GMU Law is a great place to do law and economics.  The Law and Economics Center, with a new and ambitious research agenda under Henry Butler, is a wonderful asset for a law and economics scholar in the making, and the law and economics faculty here are interested in a wide range of legal topics and play an integral part in the Levy Fellow program.  The program isn’t for everybody.  We’re looking for economists who are interested in understanding legal institutions and plan on entering the academic job market.  Experimental economists interested in the special opportunities available at the Interdisciplinary Center for Economic Science and Center for the Study of Neuroeconomics might also find the program especially attractive.

The full text of the advertisement is below the fold.  Contact me if you have questions.

GEORGE MASON UNIVERSITY

School of Law

Robert A. Levy Fellowship

George Mason University School of Law invites applications for the Robert A. Levy Fellowship in Law & Liberty. The Levy Fellowship includes an annual stipend of roughly $27,000 per year plus a tuition waiver and is available to PhD or ABD economists who wish to pursue a JD at George Mason.

DESCRIPTION:

Applicants will be evaluated for their promise as Law and Economics scholars capable of making a significant contribution to understanding the institutions of a free society. We are pleased in recent years to have placed fellows in highly ranked institutions. Two or more fellowships will be awarded for the 2011/12 academic year. Applicants should arrange to take the LSAT no later than
February 2011. George Mason University is an equal opportunity-affirmative action institution.

A special opportunity now exists for those interested in experimental economics. Levy Fellows will have the opportunity to run experiments and collaborate with faculty at the path breaking Interdisciplinary Center for Economic Science and Center for the Study of Neuroeconomics.

APPLICATION PROCEDURE:

Please provide all items requested in standard law school application process, including LSAT/LSDAS, PLUS cover letter with three references, curriculum vitae, graduate transcripts, and a copy of current research.

Letters should be sent to the:

CONTACT:

George Mason University School of Law
Office of Admissions
3301 Fairfax Drive
Arlington, VA 22201

Or calls made to:

Tel: (703) 993-8010

The co-director of the Levy Fellowship program:

CONTACT: Professor Joshua Wright
Email: jwrightg@gmu.edu

If there is an orthodoxy at the University of Chicago, it is there are enormous welfare gains to be had from voluntary trade—the virtue of markets.  But not all markets are self-evidently welfare enhancing.  This Greenberg seminar looks at potentially “bad” markets—sex, drugs, terrorism financing, corruption, and criminal gangs.  What happens when markets go bad?  What should we do to curtail the harms from those markets?  And what do we learn more generally about the operation and limitations of the market principle?  We will read work by journalists, sociologists, and even perhaps economists to try to answer these questions and more.

If anyone has read any good books on point, we’d welcome suggestions. And, of course, for prospective law students out there, come to Chicago and you can join us at a future Greenberg seminar.

This edition of my long-running casebook and its exhaustive teacher’s manual have been well-received. Ultimately I hope and expect this course will replace the current now-outmoded emphasis in the basic course on big publicly held corporations. Consider the following:

• LLC formations are now outstripping corporate formations.
• The unincorporated context inherently provides a better basis for a transactional-oriented course, and our book fully exploits this potential.
• Law grads need more than ever to be able to hit the practice ground running. Although spending weeks on executive compensation and proxy access might be a nice way to use the headlines to lure the students into the materials, it doesn’t provide the basic training in transactional work that most law graduates. Which
• Students easily can connect to the intimate and familiar context of the closely held firm, and the rapidly developing law of LLCs provides at least as much intellectual stimulation as the basic course.
• The contractual framework of the unincorporated course is a good basis on which to build coverage of publicly held firms, which I envision as an upper class elective.

Yes, I know, the basic texts include partnership and LLC coverage. But it’s way too little to give students the training they need in the area.

So catch the wave. Read the book and the supplement.

Well, the really bad news is about the fundamentals – where are those future jobs coming from? On that, noted legal economist Bruce MacEwen (aka, Adam Smith, Esq.) has a lot to say. He notes:

If document review can be conducted by Ivy League law school grads trained at white-shoe and Magic Circle firms for $50/hour instead of $350/hour, what’s not for a client to like?

CPA Global, which bills itself as the world’s leader in legal process outsourcing, * * * raised a mere $700-million in a private placement in the UK this past spring. * * * This is a war chest on a scale the AmLaw 10 and the Magic Circle, put together, would be very hard-pressed to match. * * * The ambitions, and business strategy, of CPA Global and their ilk are no secret: Bypassing law firms altogether and marketing their offerings directly to clients. * * * They would like to take the law firm out of the equation altogether.

MacEwen discusses a point that I frequently make to lawyers skeptical of my Death of Big Law theory: how this sort of innovation has fundamentally changed other supposedly entrenched industries, such as air travel.

Now what I always hear back is about the huge advantages of hiring an integrated law firm. But MacEwen has an answer:

[I]f all those activities are being performed at New York (or San Francisco, or Chicago) rates, the benefits of that integration better be strong. Because the CPA Globals of the world will offer to review the documents and deliver witness and exhibit binders at Bangalore, or at least at Fargo, rates.

Another response I often hear is that outsourcing can only go so far. What about the stuff only a skilled lawyer can do? But he has an answer to that too:

Once clients begin to get accustomed to the notion of being able to unbundle, or unchunk, legal engagements-be they disputed matters or transactional ones-there’s potentially little end to it. First, clients hire, or “request” (read: demand) that you hire an outsourcing firm for, say, document review. Next, the outsourcing firm makes it known that it can prepare witness binders, and next, that it can aid in the preparation of witnesses. * * *

I would argue the implication is clear (“stark,” if you prefer, but as for me, I’d choose “energizing,”or maybe even “chance of a lifetime”): our associates–indeed, your entire team–needs to move up the value chain even faster than your new competitors.

But all is not lost, according to MacEwen. He sees a possible new world in which skilled professionals are freed from “scutwork” to partner with “Knowledge Management,” and in which firms finally have the incentive to reinvent themselves.

Envisioning this world is my current project.

In the meantime, there’s always open mike night.

Here’s its description:

The LL.M. programme has been designed to meet the needs of companies and their counsels, faced with the increased complexity of the competition rules and unprecedented economic risks arising from its enforcement. It targets in particular:

• Companies, not only in-house counsels, but also managers, executives and public affairs experts who come across competition issues in their daily business activities;
• Business lawyers (junior and senior), seeking to expand, improve or refresh their knowledge of competition law ;
• Civil servants from competition agencies, sectoral regulators, public administrations and State-owned companies, who regularly have to deal with situations involving competition law.

The LL.M. programme in Competition Law and Economics has five unique, defining, features:

1. It offers practical training, thanks to an experienced contingent of high level competition lawyers, economic consultants, and senior officials;
2. It provides high-level lectures given out by outstanding academics;
3. It proposes a flexible training programme compatible with the requirements of professional practice;
4. It seeks to offer a modern approach to training, which embraces fully the interdisciplinary (law and economics) nature of competition policy
5. It gives its students opportunities to socialize and meet fellow competition professionals on a regular basis

There is now too much empirical work being done simply because it looks ‘empirical.’

Professor Bainbridge agrees.   And this isn’t Bainbridge’s first rodeo.  Here is his earlier call to “reject the quants and their methods.”   One suspects that where Professors Bainbridge and Leiter find room to agree — there must be something there.  Leiter’s post lays out the issues quite nicely and there is, indeed, quite a bit to agree with.  Here’s how he frames the problem of oversupply of low quality empirical legal scholarship:

First, too much of the work is driven by the existence of a data set, rather than an intellectual or analytical point.  But the existence of a data set then permits a display of technical skills, which is satisfying to those with a technical fetish.  But for everyone else, the question remains:  why does this matter?  why should one care? and so on.

Second, the analytical- and discursive-skill level of ELS scholars appears to be, on average, low, or at least lower than the typical law & economics or law & philosophy interdisciplinary scholar of yesteryear.  This isn’t surprising, given that the genre rewards technical skills related to number crunching and data analysis, as well as research design, rather than smarts on your feet, the ability to draw conceptual distinctions, or construct and deconstruct arguments.   But the latter intellectual skills are the ones needed in law, both in thinking about law and in teaching law, not the former.   Perhaps this is also why discussion of empirical papers typically follows the same tedious pattern of wondering how one controls for this-or-that variable, with the presenter showing, cleverly, how s/he already controlled for it, or admitting that s/he didn’t, so that this is an issue for future work, etc.

And Leiter’s addendum:

the only claim here is that a disproportionate amount [of mediocre work] is travelling these days under the rubric of ELS, and that it suffers from the flaws noted.

A few thoughts.  Well, more like seven.

First, Leiter is spot on in terms of faulting the fetishization of technical skills at least partially for the proliferation of empirical legal scholarship that is irrelevant to the law.  This is a problem I’ve discussed at length concerning the future of law and economics.  I’ve argued that, at least in economics, these trends have rewarded work that is detached from policy relevance and damaged law and economics at the “retail” level.   I’m less familiar with the details of these trends in other fields that contribute to the empirical legal studies more generally, e.g. political science, psychology, sociology and such, but its certainly an issue with empirical law and economics.

Second, Leiter actually understates the problem here.  While he correctly points out that the availability of data sets at low cost greases the tracks for empiricists with technical skills to show them off at the expense of legal relevance, the other side of this is at the reduced cost of access to large data sets and analytical tools means that we get more non-technical empirical scholarship too.  The problem here is typically quality rather than relevance.  Here is Ribstein on the potential causes and consequences of an empirical bubble.

Third, its important to point out how easy it is to overstate the relationship between work that employs the latest and greatest technical econometric methods and legal relevance.  There is plenty of work that employs these methods that has great value for legal questions precisely because it allows one to more convincingly identify causal relationships.  It need not be the case that highly technical empirical papers are devoid of policy relevance.  As I’ve written before:

While I’ve written here before about the potential harms of fetishizing formal mathematical theory rather, especially with respect to law and economics, I see that as a separate problem altogether.  Economists need not apologize for uncovering clean causal relationships in less complex settings.  There is no shame in adding to our theoretical and empirical understanding of small subjects with the hopes of generalizing to larger phenomena.

In addition, one of the larger problems in law and economics has been the fetishization of theoretical modeling that abstracts too far from real world problems.  One additional benefit of the empirical legal studies movement in the broad sense is to get legal scholars with quantitative skills focused on the real world again.  This leads into the cute-o-nomics discussion about whether instrumental variables identification strategies, the popularization of which is often attributed to and/or blamed on Steve Levitt depending on who is doing the popularizing, are focused too much of clean identification at the expense of policy relevance:

One might think that at least one important consequence of Levitt’s research agenda, in addition to adding to our economic knowledge (which used to be enough, didn’t it?), will be a contribution to making popular again economics that is more connected to explaining real world phenomena of all types with economic intuition, models, and data.  If that happens, Levitt isn’t ruining economics.  He’ll be saving it.  Or at least making it more relevant.  And definitely more fun.  If Levitt is going to take the brunt of the attack for “clever” research, at a minimum, we ought to be willing to give credit for sending the pendulum back towards the empirically-oriented side of the spectrum by making it “cool” to worry about the real world again.

If the price of getting increased interest in policy-relevant empirical work is that we also get a proliferation of technical models with narrow and less generalizable results along with it,  I’m buying.

Fourth, and on to Leiter’s second claim:

The analytical- and discursive-skill level of ELS scholars appears to be, on average, low, or at least lower than the typical law & economics or law & philosophy interdisciplinary scholar of yesteryear. This isn’t surprising, given that the genre rewards technical skills related to number crunching and data analysis, as well as research design, rather than smarts on your feet, the ability to draw conceptual distinctions, or construct and deconstruct arguments.   But the latter intellectual skills are the ones needed in law, both in thinking about law and in teaching law, not the former.  Perhaps this is also why discussion of empirical papers typically follows the same tedious pattern of wondering how one controls for this-or-that variable, with the presenter showing, cleverly, how s/he already controlled for it, or admitting that s/he didn’t, so that this is an issue for future work, etc.

I’ve got no position on the empirical claim that ELS scholars, on average, have lower analytical skill levels than earlier generations of law of interdisciplinary scholars.  Maybe.  I don’t know.  I have been feeling a bit sluggish lately.  But this argument is easy to overstate, I think.  I would guess that the number of empirical legal studies folks doing the sort of highly technical work rewarded by economics departments, for example, is very, very low relative to the number of non-technical folks mixing it up with data sets.  This latter group of folks, the non-technical group, probably contributes a dominating fraction of the total empirical legal studies output right now.  There are some very good people doing both sets of work, of course.  Nobody disputes that.  But my sense is that the latter group is much larger.  If that is true — and its an empirical question — the impact on the average “legal” analytical skills is likely to be small because the non-technical group are trained to do all the things legal scholars do.

Fifth, I’m pretty certain I disagree with the claim that a “disproportionate amount” of “mediocre work” is traveling under the ELS umbrella.  Again — it should be quite obvious from the above that I agree that there is a lot of mediocre work traveling under all sorts of umbrellas.   I think Bainbridge and Leiter both agree.  There is too much empirical work done because it looks empirical, too much doctrinal work that chases hot topics because they are hot topics, too many articles with catchy titles, too many footnotes, too much behavioral law and economics, too much about the Supreme Court relative to lower courts, etc.  Heck, there might even be too many law professors.  But disproportionately mediocre?  This is another claim with a testable implication.  Perhaps one could compare the fraction of ELS work that is never cited to the total output and compare that to other fields.  But that might not be a decent measure of “mediocre.”  But the the non-empirical legal studies world is huge.  And I get enough SSRN emails and see enough papers to suspect that ELS doesn’t seem to have any comparative advantage in mediocrity.  On average, I suspect that the relative mediocrity level for those engaging in empirical work is just about right thank you very much.  An alternative explanation is that Professor Leiter is reading a disproportionately high amount of bad empirical legal studies work and not enough mediocre doctrinal, non-empirical work.  I’ve got a box of reprints that can get to Chicago and solve this imbalance forthwith.  Just say the word :)

Sixth, and related to the last point, is that an inherent suspicion of empirical work I think lies beneath much of the conclusion that the work is of low quality.  Professor Bainbridge gets at some of that in this post when he writes that empirical work will “always be suspect — and incomplete in my book.”   That seems wrong to me.  Suspect and incomplete need not be the same thing.  And too often the responses I hear from legal scholars to empirical work that actually has legal relevance and is well done is reflexively dismissive: “but you can’t possibly control for everything can you?”   Sometimes there will be a short quip about “omitted variable bias” or something like that.  In the panel data setting, I’ve often sympathized with the econometrician who tries to explain exactly what state fixed effects are controlling to an audience to whom the answer sounds like he is selling them a used car without an engine.   I suspect when Leiter complains of the discussion that follows empirical papers as always involving “the same tedious pattern of wondering how one controls for this-or-that variable, with the presenter showing, cleverly, how s/he already controlled for it, or admitting that s/he didn’t, so that this is an issue for future work, etc.” — that there might be some meaningful information in there.  It, in fact, matters a great deal whether something is properly controlled for, whether the error structure is appropriate.

I’m not saying that there is no reason to be suspicious of empirical work.  Skepticism about regressions is good.  Just like skepticism about other interdisciplinary or doctrinal arguments — indeed, sometimes it is easier to hide assumptions that are driving the analysis in the latter.  But it is hard to escape the conclusion that at least some of the objection to empirical work smacks of folks who don’t do a certain type of work convincing themselves that there aren’t missing anything.  I previously noted:

I understand that lawyers are going to be suspicious of foreign toolkits, like econometric analysis.  But in my view, the reflexive rejection of empirical work because “its hard to control for everything” is about as persuasive as reflexive rejection of claims that there is some coherent theory of statutory interpretation because “the judge just makes it up anyway, doesn’t he?”  Both might be true on a case by case basis, but I think the bar that legal scholars face in each case is to take seriously the work of others and describe exactly what the problems are and what implications they have for the results.

Seventh, Leiter’s concern about ELS becoming a mutual admiration society is well founded.  More generally, I think for folks doing quantitative empirical work and working in law schools, it is increasingly important both to present work at conferences like ALEA and CELS, as well as “taking the show on the road” more broadly.  The former provide a much needed opportunity for critical comments on work at early stages to improve quality; the latter an opportunity to see what the rest of the academy is up to and explain why your work matters.

That’s all I have for now.  Let’s talk about it again in November after the next CELS.

It is quite true that George Mason is a special place to learn, teach and write about antitrust.  This is at least in part because of the law and economics focus embedded into the core of our educational mission which ties so well with courses like antitrust.  But one need not rely on the rankings to figure out George Mason’s antitrust presence.  In fact, SSRN downloads underestimate our antitrust presence in a few very important ways.  First is that the SSRN measure misses our “signature” antitrust faculty member, former Chairman and FTC Kirkpatrick Award winner Tim Muris.   Second, there is long and deep history of antitrust at George Mason.  Consider the following list of current and former antitrust professors at George Mason,  including those who have taught as adjuncts, include: Alden Abbott (FTC), Henry Butler (now back at George Mason as the Executive Director of the Law and Economics Center), Mark Grady (now at UCLA), Commissioner (and former Chairman) Kovacic, the late Ernest Gellhorn, the late Jim Liebeler (who I worked for at UCLA), Bruce Johnsen, and Judge Douglas Ginsburg.   And I’m sure I’m missing a few!  Third, escaping rankings like these are faculty members like Tom Hazlett, who teaches a seminar on the law and economics of telecommunications and media regulation which involves a substantial amount of competition policy, and Todd Zywicki, who was former Director of the Office of Policy and Planning at the FTC and teaches about competition policy and regulation in his public choice seminar and writes about these issues in the credit card market.

There are a lot of very good places to learn about antitrust as a law student and a number of great environments to do antitrust research, writing and teaching as a professor: Georgetown, NYU, Iowa, Michigan, Florida, Yale, and Chicago all come immediately to mind.  There are others I’m sure — though it is sad for me to see that the West Coast has pretty much surrendered this increasingly important territory entirely with very few exceptions.  I’m biased, of course.  But I simply don’t think there is a better place in the country to do antitrust  — and I’m very proud and humbled to be a part of the “antitrust group” at George Mason.

The conventional wisdom seems to be that the irrelevance hypothesis doesn’t hold.   Let the anecdote stacking begin!  The NYT story itself  notes that “in the last two years, at least 10 law schools have deliberately changed their grading systems to make them more lenient … to rescue their students from the tough economic climate.”   This view appears to agree with the intuition of many a law blogger.  Over at the Conglomerate, Christine Hurt suggests that small and out-of-town firms may not know about the variance in grade distributions across schools and individual schools have the incentive to inflate.  Howard Wasserman notes that:

The problem is an (anecdotal) strong resistance in the legal market to do so. Part of the push to change here came because our dean’s conversations with people in the hiring market convinced him that GPA was the be-all-end-all and class rank did not matter. As a relatively new, lower-tiered school, firms are interested only in our very top students. But many firms seemed to say that a 3.3 GPA was not high enough for them to look at, even if that person was # 3 in the class.

There is a battle of intuitions and priors about the legal market going on here without much evidence.  One underlying assumption about legal employers, or some set of legal employers, is that firms are either not paying attention or are irrationally committed to metrics like GPA when more informative measures like class rank are available.  And of course, the fact that 10-12 schools have engaged in this experiment presumably with some educated guess as to the reaction of employers certainly contains valuable information.  As an interesting side note, the Loyola LA Dean announcement discussing the change goes the other direction, noting that the fact that employers pay “very close attention” to these numbers is a reason for the change!  Of course, even if the irrelevance hypothesis passes muster, it does not strictly follow that moving the mean GPA upward is a bad thing for reasons unrelated to job outcomes.

But lets get back to the basics: invariably, the cost/benefit analysis for grade inflation comes down to whether these changes are having an impact on the job market.  Are employers adjusting?  Is there a difference in the reaction time of out of town and local firms?  Does the adjustment have a short-term effect while employers figure it out and then things return to normal?  Do schools that inflate multiple times pay a reputational penalty on the job market as employers get frustrated with the gamesmanship?  Does a student who finishes with the same class rank but higher GPA than a student at a similarly ranked law school better off in some meaningful way?  Do students at the top of the class suffer from these experiments in inflation as it makes it more difficult for them to stand out from their peers on GPA terms?

The NYT story reports that at least 10 schools have made these changes over the last decade.  One source reports the number is closer to 12.  These changes seem like excellent opportunities for empirical testing of some of the underlying assumptions floating around out there both about consumers and producers in the legal education market.  The anecdotes have some limited usefulness here and all, but the same anecdotes have been around for quite some time, and perhaps there an opportunity to move beyond anecdote and toward empirical analysis here?  Interest in the reform of legal education and outcomes seems to be on the rise in academic circles, though this is not an area I’m too familiar with.

Do we have data that can help us answer these questions?  What’s the evidence?

My presentation will continue my speculation, begun in Death of Big Law, on the “legal information industry” that could develop in the aftermath of the demise of current models of delivering legal services.  Consistent with the theme of the mini-conference, I focus on opportunities for entrepreneurship in this new industry.  So the project might be especially intriguing for those, including the law school class of 2010, who might appreciate alternative employment opportunities.

The paper begins by discussing the forces that are giving birth to the new industry:  globalization, new information technologies, clients’ demand for cheaper law, and deregulation of legal services.

I then examine some possible ways to tweak the existing industry model based on customized advice to clients.  We can expect to see new ways to connect lawyers and clients, and ways such as outsourcing to substitute contracts for firms. Also expect new kinds of firms that can be sold to the capital markets and that combine law with other disciplines.

Then I look beyond legal advice to refashioning legal information into products.  Entrepreneurs might develop new ways to sell legal ideas, uses for contract templates, ways to standardize contract drafting, private development of new business associations, mechanized contract review and investments in legal think tanks that engage in research and development.  

The r & d idea could be of particular interest to law professors.  I consider the potential for a law version of “Bell Labs” that could privatize some of the research now happening in academia.  Good thing, too, because I’m not sure how much room will be left in the brave new world of legal information for research subsidized by law school tuition based on big law jobs that no longer exist.

Next step is revolutionizing litigation.  I try to run, or at least walk, with the idea of litigation as an exploitable asset.  I consider potential opportunities for entrepreneurship in exploring for new causes of action, production of lawsuits, legal research, financing litigation, assisting the capital markets in valuing litigation and liabilities, legal risk management, and adjudication.

Finally, I consider the preconditions for robust legal entrepreneurship:  how the law will have to change; the interest group alignment that will make this legal change possible; and last, but not least, how to train a new generation of legal entrepreneurs who invent things rather than wait for cases and transactions to walk in the door.

The bottom line is that the ancient idea of legal information production as the exclusive province of worker cooperatives surely is going the way of all the other precursors of the industrial revolution.  As the existing business model gasps its last breath, it’s time for some serious creative destruction.  I plan to consider what this might look like.