Empirical Legal Studies

Intriguing Use of Content Analysis

Political scientists Brian Calvin, Paul Collins, and Pamela Corley (at Univ. North Texas, Univ. of North Texas, and Vanderbilt, respectively) report results from their study that compares Supreme Court opinion text with text from the relevant lower court opinions. Over at the Conglomerate David Zaring's post provides helpful context. The paper's excerpted abstract, below, summarizes.

"... We argue that lower court opinions will influence the content of the Court’s opinions based on a number of factors, including the prestige of the lower court opinion author, the published or unpublished nature of the lower court opinion, the ideological compatibility of the lower court opinion vis-à-vis the Supreme Court’s decision, the type of lower court opinion, and the lower court from which the opinion emanated. Utilizing plagiarism detection software to compare lower federal court opinions with the majority opinions of the Supreme Court during the 2002-2004 terms, we uncover support for our hypotheses, indicating that the Supreme Court systematically incorporates language from the lower federal courts into its majority opinions."

Law School 4.0: Are Law Schools Relevant to the Future of Law?

Paul Lippe, a well-known Silicon Valley GC and founder of Legal OnRamp (LOR), recently posted an essay on the Am Law Daily that essentially argues that law schools, at least in their present form, are not relevant to the future of law.  Here is Paul's opening graph:

If I need some insight into the future of medicine, I might head over to Stanford Medical School. If I wanted to learn about likely directions in finance and hedge funds, I might visit Penn's Wharton. If I were looking to make investments in computing, I might arrange a tour of a lab at MIT. If I decided to learn something about where legal practice, law firms, and legal departments will be in 2014, where would I go? Not to law school.

According to Paul, it is not that we are working on irrelevant stuff.  It is worse than that:  we are enjoying a comfortable living while loading our students up with debt and having a low opinion of practicing lawyers and the clients they service.  Paul recounts a recent meeting with law school deans in which he "asked the question, 'If you decided the purpose of law school was to maximize the comfort and income of the faculty, what would you do differently?' The answer: 'Nothing.'" 

Some people might be tempted to lump Lippe together with Judge Harry T. Edwards, who wrote several withering critiques of legal education during the early and mid-1990s.  See, e.g.,  Harry T. Edwards, The Growing Disjunction Between Legal Education and the Legal Profession, 91 Mich L. Rev. 34 (1992); Harry T. Edwards, A Postscript, 91 Mich. L. Rev. 2191 (1993).  Such lumping together is a mistake.  Edwards' criticisms were largely centered on the present--that professors where disengaging with doctrine and increasingly irrelevant to judges and practicing lawyers. 

In contrast, the gravamen of Lippe's remarks are about thought leadership and the ability to identify future solutions to macro-level problems.   Consider the following trend-lines, which are representative of the types of issues that Lippe often discusses in his LOR and Am Law Daily columns:

• Nature and Cost of Civil litigation.  With the proliferation of electronic documents, civil litigation is becoming more time-consuming and expensive.  Thus, disposition of cases is increasingly influenced by the financial wherewithal to wage prolonged campaigns in court rather than the merits of underlying disputes.  A thought leader would be proposing (a) how to re-engineer the civil justice in a way that reduces costs and improves access, or (b) how to anticipate and avoid legal disputes through systems that keep clients out of a broken civil justice system. 

Mediation and arbitration are just the beginning, not the end.  For example, the credit card industry has eliminated virtually lawyers from consumer-vendor  disputes.  See Morriss & Korosec, Private Dispute Resolution in the Card Context (working paper, June 2005).  Some would argue that this is a good thing for business and consumers.   Further, the lawyers who innovate through designing such a system will always get a prime seat at the table. In contrast, lawyers wedded to established ways may find fewer buyers of their services.

• Shifting Nature of Clients. Because of the shifting economics of the profession, an ever large proportion of law graduates earn their living as "thing" lawyers rather than "people" lawyer.   Believe it or not, in the 1930s, the dean of Yale Law School was preoccupied with the oversupply of lawyers. Why? Because the majority of Yale grads became general practitioners--i.e., people lawyers--within the local New England economy.  See Charles E. Clark & Emma Corstvet, The Lawyer and the Public: An AALS Survey, 47 Yale L. J. 1272 (1938).  That world no longer exists.  The overwhelming majority of law school graduates will serve as "thing" lawyers, either for government, private industry, or a public interest cause.  Yet, hearkening back to the time of Dean Clark, our entire regulatory framework is premised on the idea of a client who is a single, natural person. 
  

We lawyers claim to be responsive to economic and social forces and readily profess our commitment to the public interest.  See Preamble, MPRC para. 6 ("As a public citizen, a lawyer should seek improvement of the law, access to the legal system, the administration of justice and the quality of service rendered by the legal profession. ... A lawyer should aid the legal profession in pursuing these objectives and should help the bar regulate itself in the public interest.").  Yet, for nearly a century, the pace of regulatory reform for lawyers has been either glacial or non-existent.  And all-too-often, the changes that have occurred are driven by "parochial or self-interested" motives. Id at para. 12.

Under Lippe's thought-leader ideal, members of the legal academy would be re-conceptualizing the assumptions underneath lawyer regulation and proposing an institutionally coherent strategy for altering the regulatory landscape in a way that simultaneously helps ordinary citizens, business, and the democratic process.  In theory, we've got the time, resources, and brain power.  Where is the leadership?

• Cost and Quality of Legal Education.  Over the last 30 years, the cost of a legal education has increased approximately three times faster than the average household incomes.  Yet, it is difficult to identify a corresponding innovation within legal education that justifies the higher cost.  A thought leader conceives of ways to reduce the cost of legal education or equip graduates with a larger skill set that is likely to provide a substantial return on investment.  Here, I am not talking MacCrate-type skills, as important as they might be.  Rather, I am thinking legal-process engineering and the ability to standardize and commoditize legal products in a way that increases predictability and drives down cost.   See, e.g., Richard Susskind's collected works. 
  

If lawyers solve problems, perhaps traditional legal disputes and transactions are a mere subset of  the services we might provide.  What skills are especially relevant to the 21st century global economy.  Once again, because of our time, resources, and brain power, Lippe is surprised we are not leading the conversation.  Maybe he has a point.

It is tempting to write Lippe off as an arrogant Silicon Valley GC.  But before we do, it is worth noting that Fred Krebs, president of the Association of Corporate Counsel (ACC), wrote in a comment to Lippe's essay that Paul was "Right on point. Should be required reading for law school faculty."   We can be dismissive of Krebs as well, but the legal spend of his constituents (in-house legal departments) is the very thing that supports the high cost structure of legal education.  If legal educators are uninterested in problems of people who buy the majority of legal services, we should not be surprised when in-house lawyers work very hard to reduce their reliance on U.S.-trained lawyers.   Entrepreneurs in Europe, India, and Latin America are salivating at the prospect of easier access to the U.S. corporate legal market. There is just no way that a state disciplinary commission is going to use the unauthorized-practice-of-law hammer to challenge how GE or DuPont allocates its legal spend--there is zero consumer protection basis for stopping the mass migration of this type of legal work. 

Frankly, amidst the meltdown of the entry-level lawyer job market, I am surprised by the lack of significant interest or attention by legal academics, at least as judged by blogosphere traffic.  It is all-too-easy to assume that the market will rebound next year, or 2011 at the latest.  To this I might ask, "What is the basis for the optimism?"   The salad days of 2004 to 2008 were driven by a Wall Street juggernaut that destroyed the U.S. investment banking industry, which was the historical client basis for the industry's most prestigious law firms.  And here is a more pointed follow-up question, "How much does the legal economy need to recover so that our students can to support their debt load?"  See, e.g., Jonathan Glater, Finding Debt a Bigger Hurdle than the Bar Exam, NY Times, July 1, 2009.  Obviously, the answer to this question requires some careful study and some math.  Vague appeals to the business cycle just won't cut it.

It is one thing to acknowledge that we lack good answers--that part is forgivable.   But it is quite another to ignore or minimize the problem because, quite frankly, it really does not affect us personally.  All of this reminds me of my youth in Cleveland, Ohio during the 1970s and 80s.  Lots of my friends' parents worked for General Motors, which offered high pay, amazing benefits, predictable hours, and long vacations.  No one else seemed to have it so good.   I remember thinking at the time that GM was both complacent and invincible.  It turned out that I was only half right.   So I worry about my own industry.  Do I have the mindset of a GM employee circa 1979?  God, I hope not. 

Recently, the editors of Above-the Law surveyed the changes within the legal job market and asked two good questions:  (1) if the Howrey/Drinker Biddle/Frost Brown Todd apprenticeship model gains traction, is it appropriate to shorten law school to two years? And (2) if law school salaries are going down, should law schools be expected to "share in the pain" by figuring out ways to reduce tuition?  Unless the job market significantly improves during the next 12 months, it is going to get much more difficult for us to ignore these issues. For a realistic cost analysis of the current system, see Edward Rubin, Should Law Schools Support Faculty Research, 17 J. Comtemp. Leg. Issues 139 (2008).

I don't want this post to be a screed.  I am looking for next steps that will produce concrete and sustainable forward progress.  But I have read enough history on the growth and evolution of U.S. legal education to have a realistic view on institutional change.  Here are my two primary rules:

Rule #1:  Great ideas are not enough.  As a result, bold initiatives by professional organizations like the AALS or the ABA rarely have staying power.   Law professors are intellectuals; hence, we fall in love with our own ideas.  But all-to0-often, we fail to do a coherent institutional analysis that explains why others will adopt our ideas.   Skipping this step is one of the privileges (and hazards) of the ivory tower.  For a more elaborate discussion of this point, see Why I Worry About the Carnegie Report: Four Data Points (Dec. 7, 2007).

Rule #2:  Sustainable ideas within any industry are always accompanied by institutional self-interest--legal education is no exception.  In other words, the people who execute on the idea have to be made better off, e.g., through financial gains, professional reputation, leisure, economic security, or (at the individual level) self-actualization.   This was secret sauce behind the Langdell case model:  It was more effective than self-study yet it facilitated large enough class sizes to generate a perennial economic surplus.  In turn, lawyers-turned-law-professors were freed from the commercial pressures of practice and could advance their careers as experts.  The university, professors, and students were all made better off.  As a second order effect, so was the legal profession.   Of course, this revolution occurred 100 years ago.  It is time for a new legal education formula that fits the 21st century.

Lippe understands this calculus.  Indeed, he ends his essay with a "glass is half-full" perspective that is bound to be overlooked: 

While law schools need to figure out how to get graduates out the door faster and for less money, they also are the logical source ... of skills (as well as reputation and network) development for lawyers to become fully functional, especially as firms' appetite for subsidizing training will decline. Medical schools and business schools make a ton of money at continuing/executive education, so this is a great opportunity to enrich the faculty and student experience, generate an income stream, and engender more alumni loyalty.

In other words, innovation starts at home with a law school business model that pays the freight by delivering financial and reputational benefits to stakeholders.  And if our metric is 20 slots in US News, we are setting the bar too low.  This type of innovation creates an entirely new system of merit.   To my mind, Lippe's Law School 4.0 is a worthwhile and achievable goal.  The only downside is that we have to fully engage in the problems of the modern legal profession and be willing to fall flat on our faces.  Sounds interesting.  Sign me up.

Updated Judicial Common Space Scores

here. Courtesy of Profs. Lee Epstein, Andrew Martin, Jeff Segal, and Chad Westerland. JCS attempt to provide preference estimates for Supreme Court justices that are directly comparable to preference measures of Courts of Appeals judges, members of Congress, and the President. Our data extend through 2008 and correspond with the most recent version of Keith Poole's Common Space scores.

The End of an Era: the Bi-Modal Distribution for the Class of 2008

NALP has just posted its entry-level starting salary for class of 2008--i.e., the lawyers who started their jobs just as Bear Sterns and Lehman Bros unraveled and the credit markets completely froze up. 
 
Of the 22,305 law school graduates in NALP's sample (over half of all 2008 graduates), a remarkable 23% (5,130  '08 grads) reported an entry-level salary of $160,000.  In contrast, 42% of entry level lawyers reported salaries in the $40,000 to $65,000 range.  Once again, the central tendencies are a poor guide to the distribution as a whole: whereas the mean salary is a $92,000, the median salary was $72,000.   Further, the two modes ($50,000 and $160,000) are separated by $110,000.

Amidst all the layoffs, deferrals, salary cuts, and apprenticeship programs announced in 2009, it is safe to venture that the bi-modal era has peaked.  Every law school class for the foreseeable future will graduate to a much different economic landscape.  Although many students will regret the opportunity to earn such a big payday upon graduation, it brought with it intense billing pressure, client resentment, heavy leverage, and very little substantive training for new hires.  I would argue that profession as a whole (including current and future graduating classes) is better off with a lower entry level salary. 

Admittedly that is a long-term view for the profession as a whole.  In the short term, current students and recent graduates are in a world of hurt.  Specifically, law school debt loads continue to climb.  Thus, law schools are (rightfully) going to be under increased pressure to deliver value to our students.  I don't think most law professors and law school administrators fully appreciate the difficult times ahead.  For a provocative take on the current state of legal education, see Paul Lippe, Welcome to the Future: Time for Law School 4.0.

For some perspective on how this crazy market evolved, see:

• Henderson, Distribution of Starting Salaries for 2006: Best Graphic of the Year (Sept. 4, 2007)
• Henderson, How the Cravath System Created the Bi-Modal Distribution (July 18, 2008)
• Henderson, Class of 2007:  A More Extreme Bi-Modal Distribution (July 30, 2008)
• NALP, A Picture is Worth 1,000 Words (Sept. 2007).

After the jump are the distributions from 1991, 2006, and 2007.  The primary takeaway is that the bi-modal did not exist in the early 1990s.  It first emerged in 2000 (with the dot.com salary wars) and became progressively more extreme starting as the decade unfolded.  On Wednesday, I have an article coming out in the NALP Bulletin, entitled "The Bursting of the Pedigree Bubble," which will provide some additional analysis.

Dependent Data

A nice--albeit somewhat technical--paper (here) underscores an all-too common challenge in empirical legal studies: The perils of serial correlation and the threat it poses to independence assumptions in models.  An excerpted abstract follows.

"In a recent securities law case, the statistical methods used by the regulator in analysing data on daily commissions and hypothetical profits from initial public offerings (IPOs) assumed that the data on consecutive days were independent. Consecutive observations in most business and economic data, however, are positively correlated. While statistical articles demonstrate that this type of dependence affects the distribution of virtually all statistics, including non-parametric and goodness-of-fit tests, the magnitude of the effect may not be fully appreciated. For example, in one comparison of commissions one broker received on days with an IPO to the days when no IPO was issued yielded a statistically significant p-value of 0.02, under the independence assumption. Accounting for serial correlation, the test actually had a non-significant p-value close to 0.09. Other examples of the effect of dependence include jury discrimination cases in locales where grand jurors can serve two consecutive terms as well as cases concerned with environmental pollution where measurements are spatially and temporally correlated. This paper describes the noticeable effect violations of the independence assumption can have on statistical inferences."

ECJ Database

Alec Stone Sweet and Thomas Brunell have posted three data bases, on the activities of the European Court of Justice, and the adjudication of EU law, under Articles 226 (infringement proceedings - brought by the Commission against a Member State), 230 (annulment actions in administrative law brought by individuals and companies against the EU), and 234 (preliminary references from national judges to the ECJ).  They collected these data over the course of 12 years, and they are unavailable outside of the Court, which does not provide public access to them. The home for these data is the Robert Schuman Centre, the European University Institute. The datesets, accompanying codebooks, and papers providing summary analyses of the data can be found here: http://www.eu-newgov.org/datalists/deliverables_detail.asp?Project_ID=26. Since 1996, scholars have used these data in a wide variety of research projects, including doctoral dissertations, books, articles in economics, law, sociology, and political science.

Call For Papers: SELS 2009

The Fourth Annual Conference on Empirical Legal Studies will be held at the USC Gould School of Law in Los Angeles, California on Friday, November 20 and Saturday, November 21, 2009. The conference will feature original empirical and experimental legal scholarship by leading scholars from a diverse range of fields. (General information about SELS 2009 is found here.)

The deadline for submission of papers is July 15, 2009, with late papers accepted on a space available basis through September 1. (Information on submissions is found here.)

Northwestern Continues to Build Group of Empirical Scholars

To: The Northwestern Law Community
From: David Van Zandt
Re: Bernard Black and Katherine Litvak to Join Northwestern Law

I am pleased to announce that Bernard Black and Katherine Litvak have accepted offers to join our research faculty.

Bernie will officially join the Law School in September 2010 with a joint appointment in the Finance Department at Kellogg.  He will be installed as the first holder of a new professorship in formation between the Law School and Kellogg.  A nationally-recognized expert in corporate law and finance as well as health care regulation, Bernie currently serves as the Hayden W. Head Regents Chair for Faculty Excellence at the University of Texas School of Law, a professor of finance at the McCombs School of Business, and co-director of the Center for Law, Business, and Economics at the University of Texas.  Prior to these appointments, he was the George E. Osborne Professor of Law at Stanford, and prior to that, a Professor of Law at Columbia Law School, counsel to a commissioner of the Securities and Exchange Commission, an attorney at Skadden Arps in New York, and a clerk for the Hon. Patricia Wald of the U.S. Court of Appeals for the District of Columbia.  Bernie has also served as a policy advisor to the U.S. government as well as several countries throughout the world, including Russia, Ukraine, Indonesia, South Korea, Mongolia, and Vietnam.  He has authored or co-authored numerous books and scholarly articles.  Bernie received a BA from Princeton, an MA in physics from Berkeley, and a JD from Stanford Law School. 

Kate joins the Law School this September. Her areas of expertise include venture capital, private equity, corporate and securities law, and corporate finance.  Currently an assistant professor at the University of Texas School of Law, Kate previously served as a clerk for both the Hon. Ralph K. Winter of the U.S. Court of Appeals for the Second Circuit and the Hon. Frank H. Easterbrook of the U.S. Court of Appeals for the Seventh Circuit, as well as a John M. Olin Fellow in Law and Economics at Columbia Law School.  She has presented at more than 50 national and international conferences, workshops, and seminars.  Kate received her BA from the University of California-Los Angeles, an MA in international relations from Harvard, her JD from Stanford Law School, and also is commencing studies in Kellogg’s PhD program in finance.

I am delighted to welcome both Bernie and Kate to the Law School and thankful to the many members of our community who helped with the hiring and recruitment process.  The addition of these two scholars will further enhance our already strong reputation in the areas of corporate governance and finance.

David E. Van Zandt
Dean
Northwestern University School of Law
375 East Chicago Avenue
Chicago, Illinois 60611
312-503-8460
801-650-6873 (fax)

Pace Environmental Law Review Announces Shift to Peer-Review

An Announcement from Pace:

 Established in 1982, PELR was one of the first scholarly environmental law journals.  As of August 1, 2009, Pace Environmental Law Review (PELR) will use a new Peer Review process to select articles for publication.  Submissions will be reviewed internally and then forwarded to a select group of Peer Reviewers − academics, practitioners, and experts in the field, including members of Pace Law School’s world-renowned environmental law faculty.  The Peer Review process will offer new and distinctive opportunities to foster continued debate and reflection upon some of the most pressing topics within the field of environmental law. Articles selected for publication will benefit from:

 •       Expedited editorial processing of 8 to 10 weeks from acceptance.

 •       Single-article hard copy publication.

 •       Inclusion in a bound volume distributed to PELR’s wide-ranging list of subscribers.

 All articles submitted to PELR must be original scholarship and not previously published.  Exclusive submission not required.  Empirical scholarship very welcome.

 We invite authors to submit articles either via ExpressO or directly in either MSWord or PDF format to the PELR Development & Acquisitions Editor at pelracq@law.pace.edu.

 For more information, please visit the website at http://www.law.pace.edu/pelr

Call for Papers for "Law Firm Evolution: Brave New World or Business as Usual?"

[posted by Bill Henderson] 

The Center for the Study of the Legal Profession at Georgetown University Law Center has issued a call for paper for a March 2010 conference.  The topic could not be more timely:  Law Firm Evolution: Brave New World or Business as Usual?".  Based on numerous conversation I have had with law firm insiders, my money is definitely on the former.  The full details can be found online here.