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July 09, 2013

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A certain Santa Clara professor

I don't see any claim from any of the Anons that law faculty are underpaid. Another example of the misleading claims of the law school critics. In fact, if you paid attention to the argument you will see that the point was that law schools are impacted by market forces, too, and that the smart law schools recruit very talented people and pay them appropriately.

By the way, I would stack up the private practice backgrounds of Santa Clara faculty against any faculty in the country. There is plenty of exposure, past and present, to what you call the jungle.

You are also mistaken about law faculty and student loans. Many law faculty have outstanding loan debt, including me. My interest rate is 9%. What is yours?

Stan

"Faculty accept lower salaries and the other perks of taking on the risks of the private marketplace in return for their commitment to pursue knowledge and train future lawyers."

6th paragraph down.

http://stephen-diamond.com/?p=4918

Anon

Lower salaries does not mean the same thing as being underpaid.

In any case the claim was that Anons here had claimed that faculty are underpaid not what was said elsewhere. (Do law students no longer take basic economics courses?)

That is clearly wrong and it is also wrong to claim that lower salaries means being underpaid.

Faculty accept lower salaries than are available in the private sector in a fair bargain - they get job security and the ability to pursue research and teaching interests as well as a certain level (not clearly not absolute) of job security.

Some law schools pay more than other law schools in efforts to recruit faculty with certain skill sets that will generate revenue for their schools. This is smart.

Stan

Semantics aside, I reject the argument that law professors accept lower salaries than they would otherwise have in the private sector.

I graduated with a class of 300 students. Six got jobs paying more than $100k. I was not one of the six. I currently make under $50k, without benefits. I am squarely in the median of my friends. Many make slightly more. Many make slightly less.

Outside the six mentioned above, the highest is around $60k (with benefits). The lowest is unemployed. All have debt.

To be generous, if you are currently making more than $60k, you are not "underpaid." Rather, according to the market that you seem to love, youre grossly overpaid.

I believe that, deep down, professors know this. I would imagine that this knowledge is a scary thought. As such, I would likely need something to justify my salary. Sacrifice to the altar of scholarship seems like it might work nicely.

The argument for scholarship in order to maintain the status quo is smart. Paying professors on the backs of their students is not.

Anon

Stan, I think you should pay a little more attention to the CV's of many faculty members, particularly those hired in the last decade. You will see there a significant number who graduated from HYSC and many who practiced at top tier law firms for several years before joining a faculty and many who were federal appellate or Supreme Court clerks. Certainly those who left private practice took on lower salaries unless they left immediately after their first year of practice and then went to a top ten law school. I am fairly confident that those who left did not do so because they were not succeeding in private practice. They also quite likely did not leave because they did not like private practice. They left because of a relative preference for academic work. They quite likely work now nearly as many hours as they did in private practice but without the all nighters and with the flexibility to take a weekend off now and again.

All of this suggests that many law faculty could have stayed in private practice and made much more money. That does not, I repeat, does not mean they are underpaid as faculty. No one has suggested that and it is a canard to continue to suggest that. Faculty are paid a market rate. It is a very competitive market and a fairly efficient one. Salaries are higher at higher ranked law schools because those faculty train law students who will be paid more in the market. Smart law schools will try to compete for smarter students and that requires faculty with certain skill sets and thus those faculty can command and should get higher salaries.

Now, all that said, at some point many faculty who have been out of the so-called "real world" or "jungle" if you prefer, will have little interest in returning to it and that world may have little interest in them returning. Keep in mind, however, that today many law school faculty no longer live solely in the cocoon that academia seems to many. They are of counsel, they are serving as board members, they are consultants, they are expert witnesses, and some have their own legal practices (surely you have seen Reversal of Fortune?). A return is not necessarily as difficult as you think because often many never quite left, they just restructured their work.

In any case, the inability of a 60 year old faculty member who has not seen the inside of a courtroom for 40 years - even if not an inaccurate stereotype - to return to private practice will have little impact on faculty salaries. Why? Because those salaries are set by what law schools need to pay in order to recruit today. And despite the new normal recruiting will continue as the older generation (and many law schools are top heavy) retire. In fact, even with the downturn - now on the mend by the way - I predict increased hiring of faculty in the future because of the baby boom retirements combined with a growing global demand for US style legal training.

BoredJD

I'm not sure how it is "smart" to pay higher salaries to attract better professors. Unless you make cuts elsewhere, that is going to lead to higher tuition, which is going to lead to fewer students applying.

As long as students believed law schools were getting them jobs that allowed them to pay back their debt, they continued to pay tuition at levels exceeding the cost of education. Now, they are increasingly not willing to do that, and it has nothing to do with the credentials of professors or the content or quality of education. It has everything to do with the cost and the job prospects.

What those lower ranked law schools should do is double-down on what Seton Hall has done- they should drastically cut tuition to attract cost-conscious applicants, and then restructure as best they can.

The fact that you can even have a discussion on these terms is amazing. Universities should not be run like businesses.

Cassandra

BoringJD, we're seeing a significant segmentation in legal education. The very top schools (think T12 or so, Georgetown isn't quite making the cut these days) are continuing to fill their classes without taking much cut in quality. Plus the very good public schools (Minnesota, Illinois, UCLA, Alabama, and a few others) are able to continue to fill their classes. That these schools have chosen this path is making life difficult for everyone else. Even pretty good privates (American, Tulane, Wake Forest) are struggling to fill their classes. Washington University's recent full ride scholarships shows they're feeling the heat. Probably places like BU and BC are in the same or slightly worse situations. For those outside the top 50 and certainly top 100, life is difficult. Unranked schools are finding they are falling far short of their enrollment goals/needs. Pain is significant for some; limited or non-existent for others. The pain is not being felt anywhere near equally.

How does Seton Hall's model of cutting tuition help them? We're getting close to where they won't be able to give away their product.

The elite schools and major publics -- the only ones that are maintaining their class size -- are going to continue to compete for excellent faculty. Those faculty are in pretty good shape. For everyone else, pay and working conditions will be getting worse. This may come in the form of pay cuts, as at Seton Hall. It will also include more teaching and administrative work.

Anon

BoredJD: the model of recruiting stronger faculty and paying them more can actually help manage tuition levels because it is aimed at increasing revenue coming into the school. it is an entrepreneurial approach. that is why I labeled it the Stanford Model above. Not Stanford Law School (although they engage in this too) but Stanford - which hires faculty (particularly in the sciences) based in part on the market value of their ideas. venture capital plays a significant role in the process. and in fact the law school itself is jointly engaged in efforts with computer science to incubate startups that are applying technology to law. these efforts will pay off financially for Stanford over the long term in numerous ways - licensing revenue, equity ownership, and donors. that helps the endowment and helps Stanford Law keep tuition (relatively) low (at schools like HYSCh, tuition is only a fraction of the cost of educating students).

Stan

Anon, perhaps you are right. I'm persuaded that past SCOTUS clerks will likely be just fine. As will those who have their own white-shoe books of business.

However, the minority of SCOTUS clerks and professors teaching at HSY aside, it is the T2 & below professors who spent a few years in private practice nearly 15 years ago - say from 1995-1999 for example - that will have a hard, if not impossible, time finding a private legal occupation paying the same salary that their professorship currently provides.

In fact, I would say that the odds of released faculty finding such financially rewarding legal work in the private sector are fittingly similar to the odds of their students. Grim.

This gives me no pleasure to say. Most of my past professors fall into this category and I wish no ill will upon them. But I see the realities of the marketplace first hand every day. And sir, I have to tell you that, HSY included, these realities are unkind.

Mike Spivey

Cassandra, let me take exception to a few of your assumptions because, unlike areas of tenure and tenure track accessibility, this is something I know a great deal about.

(1) T12 schools are suffering too, albeit not as much as the masses behind them. That said, most T12 schools are having to either reduce class size or vastly expand remission amounts (scholarship is layman's terms). This is because along with the drop in applications, the highest decrease has come in the bandwidths about an LSAT of 170. So the same schools are basically offering a diminished number of applicants and thus losing on yield and/or having to compensate for this extra competition. For certain no T12 will dissvolve, but I would not exactly say they are gliding along the same path that they did in the go-go years.

(2) Wash U Law in not "feeling the heat" any more than their peer schools. Indeed I am pretty sure (having worked there and for their dean at two schools) that they are in the black, a huge rarity these days for law schools. Rather, they got a strategically negotiated 1 time money dump from their central university which they decided to employ this year, largely due to what I discussed in (1). It was, in other words, an opportune time to use this previously negotiated lump sum.

(3) Every school outside of Yale is cutting tuition on a merit-base, they are just calling is "scholarships." They are doing so for the same reason a hotel might offer you a 50% discount at the last minute -- it is better to fill a seat (or room) than have it entirely empty. This is not idiosyncratic to Seton Hall by any stretch.

BoredJD

"How does Seton Hall's model of cutting tuition help them? We're getting close to where they won't be able to give away their product."

When a product has no value (or is perceived to have no value), then you have to give it away. That is how the "market" works. But the price point for Seton Hall is nowhere near zero. Probably around 15K. Once it reaches this point, students will look at their debt and at their job prospects and make the decision to go.

The reason that those public schools are doing so well is because (1) they are cheap, (2) they own their job market, (3) they have the other significant revenue source that universities have relied on - alumni support.

Take Alabama. At $18,030 in-state, it is relatively cheap, and a student debt financing most of the cost can afford to pay back loans on a likely starting salary in the region (about 60K). It has a much employment score (70%) than other similarly situated (and even higher ranked) schools in more competitive job markets. And if the stories about the departing dean are to be believed, he was good at raising money- that plus the state subsidy gave them revenue streams that less established schools without state support have.

In order to make any expensive private school a good deal for students, it needs to lower prices. It is not a good deal at $150,000. At $60,000, it might very well be. How the law school reorganizes itself is their problem.

"BoringJD, we're seeing a significant segmentation in legal education. The very top schools (think T12 or so, Georgetown isn't quite making the cut these days) are continuing to fill their classes without taking much cut in quality."

There is, and there will always been as "significant segmentation" in legal education, because there is and will always be a "significant segmentation" in the entry-level legal market. There are law schools that send almost all of their graduates into PSLF-qualifying employment, federal clerkships, or biglaw jobs and then there are schools that do not. That is not something any conceivable form of legal education can change.

Unfortunately, faculty and deans at those second-tier schools have priced tuition way above the entry level salaries their graduates can expect.

BoredJD

"BoredJD: the model of recruiting stronger faculty and paying them more can actually help manage tuition levels because it is aimed at increasing revenue coming into the school. it is an entrepreneurial approach. that is why I labeled it the Stanford Model above. Not Stanford Law School (although they engage in this too) but Stanford - which hires faculty (particularly in the sciences) based in part on the market value of their ideas. venture capital plays a significant role in the process. and in fact the law school itself is jointly engaged in efforts with computer science to incubate startups that are applying technology to law. these efforts will pay off financially for Stanford over the long term in numerous ways - licensing revenue, equity ownership, and donors. that helps the endowment and helps Stanford Law keep tuition (relatively) low (at schools like HYSCh, tuition is only a fraction of the cost of educating students)."

I want some of whatever you are on. YHSChi's can do give massive discounts because they have massive endowments and lots of alumni support. That's because it was a selective institution, that admitted smart people, who went on to succeed in their careers (which they got because they went to a selective institution), and who donated a ton of money.

I'm not quite sure how law professors will ever become a significant source of revenue, especially when there are fewer law professors. Will they represent clients? If that's the case, then clinical faculty and clinics would seem to be the best investment, because they can concentrate in areas where the prevailing party gets fees. Will they kick back consulting fees to the school? If they are consulting, won't that take a lot of time away from scholarship and teaching?

The other thing you need to address is whether there is a large enough market for whatever it is law professors produce to support professors at 200+ institutions. And then what about colleagues not in demand by organizations that can afford to pay fees? Are the IP and corporate professors going to be the equivalent of rainmakers at large firms, while professors in social justice take a back seat?

Cassandra

BoringJD,

I'm glad you're recognizing the reality of the market. The issue that separates us is whether Seton Hall has something they can sell -- or whether they have to essentially give it away. I'm not so sure that Seton Hall can fill its classes at $15K/year tuition. I'm skeptical of this. I'd be interested in the thoughts of others -- perhaps prospective students?

What's your evidence that people will continue to pay $15K/year for a Seton Hall degree? I don't have specific knowledge of Seton Hall, but I'm hearing reliable information about admissions at a similarly ranked school. That school is having trouble getting people to accept full rides.

Anon

Bored, How do you create what you call a "selective institution"?

At all universities, smarter students want smarter faculty. Smarter faculty can therefore command higher salaries. The school pays those salaries - and students are willing to borrow against future earnings - because smarter faculty can improve the human capital of those students who then are more likely to be successful and capable of paying off their student expenses.

Smarter entrepreneurial faculty also produce research that impacts the real world and brings in more money in grants, donors willing to invest, more students, etc.

This is called a "business model."

While the model is most obviously applicable at law schools in fields like IP or business it can translate elsewhere and, yes, I think it reasonable to think that there is an argument for cross subsidization. Universities have been creating and managing this model for decades.

Stan

If law schools are businesses with business models, and businesses do not provide tenure, why should law schools should provide tenure?

Surely the fact that faculty are improving the human capital of their students is sufficient enough to protect their jobs, right?

Is Anon arguing against tenure?

Anon

Cassandra: I'm a law school graduate, not a prospective student, but I think you touch on something important. The cost of attending law school is significantly greater than whatever tuition a law school may charge. A student still has to finance their living costs for at least three years (possibly significantly longer), as well as books, travel, bar and bar study fees, etc., etc.

In addition, a prospective student has to consider the opportunity cost of spending at least three years out of the workforce, or not attending some alternative form of education. And, of course, a prospective student has to weigh the risk involved--some graduates do well out of law school, some eind up unemployed. So, it's quite possible for law school's return on investment to be negative, even at %240 tuition.

Anon

Stan, did you miss the part of the model where smart faculty leave the private sector for more secure jobs in return for less pay? try to keep up.

btw, some private sector models do offer something akin to tenure. Perhaps you are familiar with partnership in a law firm? or places like Bell Labs?

Stan

Again, Anon, Prof's are not accepting less pay. They are accepting more pay. In today's terms, literally double. Plus they have security. This is not to mention the avoidance of the 3000 billable hour year.

For a smart prof like you that provides a ton of value for his students, tenure seems like an unnecessary and burdensome mechanism that only protects those professors who are not, in fact, providing any value.

Surely, in the interest of your students, you would advocate for the removal of protections that only serve to protect the weakest of the professorial herd?

After all, tenure does nothing to prevent the (distorted) market from paying you more. It only appears to protect you from being paid less.

Tin Man

Well, Stan, I have to admit that I'd like to see Campos fired, which he would be without tenure. Then again, if he doesn't start writing some articles he may be fired anyway, because tenure doesn't offer much of a protection. Just ask the faculty at Vermont and Widener who have been "offered" "buyouts" how much tenure was worth to them.

Anon

Is it just me, or is the reaction of a lot of law professors to Paul Campos rather similar to police officers attempting to maintain the code of silence after one of them engages in misconduct, or the Mafia reacting to a snitch? It seems really rather unseemly.

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