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Category: Law School

Questions for the ABA Task Force on the Future of Legal Education

The ABA Task Force working paper has many interesting ideas in it.* But it also has several points of weakness, glossing over critical perspectives and insufficiently supporting important factual claims. We can hope that a footnoted final draft will take care of the latter issue. But the lack of acknowledgment of critical perspectives is a deeper problem, and one I hope participants at this Saturday’s meeting will raise. Questions could include:

1) When clients refuse to pay for the work of recent law school graduates, do they say, “We’re not paying for first or second year attorneys,” or “We’re not paying for attorneys without the following ‘practice ready’ skill set”?

If it’s the former, isn’t the problem more one of bargaining power than one of inadequate education? If it’s the latter, shouldn’t the ABA solicit some critical mass of major clients to articulate the skills that need to be trained, and to pledge to pay those who possess them?

2) Why are (certain types of) law jobs in decline?

The Task Force strongly believes that there are “structural changes” in legal employment. The “structural vs. cyclical” dispute over the causes of unemployment is deeply ideological. A conservative economist may characterize the great recession as a “great vacation” of people unwilling to work (or learn new skills). Paul Krugman and Mike Konczal challenge the structural story generally, and Mike Simkovic & Frank McIntyre give us some reason to doubt it in the case of attorneys. They believe that the “data does not support” the view that “law continues to be depressed while the rest of the labor market has recovered.” Many other types of professionals are also faring worse than they have in the past. For every “death of biglaw” story, there’s a skeptic who’s heard it all before.

I have no doubt that certain types of law jobs are in decline. But this raises a deeper question: why is this happening? Let’s think outside the BigLaw box, and consider, say, elder abuse attorneys. Stipulate, for purposes of this discussion, that there has been some decline in the number of attorneys specialized in the regulation of assisted living and nursing home facilities (and tort lawsuits for neglect and abuse). Why might that occur?
Read More

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ABA Task Force on Legal Education: Down with Status

aba status merceGood news for law professors now submitting articles seeking offers from high-status journals: the importance of status in American law schools is over-rated and is about to be reduced. At least that is the urging of an American Bar Association Task Force Working Paper released last Friday addressing contemporary challenges in U.S. legal education.

Obsession with status is a culprit in the woes of today’s American law schools and faculty, the Working Paper finds.  It charges law professors with pitching in to redress prevailing woes by working to reduce the role of status as a measure of personal and institutional success.  The group’s only other specific recommendation for law faculty is to become informed about the topics the 34-page Working Paper chronicles so we might help out as needed by our schoools. 

Much of the rest of the Working Paper is admirable, however, making the two specific recommendations to law faculty not only patently absurd but strange in context.   After all, the Working Paper urges reform of ABA/AALS and state regulations with a view toward increasing the variety of law schools. It calls for serious changes in the way legal education is funded, though it admits that the complex system of education finance in the U.S. is deeply and broadly problematic and well beyond the influence of a single professional task force.

The Task Force urges US News to stop counting expenditure levels as a positive factor in its rankings.  It stresses problems arising from a cost-based rather than market-based method of setting tuition. It notes a lack of business mind-sets among many in legal education.  It questions the prevailing structure of professorial tenure; degree of scholarship orientation; professors having institutional leadership roles; and, yes, faculty culture that makes status an important measure of individual and institutional success.

But amid all that, law professors have just two tasks: becoming informed and demoting status.  So there must be some hidden meaning to this idea of status as a culprit and the prescription for prawfs to reduce the importance of status as a measure of success.  I am not sure what it is. The Working Paper does not explain or illustrate the concept of status or how to reduce its importance.

I’ll to try to be concrete about what it might mean.   Given the other problems the Task Force sees with today’s law faculty culture (tenure, scholarship and leadership roles), I guess they are suggesting that faculty stop making it important whether: Read More

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Gatekeeping and the Economic Value of a Law Degree (Part 2)

LincolnIn my last post, I discussed how the commentary on Michael Simkovic and Frank McIntyre’s “The Economic Value of a Law Degree” has illuminated a separate and worthwhile avenue for further research—namely, whether the presence of powerful gatekeepers who oversee the practice of law should make us confident that the value of the law degree will be relatively stable.

Most helpful in this regard has been Deborah Merritt’s post regarding the impact of the typewriter on lawyer education requirements.  At the risk of putting words into her mouth, Merritt observed that the typewriter may have contributed to the decision of the New York bar to make attendance at a three-year law school a prerequisite to bar admission and, therefore, that S&M were too hasty in concluding that people misconceived the typewriter to be a threat to the value of the law degree.

My earlier post explained that we must be careful not to conflate structural changes in the law degree’s value with structural changes in the credentials that one will need to become a lawyer.  By keeping the two separate, we can better understand how the gatekeepers to the industry might be able to insulate the value of the degree from exogenous forces.

In this second post, I’d like to offer some final observations on gatekeeping.  I begin with the acknowledgement that the effects of gatekeeping extend well beyond the population of degree holders, though S&M had perfectly valid reasons for focusing on that population.  Thereafter, I return to the relationship between gatekeeping and nostalgia, highlighting the strange role that the late Abe Lincoln played in the adoption of education requirements.  To finish up, I briefly explain how gatekeeping measures have long been—and will continue to be—a tempting tool for those with the power to wield them. Read More

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Gatekeeping and the Economic Value of a Law Degree (Part 1)

gatekeepers image

When I first read the commentary concerning Michael Simkovic and Frank McIntyre’s “The Economic Value of a Law Degree,” I was most surprised by the attention that the commenters paid to the paper’s passing reference to the typewriter. S&M are aware that their work arrives at a time when it is popular to believe that technology has wrought a structural change to lawyers’ earnings. For their part, S&M cite Frank Miles Finch’s obloquy against typewriters in the first volume of the Columbia Law Review to show that worries of technological ruin are nothing new in our line of work. After listing several other examples (such as word processing and Westlaw), S&M maintain that “lawyers have prospered while adapting to once threatening new technologies and modes of work.”

Taken out of context, this last statement might sound as if S&M are engaging in bold fortunetelling based on a scant historical record, but a few paragraphs later, S&M concede that “past performance does not guarantee future returns” and “[t]he return to a law degree in 2020 can only be known for certain in 2020.” When read in conjunction with the rest of the paper, the typewriter reference serves as a brief and lighthearted reminder that we, like others before us, can fall victim to nostalgic gloom and doom.

Despite its minor role in the article, commenters have been eager to mention the typewriter observation, with references ranging from the favorable (here), to the neutral (here and here), to the mildly dismissive (here and here), to the critical (here). Having given some thought to the last entry on this list, Deborah Merritt’s wonderful blog entry on Law School Cafe, I now realize that I shouldn’t have been surprised by the attention paid to the typewriter; it turns out to be an important point for S&M to make.

Merritt argues contra S&M that (1) Finch was not engaging in sky-is-falling melodrama and (2) that the typewriter “may have contributed” to a structural change in lawyers’ earnings—specifically, the creation of three-year law schools and formal schooling requirements for bar admission.  As to the first point, Merritt explains that Finch mentioned the typewriter to bolster his argument that apprenticeships had ceased to be a viable training environment for lawyers. He was not predicting that the typewriter would lead to the demise of his profession; rather, he was talking about the need for an adequate training substitute. As to the second point, Merritt points out that the New York bar adopted Finch’s recommendations, in part, because it was persuaded by his Columbia article. I add that the ABA would eventually adopt similar requirements as well, also referencing Finch’s article in the process. Merritt highlights that Finch’s main point was that the typewriter limited apprentices’ exposure to the study of important legal texts and created a difficult learning environment. As a result, Finch argued, law school was the far better educational option.

Merritt’s post is thoughtful, well-researched, and concise. Moreover, she is largely right. Finch was not engaging in nostalgic sky-is-falling reasoning. In S&M’s defense, however, the notion of a Typewriter Doomsday was not altogether uncommon in the early Twentieth Century. To take but one example, Arkansas law titan George B. Rose mentioned the following in a 1920 speech to the Tennessee Bar Association:

A great menace to the wellbeing of the bar is the disproportionate increase of its numbers. With the invention of the typewriter, the simplification of pleadings and the improved methods of travel, one lawyer can now do the work of two in the olden time; yet the proportion of lawyers to the remainder of the community has enormously increased.

Rose’s remarks were received with great applause and an honorary membership into the Tennessee bar.

More importantly, Merritt stands on solid ground when she argues that technological change contributed to a shift in the business practices of legal professionals and, in turn, the shape of American legal education. There can be little doubt that this shift can be described as “structural.”

But I disagree with Merritt insofar as she believes that a structural shift in schooling requirements weakens S&M’s paper. To the contrary, it helps the paper by providing a prima facie explanation for relative stability in the law degree’s value.

We must be mindful of the distinction between structural shifts in lawyers’ earnings and structural shifts in other aspects of the legal profession, such as educational requirements. Clearly, Merritt’s focus is the latter, and S&M’s focus is the former. And just because S&M have chosen to focus on one kind of structural shift does not mean that they have “dismissed” other structural shifts, as Merritt says. S&M readily acknowledge that the structural shifts can occur with law school enrollment:

These distinctions and widespread publicity may enable critics to influence college graduates’ career plans, the judiciary, and perhaps the future of legal education. They may have already contributed to a steep three-year decline in law school applications and enrollments.

The more critical point is that breaking up structural shifts into various types can be a useful analytic tool. Distinguishing between structural shifts in the value of a law degree and structural shifts in access to the practice of law permits us to make an important observation—namely, that it is possible for the latter to prevent the former. Critics of S&M doubt that the past performance of law degree holders is a reliable predictor of future performance. We can hypothesize that, to the extent law degree holders can insulate themselves from exogenous forces that threaten the value of their services, they will increase the stability of the degree’s value and, therefore, the reliability of predictions based on their past performance.  The underlying reasoning for the hypothesis is as follows.  All other things being held constant, those who are within service industries that have the power and willingness to manipulate the supply of available service providers will likely be better at braving exogenous shocks than those who are not. Under those circumstances, when such measures are taken to protect those already possessing the credentials necessary to perform that service, the value of those credentials will tend to be relatively stable.  Whether these measures have been or will be effective enough to stabilize the value of the law degree is a question worth considering.

There are several important gatekeepers to the practice of law: law schools, the American Bar Association, state bar associations, state supreme courts, etc. These gatekeepers possess, and sometimes use, tools that have the potential to protect the economic value of the law degree. They can change the qualifications for entry, expand or contract the domain of permissible services, raise or lower rate maximums, or regulate advertising practices, among other things.  And while a considerable minority of law degree holders do not practice law (about 40% according to the SIPP data that S&M consider), there are enough practicing lawyers to give protectionist measures a fighting chance to stabilize the overall value of the degree.

Merritt deserves much credit for bringing this observation to the fore in connection with the S&M paper, although she did not expand upon it (an excusable omission in light of the fact that we are talking about a single blog post).

Having the luxury of multiple posts, I will use Part 2 to discuss a few of the protectionist measures that gatekeepers have taken over the last century.  I will focus in particular on the measure that Merritt discusses–the advent of a law school prerequisite for admission to the bar.

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Incorporating Skills Training in Substantive Courses

Historically, skills training was not part of the education students received in law school. Things have changed, of course, and recently many have emphasized the need for practice-ready law grads. Incorporating skills training in substantive courses offers one promising option for improving students’ education. I’m prepping Sales (UCC Article 2) for the fall, and the course seems to lend itself well to a more skills-oriented approach. I plan to use problem-solving exercises and assignments which will not only teach students the law governing sales of goods, but will also enhance their statutory and contractual interpretation, drafting, and client-counseling skills. I have extensive experience litigating contractual disputes, so I know these skills are essential for commercial litigators. And they seem equally important to transactional lawyers.

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Teaching Administrative Law Using Current Events

One of the best parts of teaching a course you’ve already taught is updating course materials. I’m teaching Ad. Law again in the fall, and I’m considering adding a few relatively recent events as introductory discussion problems. The goal is to get students thinking about how process and agency structure shape substantive decisions. I tried to choose topics which do not require students to grasp complicated substantive issues:
1. The TSA seeks comments on across-the-board, whole body imaging for airline passengers. Here students can consider the interplay between notice-and-comment procedure and privacy objections to the imaging. I’ll also explore whether procedures (and concerns with use of imaging) should be different if TSA employees require this enhanced screening only on a case-by-case basis.
2. The IRS has been accused of unfairly targeting conservative groups who claim tax-exempt status. The issue highlights agency structure and raises questions of accountability in a system with multiple bureaucratic decision-makers. It also illuminates the tension between law and politics in agency decision-making, especially where agencies operate under vague rules such as the “social welfare” organization exemption.
I welcome any suggestions you may have.

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Brian Tamanaha’s Straw Men (Part 2): Who’s Cherry Picking?

(Reposted from Brian Leiter’s Law School Reports)

BT Claim 2:  Using more years of data would reduce the earnings premium

BT Quote: There is no doubt that including 1992 to 1995 in their study would measurabley reduce the ‘earnings premium.’” 

Response:  Using more years of historical data is as likely to increase the earnings premium as to reduce it

We have doubts about the effect of more data, even if Professor Tamanaha does not.

Without seeing data that would enable us to calculate earnings premiums, we can’t know for sure if introducing more years of comparable data would increase our estimates of the earnings premium or reduce it.

The issue is not simply the state of the legal market or entry level legal hiring—we must also consider how our control group of bachelor’s degree holders (who appear to be similar to the law degree holders but for the law degree) were doing.   To measure the value of a law degree, we must measure earnings premiums, not absolute earnings levels.

As a commenter on Tamanaha’s blog helpfully points out:

“I think you make far too much of the exclusion of the period from 1992-1995. Entry-level employment was similar to 1995-98 (as indicated by table 2 on page 9).

But this does not necessarily mean that the earnings premium was the same or lower. One cannot form conclusions about all JD holders based solely on entry-level employment numbers. As S&M’s data suggests, the earnings premium tends to be larger during recessions and their immediate aftermath and the U.S. economy only began an economic recovery in late 1992.

Lastly, even if you are right about the earnings premium from 1992-1995, what about 1987-91 when the legal economy appeared to be quite strong (as illustrated by the same chart referenced above)? Your suggestion to look at a twenty year period excludes this time frame even though it might offset the diminution in the earnings premium that would allegedly occur if S&M considered 1992-95.”

There is nothing magical about 1992.  If good quality data were available, why not go back to the 1980s or beyond?   Stephen Diamond and others make this point.

The 1980s are generally believed to be a boom time in the legal market.  Assuming for the sake of the argument that law degree earnings premiums are pro-cyclical (we are not sure if they are), inclusion of more historical data going back past 1992 is just as likely to increase our earnings premium as to reduce it.  Older data might suggest an upward trend in education earnings premiums, which could mean that our assumption of flat earnigns premiums may be too conservative. Leaving aside the data quality and continuity issues we discussed before (which led us to pick 1996 as our start year), there is no objective reason to stop in the early 1990s instead of going back further to the 1980s.

Our sample from 1996 to 2011 includes both good times and bad for law graduates and for the overall economy, and in every part of the cycle, law graduates appear to earn substantially more than similar individuals with only bachelor’s degrees.

 

Cycles

 

This might be as good a place as any to affirm that we certainly did not pick 1996 for any nefarious purpose.  Having worked with the SIPP before and being aware of the change in design, we chose 1996 purely because of the benefits we described here.  Once again, should Professor Tamanaha or any other group wish to use the publicly available SIPP data to extend the series farther back, we’ll be interested to see the results.

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Brian Tamanaha’s Straw Men (Part 1): Why we used SIPP data from 1996 to 2011

(Reposted from Brian Leiter’s Law School Reports)

 

BT Claim:  We could have used more historical data without introducing continuity and other methodological problems

BT quote:  “Although SIPP was redesigned in 1996, there are surveys for 1993 and 1992, which allow continuity . . .”

Response:  Using more historical data from SIPP would likely have introduced continuity and other methodological problems

SIPP does indeed go back farther than 1996.  We chose that date because it was the beginning of an updated and revitalized SIPP that continues to this day.  SIPP was substantially redesigned in 1996 to increase sample size and improve data quality.  Combining different versions of SIPP could have introduced methodological problems.  That doesn’t mean one could not do it in the future, but it might raise as many questions as it would answer.

Had we used earlier data, it could be difficult to know to what extent changes to our earnings premiums estimates were caused by changes in the real world, and to what extent they were artifacts caused by changes to the SIPP methodology.

Because SIPP has developed and improved over time, the more recent data is more reliable than older historical data.  All else being equal, a larger sample size and more years of data are preferable.  However, data quality issues suggest focusing on more recent data.

If older data were included, it probably would have been appropriate to weight more recent and higher quality data more heavily than older and lower quality data.  We would likely also have had to make adjustments for differences that might have been caused by changes in survey methodology.  Such adjustments would inevitably have been controversial.

Because the sample size increased dramatically after 1996, including a few years of pre 1996 data would not provide as much new data or have the potential to change our estimates by nearly as much as Professor Tamanaha believes.  There are also gaps in SIPP data from the 1980s because of insufficient funding.

These issues and the 1996 changes are explained at length in the Survey of Income and Program Participation User’s Guide.

Changes to the new 1996 version of SIPP include:

Roughly doubling the sample size

This improves the precision of estimates and shrinks standard errors

Lengthening the panels from 3 years to 4 years

This reduces the severity of the regression to the median problem

Introducing computer assisted interviewing to improve data collection and reduce errors or the need to impute for missing data

Introducing oversampling of low income neighborhoods
This mitigates response bias issues we previously discussed, which are most likely to affect the bottom of the distribution
New income topcoding procedures were instituted with the 1996 Panel
This will affect both means and various points in the distribution
Topcoding is done on a monthly or quarterly basis, and can therefore undercount end of year bonuses, even for those who are not extremely high income year-round

Most government surveys topcode income data—that is, there is a maximum income that they will report.  This is done to protect the privacy of high-income individuals who could more easily be identified from ostensibly confidential survey data if their incomes were revealed.

Because law graduates tend to have higher incomes than bachelor’s, topcoding introduces downward bias to earnings premiums estimates. Midstream changes to topcoding procedures can change this bias and create problems with respect to consistency and continuity.

Without going into more detail, the topcoding procedure that began in 1996 appears to be an improvement over the earlier topcoding procedure.

These are only a subset of the problems extending the SIPP data back past 1996 would have introduced.  For us, the costs of backfilling data appear to outweigh the benefits.  If other parties wish to pursue that course, we’ll be interested in what they find, just as we hope others were interested in our findings.

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Brian Tamanaha’s Straw Men (Overview)

(Cross posted from Brian Leiter’s Law School Reports)

Brian Tamanaha previously told Inside Higher Education that our research only looked at average earnings premiums and did not consider the low end of the distribution.  Dylan Matthews at the Washington Post reported that Professor Tamanaha’s description of our research was “false”. 

In his latest post, Professor Tamanaha combines interesting critiques with some not very interesting errors and claims that are not supported by data.   Responding to his blog post is a little tricky as his ongoing edits rendered it something of a moving target.  While we’re happy with improvements, a PDF of the version to which we are responding is available here just so we all know what page we’re on.

Stephen Diamond explains why Tamanaha apparently changed his post: Ted Seto and Eric Rasmusen expressed concerns about Tamanaha’s use of ad hominem attacks.

Some of Tamanaha’s new errors are surprising, because they come after an email exchange with him in which we addressed them.  For example, Tamanaha’s description of our approach to ability sorting constitutes a gross misreading of our research.  Tamanaha also references the wrong chart for earnings premium trends and misinterprets confidence intervals.  And his description of our present value calculations is way off the mark.

Here are some quick bullet point responses, with details below in subsequent posts:

  • Forecasting and Backfilling
    • Using more historical data from SIPP would likely have introduced continuity and other methodological problems
    • Using more years of data is as likely to increase the historical earnings premium as to reduce it
    • If pre-1996 historical data finds lower earnings premiums, that may suggest a long term upward trend and could mean that our estimates of flat future earnings premiums are too conservative and the premium estimates should be higher
    • The earnings premium in the future is just as likely to be higher as it is to be lower than it was in 1996-2011
    • In the future, the earnings premium would have to be lower by **85 percent** for an investment in law school to destroy economic value at the median
  • Data sufficiency
    • 16 years of data is more than is used in similar studies to establish a baseline.  This includes studies Tamanaha cited and praised in his book.
    • Our data includes both peaks and troughs in the cycle.  Across the cycle, law graduates earn substantially more than bachelor’s.
  • Tamanaha’s errors and misreading
    • We control for ability sorting and selection using extensive controls for socio-economic, academic, and demographic characteristics
    • This substantially reduces our earnings premium estimates
    • Any lingering ability sorting and selection is likely offset by response bias in SIPP, topcoding, and other problems that cut in the opposite direction
    • Tamanaha references the wrong chart for earnings premium trends and misinterprets confidence intervals
    • Tamanaha is confused about present value, opportunity cost, and discounting
    • Our in-school earnings are based on data, but, in any event, “correcting” to zero would not meaningfully change our conclusions
  • Tamanaha’s best line
    • “Let me also confirm that [Simkovic & McIntyre’s] study is far more sophisticated than my admittedly crude efforts.”