in applications to law schools, which occurred in the wake of publicity about the recession in the market for new lawyers post-2008.  Back in 2013, I guesstimated we might see up to 10 law schools close,and I still think that's possible.  Of course, a sudden change to student loan rules could make that guesstimate look way too conservative, and it's hard to predict what Trump/DeVos will do on that front.  But barring that, I doubt we'll see more than ten law schools close, and almost all will be younger and/or for-profit institutions.

August 15, 2017 in Legal Profession, Of Academic Interest | Permalink

Monday, August 14, 2017

Law schools ranked by American Academy of Arts & Sciences membership, 2017-18

             FACULTY QUALITY BASED ON MEMBERSHIP IN THE AMERICAN ACADEMY OF ARTS & SCIENCES, 2017-18

                                                                       August 2017

The American Academy of Arts & Sciences each year elects members based on their contributions to scholarship, the arts, education, business, or public affairs. In reality, the Academy tends to be a bit “chummy”—schools already “rich” with members get “richer,” not always on the merits—though the sins tend to be of omission rather than inclusion.  (See this earlier post. Ironically, the earlier prejudice against Legal Realists has not carried over to Critical Legal Studies faculty.)  Faculty also tend to be elected later in their careers (though, on average, female faculty are elected at younger ages than male faculty in the last generation) and untenured faculty are never elected. 

 

With those caveats in mind, here are the ten law schools with the highest percentage of faculty elected to one of the scholarly sections of the American Academy of Arts & Sciences (excluding untenured faculty from the count for purposes of calculating the percentage). As you will see from the lists, below, total membership drops off rather quickly.  For purposes of this study, “faculty” means faculty who are wholly devoted to teaching and scholarship, even if they do so at more than one school, but only if they hold tenure in the Law School.  (Lists aim to be current for faculty affiliations come fall 2017.)  These criteria have the effect of excluding distinguished judges who still do some teaching (e.g., Frank Easterbrook, Richard Posner, and Diane Wood at Chicago, or Guido Calabresi at Yale), as well as law faculty elected in non-scholarly sections of the American Academy, like educational administration (e.g., John Sexton at NYU or Mark Yudof at Berkeley [though he is now emeritus]). 

Rank

School

Percentage of Senior Faculty Elected to AAAS

Percent of Elected Faculty Over 70 in 2017

1

Yale Law School

46%

29%

2

Harvard Law School

30%

31%

 

University of Chicago Law School

30%

33%

4

New York University School of Law

23%

32%

 

Columbia Law School

23%

71%

6

Stanford Law School

18%

22%

7

University of California, Berkeley School of Law

12%

33%

8

University of Michigan Law School

11%

80%

 

University of Virginia School of Law

11%

57%

10

Duke University School of Law

  8%

0%

 

Runners-up for the top ten

 

 

 

Georgetown University Law Center

  6%

33%

 

Northwestern University Pritzker School of Law

  6%

0%

 

University of Pennsylvania Law School

  5%

0%

 

Below is a list of the non-emeritus teaching faculty from each school ranked above who are elected to the Law Section of the American Academy of Arts & Sciences. Faculty 70 or older (in the year 2017) are marked with an *.  Those marked with an # were elected in a scholarly field other than Law.

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August 14, 2017 in Faculty News | Permalink

Thursday, August 3, 2017

Bad behavior by the ABA Legal Education Council

Jerry Organ (St. Thomas) has the details.

UPDATE:  At least one of the changes--namely, to stop stigmatizing law-school funded positions--probably makes sense.  Here are comments that were forwarded to me that make the case aptly:

The goal of employment reporting is to provide accurate information, including to prospective students and the general public.   All who are employed by the ABA’s definition (full-time at a salary of at least $40,000) should be counted as employed, regardless of the source of funding.   To not count graduates on school-funded fellowships as employed (or to treat them differently) presents an inaccurate picture of a law school’s actual employment numbers.   I, of course, know that there was a time when some law schools tried to game the rankings by employing students at a very low salary.  But the ABA changed its definition to address this by requiring a salary of at least $40,000, which is approximately market rate for many public service jobs.  In light of this change in definition, it made total sense for the ABA to revise its reporting form as it did to treat all employment that meets its definition the same regardless of the source of funding.  Graduates who are working full-time as public defenders, as legal service lawyers, in non-profits, and for government agencies should be treated the same as those in private firms, regardless of how their salary is being paid. 

The ABA long has professed an important public service mission, including to help close the justice gap by helping to ensure representation for those who otherwise cannot afford it.   In light of this, it was completely appropriate and necessary for the ABA to change its reporting form as it did.  Treating school-funded positions differently penalizes schools that provide fellowships to students to launch their careers in public service and to help provide representation for those who most need it.  The reality is that school-funded fellowships often are essential for graduates who want to begin a career in public service.  My experience is that these fellowships work exactly as hoped with most of these graduates getting permanent offers at their organization or similar ones.  To pick a single example, Gideon’s Promise is a wonderful program where the law school provides a fellowship for one year for a graduate to work in a public defender office and then is guaranteed a job for the next two years in that office.  I would like to see the ABA encourage law schools to fund such positions, but at the very least the reporting should not penalize law schools that do so or create a disincentive for such funding.  

August 3, 2017 in Legal Profession, Of Academic Interest, Professional Advice | Permalink

Monday, July 31, 2017

Focus group of California lawyers defends tight restrictions on entry into the legal profession (Michael Simkovic)

California is an extreme outlier in the extent to which it restricts entry into the legal profession compared to other U.S. jurisdictions.  Two examples of this include an unusually high minimum cut score on the bar exam and a refusal without exception to permit experienced licensed attorneys from other jurisdictions to be admitted without re-examination.

California lawyers are relatively highly paid, and relatively few in number considering the size of the workforce in California.  Restrictions on entry into the profession may help maintain this status quo.  There are serious questions about whether this protects consumers, or is economic protectionism.  Economic protectionism could benefit California lawyers, but it would likely also harm consumers of legal services by making legal services less available, more expensive and perhaps lower in quality because of reduced competition.  Protectionism would also reduce economic opportunity for those denied the option of practicing law in California, much as immigration restrictions deny economic opportunity to those excluded from high-income countries.

The Supreme Court of California, concerned about the anti-trust implications of a licensed profession establishing criteria for entry, instructed the California State Bar to prepare recommendations on revising the California bar cut score.

Stephen Diamond reports that the California State Bar recommended that its bar examination should either stay the same or be made even harder.  

The California Bar arrived at this conclusion by asking a panel of California lawyers how hard the bar exam should be.  To be more specific, panelists read essays, categorized them into good, medium and bad piles, and, with the assistance of a psychologist who specializes in standardized testing, used this categorization to back-out an extremely high recommended bar passage score.  

Finding that people with high multiple choice scores also tend to write better essays is about as surprising as finding that cars that Consumer Reports rates highly are also often highly rated by J.D. Power.  It's also about as relevant to the policy decision facing the California Supreme Court about minimum competence to practice law.

The relevant question for restricting entry into the legal profession is not whether good (and presumably expensive) lawyers are better than mediocre (and presumably more affordable) lawyers.  Rather, the relevant question is when consumers should be able to decide for themselves whether to spend more for higher quality services or to save money and accept services of lower quality.  Most people will agree that a new Lexus is likely a better, more reliable and safer car than a similar-sized used Toyota.  But this difference in quality does not mean that the government should banish used Toyotas from the roads and permit to drive only those who are willing and able to buy a new Lexus. 

Is there evidence that a bar examinee who would be permitted to practice law in Washington D.C. or New York or Boston or Chicago, but not in California, would routinely make such a mess of clients' affairs that California clients should not even have the option to hire such a lawyer?

Is there evidence that consumers of legal services cannot tell the difference between a good lawyer and a dangerously bad one?  

If these problems exist, could they be addressed by simply requiring lawyers to disclose information to prospective clients that would enable those clients to judge lawyer quality for themselves?  

The California Bar has not yet seriously addressed these questions in arriving at its recommendations.

The California Bar also reported that other states have sometimes recommended increases or decreases to their own bar examination cut score.  But these states are almost all starting with much lower bar cut scores than California's baseline.  It appears that few if any other states recommended bar examination cut scores as high as California's.

July 31, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Science, Weblogs | Permalink