June 17, 2016
An Open Letter to New York Times Journalist Noam Scheiber: Journalists Should Consult Peer-Reviewed Research, Not Bloggers (Michael Simkovic)
Dear Mr. Scheiber:
Have you seen this line of peer-reviewed research, which estimates the boost to earning from a law degree including the substantial proportion of law graduates who do not practice law?
- Michael Simkovic & Frank McIntyre, The Economic Value of a Law Degree, 43 J. Legal Stud. 249 (2014)
- Michael Simkovic & Frank McIntyre, The Economic Value of a Law Degree (2013)
- The Economic Value of a Law Degree PowerPoint Presentation
High quality nationally representative data from the U.S. Census Bureau, analyzed using standard and widely accepted econometric techniques, shows that even toward the bottom of the distribution, the value of a law degree (relative to a terminal bachelor’s degree) is much greater than the costs.
All of the data suggests that this has not changed since the financial crisis. The economy is worse and young people are facing more challenges in the job market, but law graduates continue to have the same relative advantage over bachelor’s degree holders as they have had in the past:
These findings have been covered in the New York Times before:
- Michael Simkovic, Overall Stagnation in Legal Jobs Hides Underlying Shifts, The New York Times Dealbook, April 1, 2016
- Steven Davidoff Solomon, Law Schools and Industry Show Signs of Life, Despite Forecasts of Doom, The New York Times Dealbook, March 31, 2015
- Steven Davidoff Solomon, Debating, Yet Again, the Worth of Law School, The New York Times Dealbook, June 18, 2013
Data from the U.S. Census and the Department of Labor Bureau of Labor Statistics shows that the number of lawyers has grown since the financial crisis, both in absolute terms and relative to overall employment.
Data from the Department of Education shows that law school graduates, even from very low-ranked law schools, have exceptionally low student loan default rates.
I have a number of concerns about factual inaccuracies in your recent story, “An Expensive Law Degree, and No Place to Use It” and your reliance on “experts” such as Paul Campos who lack any technical expertise or even basic financial or statistical literacy.
Your readers would receive more reliable information if you concentrated less on sources like Paul Campos and internet “scamblogs” and focused instead on peer-reviewed research by professional economists using high quality data and well-established methods of statistical analysis.
June 18, 2016: Noam Scheiber replies and I respond by re-interviewing Acosta and pointing out specific factual errors in Scheiber's story.
June 20, 2016: I explain different data sources that are useful for counting lawyers.
June 21, 2016: Steven Davidoff Solomon weighs in at N.Y. Times Dealbook, citing my research and supporting my points.
June 21, 2016, 10:05pm EST: Noam Scheiber sent a lengthy response by email and posted his response to his facebook page. Scheiber informs me that his response was reviewed by his editors at the New York Times.
June 24: I responded to Scheiber and explain Why The New York Times Should Correct The Remaining Factual Errors in Its Law School Coverage. In response, the New York Times posted a correction to the most minor of the 5 remaining errors.
June 10, 2016
Tabloid Gawker Media Files Bankruptcy, Seeks to Prevent Privacy Plaintiff from Collecting $130 Million Judgment (Michael Simkovic)
Gawker Media, an internet tabloid, filed bankruptcy today in the Southern District of New York after losing a $130 million privacy lawsuit to former professional wrestler Terry Bollea (better known as ‘Hulk Hogan’). According to the WSJ, the Court overseeing the Bollea case refused to stay collection against Gawker pending Gawker’s appeal unless Gawker posted a $50 million bond.
Filing bankruptcy could provide Gawker with a less expensive way to delay paying the judgment, to continue operations, and to finance its appeal. Gawker almost immediately asked the Bankruptcy court to halt privacy and defamation litigation against not only Gawker corporate affiliates, but also against individual defendants, including Gawker’s founder Nick Denton and other key employees. Bankruptcy courts routinely stay (or pause) civil litigation against entities that have filed bankruptcy (debtors), but extending the protections of the automatic stay to non-debtor co-defendants is more controversial.
Denton and other individual defendants have not yet filed personal bankruptcy, but may do so if the Court does not extend the automatic stay.
Gawker is seeking to sell itself quickly to a friendly buyer through a 363 sale. The buyer would take the assets of Gawker free and clear of liability. The proceeds of the sale would be used to first repay the expenses of Gawker’s bankruptcy process and to repay its secured creditors. The bankruptcy trustee could use the proceeds to continue to appeal the Bollea judgement and challenge the viability of other claims. Any remaining funds would be paid to unsecured creditors. (If all unsecured creditors were paid in full, the remainder would go to equity holders).
Depending on the sales price, Bollea might collect substantially less than the $130 million judgment. Research suggests that speedy 363 sales often bring in low prices. This may sometimes be because of collusion between buyers and managers. Managers can exercise a great deal of control over the sales process, and often wish to ensure that the company lands in friendly hands.
According to Business Insider, Nick Denton valued Gawker at $250 million as recently as 2014. Gawker’s revenues appear to have increased by about 7 percent in 2015.
In its bankruptcy filing Gawker listed $50 million to $100 million in assets and $100 million to $500 million in liabilities. (The going concern value of the company could be substantially higher than book value of its assets). Bollea’s $130 million claim is by far the largest unsecured claim, with the next highest claim at just over $100,000.
June 09, 2016
Journalism researcher: To correct misinformation, essential to monitor and respond immediately (Michael Simkovic)
Scholars Strategy Network's No Jargon: 13: The Misinformation Age
Professor Brian Southwell explains why people tend to believe false information and discusses strategies for correcting the public perception of misinformation. Southwell is a professor of Mass Communication at University of North Carolina at Chapel Hill.
April 22, 2016
Professor Paula Franzese of Seton Hall law school is something of a patron saint of law students. Widely known for her upbeat energy, kindness, and tendency to break into song for the sake of helping students remember a particularly challenging point of law, Paula has literally helped hundreds of thousands of lawyers pass the bar exam through her video taped Property lectures for BarBri.
Paula is such a gifted teacher that she won teacher of the year almost ever year until Seton Hall implemented a rule to give others a chance: no professor can win teacher of the year more than two years in a row. Since the rule was implemented, Paula wins every other year. She’s also incredibly generous, leading seminars and workshops to help her colleagues improve their teaching.
Paula recently wrote a book encouraging law students to have a productive, upbeat happy, and grateful outlook on life (A short & happy guide to being a law school student).
Paula’s well-intentioned book has rather bizarrely been attacked by scambloggers as “dehumanizing”, “vain”, “untrustworthy” and “insidious.” The scambloggers are not happy people, and reacted as if burned by Paula’s sunshine. They worry that Paula’s thesis implies that “their failure must be due to their unwillingness to think happy and thankful thoughts.”
Happiness and success tend to go together. Some people assume that success leads to happiness. But an increasing number of psychological studies suggest that happiness causes success. (here and here) Happiness often precedes and predicts success, and happiness appears to be strongly influenced by genetic factors.
Leaving aside the question of how much people can change their baseline level of happiness, being happier—or at least outwardly appearing to be happier—probably does contribute to success, and being unhappy probably is a professional and personal liability.
People like working with happy people. They don’t like working with people who are unhappy or unpleasant. This does not mean that people who are unhappy are to blame for their unhappiness, any more than people who are born with disabilities are to blame for being deaf or blind.
But it does raise serious questions about whether studies of law graduates’ levels of happiness are measuring causation or selection. We would not assume that differences between the height of law graduates and the rest of the population were caused by law school attendance, and we probably should not assume that law school affects happiness very much either.
April 01, 2016
March 24, 2016
CBS News reported as follows:
"Alaburda filed her lawsuit in 2011, seeking $125,000 in damages on claims of false advertising and misrepresentations by TJSL and an order preventing it from misleading students. Jurors awarded her nothing. . . .
Michael Sullivan, the attorney for the law school, said the jury verdict showed that TJSL does its best to provide accurate information on its graduates . . . Sullivan told the jury that Alaburda, 37, did not suffer any damages and that she went to TJSL because it was the only law school where she got accepted.
Once there, the plaintiff was awarded a $20,000 scholarship to help with tuition, making her total debt $32,000 after three years, Sullivan said. Alaburda decided not to work during her first two years of law school and within two months of graduating, had two job offers in the legal field, the attorney said.
Sullivan said the process of gathering employment data for graduates is "difficult'' and a "challenge'' for the school, but said there was "not a pattern of mistakes'' by TJSL. . . .
Eventually, Alaburda got a $60,000 job offer from a San Bernardino law firm and took a $70,000-a-year job with a legal publisher . . ."
March 16, 2016
Statistician and data visualization expert Hans Rosling recently took the media to task for misleading readers and viewers using unrepresentative anecdotes and ignoring contradictory data.
Rosling says "You can't trust the news outlets if you want to understand the world. You have to be educated and then research basic facts."
While journalists often depict the developing world as full of "wars, conflicts, chaos" Rosling says "That is wrong. [The press] is completely wrong.. . . You can chose to only show my shoe, which is very ugly, but that is only a small part of me. . . . News outlets only care about a small part but [they] call it the world."
Rosling complains that the slow but steady march of progress is not considered news.
Rosling is famous for his data visualizations, especially this video briefly illustrating 200 years of global progress toward health and prosperity. It's optimism for the data-driven set (and is a big hit in my business law classes).
February 09, 2016
The latest unscientific fad among law school watchers is comparing job openings projections for lawyers from the Bureau of Labor Statistics* with the number of students expected to graduate from law school. Frank McIntyre and I tested this method of predicting earnings premiums--the financial benefits of a law degree--using all of the available historical projections from the BLS going back decades. This method of prediction does not perform any better than random chance.** Labor economists--including those working at the BLS--have explicitly stated that BLS projections should not be used to try to value particular courses of study. Instead, higher education should be valued based on earnings premiums.
Bloggers who report changes in BLS projections and compare projected job openings to the number of students entering law school might as well advise prospective law students to make important life decisions by flipping a coin.
Many law graduates won't practice law. Many engineering graduates won't become engineers. Many students in every field end up working jobs that are not directly related to what they studied. They still typically benefit financially from their degrees by using them in other occupations where additional education boosts earnings and likelihood of employment.
And if one's goal really is to practice law even if practicing law is not more lucrative than other opportunities opened by a law degree, then studying law may not be a guarantee, but it still dramatically improves the odds.
* BLS job opening projections--which are essentially worthless as predictors for higher education--should not be confused with BLS occupational employment statistics, which provide useful data about earnings and employment in many occupations, including for lawyers.
** There isn’t even strong evidence that changes in the ratio between BLS projected lawyer job openings and law class size predict changes in the percent of law graduates who will practice law, although the estimates are too noisy to be definitive. Historically, the ratio of BLS projected openings to law graduates (or first year enrollments 3 years prior) has systematically under-predicted by a wide margin the proportion of law graduates practicing law shortly after graduation, although it is clear that a large minority of law graduates do not practice law.
February 9, 2016 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Legal Profession, Ludicrous Hyperbole Watch, Of Academic Interest, Professional Advice, Science, Student Advice, Web/Tech, Weblogs | Permalink
February 03, 2016
December 14, 2015
A recent New York Times editorial attacking law school as “a scam” was widely criticized because of its exaggerations and factual inaccuracies (here and here). The dean of Florida Coastal, which The New York Times specifically targeted for opprobrium, wrote “the Times is saying something demonstrably false and which had not been properly fact checked. . . . [T]he Times could have had [accurate information] if it had simply asked. . . the Times . . . misled its readership by failing to properly fact check.”
Felix Salmon, contemplating recent journalistic controversies, argues that fundamental problems with journalistic methods lead errors to go undetected and unchallenged. According to Salmon, the risk is particularly high when errors originate with a powerful newspaper like The New York Times. Glenn Greenwald similarly notes the alarming pervasiveness of factual errors by respected media organizations, and how consumers rarely spot these errors unless they personally have intimate knowledge of the subject of the article—for example because they are the subject. A large survey found that news sources rarely correct errors because they believe that journalists ignore serious mistakes. Sources also fear that if they push for a correction, the media will retaliate.
To better understand the press’s incentives to carefully research their stories, I asked leading media law scholars to discuss whether The New York Times law school editorial raised any legal issues. According to both my Seton Hall colleague Thomas Healy and Howard Wasserman of Florida International, The New York Times has little reason to fear liability, even if it negligently supplies information that is poorly researched, misleading, or harmful.
Howard M. Wasserman, Professor of Law, FIU College of Law
Facts, Damn Facts, and Statistics (full analysis):
Neither Florida Coastal School of Law nor its owner, InfiLaw, has threatened to sue The Times for defamation over its October 24 op-ed. Any such lawsuit would be futile in the face of stringent First Amendment protections against defamation liability. . . .