January 17, 2017
January 04, 2017
A partner in a prominent San-Francisco-Bay-area venture capital firm recently told me, “The tech sector is eating the world. The menu is full of inefficient legacy industries.”
The thesis of USC Professor Gillian Hadfield’s new book, Rules for a Flat World, is that the legal profession should be near the top of the menu. Hadfield argues that law is overly complicated, expensive and inefficient. This is because lawyers have monopolized the practice of law, locking out more efficient, technologically empowered, venture-capital backed competitors. These competitors—software engineers backed by venture capital money, perhaps in cooperation with lawyers and paralegals—could hopefully improve quality, reduce costs, and generally run circles around overly conservative law firms and inefficiently subscale solo practitioners.
This book will engage venture capitalists and entrepreneurs, established legal technology companies, individuals interested in regulation of the legal profession, and more broadly, those who study privatization and deregulation.
She raises important questions about which regulations of the legal profession protect consumers or serve other legitimate public policy goals and which might be merely protectionist. She targets prohibitions on practice of law within a corporation and prohibitions on profit-sharing with non-lawyers. Without such regulations, it would be easier for non-lawyers to invest in and make high level decisions for legal services providers. Non-lawyers might place more trust in technology than lawyers and might be more open to new business models.
Hadfield’s analysis focuses on the aspects of law that are an economic service (she describes it as “economic infrastructure”). Hadfield is primarily focused on commercial and corporate law. Hadfield notes that while criminal law may be more salient in popular culture, since the time of Hammurabi, most law has been about money, property rights, risk allocation, and supporting business activity.
Hadfield argues that if companies such as Westlaw, Lexis and Legal Zoom could hire lawyers to provide customer support directly to end-users, these companies could improve the appeal of their offerings and more easily compete with small and solo-practitioners. Moreover, these companies would have economies of scale and efficiencies that solo practitioners cannot readily match. Because of these efficiencies and expansion of the legal market to under-served populations, lawyers working for incorporated legal services providers would not necessarily earn less than solo practitioners currently earn, although lawyer-employees would have substantially less autonomy than lawyer-owners.
December 06, 2016
My former Texas colleague Mark Lemley (now at Stanford) kindly gave me permission to share this little story he posted on Facebook:
I have an article with the (admittedly extremely boring) title "Rethinking Assignor Estoppel" coming out in the Houston Law Review. It has been on SSRN for nine months. I have posted about it twice on Facebook and Twitter, and it has shown up in all the SSRN journals. In that nine months it has garnered 982 views and 172 SSRN downloads.
Late Friday afternoon, prompted by some friends teasing me for the boring headline, I posted the exact same article, with the exact same abstract, but with a new, click-baity title: Inventor Sued for Infringing His Own Patent. You Won't Believe What Happened Next. I did this in part as a joke, and in part as an unscientific test to see how susceptible law professors were to clickbait.
The answer is, quite susceptible indeed. In less than two hours on a Friday night the number of views for this "new" article surpassed the old one. In 26 hours, by late Saturday, more people had downloaded the new article than the old one, even though before downloading you are exposed to the same old boring abstract. And by the end of the weekend, the article had been viewed nearly six times as often as the original and downloaded three times as often as the original.
The article will soon appear in the Houston Law Review under its old, boring title. But it sure looks like titles matter.
This will remind long-time readers of the late Christopher Fairman's article "Fuck," an even bigger download sensation (see here, here, and here). Of course, a download surge due to a "clickbait" title doesn't necessarily mean additional actual readers.
November 21, 2016
The Court reverses a lower court decision dismissing the plaintiff's defamation claim against Gawker Media pertaining to comments on one of its websites--see the discussion that starts at p. 13. Here's the crucial bit:
A company can, however, be liable for creating and posting, inducing another to post, or otherwise actively partici-pating in the posting of a defamatory statement in a forum that that company maintains. See Chi. Lawyers’ Comm., 519 F.3d at 671; see also Fair Hous. Council of San Fernando Valley v. Roommates.Com, LLC, 521 F.3d 1157, 1166–67 (9th Cir. 2008) (en banc) (concluding that a website was not a "passive transmitter of information provided by others" but instead helped develop the information by "requiring subscribers to provide the information as a condition of accessing its ser-vice, and by providing a limited set of pre-populated an-swers"); FTC v. Accusearch Inc., 570 F.3d 1187, 1199–1200 (10th Cir. 2009) (concluding that a website developed the in-formation by "solicit[ing] requests" for the information and then "pa[ying] researchers to obtain it").
Huon argues that the Act is inapplicable here because Gawker’s comments forum was not a mere passive conduit for disseminating defamatory statements. Rather, Gawker itself was an information content provider, insofar as the Gawker Defendants: (1) "encouraged and invited" users to defame Huon, through selecting and urging the most defa-mation-prone commenters to "post more comments and con-tinue to escalate the dialogue"; (2) "edited," "shaped," and "choreographed" the content of the comments that it re-ceived; (3) "selected" for publication every comment that appeared beneath the Jezebel article; and (4) employed indi-viduals who authored at least some of the comments them-selves.
I wonder what role worries about this issue played in the decision awhile back of Above the Law (also a defendant at an earlier stage in this litigation) to eliminate its comment sections?
October 19, 2016
October 07, 2016
The distinguished criminal law scholar Susan Bandes (DePaul) invited me to share a story she recently shared via a listserve:
In September I posted an article on SSRN (What Executioners Can--and Cannot--Teach Us About the Death Penalty http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2835145). I chose the allotted 10 subject matter classifications. I learned yesterday that three of these classifications were rejected: criminal law e-journal, criminal procedure e-journal and criminology e-journal. I was surprised by all of these rejections, and especially criminal law, since the article is focused on the purposes of punishment, a core criminal law concern. I called SSRN this morning, and they explained to me that SSRN sometimes rejects classifications, even when they are substantively appropriate, if they view them as overlapping with other classifications. In this case, they accepted my "corrections and sentencing" classification, and apparently viewed the criminal law, criminal procedure, and criminology e-journals as overlapping with corrections and sentencing and therefore rejected all three of those broader classifications. In short, the only criminal-law related e-journal in which my article will be listed is corrections and sentencing. I asked SSRN to review this decision, which they are now doing.
To my mind, there are a few problems with this way of doing things:
First of all, I haven't checked the subscription numbers, but it's hard to believe that the corrections and sentencing journal reaches nearly the same audience as the journals with broader classifications, such as criminal law and criminal procedure. As both an author and a reader, I expect relevant articles to be included in the broader topic areas. What is the interest in refusing to include an article in an e-journal squarely within its substantive reach? I suppose the goal is to avoid inundating e-journal readers. Is this an adequate justification? (it might be; that's a genuine question).
Second, SSRN authors are permitted 10 classification choices at the outset. My article will now be distributed in only 7 of the 10 journals I chose. Until now I assumed such rejections were based on substance. To the extent they aren't, shouldn't SSRN give us the allotted 10 journals to disseminate our work?
And finally, for those of us who care about such things (and I count myself among that group), CrimProf Blog has a nice feature: it lists the top ten downloads in the Criminal Law e-journal and the Criminal Procedure e-journal. That's a very reasonable choice of e-journals, since one would think they cover the broadest substantive areas. But for those who like to read--and for those who hope sometimes to be included on--the CrimProf blog list, SSRN's practice of rejecting relevant articles from those classifications (for reasons that cannot be predicted) is all the more problematic.
Professor Bandes tells me that "on appeal," the article was included in the criminal procedure journal! Why the criminal law e-journal excluded a piece on the death penalty by a leading criminal law scholar--who knows? Interestingly, the problem is somewhat the opposite for the "Jurisprudence & Legal Philosophy" e-journal, which (though better than in the past) often contains articles that are neither jurisprudence nor legal philosophy. (Please, if your work isn't jurisprudence or legal philosophy, don't put it there!) Here are some examples of recent articles that appeared in, but do not belong in, the "Jurisprudence & Legal Philosophy" e-journal:
Law and Macroeconomics: The Law and Economics of Recessions
New Wine in Old Wineskins: Metaphor and Legal Research
The Impact of Biological Psychiatry on the Law: Evidence, Blame and Social Solidarity
No doubt these are useful and interesting articles, but those of us subscribing to that e-journal aren't expect these pieces!
July 28, 2016
Some questions for Professor Benjamin H. Barton about his use of IRS data to estimate solo practitioner incomes (Michael Simkovic)
After Tuesday's post explaining why IRS schedule C data dramatically underestimates incomes for solo practitioners and other sole proprietors, Professor Benjamin H. Barton emailed to indicate that his views remained unchanged and he did not intend to respond beyond his previous comments on Professor Stephen Diamond's blog. Barton's comments did not address many of the issues I raised.
On Wednesday, I asked Professor Barton to consider the following questions:
1) Do you think that 20 million or so U.S. small business owners are living below the poverty threshold for a 2 person household?
2) Do you think the IRS is wrong about its own data and schedule C does not in fact understate net income? Why do you think that you understand IRS data, IRS enforcement capabilities, and the level of tax evasion better than the IRS?
3) Do you think that everyone who files schedule C has no other sources of income?
4) Do you think that Treasury and JCT estimates of tax expenditures are way off and exclusions and deductions from tax concepts of income are negligible?
5) If apples to apples comparisons using schedule C data show that legal services sole proprietorships are more profitable than 97 percent of sole proprietorships, is that something you should mention? Would you at least agree that using schedule C data for legal services and census data for everyone else is a methodological error?
Professor Barton has not yet responded.
Aug. 11, 2016. Professor Barton responded without specifically answering the questions above, but generally conceded that IRS data is problematic.
Aug. 15, 2016. I replied to Barton.
July 22, 2016
An important milestone; law professor Mary Anne Franks (Miami), the primary author of the bill, is quoted in the article.
(Thanks to Jason Walta for the pointer.)
UPDATE: An op-ed by Prof. Franks about the law. If there is, in fact, a successful First Amendment challenge to the law, it would just be a further indication of how wrong U.S. free speech doctrine is in important respects.
July 18, 2016
June 24, 2016
Last week I wrote an open letter to New York Times reporter Noam Scheiber discussing problems with his law school coverage and his reliance on low quality sources such as internet blogs and "experts" who lack relevant expertise rather than peer reviewed labor economics research. By email, Scheiber insisted that there was nothing wrong with his coverage, but he'd be happy to hear of any specific factual problems I could identify.
I identified 6 clear factual errors and multiple misleading statements. I also reinterviewed his lead source, John Acosta and found important discrepancies between how Scheiber depicted Acosta as someone who was suckered into un-repayable debt, while Acosta describes his own situation as hopeful and law school as a worthwhile and carefully researched investment. New York Times Dealbook reporter and U.C. Berkeley Professor Steven Davidoff Solomon weighed in, citing my research and supporting my points.
Scheiber posted a response to his facebook page, after running it by his editors at the New York Times. The New York Times agreed to correct the most minor of the six errors I identified. They also "tweaked" two sentences so that the language was less definitive.
Scheiber's response includes some good points (many students from Valparaiso might be below the 25th percentile of law school graduates) as well as strained interpretations of the language of his original article: "fewer" did not actually mean "fewer"'; "Harvardesque" did not actually mean "similar to Harvard." Scheiber describes my presentation of data that contradicts his factual claims as "strange", "bizarre", "odd", "overly-literal" and (on Twitter) "gripes." Interestingly, Scheiber thinks that "most law school graduates who pass the bar are going to have at least a few hundred thousand dollars in assets like 401k and home equity by the time they work for 20 years." This level of savings would make them far more financially secure than the vast majority of the U.S. population.
My response to Scheiber is below. I explain why The New York Times has an obligation to its readers to correct the remaining uncorrected factual errors in Scheiber's story.
Scheiber embedded his response in my explanation of the 6 clear factual errors in his story, and I in turn embedded my response within his response. To ease readability, I have color coded Scheiber's response in orange, and my new response in blue. Scheiber's response is indented once, and my new response is indented twice. The least indented black text at the beginning of each thread is from the list of 6 clear factual errors, and can be skipped (scroll down until you see orange or blue text) by those who have followed the discussion thus far.
UPDATE: June 25, 2016: Yesterday, The New York Times posted an additional minor correction to its discussion of taxation of debt forgiveness, stating that debt forgiveness would "probably" be treated as taxable income. This is an improvement over the original, but could still mislead or confuse readers. It also leaves many of the most important errors uncorrected.
Scheiber tells me that the "tweaks" to the language which he communicated to me in his facebook post from Tuesday 6/21 actually happened on Friday evening 6/17. This would make them coincide with the timing of my open letter, but before my more detailed explanation of 6 clear factual errors. Scheiber tells me that these "tweaks" were not made in response to my letter, although he has not specified when on Friday evening the changes were made. They appear to have been made after I sent him the letter.