Counter Offers and Prospect Theory

One of the things you hear in law teaching is how salary increases are the result of counter offers. A faculty member gets an offer from another school and then asks her dean to match or beat it or she will leave. (I am not sure the dean's response is really a "counter offer" unless it's viewed as a response to an offer made by the the threatening faculty but that is for contracts teachers to figure out.)

Before getting into the main point, I think it is important to note that the number of offers faculty talk about having exceeds the number they actual have and this exceeds the number they would actually accept. In short, there is a bit of gaming. [A second point that is unrelated: Hey UT Law School, I need a loan.]

Most of the time when I hear of counter offers I think about prospect theory -- what is this obsession deans have with keeping people from leaving. So often their efforts are misguided. When it comes to faculty there are good loses and very few good keeps that are also controllable.

Offers from other schools fall into three categories; Ones the Dean cannot possibly keep the professor from taking, those that the person would not take even if the dean did nothing, and those in which the dean's actions may make a difference.

At my school we have had two people go to much better schools. The deans involved had no chance but foolishly acted like they did. Foolish not just because they had no chance but because these were good losses. It was a feather in our cap to have them move on and, perhaps, less of a feather if they had stayed becuase,alas, they would still be at UF. Similarly, when the professor is going "back home" or to a highly preferable geographic or life style setting, forget about it. Let them go.

When the offer is from a school down in the pecking order and the professor shows up to discuss it with the dean, it's a "tell" -- they have mixed feelings and it may just be posturing. They may or may not go and the dean may make a difference but should seriously consider not budging. Admittedly, this is related to my view that virtually all faculty at schools from 25 on down are fungible in that no students or alums and not many faculty will even notice they are gone. Still, just how many students is the person teaching? How flexible has he been? Does he pimp articles of others by badgering the law review? Does he work for the good of the whole or just for himself? This could well be another good loss. Plus there are few ways to undermine whatever morale there is than by giving a huge raise simply because a lesser school will pay him more money. I do not follow that logic but many deans rely only on short term or myopic logic.

Somewhere between these two good losses there are those a dean should try to avoid and he could make a difference. One reason to keep someone is simply to avoid the transaction costs of replacing him. If the potential increase in productivity from a replacement is low or negative and the money saved in transactions costs relatively high, it makes sense to try to hang onto the person up to a point. That point depends on the salary for the replacement.

My perception which is admittedly mostly anecdotal, is that deans have an irrational aversion to letting people go. Unless the person is really awful I've seen them stretch to keep them even when we would not hired them today as a lateral. I've even seen them cave into threats to leave and efforts to leave that did not pan out.

Ours is an odd profession. I remember being on the way to my first teaching job and this thought occurred: "I know a fair amount of economics [not as much as I thought I did] but I did not take any courses on teaching." A similar thought occurs to me when I look back at over 30 years of the decision making of administrators. "Most of these deans were law teachers and scholars and many of them not that good. Now they are in management. Have they taken any courses on management"

A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduates’ Economic Viability

Jim Chen, A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduates’ Economic Viability, 38 Wm. Mitchell L. Rev. (forthcoming 2012):

This article evaluates the economic viability of a student’s decision to borrow money in order to attend law school. For individuals, firms, and entire nations, the ratio of debt to income serves as a measure of economic stability. The ease with which a student can carry and retire educational debt after graduation may be the simplest measure of educational return on investment.

Mortgage lenders evaluate prospective borrowers' debt-to-income ratios. The spread between the front-end and back-end ratios in mortgage lending provides a basis for extrapolating the maximum amount of educational debt that a student should incur. Any student whose debt service exceeds the maximum permissible spread between mortgage lenders' front-end and back-end ratios will not be able to buy a house on credit.

These measures of affordability suggest that the maximum educational back-end ratio (EBER) should fall in a range between 8 and 12 percent of monthly gross income. Four percent would be even better. Other metrics of economic viability in servicing educational debt suggest that the ratio of total educational debt to annual income (EDAI) should range from an ideal 0.5 to a marginal 1.5.

EBER and EDAI are mathematically related ways of measuring the same thing: a student's ability to discharge educational debt through enhanced earnings. This article offers guidance on the use of these debt-to-income ratios to assess the economic viability of students who borrow money in order to attend law school.

To offer good financial viability, defined as a ratio of education debt to annual income no greater than 0.5, post-law school salary must exceed annual tuition by a factor of 6 to 1. Adequate financial viability is realized when annual salary matches or exceeds three years of law school tuition. A marginal, arguably minimally acceptable level of financial viability requires a salary that is equal to two years’ tuition. The following table compares some tuition benchmarks with the salary needed to ensure the good, adequate, and marginal levels of financial viability identified in this article:

Tuition	Salary needed for good viability	Salary needed for adequate viability	Salary needed for marginal viability
$16,000	$96,000	$48,000	$32,000
$32,000	$192,000	$96,000	$64,000
$48,000	$288,000	$144,000	$96,000

Available for download on SSRN at http://ssrn.com/abstract=1967266. Highlighted by Paul Caron on Tax Law Prof Blog, by Karen Sloan in the National Law Journal, by Sam Favate on the Wall Street Journal's Law Blog, by Debra Cassens Weiss in the ABA Journal, and by the Ed Clinton Law Firm Blog. Paul Caron has kindly written a follow-up post.

David Segal's critiques of legal education and the academy's reaction

David Segal of the New York Times has spent the better part of 2011 skewering American legal education. Academic reaction, though never favorable, reached a nadir when Segal assailed legal scholarship and the process for hiring law professors. This post is intended primarily as a way of documenting the Segal critique and some (though by no means all) of the academy's reaction to it.

Segal's articles:

1. The economic irrationality of the decision to attend law school
2. Allegedly deceptive practices in the awarding of law school scholarships
3. The economics of law school admissions
4. How the curricular priorities and hiring practices of law schools depart from legal employers' expectations
5. A Times "Room for Debate" forum, The Case Against Law School
6. A Times staff editorial, undoubtedly inspired by Segal's series, urging reform of legal education

Herewith a few responses to the Segal series and to the larger issues triggering this discussion:

1. Paul Caron's compilation of academic responses to David Segal
2. Paul Caron, Are Law Review Articles Worth $575 Million ($4,000 Per Student) Per Year?
3. Sarah Krakoff, David Segal's Paper Chase and Some Musings on Legal Education
4. Dan Farber, The Unexamined Life of the American Law School
5. Bill Henderson, The Hard Business Problems Facing U.S. Law Faculty
6. Michael Froomkin, Links to Postings on l'Affaire Segal
7. Daniel Martin Katz, Thoughts on the State of American Legal Education — The New York Times Editorial Edition
8. John Steele, 1.5 Cheers for Segal's Article
9. Matt Bodie, A Recipe for Trashing Legal Scholarship
10. Orin Kerr, What the NYT Article on Law Schools Gets Right
11. Frank Pasquale, New York Times Financial Advice: Be an Unpaid Intern Through Your 20s (Then Work till You’re 100)
12. Brian Leiter, Another Hatchet Job on Law Schools
13. Scott Greenfield, Those Who Can't, Teach Law
14. Peter Tillers, Sequelae to Law School and Law Practice, and A Bit of Progress Immersed in Murk
15. Bruce Ackerman, The Law School Experience (letter to the editor of the New York Times
16. Stanley Fish, Teaching Law

Practical advice for new law professors: Grading on a curve

Around this time of year, American law schools begin issuing offers for entry-level, tenure-track teaching positions. The typical new recruit has more experience with scholarship than with teaching, grading, or lesson-planning. MoneyLaw will offer some practical advice to some of these new law professors. I will start by explaining standard scoring, more colloquially known as grading on a curve.

Why? At a minimum, this forum takes some pleasure in indulging the holiday spirit of giving and sharing. More seriously, I am acutely aware that many American lawyers — and many of their teachers — tend to be innumerate. With regrettable frequency over the course of nearly two decades in the legal academy, I have heard tenured law professors assert that "there is no mechanical way to convert raw scores to scaled grades." The truth is much simpler: There is a set of practical problems that mathematics can solve. Standard scoring is one of them. Instead of being content to post the occasional exercise in refreshing my own quantitative skills, I will try to share a few things with newcomers to the academy — ideally, things not discussed at the law school hiring combine or during faculty orientation.

Most (though not all) American law schools enforce some form of constraint on the grades that their professors can assign. Wikipedia has collected a list of grade point average curves at American law schools. The subject arises with regularity in prelaw and law student blogs, and with good reason. Some law schools condition their students' retention of financial aid on the maintenance of a minimum GPA. If you know the mathematics of standard scoring, you can predict with a high degree of accuracy the probability of maintaining the threshold GPA throughout all three years of law school. Students and professors alike therefore have a stake in understanding the mathematics of grading.

Read the rest of this post . . . .In my experience, law professors who react instinctively, and perhaps even inanely, against grading on a curve do so for either or both of two reasons. One is simple ignorance, a byproduct of the innumeracy that might have prompted them to study law instead of a more quantitatively demanding discipline. The other is an inborn distrust of authority. That distrust often extends to school-wide rules on mean GPAs or grade distributions, as though divining the precise line between a C+ and a B- represented a central plank of academic freedom. The truth is that standard scoring leaves ample discretion for all instructors to evaluate their students and to distribute individual grades. The only constraint is that the mean grade in each course should fall within some range. (How tight that range should be, like almost every other subject imaginable, is the subject of some dispute among law professors.). Moreover, the exercise of "grading on a curve" is both mathematically elegant and logistically simple. You have no excuse for not grading on a curve.

Absent extraordinary circumstances, grades in any class will follow a normal, Gaussian distribution. Happily, grading a class means measuring an entire population. We can therefore use standardization techniques.

I will further assume, for clarity's sake, a straightforward map of points corresponding to letter grades. In increments of 0.333, progress from 0.000 for an F to 4.333 for an A+. In other words, a C+ is worth 2.333. A B- is worth 2.667. Many schools use no more than one significant digit after the decimal point, which leads to mathematical anomalies arising from crude rounding. At 2.3, a C+ is 0.3 points removed from a C, but 0.4 points removed from a B-.

Finally, I assume that the professor consistently adheres to some way, any way of assigning raw scores. Giving points for each valid argument and assigning percentages for each task accomplished represent merely two among many plausible methodologies. The real trick lies in converting these raw scores to standard scores.

Begin by calculating the z-score. The z-score, or simply z, may be computed according to this formula:

z = (x – μ) / σ



Where:

x  =  Raw score to be standardized
μ  =  Mean raw score
σ  =  Standard deviation

In practice, most values of z will be greater than -2 and less than 2. Absolute values of z exceeding 2 correspond to true outliers, and those students are either ironclad locks for the book award, or good candidates for receiving an F. In my own career, I have issued F's very sparingly because the D and D- minus grades carry roughly the same message without automatically depriving a student of academic credit. Generally speaking, if |z| > 2, I counsel removing the grade in question from the curving algorithm I am about to describe and assigning it "manually," after careful comparison to the other student performances that are closest to it.

If the target class mean is a C+, or 2.333, and the instructor is willing to stretch the distribution of grades from a dummy grade of F+ (0.333, or 2.333 - 2, as the midpoint between an F at 0.000 and a D- at 0.667), to A+ (4.333, or 2.333 + 2), then each student's grade can be very simply calculated:

g = 2.333 + z

This example works because it a special case, with very easy figures, of the more general formula for standardizing a set of normally distributed raw scores:

g = K + z * (M – K) / 2

Where:

g  =  Scaled grade
z  =  The z-score (standardized score) as defined above
K  =  Target class mean
M  =  Maximum grade point value, typically 4.333 in a system with an A+

The denominator in the final fraction, or 2, reflects the maximum absolute value of z that we realistically expect to encounter in this population. It would not be inappropriate to adjust this denominator slightly upward to catch not just most but all scores we expect to fall between the first and 99th percentiles. Nor is it inappropriate for an instructor to give close personal attention to exams whose z-scores approach -2. In the absence of a true F+ grade, a scaled grade of 0.333 invites discretion to choose between an F and a D- (or a D in universities that have abolished the grade of D-).

Substituting 2.333 for K and 4.333 for M yields the simpler formula above.

Recall my earlier observation that most (though not all) z-score values will fall between -2 and 2. In other words, -2 ≤ z ≤ 2 in most instances. If you divide the z-score range from -2 to 2 into equal bands of 0.5, and you envision all z-scores below -2 and all z-scores above 2 as bands of their own, you will find 10 zones corresponding very nicely to the 10 passing grades from D+ to A+, inclusive:

Minimum z-score	Letter grade
<-2.0	D+ (or lower, in truly extreme cases)
-2.0	C-
-1.5	C
-1.0	C+
-0.5	B-
0.0	B
+0.5	B+
+1.0	A-
+1.5	A
+2.0	A+

The closely related system of stanines (Standard Nines) also works very well with the grading scale I have just described. The United States military historically valued stanines as a way of translating the z-scores of standard scoring, which range across either side of zero, to a scale of single-digit integers from 1 to 9 inclusive. To use stanines, divide a Gaussian distribution into nine bands, centered on the fifth band. The second through eighth bands each traverse 0.35 standard deviations; the first and ninth stanine cover, respectively, the lowest and highest ends of the distribution. Assigning a B- (2.667) to the fifth stanine and moving one-third of a letter grade in each direction yields the following table of converted grades:

Stanine	Letter grade
1	D+ (or lower, in truly extreme cases)
2	C-
3	C
4	C+
5	B-
6	B
7	B+
8	A-
9	A (or A+, for truly outstanding performances)

As a final bonus, faithful readers of this forum will recognize that z-scores lie at the heart of the U.S. News rankings of law schools and other branches of American universities. Demystifying standard scoring in the classroom represents a modest but important first step toward demystifying one magazine's standard scores of competing classrooms.

The Skills Thing

Jim has provided an excerpt from Sunday's NYT front page article on Law Schools. The article make some good points on the topic of legal scholarship. On the other hand, the article's whining about preparing students to practice law made me consider getting off the "more skills" bandwagon.

I was struck by a collective law firm sense of entitlement. This sense of entitlement seems to equate the bottom line interests of small and large firms with what law schools should be doing. Public law schools already provide a huge human capital subsidy to private law firms. (I've never understood why this started other than to subsidize the class of people who had property to protect.) Now the firms have their hands out asking for more. Closely related is the tendency for some law schools now to offer classes on "law firm management." Exactly why a public school should teach a law student to operate his or her business and not the manager of a laundromat is not clear to me.

There is another problem with the "skills" thing. Most of the people I know who talk about skills and even teach one version or another have not practiced law, practiced a very short period of time or practiced it 20 years ago or more. In fact, a 45 year old with twenty years of recent experience typically falls to the bottom of lists of possible hires.

I am also not sure I know what the word "skills" means. My fear is that to the extent the desire for more skills is voiced by those in law teaching it may have a self-referential component. If you are into mediation, guess what skill might mean to you. Same for arbitration, collaborative law and so on. And I sense there is an ideological element here as well.

Maybe public law schools should eliminate skills altogether or offer them at an enhanced level of tuition. After all, these highly "skilled" graduates would save law firms so much money they almost certainly would offer higher salaries to graduates that would off set the extra tuition. Of course, it is just possible the firms prefer to stay on the dole.

Everything I needed to practice law, I didn't learn in law school

In his ongoing series of searing critiques of legal education, David Segal takes aim again at the excesses and shortcomings of American law schools. He describes this scene from "a crash course in legal training":

[T]he three people taking notes are not students. They are associates at a law firm called Drinker Biddle & Reath, hired to handle corporate transactions. And they have each spent three years and as much as $150,000 for a legal degree.

What they did not get, for all that time and money, was much practical training. Law schools have long emphasized the theoretical over the useful, with classes that are often overstuffed with antiquated distinctions, like the variety of property law in post-feudal England. Professors are rewarded for chin-stroking scholarship, like law review articles with titles like “A Future Foretold: Neo-Aristotelian Praise of Postmodern Legal Theory.”

Legal education and the heir of Slytherin

That was then. This is now.

In my own lifetime, fiction for young adults has moved from S.E. Hinton to J.K. Rowling. Gritty stories about rumbling gangsters at an Oklahoma high school have given way to soaring fantasies about dueling sorcerers at the Hogwarts School of Witchcraft and Wizardry. At heart, though, I still believe what John Steinbeck said in East of Eden: There is one story in the world, and only one. Whether the setting is Will Rogers High, Hogwarts, or the law school of your choosing, formal schooling often pits Socs against Greasers and Purebloods against Mudbloods. The narrative is one of epic, ceaseless competition between elites and outsiders.

If you've managed to miss one of the greatest cultural phenomena of the last generation, let me introduce you to the magical world of Harry Potter. The boy wizard finds himself locked in a life-and-death struggle against the irredeemably evil Lord Voldemort. In his own time as a student at Hogwarts, Voldemort revived an old grudge that the ancient wizard, Salazar Slytherin, held against those he felt unworthy to practice magic. As the self-anointed Heir of Slytherin, Voldemort sought to purge all Muggle-born witches and wizards from Hogwarts and the magical arts. Who are Muggles? We nonmagical folk are Muggles. Voldemort had no use for witches and wizards born of ordinary, nonmagical parents. In the mind of the Dark Lord, only those born to pure-blooded witches and wizards deserve to command the potions, incantations, and spells of his profession.

Read the rest of this post . . . .All of this prepares me to open one of the darkest chambers of secrets in law and legal education. Law schools and the country's largest law firms have long occupied — and jealously guarded — the most coveted corners in the American legal profession. Indeed, these institutions perpetuate each other's lock on power and prestige. Every city has its collection of "BigLaw" firms — highly leveraged partnerships performing a wide range of legal services on behalf of the corporate and institutional clients that control our society's greatest concentrations of wealth. BigLaw draws its talent from the most highly credentialed students emerging from our law schools. Without elite grades, no student stands a chance of scoring a BigLaw interview, let alone a BigLaw job.

At some schools, BigLaw does dig deeper in the talent pool. Of course, those schools are the prestigious ones with national reputations. Typically they're named for dead white men who conquered and paved North America, or else for big, wealthy states. At schools such as Harvard, Duke, or Vanderbilt, or Virginia, Michigan, or Berkeley, BigLaw historically has been willing to interview a broader spectrum of students. At schools that historically operated under a municipal charter and have dedicated themselves to the higher training and useful education of local youth, BigLaw has been decidedly pickier.

This is not an altogether flattering portrayal. I admit as much. In fairness, I will say this: My own corner of the profession, legal education, has been complicit in this elitist exercise. That is a severe understatement. Indeed, law schools collectively have elevated grades and rankings above all other considerations. Legal educators devised the elitist complex of grades, honors, law review credentials, and federal court clerkships on which BigLaw has built its entire model for evaluating talent. If anything, academia has doubled down on BigLaw's bet. We draw our own faculty ranks from an even more selective pool of candidates. BigLaw and American law schools have anointed their superstars on the basis of schools attended and grades attained when these lawyers and professors were students in their twenty-something years, as though ancient educational credentials represented the lone basis of membership in some sort of professional apostolic succession.

Excessive emphasis on pedigree over performance has pushed the legal profession to a point of reckoning. Hourly billing, at hundreds of dollars per hour and without regard to actual value delivered, is a barbarous relic that contemporary clients, sensitive to their own economic survival, have rightfully begun to reject. Law schools can no longer indulge the conventional assumption that they can focus entirely on training their students to "think like lawyers," without attention to concrete skills or the pragmatic nuances of actual practice. Every instance of mismatch between paper credentials and actual performance on the job signals incompleteness or even outright inaccuracy in the elite model of legal education and BigLaw recruitment. Every BigLaw hire that flames out after two unproductive years should prompt honest recognition of the limits of elite credentials. Honesty about the limits of the existing model of legal education should prompt all law schools to ensure their students a true return on their educational investment, to prepare all students not just to ace an exam or "book" a subject, but to be as fully prepared to serve clients and deliver results as a lawyer can be upon passing the bar exam.

This is not a jeremiad against legal education and elite law firms. All models of legal practice, in firms large and small, in government as in education and in philanthropy, deliver value to clients and to society at large. I believe wholeheartedly in the transformative power of legal education, motivated by a passion for teaching and informed by serious scholarship. For me to believe otherwise would force me to declare my own life an evil, bankrupt waste, and I emphatically believe that I have not lived in vain.

For good reason, jobs in BigLaw and the legal academy are very highly coveted. A BigLaw salary is one of the very few ways a new law school graduate can realize an immediate return on educational investment. Law professors earn very decent pay, with tenure, for intellectually stimulating work in an environment dedicated to educating youth and elevating society. If anything, though, the benefits of working in BigLaw or the legal academy affirmatively compound the heavy burden that its defenders must discharge. Those of us who care most about the legal profession and have gained the most from it owe a corresponding duty to take a hard look at the weaknesses of our shared calling. Whatever personal or professional inconvenience we may incur, those of us at the pinnacle of professional success must tell the truth.

How shall we make things better? I always recommend some combination of honesty and optimism. Speak the truth and point to hope. This message combines my own experience with insights from history and literature. The world in which S.E. Hinton came of age was one that locked the rival political ideologies of the Soviet bloc and the north Atlantic alliance in mortal combat. The world of Harry Potter is one that pits the virtuous Order of the Phoenix against Lord Voldemort's degenerate Death Eaters. Those stories, real and fantastic, teach us useful lessons. Extreme opponents often become agents of reconciliation. The greatest breakthrough between the Communist world and the West came when Richard Nixon, the consummate Cold Warrior, visited "Red" China. By contrast, those who prevail through conflict and confrontation often do so by virtue of some close connection to the enemy, perhaps even kinship. At the risk of spoiling J.K. Rowling's books and the movies inspired by them, I will tell you that Harry Potter ultimately defeats Voldemort on the strength of a mysterious connection that links the boy wizard to the Dark Lord's most treacherous powers. The intermediary who helps Harry harness those powers had himself been seduced in his youth by the Death Eaters. The power of the enemy, personally taken, holds the key to victory over that foe.

And so it must be that a critic of elite legal education, to be credible, must be one who has succeeded by its terms, both in school and in later professional life. With your indulgence, I'll make my argument very personal. In my twenties I enjoyed a double dose of privilege and prestige: Not only did I attend Harvard Law School alongside the future President of the United States; I also clerked at the Supreme Court of the United States. These experiences gave me the privilege of choosing between BigLaw and the legal academy. I spent many hours in my thirties divining some of the law's most intellectually challenging mysteries, from the use of macroeconomic indicators in utility regulation to the legal protection of biodiversity and functioning ecosystems as information platforms. All those things came to me, in large measure, because I turned in fantastic performances in torts, federal courts, and international business transactions. Those grades predicted intelligence of some relevance to the legal profession, and I worked my hardest to make good on the promise of my youth. But the task to which I have devoted my forties, that of managing a complex educational institution for the betterment of its students and the clients they will ultimately serve, is one that transcends my grades, my diplomas, my clerkships, and even the articles on my curriculum vitae. Everything I've done in life didn't get graded in law school. Grades were then. Life is now. As a firmly committed Muggle, I am no heir of Slytherin. Fate did bestow upon me a bundle of legal education's most elite experiences. And this is what I have learned since graduation: There is no value in prestige or credentials. There is only performance, and those who have the wisdom to prize it.

The Least Ethical?

In what my wife calls my not real world life I typically come into contact with attorneys, law professors, students, and expert witnesses. Within each group I observe a great range of ethical standards although the pressures are always downward. Nevertheless like four racehorses, I think of the groups as racing to the bottom. In terms of shameless lying, expert witnesses are still in the lead. Have you ever compared what some law professor experts write and then the positions they take for money? And then there is the sad story of Robert Lucas -- Nobel Prize winner -- getting clobbered for his expert opinions.

The latest Law School cheating news -- Illinois -- makes me reconsider the ranking. Is it possible law faculties (including deans) have overtaken expert witnesses? I'd be inclined to give Illinois a break since the differences are small. If you are going to lie, why not go big time? On the other hand, just like getting the wrong change back in some foreign countries, the errors always seem to cut in one direction. These "mistakes" at the margin may affect the investment decisions of thousands of law students. Is there a remedy for them?

Still out there is the ethical question I asked about six weeks ago. One school lies. The other school spends thousands hiring its own students or recruiting transfer students or teaching new bar exam courses so it can "honestly" report its new numbers. But for the rankings, it would not have done any of this. Is redirecting resources in this way any worse than lying?

Just a perfect reflection

Guster, Fa Fa



As economic fortunes fall anew and fear runs rampant, legal education is experiencing another season of regret. Recent graduates and even some students have come to regret their decision to attend law school. They're hardly alone.



Regret is nothing more than fermented wisdom, and I am a very wise man. There are moments when I fervently wish I could take my own academic advice, dispensed at greatest length in The Death of the Regulatory Compact: Sunk costs are just that, sunk. Time moves in one direction. So should we.



In this spirit I offer my readership this musical interlude. Its essential message is a familiar one. For those who might prefer T.S. Eliot's formulation over Guster's, I'll happily oblige:

What might have been and what has been

Point to one end, which is always present.

Footfalls echo in the memory

Down the passage which we did not take

Towards the door we never opened

Into the rose-garden.

Remember always that the detail of the pattern is movement.

Is Villanova Evil or Just Efficient?

This story has been bouncing around for months but, as so often happens, I am the last to know. As I understand it, Villanova, to put it bluntly, lied.



I am wondering just how bad that is. Compare an alternative. A School adopts new and expensive programs because it will help in the rankings game. But for the rankings these programs would not be adopted. It hires its own grads, introduces bar prep courses, admits fewer first year students, increases transfers, and calls everyone a professor. Now it accurately reports its new and more impressive numbers. Putting aside the possibility that the rankings may have induced the school to do the right thing for the wrong reasons, is the second school less corrupt than a false reporting school?



Maybe Villanova just got the result it wanted at a lower cost and with less waste.

Taken for a ride

AM Radio, Taken for a Ride

I can no longer ignore that, for a very large proportion of my students, law school has become something very much like a scam. . . . When people say 'law school is a scam,' what that really means, at the level of actual moral responsibility, is that law professors are scamming their students.

So laments the introductory post to Inside the Law School Scam, a confessional blog by an anonymous "tenured mid-career faculty member at a Tier One school." This fascinating contribution to the burgeoning online literature on the economics of legal education and law school graduates' job prospects is unique because it comes from the inside. In his critique of legal scholarship, this blogger, both tenured and anonymous, confesses that "students at the contemporary law school end up paying enormous amounts of money for something that they aren't getting, and in many cases wouldn't want even if it were being provided to them."



This is prose as potent as it is provocative. Inside the Law School Scam essentially argues that law schools and law professors are taking their students for a ride. I look forward to each installment of this anonymous blogger's saga.

Matasar criticizes the "inordinate scrutiny" given to law schools

In the first segment of a two-part interview responding to David Segal's critique of law school economics, Richard Matasar says that law schools receive "inordinate scrutiny."

The economics of law school admissions

It is now officially a muckraking crusade.

Three times this calendar year, David Segal of the New York Times has commanded the front page of the Sunday business section with an exposé of the business of law schools. First, he assailed the economic rationality of anyone electing to study law. Then came his attack on the use of deceptive scholarship awards to attract students and boost rankings. Now comes a more comprehensive broadside against the economics of law school admissions:

Legal diplomas have such allure that law schools have been able to jack up tuition four times faster than the soaring cost of college. And many law schools have added students to their incoming classes — a step that, for them, means almost pure profits — even during the worst recession in the legal profession’s history.

Meanwhile, David Leonhardt of the Times writes that the Great Recession refuses to ease into a renewed cycle of job growth because nothing has emerged to replace the economic model of consumer spending and easy debt that fueled the collapse in the first place.

The task of discerning the validity of these critiques and, if appropriate, applying the lessons learned to the project of reforming legal education is left as an exercise for the reader.

Which side are you on?

In academia, this old question of labor-management relations has an especially odd twist.

Stanley Fish recounts a recent dispute over the reorganization of Idaho State University from seven to five colleges:

The story is a familiar and dispiriting one: the administration is accused of imposing its will in the face of strong opposition from the faculty, and the faculty is accused by the administration of being obstructionist and standing in the way of needed reforms.

For whom do you work? In almost any other line of work, the answer is clear: A "jeweler or accountant or court clerk" works for the owner of the enterprise, or at least the government agency, that issues her instructions and pays her for services properly rendered. Academia, for good or for ill, operates under no comparable clarity.

I leave to Stanley Fish the task of describing all the details of the Idaho State controversy. The crucial question was whether Idaho State's president has "the authority to try" to reorganize his university and to "live or die by the results," or whether instead he must "receive the faculty’s permission before he exercises his administrative judgment, the judgment for which, one assumes, he was hired?"

The American Association of University Professors and other proponents of shared governance demand much more than consultation. Shared governance rests on the notion of academic expertise. Precisely "because academics are experts in their subjects and in the art of teaching," shared governance assigns to faculty members the responsibility to make "core academic decisions." The question, as Fish poses it, is whether "academic expertise extend[s] to the planning and construction of buildings, the projection of budgets, the intricacies of the legislative process, the presentation of the university to the general public, the interface with industry and the relationship between university organization and budgets?"

The AAUP's report on the Idaho State affair leaves no doubt of that organization's answer: “It is no coincidence that many who seek to reduce higher education to a form of narrowly conceived job training are also in the forefront of efforts to replace shared governance with a corporate style of management.” One presumes that even the most diehard members of the AAUP hope someday to retire on the strength of corporate management, if only at TIAA-CREF and the publicly traded companies whose securities populate TIAA-CREF's mutual funds. I'll leave the solution of that conundrum as an exercise for the reader. This much is clear, though. When it comes to labor-management disputes, in academia as in Harlan County, there are no neutrals there.

Fidelity in transition

» With apologies and an admiring nod to Lawrence Lessig, Fidelity in Translation, 71 Tex. L. Rev. 1165 (1993). «

Bureaucracy is the bane of modern life, in all of its organizational manifestations. From this reality academia offer no escape. But there are lessons to be learned from things that universities, governments, and for-profit businesses have in common.

Academia, government, and private enterprise all offer variations on the theme of leadership and turnover. Because of their unique susceptibility to transitional disruption, startup companies and family-owned enterprises arguably have the most to gain from business succession planning. At the opposite end of the scale, Fortune 500 companies and the federal government also take care to anticipate and choreograph internal changes in personnel.

Academic institutions devote considerable energy (and with justification) making their best-laid plans in the event top-level managers resign, retire, or die. As I have discovered in my scholarly work on disaster law, preparing for these obvious contingencies is tantamount to the Maginot Line of academic succession planning. Preparing for an associate dean's departure rarely draws the same degree of advance planning, though quite arguably it should.

The job of the associate dean, after all, requires more detailed operational knowledge of an institution. This is especially true of the office of academic affairs, the function most often assigned to an associate dean. The associate dean is to the dean as the university provost is to the president. Hardly anyone aspires to the office; it is a bureaucratic soul that dreams someday of being an associate dean or a provost. The job is largely thankless, and the usual forms of compensation — a modest emolument, coupled with a slightly lighter teaching schedule — are barely commensurate, if at all, to the extra work.

To top it off, the pool of potential candidates is typically smaller. Decanal pools, in practice, can be quite deep. By contrast, associate deans are almost always drawn from the ranks of incumbent faculty. Though I have no empirical evidence to back this assumption, I do believe that turnover among associate deans exceeds that of deans.

In all settings, from business to academia and other nonprofit environments, best managerial practices demand anticipating the dull, the boring, the thoroughly unsexy. Taking care, more often than not, means thinking about ordinary places, ordinary things, and ordinary events — and then having the discipline to follow through.

Tenure in disfavor among college presidents

A majority of college and university presidents surveyed by the Pew Research Center and the Chronicle of Higher Education effectively oppose tenure:

Less than a quarter of those surveyed said they would prefer full-time, tenured professors, while a whopping 69 percent reported to prefer that a majority — if not the entirety — of faculty work under annual or long-term contracts. . . .

Mark C. Taylor calculates in his book Crisis on Campus that someone who serves as an associate professor with tenure for five years and then becomes a full professor for 30 years sets a private university back $12.2 million and costs a public university $10 million during the same period of time. . . .

At public four-year institutions, 52 percent of presidents with previous faculty background favored tenure, while just 37 percent without faculty experience did. Among presidents of private four-year institutions, 35 percent who had formerly served as faculty favored tenure, compared with 20 percent of those without faculty experience.

Is there academic freedom in this controversy?

Stanley Fish warrants frequent mention on MoneyLaw for his wisdom on academic freedom. In a recent New York Times blog post, Fish helps us filter legitimate claims of academic freedom from a noisy backdrop in which that principle is too readily invoked and thereby too easily cheapened. Fish cites more comprehensive works — especially Matthew W. Finkin & Robert C. Post, For the Common Good: Principles of American Academic Freedom (2009) and Rodney A. Smolla, The Constitution Goes to College: Five Constitutional Ideas That Have Shaped the American University (2011) — but his own summary is worth reproducing here:

[A]cademic freedom is a useful notion only if it is narrowly defined. More things escape its ambit than fall within it. . . .

No one owns a course; no course has a right to be given; and no subject has a claim on university time and money. [Too many commentators] cry[] academic freedom whenever a university does something they don’t like, and by doing so, they cheapen the concept. . . .

[True academic] sin is to insist that a certain idea be discussed whether or not it has made its academic way because a few disappointed outsiders are willing to spend big bucks to get it inside. If, in the judgment of an instructor, “Atlas Shrugged” will contribute to a student’s understanding of a course’s subject, there is every reason to assign it. But if assigning “Atlas Shrugged” is the price for the receiving of monies and the university pays that price, it has indeed sold its soul. . . .

[A]cademic freedom issues legitimately arise . . . . when the university either allows its professors to appropriate the classroom for non-academic purposes . . . or allows itself to become the wholly owned subsidiary of another enterprise . . . .

U.S. Supreme Court Prediction Market

Recently posted to SSRN: FantasySCOTUS: Crowdsourcing a Prediction Market for the Supreme Court, a draft paper by Josh Blackman, Adam Aft, & Corey Carpenter assessing the accuracy of the Harlan Institute's U.S. Supreme Court prediction market, FantasySCOTUS.org. The paper compares and contrasts the accuracy of FantasySCOTUS, which relied on a "wisdom of the crowd" approach, with the Supreme Court Forecasting Project, which relied on a computer model of Supreme Court decision making. From the paper's abstract:

During the October 2009 Supreme Court term, the 5,000 members made over 11,000 predictions for all 81 cases decided. Based on this data, FantasySCOTUS accurately predicted a majority of the cases, and the top-ranked experts predicted over 75% of the cases correctly. With this combined knowledge, we can now have a method to determine with a degree of certainty how the Justices will decide cases before they do. . . . During the October 2002 Term, the [FantasySCOTUS] Project’s model predicted 75% of the cases correctly, which was more accurate than the [Supreme Court] Forecasting Project’s experts, who only predicted 59.1% of the cases correctly. The FantasySCOTUS experts predicted 64.7% of the cases correctly, surpassing the Forecasting Project’s Experts, though the difference was not statistically significant. The Gold, Silver, and Bronze medalists in FantasySCOTUS scored staggering accuracy rates of 80%, 75% and 72% respectively (an average of 75.7%). The FantasySCOTUS top three experts not only outperformed the Forecasting Project’s experts, but they also slightly outperformed the Project’s model - 75.7% compared with 75%.

You can download a copy of the draft paper here.

[Crossposted at Agoraphilia, Midas Oracle, and MoneyLaw.]

Pants Down Part 2

http://classbias.blogspot.com/2011/04/ncaa-and-law-schools.html

Pants Up

I am sincerely sorry if the last post on this blog somehow spelled the end of any contributions. To try and make up for it, I want to try to get those pants pulled back up. The problem is that it is probably only a wishful thinking pants up. One of the things that stood out in the US News and World Report rankings this year was the decline of the University of Missouri Law School. I have tried unsuccessfully to determine the exact factors causing this decline and the limited information I could find suggests they were mainly financial. Nevertheless, here's what I would like to believe: Their ranking fell because they refused to game the system AND in the aftermath they did not fire their dean. Plus, in the prisoner's delimma world of gaming the system, that school's risk taking will be followed by others. I do not know if that is true but, if so, a big Pants Up to them.

Pants Down

I guess I did not see it when it came out but now I have come across the Leiter ranking (or is an effort to allow others to rank) of the top 40 law schools. As I understand it, 331 respondents ranked 57 law school that are arguably in the top 40. The eventual ranking was then determined by taking each school and seeing how it did in head to head combat with each other school. The most wins gets you number 1 and so on. Yale is overall the winner and Harvard second.

Whether or not I have described the methodology exactly accurately, the most interesting part of the effort is the rankings of each respondent. Leiter picks on FSU a bit for its strategic voting. Rightfully so since FSU is ranked ahead of Yale on 35 ballots. Plus FSU has about 20 votes for the top law school in the land and most of the voters taking that view ranked all other schools as tied for last of 57. Remember, this gets FSU 20 x 56 wins in head to head competition. I can understand the FSU frustration. It is an excellent law school and overlooked but, sadly, their pants are down.

Plus, there are plenty of others with their pants around their ankles. Yale gets about 35 last place votes. In fact, Yale's high ranking is mostly the result last place votes (yes, worse of 57 schools) combining with many very high votes. It goes the other way too. A number of those voting for Yale as number one also rated every other school last. Think about it! You are a Yale grad and so worried about Yale's ranking, that you feel compelled to rank every other school as tied for worst. Harvard has a number of these as well. These voters, far more than FSUs, should look into therapy. There must be a limit to insecurity or a craving for status. Is it a sense of entitlement or are they just girlie men or women who did not get hugged enough? Well, here is a big internet hug so you can do your best not to create the same pathetic behavior in our own kids.

Even this way understates those with their butts hanging out. Miami gets a first place vote, also by someone ranking every other school last. So do Michigan, San Diego and others.

In fact, although I did not count, it appears that the most common ranking given was 57. How does that come about? It happens when someone votes the school he or she teaches at or the school he or she attended first and all other schools tied for last or 57th.

As I said, 331 people voted. I deeply appreciate those instances in which an obviously outside the top 15 school did not get a first place vote. I have no idea what percentage of those voting voted strategically. I did do this. I selected Boston College. I doubt any reasonable person thinks BC is the best or the worse law school of the 57 selected. Thus, I counted the number of last place or first place votes BC got as a rough and very very conservative estimate of the percentage of strategic voters. I get 79+ strategic votes out of 331. Twelve of them are from those who ranked FSU first.

Well, gotta go. I've got many hugs to deliver and my work is just beginning.

Class Participation: How and Why?

I have been rethinking my approach to class participation, and invite your suggestions about how to grade that aspect of student performance, if at all.

Last semester, in Property I, I based 10% of the students' grades on class participation. They won points for class participation in a variety of ways, including serving on review teams, filling out short ungraded quizzes, and signing an "on deck" sheet for Socratic questioning. Despite those many inputs, I still ended up with a very tight cluster of scores, making it difficult to generate a curve that satisfied Chapman's somewhat challenging specs. (My other class, a Law & Economics seminar, raised similar problems.)

I've tried in the past scoring class participation on a more subjective basis, marking the seating chart immediately after class to indicate which students has won class participation points for contributing to discussion of the assigned materials. Although no student ever challenged that system for fairness, it admits the claim all too easily; I prefer more objective measures of performance. Also, I found that scoring students during or after each class, based on some rough measure of "added to class discussion," invited pestering along the lines of, "Did you count my performance, today, Professor Bell? I didn't see you mark the sheet, and you confess to being absent-minded." Fie on that.

I could give up entirely on grading class participation. I don't recall my profs at Chicago keeping track of student participation, after all, unless perhaps for casual dissection in the faculty lounge, and they taught very well. Perhaps I should just stick to exams, and run the risk of teaching to students unprepared for class and unrepentant about their ignorance.

I promised my students that, before I decided how to assess class participation in Property II, I would seek informed advice. If you have some to share, I would welcome hearing it, in the comments below or privately. Thank you.