July 31, 2017

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

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

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

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

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

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

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

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

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

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

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

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

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


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

July 18, 2017

Is California’s bar examination minimum passing score anti-competitive? (Michael Simkovic)

Occupational licensing regimes can help markets function when those markets suffer from what Economist George Akerlof coined a “lemons” problem.  In a lemons market, it is too costly or difficult for consumers to distinguish goods or services of acceptable quality from those that are close to worthless or even harmful.  Licensing regimes can help solve this problem by assuring consumers of a minimal baseline level of quality.  Effectively, licensing removes the bottom of the market, increasing quality, consumer confidence, volume, and price.

But economists worry that licensing regimes could be abused.  For example, if members of a licensed occupation were to seize control of licensing, they might set unnecessarily high barriers to entry for their industry, above what is optimal for consumer protection.  This could create an artificial shortage, reduce competition, drive up prices and drive down quality of services.  Political leaders also worry that excessive state or local licensing regimes could deprive workers of valuable economic opportunities and reduce their geographic mobility.

The deans of almost all ABA approved California law schools have jointly expressed concerns that California’s minimum passing score (‘cut score’) on the nationally uniform, multiple choice, Multi-State Bar Exam bar examination is excessively high. 

These leaders of legal education note that California has a higher cut score than any state except Delaware, no justification has been provided for this unusually high cut score, and some parts of California may have a shortage of lawyers.  Moreover, although law graduates from California score better on the MBE than the national average, they are less likely to pass the bar exam because of California’s unusually high cut score.  The case for bringing California’s cut score into line with those of other leading legal jurisdictions such as New York has been most forcefully stated by UC-Hastings Dean David Faigman. 

Amid concerns about possible anti-trust lawsuits against the State Bar, the Supreme Court of California has agreed to supervise the state bar of California and may set a lower bar cut score.

High cut scores are not the only signs of possible anti-competitive protectionism in California. California is among the few states that, without exception, forces experienced attorneys licensed in other states to sit for reexamination prior to relicensing. The overwhelming majority of jurisdictions—including New York, Washington D.C., Illinois, Texas, and Massachusetts—permit experienced lawyers who are licensed in another state to obtain a license to practice law on motion, without the need for reexamination.  (Some impose additional requirements, such as graduation from an ABA-approved law school or reciprocity by the state of origin).

Data from the U.S. Bureau of Labor Statistics, Occupational Employment Statistics[i] shows that California lawyers earn more, on average, than lawyers in any jurisdiction except Washington D.C. 


2016 BLS mean lawyer earnings by state

Top paying States for Lawyers:

State

Employment

Employment per thousand jobs

Location quotient[ii]

Hourly mean wage

Annual mean wage 

District of Columbia

31,470

44.81

10.16

$87.89

$182,810

California

76,840

4.81

1.09

$77.89

$162,010

New York

72,760

8.00

1.81

$77.53

$161,260

Massachusetts

17,440

5.04

1.14

$76.33

$158,760

Delaware

2,590

5.87

1.33

$75.77

$157,610

While this may be great for lawyers, it is not necessarily an unmitigated good.  It means that legal services likely cost clients more and may be less widely available. 

Continue reading


July 18, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink

July 05, 2017

Wall Street Journal trims legal coverage (Michael Simkovic)

The Wall Street Journal closed several of its blogs on Monday, including its Law Blog.  The WSJ has maintained its blogs with broader readership, such as those about economics and personal finance.  


July 5, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest, Weblogs | Permalink

June 23, 2017

Least educated county on Oregon's Pacific Coast shuts its last public library rather than increase taxes by $6 per month per household (Michael Simkovic)

Douglas County in rural Oregon recently shut its last public library rather than increase property taxes by around $6 per month per household.  Less than 16 percent of the population of Douglas County has a bachelor's degree or above, making it the third least educated county on the Pacific Coast of the United States and the least educated coastal county in Oregon. 

 

Across the Pacific, cities like Singapore, Hong Kong and Shanghai have built globally competitive workforces by investing heavily in education and infrastructure and embracing global trade.  In the United States, excessive anti-tax movements have contributed to disinvestment and have slowed U.S. economic growth.

 

Update:  Michelle Anderson (Stanford) and David Schleicher (Yale) debate policy responses to local economic decline and migration of educated populations away from depressed areas.  Hat tip Paul Diller. (Willamette).

 


June 23, 2017 in Guest Blogger: Michael Simkovic, Of Academic Interest, Science, Web/Tech, Weblogs | Permalink

June 21, 2017

House Democrats propose bill to reduce debt burden for graduate students (Michael Simkovic)

Representative Judy Chu (D-CA) (Pasadena) recently introduced H.R. 2526, the Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act. The bill would restore the in-school interest subsidy for graduate and professional students who borrow federal Direct Stafford Loans.  

Federal in-school subsidies were terminated by The Budget Control Act in 2011, which ended the debt ceiling crisis of 2011.  During the debt ceiling crisis of 2011, Congressional Republicans successfully maneuvered for large cuts to federal spending (other than military spending and pension and health benefits for retirees) by threatening to force the federal government to default on its sovereign debt unless then President Obama agreed to large spending cuts.

The POST GRAD Act would reduce the disparity between funding policy for graduate education and undergraduate education by reinstating graduate students’ eligibility for federal subsidized student loans, although graduate student borrowers, who have lower default rates, would continue to pay a higher interest rate after they complete their studies.

Christopher P. Chapman, CEO of the AccessLex Institute, estimated that the bill would save the typical law student $4,000 if passed.  

If the interest rate subsidy encourages more investment in graduate education, it could more than pay for itself with higher future tax revenue.

 

UPDATE:  The New America Foundation, which has close ties to the private student loan industry, has condemned proposals to reduce federal student loan interest rates.   NAF claims that the immediate benefits of higher education financing only benefit a "small majority" of households and therefore are bad policy.  New America argues that an increased military presence in Syria, Iraq and surrounding countries would be a better use of taxpayer dollars.

 

UPDATE 2, 6/30/2017: The New York Law Journal covers efforts to reduce student loan interest rates for graduate students.


June 21, 2017 in Guest Blogger: Michael Simkovic, Of Academic Interest, Science | Permalink

May 07, 2017

What is the most productive way to use a sabbatical? (Michael Simkovic)

Every 6 to 7 years, some professors are offered one semester or one year without teaching or administrative duties.  Some use the opportunity to start an ambitious research project, like a book.  Others upgrade their skills by taking courses toward another advanced degree.  Some work in government or for a large corporation, gaining new insights into their areas of interest.  Still others visit another institution, for example where important research collaborators or resources are located.

Since sabbaticals are rare events—perhaps occurring 4 times in a career or less—any individual faculty member will have relatively limited personal experience to draw upon and will instead rely on the collective wisdom of his or her peers.

What do you think are some of the best ways to spend a sabbatical and why? 

Comments are moderated.  Please provide your real name.  


May 7, 2017 in Guest Blogger: Michael Simkovic, Of Academic Interest, Professional Advice | Permalink | Comments (6)

April 28, 2017

Four law professors win Carnegie fellowships in 2017 (Michael Simkovic)

 Winners of Carnegie Fellowships for 2017 include:

  • Katerina Linos (U.C. Berkeley)

  • Polly Price (Emory)

  • Emily Ryo (USC)
  • Mila Versteeg (University of Virginia)

The Andrew Carnegie Fellows Program provides fellowships advancing research in the social sciences and humanities.  35 winners are selected from among hundreds of candidates.


April 28, 2017 in Faculty News, Guest Blogger: Michael Simkovic | Permalink

April 26, 2017

Consumer Financial Protection Bureau may monitor Student Loan Servicers more closely (Michael Simkovic)

Kathleen Engel (Suffolk), Jonathan Glater (U.C. Irvine), and 13 more legal scholars and economists who study higher education and consumer finance have submitted a comment letter supporting a recent proposal by the Consumer Financial Protection Bureau to monitor student loan servicers more closely.  The scholars have also suggested that anonymized versions of the resulting data should be shared with researchers who can help analyze it.

Although the federal government originates and holds most student loans, it contracts with non-profits, state agencies, and private lenders to service those loans--that is, to interact with borrowers, send statements, and collect payments. The scholars expressed concerns that some servicers might not be adequately informing borrowers of the various repayment plans available to them, and could thereby be driving up defaults or financing costs for borrowers. 


April 26, 2017 in Guest Blogger: Michael Simkovic, Of Academic Interest | Permalink

April 23, 2017

How sustainable is elite law firms' competitive advantage? (Michael Simkovic)

Elisabeth de Fontenay at Duke argues that elite law firms' expertise in sophisticated corporate transactions is self-sustaining and resistant to competition.  This is in part because firms with that do the lions share of negotiation and drafting for specific kinds of transactions create, manage and retain private information about the current market for terms.


April 23, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink

April 18, 2017

The 10 most cited health law scholars, 2010-2014 (Michael Simkovic)

Mark Hall and Glenn Cohen have extended Brian Leiter's approach to ranking faculty by scholarly citations (based on Sisk data) to the field of health law.

According to Hall and Cohen, the most cited health law scholars in 2010-2014 (inclusive) are:

Rank Name School Citations Approx. Age in 2017
1 Larry Gostin Georgetown 510     67
2 Mark A. Hall Wake Forest 480     62
3 David A. Hyman Georgetown 360     56
4 I. Glenn Cohen Harvard 320     39
5 John A. Robertson Texas 310     74
6 Mark Rothstein Louisville 300     68
6 Michelle M. Mello Stanford 300     46
6 Frank Pasquale Maryland 300     43
9 Lars Noah Florida 280     52
10 George J. Annas Boston U 270     72

 

The full ranking is available here.


April 18, 2017 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Of Academic Interest, Rankings, Weblogs | Permalink