The ABA, the AALS, and the Rule of Law

Thom Lambert —  15 February 2006

In an op-ed published in Saturday’s W$J (slightly updated version available here for free), Prof. David Bernstein drew attention to the American Bar Association’s proposed revision to its law school accreditation standards concerning student and faculty racial diversity. Bernstein criticized the ABA proposal for, in essence, calling on law schools to ignore constitutional and statutory provisions governing the use of racial preferences in admissions and hiring. Indeed, the revision’s interpretive guidelines (which apparently carry the same weight as the standards themselves) state that:

the requirements of a constitutional provision or statute that purports to prohibit consideration of gender, race, ethnicity or national origin in admissions decisions is not a justification for a school’s non-compliance with [the diversity standard].

It thus seems that Bernstein is not exaggerating when he claims that the ABA is attempting to put its own political agenda above the law.

The ABA, of course, says otherwise. In a letter in yesterday’s W$J (free copy here), the ABA president says that “David E. Bernstein unfortunately misrepresents the impact of proposed revisions to the ABA Standards for the Approval of Law Schools,” for a law school would not be required to consider race and ethnicity in its admissions process.

I don’t intend to weigh in on the debate over the ABA diversity standards — except to say that Bernstein’s view that the ABA is calling for law schools to ignore laws that conflict with its own agenda is consistent with my experience with the Association of American Law Schools (AALS). My own institution has recently gone through re-accreditation, and the direction we received from the AALS regarding our heroic efforts to diversify our student body and faculty suggest that the organization will be satisfied with nothing less than results — regardless of constitutional or statutory impediments. As an untenured faculty member, I’m reluctant to say more about what went down at my school (I thought of posting the AALS’s letter, but that would likely be frowned upon). I will therefore leave the debate regarding the ABA’s diversity standards to Bernstein (blogging at Volokh) and the others who have weighed in on that issue.

I do want to note, though, that this is not the only context in which the ABA and the AALS have sought to put themselves above the law. They’ve taken a similar stance toward the antitrust laws. First, the ABA imposed accreditation standards that collusively increased faculty salaries and thereby raised the barriers to entry into legal education. The Justice Department sued the ABA over those standards, and the association entered a consent decree settling the lawsuit and agreeing to alter its competition-reducing rules.

The AALS’s antitrust conspiracy, on the other hand, continues. As law professors throughout the land well know, the days in which lateral employment offers may be extended are waning. Pursuant to AALS “good practices,” member law schools have agreed amongst themselves not to make permanent employment offers to law professors at other law schools after March 1 (or, for offers to visit, after March 15). In other words, a group of competitors, who are not engaged in any sort of joint venture, have collectively agreed not to compete with each other after a certain date for what is undoubtedly their most important input. Imagine if Ford and GM, who must prepare models for the new season and therefore need some lead time for their design teams, agreed that they would not try to poach each others’ engineers after a certain date. That would clearly be a per se violation of Sherman Act Section 1. Similarly, the agreement among AALS members to restrict their competition for professors would seem per se illegal.

Even if the agreement is not illegal per se, it cannot withstand rule of reason scrutiny. As Royce Barondes and I argued in a recent essay (Should Antitrust Education Be Mandatory (for Law School Administrators)?, 38 U.C. Davis L. Rev. 1299 (2005)), the restraint at issue has a substantially adverse effect on competition and provides no countervailing procompetitive virtues, and its legitimate ends could be achieved less restrictively. (I won’t bore you with the details of our rule of reason analysis — an SSRN version of the essay is available.)

As they exercise their powers to regulate (i.e., restrict) who may enter the legal profession, the leaders of the ABA and AALS would do well to remember John Adams’ little maxim about this being “a government of laws and not of men.”

Thom Lambert

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I am a law professor at the University of Missouri Law School. I teach antitrust law, business organizations, and contracts. My scholarship focuses on regulatory theory, with a particular emphasis on antitrust.

10 responses to The ABA, the AALS, and the Rule of Law

  1. 
    antitrust guy 6 March 2006 at 1:06 pm

    I noticed that the consent decree expires soon. Are decrees ever renewed?

  2. 

    Re DL’s question about the competition for law clerks, I think Thom is right that there’s no antitrust exposure, but I’m not sure that Copperweld needs to be invoked. While state governments are subject to the antitrust laws with respect to their behavior as market participants (as distinct from policymaking for which there is state action immunity), I can’t recall any cases holding that the Sherman Act applies to the federal government.

  3. 

    Very nice post Thom.

  4. 

    Thanks gentlemen. For anyone wondering what this “clerkship cartel” is, here‘s a description from the ad hoc committee of federal judges who crafted the agreement. Here’s a W$J op-ed by a federal judge who’s critical of the agreement. He calls it a restraint of trade but doesn’t do a full-on antitrust analysis.

  5. 

    Excellent response, Thom (it should be its own blog post!). The first point –intra-enterprise conspiracy — seems like the strongest defense, especially if the Chief Justice approved of the cartel (but, to my knowledge, it has never been a top-down directive, but rather just a few circuit judges who rallied others). Chicago Board of Trade seems the second-best argument.

    I’d have to think more about the other two. You make reasonable points. But, like you, I still think something is a little off about the whole process.

  6. 

    Excellent post and analysis Thom.

    Also, George Priest has an excellent article on matching markets and other markets using time as currency to clear markets where the use of price is otherwise constrained. There is a version on SSRN available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=444220.

  7. 

    DL:

    Sorry for the delayed reponse. Busy, busy day.

    I’ve long thought the clerkship cartel was fishy, and I’ve always been proud of Judge Jerry E. Smith, for whom I clerked, for refusing to participate. That said, I think there are some important distinctions between the judges’ agreement and that of AALS members. Here are four off-the-cuff thoughts:

    First, federal judges are not really competitors (other than for prestige, etc.). They’re basically agents of a larger single body — the federal judiciary — and, in theory, they should be wholly devoted to its proper functioning. Any agreement among the judges would likely come within Copperweld‘s intra-enterprise conspiracy doctrine. AALS member schools, by contrast, are bona fide economic competitors. An agreement among them is more troubling.

    Second, the clerkship cartel strikes me as less likely to result in allocative inefficiency. The AALS agreement causes allocative inefficiencies because, among other things, it affects the “prices” paid for law professors. Oftentimes, law schools will not inform their professors of how much they’ll be making the next year until after March 1 — i.e., after the time when they could threaten to go elsewhere. This reduces the degree to which law schools will compete for professors and, thus, the “accuracy” of the price paid for teaching talent — i.e., the degree to which it reflects the true value of the professors’ services. The net result is that professor talent may not be allocated according to its highest and best uses. With judicial clerkships, by contrast, there’s no reason to worry about labor prices not reflecting actual labor value, for the price of clerk labor is not determined by the competition among judges for clerks. In fact, the clerkship cartel may enhance allocative efficiency, for it’s more likely that judges will be better able to identify the best and brightest if they have more of a law school record to go on, and the agreement among judges is the best way to ensure that they have that record. [Note that the competition-reduction occasioned by the cartel may result in a different matching of judges and clerks (e.g., Judge x may end up with Clerk y rather than Clerk z), but its only likely effect on which clerks make it into the system at all is probably positive.]

    Third, whereas the clerkship cartel is probably the least restrictive (and perhaps only) means by which judges can avoid the problem of “early offer creep” and thereby ensure that the best and brightest are selected as law clerks, the agreement among AALS member schools is NOT the only way law schools could avoid the disruption of late-term faculty departures. They could easily insert in faculty contracts some sort of liquidated damages provision requiring the faculty member to pay a substantial sum if she decides to depart after March 1 (or whenever). The possibility of a less restrictive option — one that makes sense if adopted unilaterally — makes the AALS agreement look even more anticompetitive.

    Finally, there seems to be a difference in that the clerkship cartel facilitates the creation of a centralized market for law clerk services. This was one of the bases on which the Supreme Court approved the restraint of trade at issue in the Chicago Board of Trade case (see 246 U.S. at 239). The Court said that a limitation on the period of price-making basically encouraged all buyers and sellers to come together at a single place and transact. (This, of course, led to more efficient prices, etc.) The clerkship cartel similarly gets all the players in the same “place” at the same time. The AALS agreement, by contrast, doesn’t encourage participation in any kind of public bidding system.

    That’s all I have off the top of my head. I’d be interested if others can think of additional distinctions.

  8. 

    Thom,

    Haven’t had a chance to read your piece on the AALS yet, but any thoughts on the clerkship cartel? Are a strong majority of federal judges violating the antitrust laws as well?

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