September 12, 2005
PhD vs. practice experience
Posted by Victor Fleischer

I'm late to the party, but the Prawfs debate on whether a PhD is necessary to do serious law-and-econ (and other law-and ) scholarship is really interesting.  See also Larry R.  Brett McDonnell pretty much nails it in his comment about halfway down the Prawfs thread.

More thoughts below the fold.

[*(By way of background:  I think of myself as a consumer, not a producer, of law and economics.  Economics informs my scholarship, as does philosophy, psychology and sociology.  If forced to choose a discipline or methodology, it would be intra-disciplinary (tax and business law), not inter-disciplinary.)]

I think it's worth adding one more element to the debate, at least as it pertains to business law: practice experience. This debate is not, or should not be, a debate about serious law-and-econ vs. armchair law-and-econ.  Most of us recognize that most schools still need more economists and fewer dabblers.  But at the same time, dabbling has its place.  Especially if the dabblers bring something else to the party.  What is that something?  Let's call it legal professionalism, both in the sense of practical experience and an understanding of the norms of how lawyers and clients make decisions.   

Litvak points out, quite accurately I think, that ALEA has become dominated by serious econ types.  The conference is no longer very hospitable to the likes of Conglomerate.  In part, the drive to muscle up corporate law is a needed correction.  I certainly think the empirical work is immensely valuable in testing an overtheorized field.  But I think the trend may have gone too far.  Shutting the lawyers out of ALEA will not ultimately advance our collective understanding of how things work on Wall Street or in Silicon Valley.

The Leiter/ALEA way-of-thinking suggests that it may be appropriate to require a PhD in economics (or similar skills) to get a law teaching job at a top school or to join in the debate.  I'm not so sure this is a good idea.  A PhD is often a substitute for practice experience.  And yet most economists recognize that institutions and norms affect the way things work in practice, and it can be helpful to have practiced yourself.   (N.B. This deficit can be overcome by interviewing lawyers, as we all have to do when our first-hand experience is inadequate.)

Moreover, doing "cutting-edge work" in economics is not the only game in town.  One important role for us non-PhDs is to translate the teachings of L&E into language that non-economists (esp. lawyers and policy-makers) can understand and appreciate.  Litvak herself provides a nice example in this piece.   

Lastly, many finance puzzles cannot be understood without a fairly sophisticated understanding of the regulatory backdrop.  I find many of the finance papers I read on SSRN lacking in this respect (although, increasingly, many are good).  I tend to focus on the interaction between tax and corporate governance, but of course other regulatory fields like securities, banking, and financial intermediation rules are important too.  (Litvak and I have had an exchange in print that illustrates my point.  Her piece is here; my short response is here.)

Now, having said all that, I don't want to lose sight of the original question on Leiter's blog, which was the value of a PhD.  It's my opinion that most schools need more PhDs, not fewer.  I just hope that hiring more PhDs adds richness to legal scholarship without dividing us into too many separate pods.

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