[Update: Paul Caron (Cincinnati), Michael Madison (Pittsburgh Law), Jeff Lipshaw (Suffolk), Jim Chen (Louisville) have picked up on the analysis in the below post. There seems to be some misunderstanding on my point of "long-term contracts." In retrospect, I should have said "long-term commitments" (i.e., extra-legal and perhaps not committed to writing) to avoid what I think is an unproductive analysis of run-of-the-mill employment and commercial contracts.
I am talking about this: Academic X says, "I will stay here X number of years and ignore outside offers if you provide me with the resources to execute the following institutional plan [e.g., labor-intensive but high-yield teaching, public service, useful scholarship that will be noticed and solve a real world problem, etc.]." Law School Y says, "I love this idea. If you are right, it will grow our institution. Because you have committed to building it here, School Y will fund it." Because both Academic X and Law School Y have aligned personal and institutional agendas, their cooperation and commitment grows the institutional pie; both are made better off. Moreover, it becomes magnetic for other scholars and funders who share the substantive vision.
So we are talking about communitarian norms here. This type of approach is easy in small groups, which is what law faculty are. Firm-specific capital in law firms is harder to grow/maintain because (a) they have gotten larger, (b) covenants not to compete are prohibited, and (c) there are liquidity constraints imposed by the ban on non-lawyer ownership. On the other hand, law firms work harder at it because they increasingly operate in a competitive national marketplace--firm-specific capital can be huge competitive advantage. Law schools, in contrast, are not subject to the same market pressures--the most elite have huge endowments and donors who want to give more to be associated with the elite brands. Thus, in the legal academy, the free agent ethos is damn near ubiquitous.
No need to be abstract about all this. I lay out a highly plausible counteractive approach in this comment.]
Several bloggers have noted Clayton Gillette's recent article, Law School Faculty as Free Agents, 17 J. Contemp. Leg. Issues 213 (2008). See, e.g., Paul Caron, Larry Ribstein, Al Brophy, and Paul Secunda. Gillette's essay provides the type of straight thinking needed to move the Moneyball-Moneylaw debate into a mode of institutional analysis that can produce actual results. I will briefly lay out Gillette's analysis and then extend it to a concept I call "school-specific" capital--an analog to firm-specific capital.
Law Professor Free Agency
In a nutshell, here is Gillette's argument. The lateral market for law professors is primarily based upon scholarship, which is an observable, coveted good. Teaching and service, to be sure, are relevant goods, but they are hard to measure. Further, faculty make hiring decisions; when they land a high profile scholar, they share equally in the school's reputational gain (albeit these gains are largely limited to opinions of other professors). Yet, if new colleagues shirk committee work or are disengaged and uninspiring teachers, the costs borne by individual faculty members are negligible or non-existent. Hence scholarship becomes the focus of lateral hiring. Clayton observes,
In 30 years of teaching, service as vice dean, and membership on appointments committees, I don’t believe I have ever heard a discussion of a candidate’s qualifications that included serious consideration of institutional service, except insofar as it related to scholarship. ...
[H]iring schools tend to invest little in discovering teaching quality. The hiring decision is typically made after one or two faculty members at the hiring school attend one or two of the visitor’s classes, and that is done through a process (e.g., informing the visitor when faculty members will attend, and allowing the visitor to choose that time) that diminishes the likelihood that those classes will be representative. ... The result is that, as opposed to the meticulous, highly tailored criticism to which a candidate’s scholarship will be subjected, a candidate’s teaching will be evaluated largely to determine whether it is “good enough.” (pp. 228-29)
Gillette's key insight is that the lateral market in legal academia, unlike baseball (a crucial point), does not force the decision-makers [faculty] to internalize the benefits and costs of free agent activity: Some costs potentially get externalized onto the students, alumni and law school administrators. When scholarship opens so many doors, Gillette suggests, it is easy to see how a more robust lateral market can skew institutional incentives and detract from overall educational quality.
To my mind, Gillette sets forth a very coherent and plausible analysis. [I suspect a lot of people will quibble with it, however, believing that their own lateral experience (or aspiration) reflects a more optimal outcome at the institutional level. Listeners interested in the merits of this debate should weigh the critic's potential bias.] It is an open question whether lateral mobility is really on the rise. At Indiana Law, we are building a law faculty universe database that covers 80 years of AALS schools. See "Is Lateral Movement on the Rise? A Precise Answer is on the Way," ELS Blog (Dec. 21, 2006). We see a lot of lateral movement in the 30s, 40s, 50s, 60s, and 70s. Eventually we will answer to the nagging empirical question of whether lateral movement is truly on the rise.
But one thing I can say with confidence--information published on the Internet (Leiter Faculty News and Concurring Opinions) has increased the perception of heightened movement. And perception is all that is necessary to change behavior and institutional norms--possibly in the wrong direction.
Gillette actually understates his argument. Specifically, the proliferation of a free agency ethos not only undercut educational quality, it inhibits the cooperative, highly committed, selfless environments need to create truly exceptional institutions. One of the major implications of more professor mobility is the diminution of "school-specific" capital--i.e., desirable law school attributes, such as innovative curriculum, public service reputation, alumni good will, that remains largely intact when a professor leaves. So more free agency suggests fewer law schools that transform good human capital into great human capital. On this score, the "best" law schools can, in fact, be pretty mediocre. (I believe there is a way out of this box, which I will address below.)
More after the jump. ...