Law Porn and Spending the Money of Others
posted by Jeffrey Harrison
When a public law school distributes law porn, I assume the logic goes like this. Advertising leads to a better ranking that leads to more revenue that leads to a better experience for the students that leads to a higher payoff on the public investment made by the state. Think of how tenuous the connections are. Has any school moved up by virtue of better advertising or lost ground due to its absence? Has the movement of a slot or two increased donations? Have those donations been put to good use in order to increase the return to the public investment in legal education – whatever that is? I challenge any public school dean to prove that he or she has made an effort to track through this in even a semi rigorous way. Of course, in a rational and non shirking world, he or she would have before pissing away the money. The problem is that public law school deans and their faculties get to spend the money of others. Thus, it is doubtful they go through the calculations that they would go through with their own money. And it often means spending the money of others to preserve their own positions and status whether or not the stakeholders in the law school are better off. Of course, the spending the money of others problem extends way beyond the law porn. I wonder how many of these free spenders when it comes to the money of others then turn around and buy a car only after consulting Consumer Reports, make sure no frequent flier mile goes unused, select their credits cards on the basis of the best rebate, and check several places before buying anything that costs over $100.
October 23, 2007 at 12:47 pm
Posted in: Uncategorized
Print This Post
Responses (7)
david hoffman - October 23, 2007 at 1:37 pm
Jeff: you pose hard empirical questions (“Has any school moved up by virtue of better advertising or lost ground due to its absence? Has the movement of a slot or two increased donations?”) but at least to me seem to assume the conclusion that this is money badly spent without much proof one way or another. Since most of the relevant players (public and private) are in this game, isn’t the onus on you to demonstrate why the behavior is an agency cost, rather than a good, reputation-maximizing, strategy? Or to put it another way, what evidence do you have that law deans and associate deans are personally benefited by marketing?
Jeff - October 23, 2007 at 2:40 pm
Thanks for asking. My view is that deans and administrators have a fiduciary duty to spend the money in a way that is most beneficial to law school stakeholders. And, I presume that, if they take that duty seriously, they already have in their possession proof of the rationality of these expenditures. Since they have the duty and are the lowest cost providers of the relevant information, I do not see any logic that would suggest the onus should be transferred to those whose money they are spending. If they cannot produce that evidence, I believe my point is already made that they do not take that obligation seriously.
I cannot say much about associate deans — I am not sure they benefit more than simply keeping their jobs as long as the dean is not fired.
As for deans whether they are better off — as you asked — or whether they think they are better off are two different questions. I think you mean to ask the second question because one hopes that some of the advertising would actually be off-putting and make the dean look foolish.
Beyond that,I believe they benefit personally by the rank of the School and, thus the advertising, whether or not the higher ranking or the advertising actually improve the quality the teaching, research and service at that school. I have heard of but do not know for a fact that some deans get a cut of the funds raised. Beyond that there is evidence of deans losing jobs or having their jobs in jeopardy as a result of a slip in the rankings. More generally, there is way too much supporting logic, psychology, and direct evidence to discuss other than in a short essay. Your question really asks whether I can prove that law school deans act differently than other people in similar situations that have been examined. The closest analogy is to politicians — a job held by pleasing a critical mass of people. What we know from the literature is that a critical element in their utility functions to to be reelected. For every dean I have observed this translate to “dean so as to dean another day.” I know of nothing to suggest that deans are any more principled than others in jobs that could be lost of enough if the right people are unhappy. Aside from the poltical nature of the position, in many (most?) cases, a dean occupies the best position that he or she can get. What I mean by this is that they are often not highly productive scholars and could not earn a comparable salary or be on the faculty at a comparable school as a scholar. They have, more or less, selected the administrative path and going back to a non administrative path may mean being over placed as a scholar and accepting a lower salary. I have yet to see a dean willing to risk that over a matter of principle although I am sure some have. To make a long story a little shorter, unless you have evidence that slipping in the rankings makes a dean more mobile and more likely to be appreciated by the alums, students, university administration and faculty, I will go with what the social science literature tells us.
Response to Jeff - October 23, 2007 at 4:56 pm
I am intrigued by Jeff’s suggestion that some deans get a cut of funds raised. Does anyone else know if that is actually the case or have any examples I could use in salary negotiations?
Brett McDonnell - October 25, 2007 at 11:02 am
The original post suggests the agency problem is worse in public law schools. Is Jeff or anyone else aware of any evidence this is so? If one assumes that public school deans are indeed less constrained in their ability to misbehave, this provides a possible way of testing whether law porn is a type of agency cost (although there is unfortunately a conflating possibility that private school deans may misbehave just as much as public school deans).
Jeff’s reply to David seems to undercut much of his original post. Jeff suggests several reasons why deans may have a personal stake in law porn. All of his suggested mechanisms assume that deans have a personal stake in the school’s rankings–but then, that matters only if the law porn does indeed affect rankings, which the initial post questions. Getting a cut of the funds raised suggests further that ranking affects fundraising, another link the original post questions. Indeed, although like “Response to Jeff” I have never heard of a dean getting a cut of the funds raised, analogizing with the corporate law world (my field), that would actually seem like a rather standard way of giving positive incentives to someone subject to potential agency temptations.
Jeff - October 25, 2007 at 12:56 pm
Thanks for the comment. Obviously I do not know if there is a difference between public and private law school deans. I am more concerned with public law schools deans because the money they spend is not just the money of others but money “taken” from others as opposed to money voluntarily given up through private school tuition.
I too question whether the advertising affects ranking but whether it does or not is not as relevant as the assumptions law school deans make in sending out the law porn. But it is more subtle, I think, than suggesed by Brett. A private law school dean has the luxury of not trying to figure that out. He or she is, after all, spending the money of others and need not take the risk that advertising does not affect rankings. Again, I think there is a fidiciary duty of deans to determine this.
Finally, I do not oppose letting deans have a cut but it should be a cut of the profitability of fund raising efforts in order to create a sensitivity to whether advertising actually directly or indirectly generates income.
Dave Hoffman - October 25, 2007 at 11:27 pm
Jeff – so I hope you won’t mind if I press you a bit more, because I’m now confused.
The claim (originally) I thought was related to agency costs – the hypothetical law deans were looking “preserve their own positions and status whether or not the stakeholders in the law school are better off.” But (and correct me of I’m wrong!) I think you are now saying something quite different: law marketing might work, it might not, but it isn’t a good use of money because the deans can’t prove that it is money well-spent in a fiduciary sense. Private school deans aren’t subject to this restriction because they are not spending taxpayer dollars. (Or, to put it more baldly, they have money to throw around, so mistakes are permitted.)
As described, I’m not persuaded by the argument. Law schools spend money *lots* of stuff that they can’t prove will help stakeholders. Like teaching. Does teaching help students get jobs? I’d like to think so, but the fact that there is no relationship between bar courses and bar passage doesn’t seem like a helpful fact. Or, like having tenure. Or, like building a nice new moot court room. Or like funding a journal. Or paying for alumni fundraising receptions. Or subsidizing clerkships through free mailings. Are these decisions to be evaluated on a fiduciary basis, with no deference at all to the managers’ judgments? Some decisions are good. Others are bad. Over time, deans that make foolish resource allocations will be pushed out: this explains the low mean tenure for managers of law schools. But what is gained by thinking about this as a fiduciary problem? I think you have now walked a little away from the claim that Deans are personally benefited by marketing, as your most recent comment suggests that they benefit to the extent that the school does.
In any event, I don’t think that the right question is whether doing marketing helps academic reputation. Haven’t Bill Henderson and others demonstrated that the reputation marketplace is now too competitive for such marginal strategies to matter much? The relevant question is whether NOT doing marketing hurts reputation. And, as I wrote in my original comment, the fact that most deans now market heavily tells you something about whether each individual choice was the right decision.
Jeff - October 26, 2007 at 10:28 am
Who says you have to be consistent to be a blogger? In fact, I thought the rule was the opposite.
In any case let me take a crack at it. First I am less worried about public schools deans because — rightly or wrongly — I think there is some chance of accountability. And, think of whose money they are spending — usually from the the relatively affluent or from students who take out loans to buy a brand names. I am not sure those deans have money to throw around but at least it’s not the money of the poor and middle class.
I think it is both an agency issue and an “effective of marketing issue.” We do not know whether the spending makes a difference. If it does, it also accrues to the benefit of the dean personally. We do not know that either. But, if you are a dean and relatively unaccountable, the inclination is to spend the money. The downside risk personally is 0, the upside is positive. On the other hand, for shareholders the downside risk is definitely negative. As long as this inconsistency exists the shirking will occur in terms of making subobimal investments in advertising.
Please don’t misunderstand me to be saying there are not other completely indefensible expenditures. At my School we have a $20 million building that is run at about 50% capacity or less. We pay to educate students in Poland about American law without any know benefit to Florida’s taxpayers. The waste goes on and on, not just here but I suspect at every other law school that is run for the benefit of the faculty but not the shareholders.
And don’t even get me started on decanal shirking beyond law porn. I have only seen deans who view themselves as working for the faculty. Why, because the faculty ultimately hire and fire. The stakeholders are a second tier concern.
Leave a Reply