Just wanted to say congratulations to both the SMU Dedman School of Law and my coauthor Grant Hayden on Grant's upcoming move to SMU. Grant is going there along with Joanna Grossman, James Coleman, and Dale Carpenter -- a terrific group of lateral hires. Along with a few articles in the works, Grant and I are working on a book for Cambridge titled "Reconstructing the Corporation." I'm excited for him and Joanna and congratulate SMU Dean Jennifer Collins and the SMU faculty for choosing an excellent set of new colleagues.
Congratulations to my three Colorado Law students Stephanie Drumm, Josh Kohler, and Parker Steel who were named co-national champions (along with a UCLA team) at the annual Transactional LawMeet competition this weekend in New York. The Colorado Law team also won the best draft award.
This competition -- a sort of moot court for transactional law -- was the brainchild of Drexel law professor (and friend of the Glom) Karl Okamoto. It has been running for over five years and has now grown to the point where the competition has seven regional competitions that feed into the national finals. Colorado Law students have shared the national title for the last three years. Go Buffs!
Via Paul Caron, I saw that ATL was mocking Wake Forest University School of Law for experimenting with having applicants use the GRE for admissions purposes instead of the LSAT. Instead of cheering experimentation and a possible break-up of the LSAT monopoly, the headline screamed "This Law School Will Pay You to Take the GRE to Save its USNews Rank From the Dreaded LSAT."
Ugh. Putting aside the clickbait headline, there is something interesting going on here. First of all, WF isn't paying random people to take the GRE and apply, it's paying its own graduates to take the GRE, so it can analyze a group of folks with LSAT scores, law school grades and bar passage information who also took the GRE. Researchers often use monetary incentives to get subjects to enroll in studies, and taking the GRE is a four-hour commitment. So, $50 and lunch for four hours of pretty intense concentration doesn't seem like excessive bribery to me. To incentivize serious test-taking, WF will pay $25 more if your GRE score is within 20 percentile points of your LSAT score, which seems quite generous and aimed merely to weed out the "I put my name down" crowd. If the study finds that the GRE has predictive value for success in law school and/or bar passage, that would be awesome and perhaps give some competition to the LSAT.
Though ATL quotes its "tipster" as saying "How can this be read as anything other than borderline panic about the future of legal education?" I have a completely different read. How cool!
I haven't talked to anyone at WF about this, but my intuition as a faculty member is that proving to the ABA that the GRE is as predictive as the LSAT has a lot of benefits (and not mere instrumental USNWR gaming). What we have seen in admissions is that a lot of stellar undergraduates are choosing not to apply to law school (and not to take the LSAT). These people must be doing something else instead, and chances are many of them are taking the GRE and going to a different graduate program. If you could get that cohort to apply to law school easily, then you might be able to persuade them that law is still a great career path. If they've already taken the GRE, then they can use that score and not worry about studying for the LSAT or plunking down $1k for a prep course. In addition, recruiting folks already in graduate programs or who have completed graduate school to apply may be easier if they don't have to take a different test. Even trying to recruit someone who has taken neither test to apply to law school would be easier if they could take the GRE. The GRE is given on a rolling, year-wide basis around the world and even on your own computer. I just looked online, and I could take the GRE as early as Monday (less than a week from now) a few miles from here or even sooner if I drove 30-45 minutes. I would have my scores in 10-15 days. The LSAT, however, is given four times a year (with alternate dates for Saturday Sabbath observers and Spanish speakers). Test-takers must register a month in advance and wait a month following the test for their scores. I find it strange that the LSAT schedule has not changed since I took it in 1989.
So, I think it would be great if applicants could use either the GRE or the LSAT to apply to law school. Perhaps then the LSAT could change with the times and become more computer-friendly and flexible. (The GMAT is also given year-round, and I could make an appointment to take it a week from Monday if I so chose. The MCAT is not given year-round, but there are 18 test dates between April and September.) Either way, having applicants submit GRE scores would not serve to let WF or any other law school game the system. I'm sure if the ABA allowed law schools to use the GRE as an alternative to the LSAT, then USNWR would figure out how to rank GRE scores also.
Generally, in personal or corporate lending, interest rates reflect individualized risk. A seasoned company with years of positive cash flow and great collateral will have a lower cost of borrowing than a company with a rocky history that is highly leveraged. And, of course, anyone who watches cable TV can assume that an individual's credit score will affect the interest rate they will pay for a car loan, mortgage, personal loan, etc. However, federal student loans come in universal interest rates for undergraduates and graduate/professional students, regardless of the student's school, degree program, grades, or eventual job offer. And, these rates are fairly high, even though they were lowered under the Obama administration. The rates for law student federal loans are now 5.84% and 6.84%. Considering that the prime rate is 3.5% and a 30-year fixed mortgage rate just a smidge above that, these rates seem sort of crazy for low-risk students.
Last Spring, I was at a conference at UC-Santa Cruz (finance department), and the keynote speaker was Mike Cagney, CEO of SoFi (Social Financial). The backstory of SoFi as he told it was that he realized that students at Stanford (I think Stanford Business School) were paying the very high federal student loan rate, but that there had not been a default of a domestic Stanford (business?) student in 20 years. So, he arranged for peer-to-peer lending between Stanford alumni and students to refinance those loans at a more competitive rate. With interest rates so low, it was not a hard sell to the alumni that they could get a low-risk investment that returned 2.5% and helped out a fellow Stanford alum. Now, SoFi is venture-backed and no longer peer-to-peer. It has also grown and spread into other lending areas where there is a disconnect in this low-rate investing but strict criterial lending environment. Cagney also spoke of how banks' criteria is biased against his favorite low-risk group -- HENRYs (High Earners, Not Rich Yet).
Latham & Watkins is in the news this week for seeing the same disconnect in its new associates, who were knee-deep in high-interest student loans but were low-risk due to stable, high-income employment. So, Latham arranged with First Republic Bank and SoFi to refinance $13M in student loans for over 100 associates (that's a lot of debt-per-associate) at "rates as low as 2.5%." The details were not in the news, but it would be interesting to see what credit support Latham gave, if any. First Republic might have seen this as a private banking opportunity, just as many commercial banks lend to law firms to get the private banking business. Or, Latham may have provided some sort of guaranty support. That seems fairly risky for Latham, though. Also, I wonder if the bank loans are contingent on the associates remaining employed at Latham. The SoFi refinancings seem more like SoFi's stock-in-trade. (SoFi seems to sell its student loans into the securitization market.)
I wonder why other employers don't see the same opportunity. I can see in a cynical way that employers may like associates with high debt because then "golden handcuffs" may appear even more golden, but a lower interest rate probably isn't going to enable associates to retire early to write that novel. I could also see employers with a lot of cash refinancing the loans themselves. With paycheck withdrawals, the loans would be pretty low-risk, and it's hard for most law firms to make 2.5 to 3.0% on their money these days. I also wonder why more law schools with large endowments don't self-finance for the same reason. (Though, according to Vic Fleischer, schools with super-large endowments pay hedge fund managers to get a higher return than that.)
And yes, I understand that law school grads who refinance give up the benefits of the federal student loan program -- deferral for unemployment and health reasons, discharge for disability or death, and income repayment and forgiveness plans.
The newly-renamed school announced a $100 million gift yesterday from J.B. and M.K. Pritzker. The funds will be put to a variety of purposes. A major purpose of the gift is to provide scholarships for students to attend Northwestern Pritzker. The funds will also support several social justice centers at the school and will permanently endow Northwestern's entrepreneurship law center, which was renamed in honor of J.B.'s father Donald Pritzker. Finally, the gift also will go towards endeavors to develop students’ entrepreneurial skills and to advance law-business-technology initiatives, including the Master of Science in Law program. Dean Dan Rodriguez said, "Not a cent of this gift goes to bricks or mortar or buildings. The point of this gift is that all of it goes to the efforts to enhance our educational opportunities for our students."
Members of the Pritzker family are noted philanthropists, both in Chicago and nationally. Students of Business Organizations (past and present) are familiar with the efforts of J.B.'s uncle Jay to purchase TransUnion, which led to Smith v. Van Gorkom and then DGCL § 102(b)(7). Congrats to Northwestern for this very generous donation.
I'm very pleased to announce that starting next fall I will have Gregg Polsky as a colleague here at Georgia Law. Not only is Gregg a renowned tax scholar, but he plays in some of the same sandboxes I do: private equity, IPOs, entrepreneurship, and other fun stuff. Welcome to Georgia, Gregg!
Come be my colleague! Athens is an amazing college town, the weather is warm, and the living is easy.
The University of Georgia School of Law is seeking applicants for up to two full-time tenure-track faculty positions to begin Fall Semester 2016. Curricular needs include Bankruptcy, Corporate Finance, Corporations, Federal Taxation, Intellectual Property, and Secured Transactions. We are actively considering both entry-level and lateral candidates.
Applicants should send their material to my colleague Andrea Dennis, firstname.lastname@example.org
The University of Alabama School is hiring, and my friend Julie Hill is chairing the appointments committee. Position descriptions after the break.
Assistant Professor / Associate Professor / Professor
The University of Alabama School of Law anticipates making at least two tenured or tenure- track appointments to its faculty, to begin in the 2016-2017 academic year. The Faculty Appointments Committee seeks applications from entry-level candidates with excellent academic records and demonstrated potential for exceptional teaching and scholarly achievement. We also welcome applications from lateral candidates who possess outstanding academic credentials, including demonstrated teaching ability and a record of distinguished scholarship. Although positions are not necessarily limited by subject matter, we are particularly interested in the following academic subject areas: business law, commercial law, employment law, family law, and labor law. Most candidates will have a J.D. degree from an accredited law school. Exceptional candidates who possess an advanced degree, such as a Ph.D., and who have scholarly interests related to the law involving interdisciplinary, jurisprudential, empirical, or social scientific work may be considered even without holding a law degree. The University of Alabama embraces and welcomes diversity in its faculty, student body, and staff; accordingly, the School of Law actively welcomes applications from persons who would add to the diversity of our academic community.
Salary, benefits, and research support are nationally competitive. The School of Law will treat all nominations and applications as confidential, subject to requirements of state and federal law. Interested candidates should apply online at facultyjobs.ua.edu. The positions will remain open until filled. Please refer any questions about the hiring process to Professor Julie A. Hill, Chair of the Faculty Appointments Committee for the 2015-2016 academic year (email: email@example.com).
D. Paul Jones & Charlene A. Jones Chair in Law
The University of Alabama School of Law seeks nominations and applications for a University- level Chairholder. The School of Law has achieved a high level of excellence in the quality of its faculty, students, administration, and staff. We seek to build on our standing as one of the leading public law schools in the United States through recruitment of a Chairholder with a national or international reputation for scholarship and teaching of the highest caliber. We welcome nominations and applications in all fields of law. Most candidates will have a J.D. degree from an accredited law school. Exceptional candidates who possess an advanced degree, such as a Ph.D., and who have scholarship related to the law involving interdisciplinary, jurisprudential, empirical, or social scientific work may be considered without holding a law degree. The University of Alabama embraces and welcomes diversity in its faculty, student body, and staff; accordingly, the School of Law actively welcomes applications from and nominations of persons who would add to the diversity of our academic community.
Salary, benefits, and research support will be nationally competitive. The School of Law will treat all nominations and applications as strictly confidential, subject only to the requirements of state and federal law. Interested candidates should apply online at https://facultyjobs.ua.edu/. Nominations should be e-mailed to Dean Mark E. Brandon at firstname.lastname@example.org. The position will remain open until filled. Please refer any questions about the hiring process to Dean Brandon at email@example.com.
Alexia Brunet Marks and Scott Moss (my former Marquette colleague) have an interesting paper on SSRN this week that was also profiled on the WSJ Law Blog. "What Makes a Law Student Succeed or Fail? A Longitudinal Study Correlating Law Student Applicant Data and Law School Outcomes" should be of interest to anyone either applying to law school or admitting students to law school. The two authors collected seven or eight years of applicant data from the University of Colorado Law School and Case Western Reserve Law School for 1400 enrolled students and matched the applicant data with resulting law school grades to see which application factors had the most predictive power for law school grades. I was on an admissions committee with Scott Moss for two years, so I was very interested to see whether this study confirmed or disproved some of our heuristics.
Table 3 sums up the findings. "Positive Predictors" are LSAT, UGPA, LCM (LSAT College Mean), STEM or EAF (economics, accounting or finance) major, post-college career last 4-9 years, being a teacher, and a rising UGPA if the UGPA is not old. Though the abstract states that the LSAT underperforms compared to conventional wisdom, I think the actual findings resemble what most of us thought about the LSAT: it predicts first-year grades, but not necessarily cumulative grades. UGPA does correlate with long-term grades, but it seems like only somewhat better than the LSAT. This is surprising to me only because I tend to discount UGPA in the era of grade inflation. The combination of high LSAT/low UGPA has a negative correlation with grades, confirming a gut feeling I have been spouting off for years. The variable of have a teaching career being positively correlated with law school grades is intriguing, though it seems to match my experiences with the very small number of ex-teachers I have taught.
I will let others pore over the statistical findings. The authors do a good job of describing the limitations of their data -- grades, not job placement or satisfaction, are used as a proxy for law school "success." Only matriculants are in the pool, so these are students who may have been chosen despite low UGPAs or LSATs because of other qualities that may not show up in the data -- in other words the pool is selected to succeed. And of course, the data cannot code for personal qualities such as ambition and drive.
What is an interesting thought experiment is whether law schools would have changed any admissions practices if Marks and Moss had proven zero correlation or even a negative correlation between LSAT and law school grades. Given the oppression of the USNWR rankings, which have worked to put undue emphasis on LSAT scores, then other things would have to change before law schools could throw out the LSAT (including changes at the ABA).
As an aside, having been in admissions meetings with Scott, the most interesting finding is that a disciplinary or criminal record has a negative predictive value equivalent to over a 7 point drop in LSAT. This is fascinating to me because the applicants who are admitted with disciplinary or criminal records generally are admitted because the infraction is minor, isolated or both. In other words, most of those applicants are let in under the assumption that their records do not reflect any cause for concern. Apparently, admissions committees should be paying more attention to random minor-in-possession records than we thought! Yikes!
Congratulations to my former colleagues Alfred Mathewson and Sergio Pareja, who were named co-deans at the University of New Mexico School of Law, my old home. They will make a great team. I saw them work wonderfully together in our tight business law group, earning the respect of faculty, students, staff, bench, and bar. Both started their careers, decades apart, at Holme, Roberts, and Owen in Denver. Both are skilled tax lawyers and dedicated teachers. Alfred and Sergio also have considerable experience in administration. Alfred stepped into be interim head of UNM’s Africana Studies Program, took an active faculty oversight role in UNM Athletics, and has been active in ABA accreditation. Sergio has been a campus leader and ran a study abroad program. Alfred and Sergio served as Associate Dean for Academic Affairs.
I admit that I don't tear into every paper reverse engineering the USNWR rankings out of principle, but this paper by Robert L. Jones (hat tip: Tax Prof Blog) seemed worth the read. (The paper is a shorter essay updating a longitudinal research paper from two years ago that I missed.) Both papers look at those ever-so-important "academic reputation" scores that show up in the USNWR to make every law school strive to improve its academic reputation. These scores are the result of surveys sent to every law school dean, academic associate dean, chair of appointments and newly tenured faculty member. Each school is rated 1 to 5. If you've ever stepped foot into a law school as a faculty member, you have been in a conversation on how to boost this score. Splashy new hires? Increasing scholarship? Increasing visibility of scholarship? Conferences? And you will inevitably hear someone say that academic reputation scores are "sticky" -- they do not seem to move quickly or substantially, no matter what schools do. This paper answers the "why" of the sticky question and concludes that the scores are not sticky -- they are intentionally deflated. First, here's Jones' graph showing that the average ARS has declined since 1998, with a particular trend since the disruption in the legal market during the financial crisis, despite all the investments schools have made in increasing scholarship and expanded hiring. Moreover, these scores have declined while judge/lawyer reputation scores have increased.
Why this decline then? Jones contends that because of the importance of the rankings and the competition the rankings engender, that voters act strategically by deflating the rankings of competitor schools. The more important the rankings are, then the more strategic the voting. No voter has an incentive to give high reputation scores, but a real incentive to give low ones. Therefore, Jones concludes, the academic reputation scores are worthless. (I could see an argument that if all voters systematically gave lower grades to everyone, then the scores are valid as a ranking, much like a 2.7 grading curve mean. But, we don't know how systematic the strategic ranking is. One could imagine that competitor schools over-punish schools that make large, visible investments in academic quality and ignore schools that are not seen as threats.) I have just begun to foment thoughts on this theory, but if it's true then it calls into question many firmly-held beliefs about expensive practices that are thought to "boost the rankings."
I co-teach a year-long Business Ethics class that culminates in the students writing and presenting a case study. (It occurs to me that I haven't blogged much about this class, and I will rectify that, but that's for another post.)
Today I want to talk about a case study that focused on textbook pricing-- undergraduate, because there is more information available. One student recounted a single Intro Bio textbook that cost $500. I remember thinking books were expensive back in my college days, but $500! How does textbook inflation compare with other metrics? According to the GAO, the price of textbooks increased 82% between 2002-2021, tuition and fees increased by 89%, and overall consumer prices grew by 28% (this stat and the others come via the excellent case study).
Where does all that money go? I've always wondered. According to this US News article, 21.6 %of the purchase price of a new book goes to the bookstore, 1% to shipping, and 77.4% to the publisher. And according to the same article, in 2008 (the last available data) 15.4% of the purchase price went to marketing, 11.7% to authors, 32.2% to paper, printing, and overhead.
We told the students to be neutral in the case study, so here's the publishers' position: students increasingly want products that accompany textbooks, including study guides and applications like online quizzes and homework for teachers. These things cost money to develop.
While the case study focused on college textbooks, of course the students talked about their experiences in law school. The consensus is that casebooks are way too expensive. There's a lot of frustration over the fact that rental prices and digital casebooks are not much less expensive than new ones. The students heartily condemned the widespread practice of changing a few pages in a casebook and then trotting out a new edition to avoid cannibalization from the secondary market.
I had pushed the case study author to address the professor's role in all this--not the casebook authors, but the professor selecting a casebook. Because, as the students are all too aware, this isn't a pure market, it's a mediated one. Students enrolled in a course are captive to their professor's textbook choices. Which brings me to my ethical question: what responsibility do I as a teacher have to my students in selecting a casebook? Should I pick the cheapest one? How much, if at all, should price matter to me? Some of my colleagues have even developed online casebooks, that are either free or available at a very low cost.
I can't go that far. I switch Corporations casebooks every year because 1) I'd get bored otherwise and 2) the students would have the notes from prior years and they would phone it in. And, frankly, I'm not excited about the prospect in compiling and editing a bunch of cases--there are plenty of people out there who have spent a lot of time thinking about how to structure a casebook, and they've done a better job than I could. The compromise I've currently struck is never to select a casebook in the first year of a new edition. That way at least the students have the choice of buying used. I'm not sure this is the right balance, but it's one I can feel okay about, at least for now. More deeply, it seems like as we move to digital publishing something has got to give.
VLS is a beautiful law school, in a beautiful place, and it isn't owned by the state of Vermont. So why did it commission a study establishing its economic importance for the Vermont economy? I would guess that it is either an effort to lay the groundwork for a bailout, or a pitch that the law school should be made a part of the state university system. The study's bottom line:
VLS is shown be a very strong contributor to the local economy. By virtue of the unusually high proportion of operating expenditures made in Vermont, itself a product of relatively high salaries of its professional staff, VLS is responsible for a high level of job and income creation. VLS generates not only strong payroll-related spending, but when combined with student and visitor expenditures, resulting employment growth is very strong. The 2.9 employment multiplier for VLS, discussed in the section on total economic impact, is dramatic evidence that VLS produces a highly localized impact in a small state that normally sees a high proportion of expenditures flow from the State for goods and services produced elsewhere.
It's hard to know what the future holds, of course, but the school has been engaged in some serious downsizing - the sort of downsizing that would suggest that hiring a consultant to defend the value of the school is an expense worth foregoing. And there have long been mutters about a takeover, either by Dartmouth or UVM - the law school is located almost exactly between them. Could the law school be making a case for a merger? There's also all of this previously.
Assistant Director of the Center for Transactional Law and Practice
Emory Law School
Emory Law School seeks an Assistant Director of the Center for Transactional Law and Practice to teach in and share the administrative duties associated with running the largest program in the Law School. Each candidate should have a J.D. or comparable law degree and substantial experience as an attorney practicing or teaching transactional law. Significant contacts in the Atlanta legal community are a plus.
Initially, the Assistant Director will be responsible for leading the charge to further develop the Deal Skills curriculum. (In Deal Skills – one of Emory Law’s signature core transactional skills courses – students are introduced to the business and legal issues common to commercial transactions.) The Assistant Director will co-teach at least one section of Deal Skills each semester, supervise the current Deal Skills adjuncts, and recruit, train, and evaluate the performance of new adjunct professors teaching the other sections of Deal Skills.
As the faculty advisor for Emory Law’s Transactional Law Program Negotiation Team, the Assistant Director will identify appropriate competitions, select team members, recruit coaches, and supervise both the drafting and negotiation components of each competition. The Assistant Director will also serve as the host of the Southeast Regional LawMeets® Competition held at Emory every other year.
Additionally, the Assistant Director will be responsible for the creation of two to three new capstone courses for the transactional law program. (A capstone course is a small, hands-on seminar in a specific transactional law topic such as mergers and acquisitions or commercial real estate transactions.) The Assistant Director will identify specific educational needs, recruit adjunct faculty, assist with curriculum design, and monitor the adjuncts’ performance.
Besides the specific duties described above, the Assistant Director will assist the Executive Director with the administration of the transactional law program and the Transactional Law and Skills Certificate program. This will involve publicizing the program to prospective and current students, monitoring the curriculum to assure that students are able to satisfy the requirements of the Certificate, and counselling students regarding their coursework and careers. The Assistant Director can also expect to participate in strategic planning, marketing, fundraising, alumni outreach, and a wide variety of other leadership tasks.
Emory University is an equal opportunity employer, committed to diversifying its faculty and staff. Members of under-represented groups are encouraged to apply. For more information about the transactional law program and the Transactional Law and Skills Certificate Program, please visit our website at:
To apply, please mail or e-mail a cover letter and resumé to:
Emory University Law School
1301 Clifton Road, N.E.
Atlanta, GA 30322-2770
APPLICATION DEADLINE: April 30, 2015
In a short story sure to enrage the scambloggers, and already on AboveTheLaw, note this:
Law schools are in crisis: Enrollment is plummeting, bar exam pass rates are declining, and the employment rate for fresh graduates is abysmal. There's one area, however, in which these institutions still outpace the rest of academia: how much they pay. Tenured law professors pulled in a median salary of $143,509 in 2014, more than professors in any other discipline, according to new survey data.
Here's a chart:
This is a case where medians are ... appropriate? Tons of business school professors, who finish second on the list, make not so much. But there are way more business schools than law schools, and the variation in quality, and pay, is high. It looks like the law professor ranks include legal studies professors at colleges and business schools, and that might be a reason to suggest that the median for the salary of tenured law professors in law schools is higher than the listed number. And don't even get me started on a conflation of biological and biomedical sciences.