Brian Leiter's Law School Reports

Hiring committees and their curricular priorities can be announced...

...at the annual Prawfs thread.

In Memoriam: J. Dickson Phillips, Jr. (1922-2017)

Before becoming a distinguished and influential federal judge, Phillips served on the law faculty at the University of North Carolina, Chapel Hill, where he was also Dean.  There is a lovely memorial notice for Judge Phillips here.

(Thanks to Mitch Berman, who clerked for Judge Phillips, for the pointer.)

Eight lateral moves that made people "stop and take note" in 2016-17

 Here are eight lateral moves from the 2016-17 list that, judging from my in-box and what I've heard other ways, made members of the academic community stop and take notice:

  

*Richard R.W. Brooks (contracts, business organizations, law & economics, law & social norms) from Columbia University to New York University.  Brooks only moved to Columbia from Yale a couple of years ago, but he's now joined a long list of faculty who have decamped downtown over the last dozen years from Morningside Heights:  Jose Alvarez, Cynthia Estlund, Scott Hemphill, Samuel Issacharoff, Trevor Morrison (who moved to become Dean), Catherine Sharkey, and Jeremy Waldron.  No faculty member has moved from NYU to Columbia in over 25 years, which is a remarkable transformation in the relative academic position of the two schools from a generation ago.  (Columbia has done plenty of lateral recruitment of its own, to be sure, poaching faculty from Yale, Chicago, and Virginia, among other places.  Interestingly, Columbia graduates continue to dominate NYU graduates in the job market for new lawyers, though that gap has narrowed from a generation ago.)

 

*Eleanor Brown (property, immigration and migration law, law & development) from George Washington University to Pennsylvania State University, University Park.  A scholar of migration and the role of property rights in migrant success, she takes up a joint appointment with both the law school and the school of international affairs, both of which will now be led by Hari Osofky, recruited from the University of Minnesota to be Dean of both.  It's always a good sign when a school is able to recruit established scholars from currently higher-ranked institutions.

 

*Erwin Chemerinsky (constitutional law, civil procedure) from the University of California, Irvine to the University of California, Berkeley (to become Dean).  One of the most influential (and most-cited) public law scholars in the United States, his move to Berkeley would have made news even if he weren't also becoming Dean.

 

*Brett Frischmann (intellectual property, Cyberlaw) from Cardozo Law School/Yeshiva University to Villanova University.  A leading scholar in these areas, Frischmann was recruited by Villanova with a new endowed University professorship.  A big pick-up for Villanova.

 

*Herbert Hovenkamp (antitrust, intellectual property, legal history) from the University of Iowa to the University of Pennsylvania.  The leading figure in antitrust in the United States, he spent roughly the last thirty years at the University of Iowa, turning down offers from Columbia and Chicago during that time.  But now he's joining Penn as a Penn-Integrates-Knowledge (PIK) University Professor, with appointments in the Law School and the Wharton School.  That's the second really eye-catching senior appointment for Penn recently; the year before, Penn recruited Beth Simmons, the eminent human rights scholar, from Harvard, also with a PIK University Professorship, and appointments in both the Law School and Political Science department.

 

*Orin Kerr (criminal procedure, computer crime law) from George Washington University to the University of Southern California (effective January 2018).   Quite apart from being a well-known law blogger, he's also the most-cited criminal law and procedure scholar in the U.S. in recent years.  That's certainly a "big news" appointment for USC, which also made two other tenured lateral hires this past year (Franita Tolson from Florida State and my co-blogger Michael Simkovic from Seton Hall).

 

*Samuel Moyn (legal history, human rights) from Harvard University to Yale University.  An influential historian of human rights, he only moved from Columbia's History department to Harvard Law School a few years ago, but is now moving to Yale.

 

*Alice Ristroph (criminal law & procedure, constitutional law, political theory) from Seton Hall University to Brooklyn Law School.  Currently visiting at Harvard Law School, Ristroph is the second notable senior hire for Brooklyn in the last two years (Alex Stein [torts, evidence, medical malpractice] moved from Cardozo to BLS the year before).  Despite the turmoil in legal education, Brooklyn seems poised to give Fordham competition for the #3 spot in academic excellence among New York area law schools. 

Todd Henderson (Chicago): Lawyers make better CEOs in industries with high litigation risk (and worse CEOs elsewhere) (Michael Simkovic)

Professor Henderson finds that: "CEOs with legal expertise are effective at managing litigation risk by, in part, setting more risk-averse firm policies. Second, these actions enhance value only when firms operate in an environment with high litigation risk or high compliance requirements. Otherwise, these actions could actually hurt the firm."

The full article is here.  A summary in the Harvard Business Review is here.

Should the government raid university endowments? (Michael Simkovic)

Vanderbilt Tax Professor Herwig Schlunk wants the federal government to tax university endowments, preferably out of existence.  He writes:  “In the best of all possible worlds, the federal government could and probably should . . . confiscate[e] all private university endowments . . .”

Toward that end, Schlunk recycles arguments that were discredited years ago.

Professor Schlunk is famous for asserting that law school is a bad investment.  Schlunk’s bold claim—based on back of the envelope calculations and highly unscientific website surveys—was popularized by the Wall Street Journal and echoed by sympathetic media outlets.  Peer reviewed research by labor economist Frank McIntyre and me—using high quality nationally representative government data and well-established econometric techniques—subsequently demonstrated that Schlunk was mistaken. (See here and here).

This post critiques Schlunk’s recent work on endowments for misuse of discount rates, overlooking the importance of educational quality, mismeasuring student earnings and higher education expenditures, selectively targeting higher education, supporting policies that undermine economic growth, and overlooking stark differences between popular votes and political power.

Misuse of discount rates

To arrive at his headline-grabbing law school result, Schlunk relied on some spectacularly unrealistic assumptions.  As Frank McIntyre and I explained four years ago:

“Professor Schlunk’s analysis assumes astronomical discount rates, low earnings growth rates, and zero inflation for thirty-five years. None of these assumptions are empirically or theoretically justifiable.

 

Most studies [of higher education] by economists have generally used a discount rate between 2.5% and 3%. . . . Compared with the 3% discount rates applied in labor market studies by economists and suggested by the real (net-inflation) costs of financing a law degree . . .  Professor Schlunk applies real discount rates of between 8% and 27%. 

 

If Professor Schlunk had used comparable assumptions about discount rates to evaluate the value of a college degree compared to a high school diploma, he would have reached the conclusion that few should go to college. Indeed, given a 30% nominal discount rate, whether it makes financial sense to complete high school might be debatable.”

 

Undeterred, Professor Schlunk once again relies on unrealistically high discount rates and overlooks differences in completion rates, this time to argue that private non-profit universities provide little value when compared to leanly funded, politically vulnerable public universities.  Based on this analysis, he concludes that the federal government should tax universities more heavily than it already does.  Higher discount rates mean that future cash flows have a lower present value.  Thus the value of a lifetime of higher earnings from higher quality education is diminished by choosing a higher discount rate.

Schlunk’s justification for using such high discount rates is that higher education “puts me in mind of income streams I confronted when advising investors in the private equity sector [where] discount rates of as high as 30% were generally applied.”[1]

For the record, peer reviewed research generally finds that private equity returns net of fees are close to or less than those that can be found in the stock market—not remotely close to the 30 percent returns assumed by Schlunk.  (In addition, discount rates are supposed to reflect the weighted average cost of capital, NOT the (higher) returns to equity).[2]  If P.E. investors were applying high discount rates to cash flow projections, this likely means that investors believed that P.E. cash flow projections were over-optimistic.

Overlooking college completion rates

In his latest critique of higher education, Schlunk also overlooks large differences in completion rates.  Four-year completion rates for bachelor’s degrees are almost twice as high at private non-profit universities as at their more leanly funded public counterparts. If one accepts Schlunk’s assumptions of extremely high discount rates, even a modest delay in completion would have a dramatic impact on value.

Overlooking effects of increased educational expenditures and educational quality

Peer reviewed studies that control for differences in student characteristics consistently find that higher expenditures per student lead to significant increases in student earnings and likely contribute to higher completion rates.  (For brief reviews of the literature, see The Knowledge Tax and Populist Outrage, Reckless Empirics; See also here). 

Professor Schlunk overlooks these studies.  

Mis-measuring student earnings and educational expenditures

Schlunk overestimates the difference in expenditures and resources at elite public and private universities, which leads him to over-estimate the earnings premiums necessary for more resource-intensive private education to be worthwhile.  Schlunk assumes incorrectly that all students at elite flagship state universities pay low in-state tuition, when many students at these institutions pay much higher out-of-state or international student tuition.  He overlooks the extent to which expenditures per student at elite public universities exceed in-state tuition because of state subsidies and cross-subsidies from out-of-state students.  He overlooks the extent to which differences in financial aid affect net-tuition—and therefore educational resources and expenditures—at different universities.

The elite public universities that Schlunk presents as controls that he sees as similar to private universities, but without endowments, actually have larger endowments than many private universities.  

To the extent that Schlunk uses earnings data—again from non-representative website surveys—he focuses on median rather than mean earnings, which very likely reduces his estimate of the value of higher quality education to students or society.  He does not control for differences in student characteristics. It is unclear whether he takes into account differences in subsequent graduate school attendance. 

Selective targeting of higher education

Schlunk’s narrow focus on universities is peculiar: his critique of charitable contribution deductions as “inefficient” and “undemocratic” applies even more forcefully to other charities, such as many churches, healthcare organizations, and especially think tanks–which he does not mention. 

Many think tanks are officially recognized as 501(c)(3) educational organizations, notwithstanding the fact that they educate no students, confer no degrees, primarily produce advocacy with little resemblance to scientific inquiry, offer little protection for their research staff from politically motivated firings, and function as de facto corporate lobbies.  Think tanks have collectively attracted billions of dollars in tax-deductible charitable contributions. 

Undermining economic growth

Schlunk believes that the federal government should raid university endowments to pay for its other priorities.  As Schlunk puts it: “any expenditure made by the federal government presumptively reflects the will of all 321 million of us.”

None of these expenditures stand to generate as much economic growth as investment in education.  Government investment in education pays for itself in higher future tax revenues and lower burdens on social insurance programs.  Only around 3% of federal spending and 3% of GDP is devoted to higher education.   Extremely high returns on investment in higher education suggest underinvestment. 

Overlooking differences between popular votes and political power

Schlunk’s view that our national system of representative government reflects popular democracy is a perspective with which those familiar with the electoral college, the U.S. Senate, and political geography might take issue.  There can be—and currently are—stark differences between popular votes and political representation at the federal level.

 

[1]  In his recent article, Schlunk presents examples using discount rates ranging from 8 to 10 percent—still too high for higher education earnings premiums, but progress from his earlier article.  Nevertheless, Schlunk references his earlier claims regarding 30 percent discount rates and argues that 8 to 10 percent discount rates are “modest” and even “indefensibly low.” He never discloses that these “indefensibly low” rates are extremely high compared to those used in the established labor economics literature and the actual real (net-inflation) cost of student loan financing.

[2]  The cost of equity financing is usually much higher than the weighted average cost of capital.  Because P.E. transactions (and individual investments in higher education) are mostly debt-financed, the cost of debt is far closer to WACC than the cost of equity.  Moreover, Schlunk’s claim that higher education is undiversified (and therefore risky and deserving of a high discount rate) is implausible in the context of a large university, donor, or government funder.

 

Update 8/24/2017:  The title of this post was updated to more clearly reflect the topic of the post.

Charlotte Law School officially closes

Local news item here.  We've now seen three law schools close:  in addition to Charlotte, also Whittier and Indiana Tech, all victims of the collapse in applications to law schools, which occurred in the wake of publicity about the recession in the market for new lawyers post-2008.  Back in 2013, I guesstimated we might see up to 10 law schools close,and I still think that's possible.  Of course, a sudden change to student loan rules could make that guesstimate look way too conservative, and it's hard to predict what Trump/DeVos will do on that front.  But barring that, I doubt we'll see more than ten law schools close, and almost all will be younger and/or for-profit institutions.

Law schools ranked by American Academy of Arts & Sciences membership, 2017-18

             FACULTY QUALITY BASED ON MEMBERSHIP IN THE AMERICAN ACADEMY OF ARTS & SCIENCES, 2017-18

                                                                       August 2017

The American Academy of Arts & Sciences each year elects members based on their contributions to scholarship, the arts, education, business, or public affairs. In reality, the Academy tends to be a bit “chummy”—schools already “rich” with members get “richer,” not always on the merits—though the sins tend to be of omission rather than inclusion.  (See this earlier post. Ironically, the earlier prejudice against Legal Realists has not carried over to Critical Legal Studies faculty.)  Faculty also tend to be elected later in their careers (though, on average, female faculty are elected at younger ages than male faculty in the last generation) and untenured faculty are never elected. 

 

With those caveats in mind, here are the ten law schools with the highest percentage of faculty elected to one of the scholarly sections of the American Academy of Arts & Sciences (excluding untenured faculty from the count for purposes of calculating the percentage). As you will see from the lists, below, total membership drops off rather quickly.  For purposes of this study, “faculty” means faculty who are wholly devoted to teaching and scholarship, even if they do so at more than one school, but only if they hold tenure in the Law School.  (Lists aim to be current for faculty affiliations come fall 2017.)  These criteria have the effect of excluding distinguished judges who still do some teaching (e.g., Frank Easterbrook, Richard Posner, and Diane Wood at Chicago, or Guido Calabresi at Yale), as well as law faculty elected in non-scholarly sections of the American Academy, like educational administration (e.g., John Sexton at NYU or Mark Yudof at Berkeley [though he is now emeritus]). 

Rank	School	Percentage of Senior Faculty Elected to AAAS	Percent of Elected Faculty Over 70 in 2017
1	Yale Law School	46%	29%
2	Harvard Law School	30%	31%
	University of Chicago Law School	30%	33%
4	New York University School of Law	23%	32%
	Columbia Law School	23%	71%
6	Stanford Law School	18%	22%
7	University of California, Berkeley School of Law	12%	33%
8	University of Michigan Law School	11%	80%
	University of Virginia School of Law	11%	57%
10	Duke University School of Law	8%	0%
	Runners-up for the top ten
	Georgetown University Law Center	6%	33%
	Northwestern University Pritzker School of Law	6%	0%
	University of Pennsylvania Law School	5%	0%

 

Below is a list of the non-emeritus teaching faculty from each school ranked above who are elected to the Law Section of the American Academy of Arts & Sciences. Faculty 70 or older (in the year 2017) are marked with an *.  Those marked with an # were elected in a scholarly field other than Law.

 

Yale Law School: *Bruce Ackerman, Akhil Amar, Ian Ayres, Jack M. Balkin, R. Lea Brilmayer, Stephen Carter, William Eskridge, Heather Gerken, *Henry Hansmann, Harold Koh, Christine Jolls, Dan Kahan, *Anthony Kronman, *Robert C. Post, *George Priest, Judith Resnik, Roberta Romano, *Alan Schwartz, Reva Siegel, James Whitman, John Fabian Witt.

Harvard Law School: Lucian Bebchuk, *Robert Clark, Noah Feldman Richard Fallon, *Charles Fried, *Mary Ann Glendon, Jack L. Goldsmith III, Vicki Jackson, Randall Kennedy, Louis Kaplow, Michael Klarman, Lawrence Lessig, John Manning, Martha Minow, *Robert Mnookin, Gerald Neuman, #Annette Gordon Reed, Mark Roe, *Steven Shavell, Cass Sunstein, *Laurence Tribe, *Mark V. Tushnet, *Roberto Unger, Adrian Vermeule, David Wilkins, Jonathan Zittrain.

University of Chicago Law School:  Douglas G. Baird, Tom Ginsburg, *R.H. Helmholz, Saul Levmore, #*Martha C. Nussbaum, Eric A. Posner, *Geoffrey R. Stone, David A. Strauss, David Weisbach.

New York University School of Law:  *Jerome Cohen, *Richard Epstein, #*John Ferejohn, David Garland, Samuel Issacharoff, Marcel Kahan, Lewis Kornhauser, *Sylvia Law, Daryl Levinson, Geoffrey Miller, Trevor Morrison, *Burt Neuborne, Richard H. Pildes, Richard Revesz, *Daniel Rubinfeld, Bryan Stevenson, *Richard B. Stewart, Jeremy Waldron, Joseph Weiler.

Columbia Law School: *Vincent Blasi, Philip C. Bobbitt, *John Coffee, #*Robert Ferguson, *George Fletcher, *Ronald Gilson, Jane Ginsburg, *Michael Graetz, *Kent Greenawalt, Phillip Hamburger, Thomas W. Merrill, *Henry Monaghan, *Joseph Raz, *Robert Scott, *Michael Sovern, *Peter Strauss, Tim Wu.

Stanford Law School: John J. Donohue III, *Lawrence Friedman, *Deborah Hensler, Pamela Karlan, Mark Kelman, M. Elizabeth Magill, Michael McConnell, Deborah Rhode, George Triantis

University of California, Berkeley School of Law:  Erwin Chemerinsky, *Robert Cooter, Christopher F. Edley, Jr., Daniel Farber, Pamela Samuelson, *Franklin Zimring.

University of Michigan Law School:  #*Phoebe Ellsworth, *Bruce Frier, *Catharine MacKinnon, *Donald H. Regan, #Rebecca Scott.

University of Virginia School of Law:  *Kenneth S. Abraham, John C. Jeffries, Jr., Douglas Laycock, Paul G. Mahoney, #*John Monahan, *Frederick Schauer, *G. Edward White.

Duke University School of Law:  #Jack Knight, David F. Levi, #Mathew McCubbins

Georgetown University Law Center:  David Luban, *Louis Michael Seidman, Robin West.

Northwestern University Pritzker School of Law: Bernard Black, Shari Seidman Diamond

University of Pennsylvania Law School:  Herbert Hovenkamp, #Beth Simmons

 

Other law school faculties with non-emeritus teaching faculty elected to the AAAS:

 

University of Texas School of Law:  *Sanford Levinson

University of California, Los Angeles School of Law:  Seana Shiffrin

University of Southern California Gould School of Law:  #*Gary Watson

Washington University School of Law:  #Lee Epstein

University of Arizona College of Law:  *Carol Rose

Tulane University Law School:  *James Gordley

Bad behavior by the ABA Legal Education Council

Jerry Organ (St. Thomas) has the details.

UPDATE:  At least one of the changes--namely, to stop stigmatizing law-school funded positions--probably makes sense.  Here are comments that were forwarded to me that make the case aptly:

The goal of employment reporting is to provide accurate information, including to prospective students and the general public.   All who are employed by the ABA’s definition (full-time at a salary of at least $40,000) should be counted as employed, regardless of the source of funding.   To not count graduates on school-funded fellowships as employed (or to treat them differently) presents an inaccurate picture of a law school’s actual employment numbers.   I, of course, know that there was a time when some law schools tried to game the rankings by employing students at a very low salary.  But the ABA changed its definition to address this by requiring a salary of at least $40,000, which is approximately market rate for many public service jobs.  In light of this change in definition, it made total sense for the ABA to revise its reporting form as it did to treat all employment that meets its definition the same regardless of the source of funding.  Graduates who are working full-time as public defenders, as legal service lawyers, in non-profits, and for government agencies should be treated the same as those in private firms, regardless of how their salary is being paid. 

The ABA long has professed an important public service mission, including to help close the justice gap by helping to ensure representation for those who otherwise cannot afford it.   In light of this, it was completely appropriate and necessary for the ABA to change its reporting form as it did.  Treating school-funded positions differently penalizes schools that provide fellowships to students to launch their careers in public service and to help provide representation for those who most need it.  The reality is that school-funded fellowships often are essential for graduates who want to begin a career in public service.  My experience is that these fellowships work exactly as hoped with most of these graduates getting permanent offers at their organization or similar ones.  To pick a single example, Gideon’s Promise is a wonderful program where the law school provides a fellowship for one year for a graduate to work in a public defender office and then is guaranteed a job for the next two years in that office.  I would like to see the ABA encourage law schools to fund such positions, but at the very least the reporting should not penalize law schools that do so or create a disincentive for such funding.