January 16, 2017

U of Washington/Tacoma to delay opening new law school

This is probably wise, absent clear evidence of unusually strong and growing demand for legal services in the Pacific Northwest.


January 16, 2017 in Legal Profession, Of Academic Interest | Permalink

January 04, 2017

Jay Clayton to head Securities & Exchange Commission

President-elect Trump intends to nominate Sullivan & Cromwell partner Jay Clayton to head the Securities and Exchange Commission according to reports by the Financial Times and other newspapers.  Clayton has extensive expertise in M&A, capital markets, and financial regulation.

Clayton is a graduate of the University of Pennsylvannia Law School, where he taught a class on "M&A Through the Business Cycle" from 2009 to 2015.


January 4, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink

Should Venture Capitalists Compete with Law Firm Partners and Judges? (Michael Simkovic)

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.   

Continue reading


January 4, 2017 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Legal Profession, Web/Tech | Permalink

January 03, 2017

Oregon law professor criticizes university's response to Prof. Shurtz

December 26, 2016

Law school enrollment trends over 40+ years

Useful charts here.  JD enrollment has stabilized, though well below its peak; non-JD enrollment has spiked as law schools try to sustain financial viability for schools that grew to their present size during the years of peak demand for legal education.


December 26, 2016 in Legal Profession, Of Academic Interest | Permalink

December 21, 2016

Dept. of Education to pull federal student loans from Charlotte Law School

MOVING TO FRONT FROM YESTERDAY--UPDATED

Unless the decision is reversed, the school will almost certainly go out of business.

UPDATE:  DOE's statement about the decision.


December 21, 2016 in Legal Profession, Of Academic Interest | Permalink

December 15, 2016

Ted Seto: "The ABA's 75% bar passage proposal is innumerate"

Professor Seto (Loyola/Los Angeles) asked me to share the following analysis of the ABA's new proposed bar passs standard:

There is a serious mathematical problem with the ABA’s 75% proposal.

 

Assume for illustration’s sake that bar results are normally distributed – that is, that they will cluster around the mean in a normal distribution. (There is no reason to believe that deviations from a normal distribution affect the analysis given below.)

 

In a state in which only one school provides the bulk of bar-takers, the bulk of that the state’s normal distribution will be reflected in the school’s bar passage rate. Assuming that the state bar passage mean is reasonably high, the school will always meet the ABA’s requirement, regardless of the quality of the education it provides.

 

In a state with multiple law schools, however, the normal distribution of bar results will instead be distributed unevenly across those schools. Some schools’ results will incorporate the lower end of that normal distribution. If there are enough schools in the state and students are sorted by bar-taker aptitude across those schools, the bottom schools will always fail the ABA’s requirement, again regardless of the quality of the education they provide.

 

Note that the difference between the two results – always meeting and always failing – is not because students are being admitted who shouldn’t be. If, in the state with multiple law schools, all such schools were to merge into one single mega-school, without any change in admissions policies or educational quality, that mega-school would absorb the bulk of the normal distribution in bar passage and would always meet the ABA’s requirement.

 

What this means is that the ABA’s proposal should chiefly impact lower-ranked schools in large states – not because the quality of the educations they provide or because they are admitting students who should not be lawyers, but because of the mathematics of normal distributions. To the extent those lower-ranked schools disproportionately service students from underserved communities, the ABA’s proposal will disproportionately impact diversity in the legal profession. And again, this is not because schools are admitting students who shouldn’t be admitted. It follows from the failure of the ABA to take the mathematics of normal distributions into account in structuring its proposed standard.

 

Conversely, the ABA’s proposal should have no significant impact on schools in states with few schools – again regardless of the quality of the educations they provide or the students they admit. And again, this follows from its failure to take into account the mathematics of normal distributions.

 

I question whether a rule that it likely to have a dramatically different impact in different parts of the United States for reasons having nothing to do with the rule’s ostensible purpose should be adopted. It is likely that the ABA is seriously considering the proposal in its current form in part because lawyers are, for the most part, innumerate. Unfortunately, this reinforces the argument that the ABA should not have regulatory jurisdiction over law school accreditation – precisely the argument the proposal is intended to rebut.

 

Comments are open for those who have ideas about how to address this difficulty.  Post your comment only once, it may take awhile to appear.


December 15, 2016 in Legal Profession, Of Academic Interest | Permalink | Comments (4)

December 10, 2016

The latest from LSAC

From their various data sources, two tidbits:   LSAT takers in September were up 1% compared to last year, while applicants were down about 5% in December compared to last year.  The trend has been towards more applications later in the season, so I expect in the end this year will not be much different than last year in overall volume.  We still do not have the December figure for test-takers.


December 10, 2016 in Legal Profession, Of Academic Interest | Permalink

December 01, 2016

Law schools ranked by employment outcomes based on 2015 ABA data

Here, which also notes (and links to) other ways of crunching the data.


December 1, 2016 in Legal Profession, Rankings, Student Advice | Permalink

U.S. LLM Programs Probably Benefit International Students (Part 2): Students who return home (Michael Simkovic)

In part 1 of this 2 part post, I noted that U.S. LLM programs may provide substantial financial benefits to students who remain in the United States, even if they do not necessarily pass a U.S. bar exam.  But what about the LLM graduates who return to their countries of origin?

While good data is hard to come by, it is easy to imagine how studying U.S. law might benefit lawyers working outside of the United States and hard to imagine how international programs could continue to attract applicants if returning lawyers did not speak favorably of their studies abroad. Indeed, some countries explicitly encourage students to study abroad and return home. U.S. higher educational institutions often have far better resources than those available in international students’ countries of origin.

Many efforts to “harmonize” and “modernize” corporate, commercial, and regulatory law have historically been efforts to adopt a more U.S.-like approach. For example, the Uniform Commercial Code is greatly admired and appreciated by international bankers and lawyers who have grappled with other countries’ fragmented and inconsistent approaches to secured credit. The U.S. Bankruptcy code is thought to be more conducive to entrepreneurship and consumer finance than the approach in many foreign jurisdictions. Many securities are issued under U.S. law. Many international transactions explicitly choose New York law. U.S. anti-trust law can extend to companies based outside of the United States. U.S. tax law helps drive many international transactions.

Derek Muller recently noted evidence suggesting lower first-time bar passage rates for international students taking the bar exam compared to graduates of ABA approved 3-year JD programs. Although his headline is provocative, Muller is careful to avoid overstating the significance of this finding. Lower bar passage rates are expected, considering that for many LLMs, English is a second language, while for most ABA-approved-JD graduates, English is a first language. On the bar exam, LLMs compete without accommodation on a timed exam with a large essay component with students who either speak English as a first language or have had many more years to immerse themselves in the English language. It can take years for immigrants to become roughly substitutable for U.S.-born workers.

But as noted in my previous post, from a consumer protection perspective, the relevant comparison is not U.S.-born-citizens versus immigrants or foreigners. It’s immigrants or foreigners with more U.S. education versus immigrants or foreigners with less U.S. education.

1-year degrees appear to provide benefits. It seems likely that a 3-year degree would provide international students even more benefits than a 1-year degree. But a 3-year degree would also cost more and take more time to complete, and might be unappealing to those planning to return home.

The U.S. has a history of using English-literacy tests to exclude immigrants from Southern and Eastern Europe while permitting immigration from Northern Europe. Today, historians generally view these policies as discriminatory. It would be unfortunate if the ABA were to take a parallel approach today to deny access to U.S. legal education to lawyers from non-common-law countries on ill-considered consumer protection grounds. Many of those international students intend to return home rather than practice law in the United States. Some of those international students may face even lower odds of passing the bar exam in their countries of origin than in the United States, language barriers notwithstanding.

Continue reading


December 1, 2016 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink