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Prawf Musings and Query on the Value of Values

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15 Responses

  1. Derek Tokaz says:

    Just explain the concept of diminishing marginal utility. You might be giving up 90% of your potential earnings (not that partnership was guaranteed), but you’d only be giving up maybe half the potential utility. It’s very easy then to see how the extra utility from a professorship can more than make up for that.

  2. I gave up a very high paying position at a law firm with great earning potential – at that time patent attorneys from major technical schools like MIT were rare, and very highly prized and compensated – to join GWU law school for a reason which is probably unique – but the lesson may not be.

    Just weeks after I joined the firm, the FCC, acting upon a complaint I had filed, ruled that radio and TV stations which broadcast cigarette commercials were required to provide hundreds of millions of dollars worth of free time for antismoking messages. Only then did I learn that the firm’s major client was Philip Morris, and that the firm would probably fire me (something almost unheard of at the time) if I attempted to defend that decision from the inevitable attacks before the FCC and in the courts.

    But after many months spent in unsuccessfully trying the persuade the major national health organizations to take over the defense, after seeing the antismoking messages on the air (which caused the first ever significant drop in cigarette consumption), and after finding big firm work intellectually challenging but not at all emotionally rewarding, I decided to try teaching.

    It served as a base for me to not only continue my rewarding and fulfilling public interest work, but also – through a special clinical course i teach called “Legal Activism” – to let me students experience the same thrill I felt when I was able to use the abstract legal theories I had learned, not just to benefit whatever clients happened to walk through the door with a big check, but to accomplish something I believed was important and worthy. SEE: http://banzhaf.net/about/NYTimesBehindASHSoup.pdf

    Even though I could have found new employment at virtually any other patent firm, I have never looked back. I only wish more of my colleagues could experience the thrill of likewise using their considerable legal skills not just to teach and to write law review articles, but to actually test their ideas in those “great laboratories of the law, the courts of justice” (as well as regulatory agencies), and produce concrete results in the real world.

  3. Jimbino says:

    You mention “aspiring to morals above those of the marketplace.” I’d love to sit in on a debate between you and Milton Friedman, or even Ayn Rand, Murray Rothbard or Friedrich Hayek.

    I graduated law school back when it was almost free and well after gaining a master’s in physics and a patent. I had to turn down law jobs in SF and DC because at the time I earned far more doing aerospace contract work. When I got a wild hair to try out patent law again, the partner explained to me that I would be expected to bill 2400 hrs per year. HaHa!

    Since I began my professional computer/rocket-scientist career at age 24, I have taken 39 weeks (unpaid) vacation, on average, per year, in the other 13 weeks having found un-benefitted positions that paid a rate over twice what the benefitted, captive employee earned.

  4. Ken Rhodes says:

    “…does that mean the value of tenure and autonomy and the rest is something like $54 million?”

    No, because you need to estimate the net present value, after taxes, of your hypothetical future earnings marginal advantage.

    So it’s a significant sacrifice of dollars in exchange for other rewards, but nowhere near the fifty million mark.

  5. Ken Rhodes says:

    A few years ago my adult son had a pituitary tumor. Having the good fortune to live in Staunton, VA, and having the good fortune to be covered by a health insurance policy that would pay for him to go to the University of Virginia Medical School hospital, he had the tumor removed by Dr. John Jane, Jr.

    Dr. Jane was, in my limited but not trivial experience, the greatest surgeon I ever met, in every way. His expertise as a neurosurgeon is world renowned; his bedside manner (and all his dealings with his patients and their families) is exemplary, and his particular skill at the operation was second to none in the world, since he invented it.

    Dr. Jane is a salaried professor at the medical school. My son asked him if he regretted sacrificing the huge income he could be making were he not on straight salary. His reply was that he made enough to live comfortably, and he couldn’t imagine himself wanting to do his life over again in a different way.

    You are not alone, Professor Cunningham, and based on my limited sample, I’d say you keep good company.

  6. Orin Kerr says:

    Three thoughts:

    1) Money isn’t everything.
    2) If you think money is anything, you should be working in private equity instead of law.
    3) Law professors still make really good money.

  7. Orin Kerr says:

    Sorry, #2 above should be, “if you think money is everything,” not “if you think money is anything.”

  8. Igor Faynshteyn says:

    Orin, regarding No. 2 on your list. Not everyone has the ability to get a degree, and then work in finance. If this reasoning is applied, then it also makes sense to suggest that one should be a NBA player as well.

  9. Jeff Lipshaw says:

    More “shared mission” in academia? Obviously there are many good reasons to be a professor, some of which you mention here, but I don’t think that one is a selling point over either corporate or law firm life. If there is shared mission in academia, it tends to be ad hoc, and arising out of bonds one forms with likeminded colleagues, and not one that arises out of the nature of the institution. Comparing my career in the corporate world to being a law firm partner, I described the law firm (in my day and in the particular culture of my firm – things may well have changed since then) as less an organization than an aggregation of prima donnas. Comparing a faculty to a law firm, well, the law firm looks positively regimented!

    It may be that the comparison is different if you do it from a junior associate’s point of view versus a partner’s (which would be typical of most faculty). Certainly the opportunities for entrepreneurship of the kind you mention are greater in academia than what you are able to do as a young associate at a firm like Cravath. But my guess is that how you describe entrepreneurship is how a practice-building partner would describe his or her own endeavor. (Even that varies by firm – in a place like Cravath, where there is a lockstep compensation system, I suspect the culture runs more to “shared mission” than self-promoting entrepreneurship. Ask David Boies! Other firms are more free-wheeling, and at the extreme, the compensation system is known as “eat what you kill.”)

  10. Jeff Lipshaw says:

    Also, this is what happens in the never-never land of measuring the expected utility of incommensurate things: assume the monetary upside of the Cravath career is the NPV of $60 million, one still has to factor in the incommensurate upside and the costs, both measurable and not. I’ll posit that the incremental incommensurate value of a Cravath career is another $10 million, but the incommensurate cost of a Cravath career over the same period is the NPV of about $65 million (divorce, partnership meetings, substance abuse, stress, etc.). On the other hand, if the monetary upside of an academic career is the NPV of $6 million, even without additional incommensurate value, we can assume a cost of almost zero, particularly after tenure and perhaps even before given the likelihood one will get tenure if one is hired in the first place. So voila, being a professor is better by the NPV of $1,000,000 over a career. (Note that I have not counted faculty meetings as a comparable cost because before tenure you aren’t supposed to say anything and after tenure it doesn’t make any difference.)

  11. Lawrence Cunningham says:

    Interesting mix of comments, perhaps what one would have expected: good tips on economics (1, 4); inspiring stories (2, 3, 5); a proverbial maxim (6); and, alas, some depressing reflections on law practice and law teaching that I have not experienced (9, 10).

    [To be clear, the point two comments (4 and 10) questioned the post about (shared mission and morals) were points I attribute to others, not ones I hold myself.]

    In any event, it seems that everyone has their reasons for the complex professional trade offs many must make and they are probably all as different as one can imagine. An interesting question remains whether those are comparable to the decisions that businesspersons make when selling a business or evaluating alternative business opportunities.

  12. Jeff Lipshaw says:

    Larry, I didn’t mean them to be depressing, because I love what I do now. I think that happy practicing lawyers are happy because they find what they do meaningful, and happy law professors the same. And the sense of meaningfulness in what you do is really hard to measure much less compare. But in my own career the more I saw a meaning or purpose to what I was doing the happier I was. And to your point, I was least happy was I was purely an advocate for pay. (In the latter circumstance, the best I could come up with was what Johnny Hart said once in a B.C. comic strip. One character asks another, “why are we here?” and the answer is “The sustenance of Hart.”)

    But I don’t find a lot of difference in the institutional aspects of law firm practice and faculty life. People are people in whatever setting they find themselves.

  13. Shag from Brookline says:

    Some of us who served on adjunct law faculties while practicing law were happy in each place, even though the compensation for the former was, comparative to the latter, chump change. Much of the enjoyment i had with the former had to do with learning from students who were challenging.

  14. George Conk says:

    It’s not $54 million. It’s not a dollar. Since both are careers that permit you to support self and/or a family it is a choice of preferred work and lifestyle. The money really isn’t a factor.

  15. Ray Campbell says:

    “aspiring to morals above those of the marketplace”

    It is, of course, an element of the traditional understanding and defense of the professions that they “aspire to morals” and respond to incentives somewhat different from those of the unrestrained marketplace. It may not often be descriptively accurate that lawyers act in accordance with that understanding, but much of our system of defining, training and regulating the legal profession depends on the notion that practicing law involves a perspective broader than simply maximizing returns.

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