Empirical Legal Studies

Spaeth's S.Ct. Coding (07 Term)

Harold Spaeth has completed his coding for the Supreme Court's 07 Term. The dataset ("allcourt") is available for public download at the University of South Carolina Judicial Research Initiative (JuRI). To access the dataset please visit www.cas.sc.edu/poli/juri.

If Yale is #1 in U.S. News, Is it the Best Law School?

In a provocative post entitled "Is the End Near for Yale's Dominance", Brian Leiter reports one insider's assessment that Yale may lose three or four additional faculty members.  If that happens, surely Harvard, with its recent lateral hiring sprees, will be the best law school in the country--right? Brian thinks that predictions of Yale's decline are premature.  I agee.  But in the process Brian implicitly highlights an interesting problem: what exactly does it mean to be the "best" law school? 

Here are the vexing facts:  on a per capital basis, Yale places more people in academia and Supreme Court clerkships than any other law school;  Yale's acceptance rate is 7.3% versus 11.8% for Harvard; yet, over the last decade, the average U.S. News academic reputation score for the two schools are exactly--yes, exactly--equal: 4.840 for Harvard, 4.840 for Yale. 

Is it possible that Yale is #1 because, well, Yale is #1 -- and has been every year since USN began publication?  Brian refers to U.S. News "small school bias".  He is right.  Because of Yale's massive endowment and small student size, it enjoys a per-pupil expenditure that is roughly 1/3 its total tuition price.  According to a simulation model of the 2008 U.S. News rankings, which Andy Morriss and I recently constructed, Harvard would not overtake Yale even if: 

• Harvard's median LSAT climbed to 180 and its median UGPA hit 4.0;
• Harvard's academic and lawyer-judge reputation scores were both a perfect 5.0;
• Harvard's acceptance rate plunged to less than 5%.

In fact, even with these changes, Yale would still have a nice leadership cushion.  [Note:  Similar anomalous math was noted by Ted Seto in his classic essay, Understanding the U.S. News Law School Rankings, SMU L Rev (2007).]

Yet, Yale's dominance keeps things simple.  Applicants signal their elite status by enrolling at Yale.  Judges, in turn, derive prestige by hiring Yale graduates, even though they mockingly complain that Yale clerks know very little law.  And faculty favor Yale graduates because it validates our own sense of eliteness and institutional upward movement.  We can rationalize Yale's dominance in terms of scholarship, but the real endgame is the allocation of positional goods.  It is so easy to get too caught up on the hamster wheel of envy and prestige without realizing that the energy expended does not necessarily produce anything of lasting social value.

Of course, each of us is free to determine our own merit criteria.  I think  the "best" law school is the one where faculty are willing to make inordinate personal sacrifices for the benefit of the collective enterprise--and where aspiring lawyers leave the law school skilled, confident, ethical, and ensconced in a powerful professional network that opens doors and values public service.  In turn, alumnus are sufficiently grateful for the transformative experience they received that they are willing to underwrite the law school's mission and subsidize this opportunity for future generations.  This vision requires a greater focus on internal rather than external metrics.  For us human beings, that is no easy trick.

Class of 2007: A More Extreme Bi-Modal Distribution

NALP just published its 2007 edition of Jobs & JD's.  One topic of interest to students, lawyers, law firms, and legal educators is the change in salary distribution from 2006 to 2007.  The now famous 2006 bi-modal distribution was vivid evidence that the U.S. legal profession is undergoing significant structural change.  As shown in the graph below (from this NALP webpage entitled "Another Picture Worth a 1,000 Words"), the underlying stressors are even more pronounced for the class of 2007. 

The sample is based on 23,337 law school graduates from the class of 2007 who reported salary information.  Note, however, that 197 ABA-Accredited law schools graduated 43,518 students in 2007.  Although we know the types of jobs taken by 40,416 grads, only 57.7% of this group provided salary information.  If I had to wager on the direction of underreporting, I would predict it was under-inclusive of graduates with lower salaries and those who did not pass the bar.  Why?  Aside from the human psychology that it is easier to share flattering rather than embarrassing information, the roughly 7,500 jobs under the second mode are fairly close to figures I have seen from ALM and NALP data, which are provided by large law firms rather than individual students.  See, e.g., charts in this NLJ article.

This bias, however, is not necessarily good news.  In the above graph, 32.5% of the law graduates took jobs with starting salaries in the $100K+ range; but the true percentage for the class of 2007 is probably lower.   Some facts and then one normative observation.  The facts first:

• 91.9% of 2007 graduates were employed 9 months after graduation, which compares favorably to 2006 (90.7%), 2005 (89.6%), 2004 (88.9%), and 2003 (89.0%).  I would like to believe these numbers are trustworthy. 
  
• 76.9% were in jobs that required bar passage.  [It would be useful to disaggregate the jobs in the remaining 23.1% of law school graduates.  Who are these students?  How many entered law school with no intention of practicing law? ]
• The median salary in the above distribution is $65,750; the mean is $86,396.  But these measures of central tendency are not reliable guides of future earning power.
• 38% of all starting full-time salaries were less than $55,000 per year, including 18% of all jobs in private practice, 27.5% in business, and 70.0% in government (excluding judicial clerkships).
• 79.6% of law firm jobs in NYC, 80.3% in Washington DC, and 74.9% in Boston were in firms with 100+ lawyers.  Even in Indianapolis, 50.4% were in 100+ lawyer firms.  Wow! those are big numbers.

See also NALP Press Release, July 24, 2008.  On the normative front, I have a simple thesis:  the bi-modal distribution is bad for students, bad for law firms, bad for clients, and bad for law schools.  [When I showed the 2007 distribution to one law school dean, she shielded her eyes!]:

• Students.  It is bad for students because at $160,000 per year, many corporate clients will ask that you not be assigned to their matters.  And if your initial work experience is document review, a $160K job can quickly become a dead-end because your skill set is not growing with your billing rate (avg. 1st yr billing rate in a $160+ firm is $225 to $255/hr).   So the atmosphere among associates at $160K+ firms is probably becoming more competitive.  It would be better in the long run to start at $95K, learn your craft, and become a great lawyer who commands top dollar.  And young lawyers should think long run.

• Clients.  This is bad for clients because the short term solution of requesting only midlevels and partners will eventually constrict the supply of incoming legal talent.  When clients and law firms try to externalize the cost of mentoring and training--here I mean observation, contact, and feedback from partners and clients--associates are more likely to leave.

• Law Firms.  Actually the bi-modal distribution is only bad for firms trying to keep pace with the Am Law 200 salary pay scale.  In contrast, boutiques and organizations like Axiom will find general counsel more interested in their value proposition.  For Am Law 200 firms, the difficulty is getting partners to commit themselves to the future of the firm by spending more time and money investing in associates.  This will reduce attrition and protect the brand.   But the $160K+ cost structure provides partners with strong incentives to bill hours rather than investing in the long term future of the firm.

• Law Schools.  The economics of the bi-modal distribution take the pressure off elite law schools--indeed, they can raise tuition! Thus, for many law professors, the best outcome is lateraling into a Top 15 law school.  But more/better law review articles--a precondition of a lateral offer--is not going to solve the difficult institutional problems of lower ranked schools.  Now more than ever, all law faculty members need to understand the structural shifts taking place in our profession.  When faculty at Harvard and Yale ignore these changes, it does not mean that these changes are not important.  It just means that Harvard, Yale, et al. are not affected.

I don't have any solutions to these issues, though I did write up some useful insights in my prior post, "Part II: How law firms misapply the 'Cravath System.'"  Our situation reflects difficult collective action and coordination/signaling problems.  For example, how a firm gracefully bows out of the salary wars is an immensely difficult problem.  I do think, however, that permitting nonlawyer investment would provide law firms with the financial wherewithal (and psychological courage) to experiment with more innovation.  And that would be good.  Larry Ribstein's scholarship is now more timely than ever.  See, e.g., here and here.

When I was an interim associate at Sidley & Austin the summer after the 2000 salary wars, a partner told us that "we are all going to hell" based of the jump in salaries from $95K to $125K.  I now worry that he may have been right.

Part II: How most law firms misapply the "Cravath system"

In my last post, I discussed the linkage between the bimodal distribution and the emphasis on credentials under the "Cravath system".  I also stated that most law firms misunderstood the internal logic of the original Cravath model and promised to elaborate in a subsequent post.   This is the promised entry. 

One note of context:  this post is not a history lesson.  The Cravath system reflects a profoundly powerful method of developing human assets.  Cravath started with very good associates/inputs  and turned them into truly exceptional lawyers who were in high demand by clients and other firms.   Moreover, the Cravath system required lawyers to work together collaboratively to further the clients' interests.  This resulted in efficient and highly effective legal services that engendered the abiding loyalty of clients and more demand for the firm's services. See Results or Résumés at 4 & n. 13 (discussing concept of firm-specific capital). In other words, under the true Cravath system, everyone comes out ahead. Two caveats:  (1) the first-mover--here, Cravath 108 years ago--garners the most benefit; (2) if a firm neglects a key element--e.g., investing in associates--the model generates no competitive advantage.

[Sources: The Cravath system described below come primarily from Robert Swaine's 1948 history of the firm and other contemporaneous sources from the 50s, 60s, and 70s, which I will cite as appropriate.]

Recruiting Elite Law School Graduates

One of the hallmarks of the Cravath system is the recruitment of elite law school graduates.  As of 1948, Cravath, Swaine & Moore and its predecessor firm had employed a total of 454 law school graduates as associates.   Of this total, 67.7% attended Harvard (128), Columbia (124), or Yale (54).  According to Swaine, "in recent years there has been an increasing number from the law schools of the Universities of Virginia and Michigan."  These two schools rounded out the top five :  (UVA 30, Michigan 26).

Cravath's emphasis on credentials, however, had a clear economic logic that was designed to compensate for the deficiencies of early 20th century legal education.  During this period, most law schools required little or no college education.   In contrast, Harvard, Columbia, and Yale grads typically had a college degree before entering law school.  Swaine writes,

Cravath believed that disciplined minds are more likely to be found among college graduates than among men lacking in formal education ... .

Cravath believed in seriousness of purpose--a man with a competent mind, adapting to practicing law according to Cravath standards, should have made a good scholastic record at college.  But he recognized, without full approval, the tradition of the early decades of this century--that "gentleman" went to college primarily to have a good time and make friends.  Hence, while a good college record was always a factor in favor of an applicant, lack of such a record was not necessarily an excluding factor. ... [I]n the stern realities of the depression of the '30s, however, college records of applicants came to have added importance.

Yet, "[f]or a poor law school record Cravath had no tolerance."  Candidates who "had not attained at least the equivalent of a Harvard Law School "B" either had a mind not adapted to the law or lacked purpose and ambition ... ."  Thus, the "first choice" was a "Phi Beta Kappa man from a good college who had become a law review editor at Harvard, Columbia or Yale."

Note, however, that Cravath's emphasis on credentials had a clear business purpose designed to compensate for the limitations of legal education.  During the first half of the 20th century, going to an Ivy League law school did not guaranteed legal aptitude. Prior to advent of the LSAT in 1948, college grades were the only predictors of success in law school.  In 1955, The "LSAT Handbook" included cross-tab tables of  LSAT scores versus law school performance for several individual law schools.  At Harvard Law, roughly 1/3 of the class scored below the 50th percentile.  On the west coast, UC Berkeley had a similar wide range of LSAT scores.  See The Law School Admission Test and Suggestions for Its Use (ETS 1955).  The clear relationship between LSAT and grades subsequently  encouraged law schools to revamp their admissions criterion.   But that process took decades.  See Lunneburg & Radford, The LSAT: A Survey of Actual Practice, 18 J. Legal Educ. 313 (1965).

In a talk at Harvard Law School, Cravath stated that a successful "lawyer of affairs" (aka corporate lawyer)  assumed "the fundamental qualities of good health, ordinary honesty, a sound education and normal intelligence."  On top of these attributes, a candidate must have "character, industry and intellectual thoroughness, qualities that do not make for charm but go far to make up that indefinable something that we call efficiency.  Brilliant intellectual powers are not essential."

More after the jump...

How the "Cravath System" Created the Bi-Modal Distribution

The bi-modal distribution (graphic to the right) continues to generate interest in the blogosphere.  See, e.g., Greg Mankiw, Right Coast, Broken Symmetry.   The  chart summarizes the starting salaries for lawyers who graduated from law school in 2006.  One reason the bi-modal structure is so jarring is that it demonstrates that measures of central tendency, such as average or median, are not necessarily reliable guides for law students' future earning power.  In conventional labor markets, that disconnect is rare.

NALP recently dug into its archives to determine whether this stratification is a persistent feature of the entry level law market.  See NALP Bulletin (Jan. 2008).  It turns out that 15 years ago, the market followed a much more traditional distribution.   The chart below summarizes the salaries for the class of 1991.

The 1991 graph is right skewed but bears some resemblance to a normal curve.  Below is the graph for 1996:

The rightward skew is a bit more pronounced and the area under the $75K to $85K range is becoming more substantial.  A more seismic shift is seen in 2000 (below) with the emergence of a second mode at the $125K price point. 

At the height of the Internet boom, a remarkable 14% of all entry level lawyers took jobs at the $125K level.  According to NALP, "never before had a single salary so dominated the landscape."  Under the 2006 bimodal distribution (see chart above), 44% of graduates received entry-level salaries in the $40K to $60K range; yet, the second mode moved further to the right ($135K to $145K) and grew to 17% of all graduates.

What are the market forces that have created this peculiar salary structure?  In my working paper, "Are We Selling Results or Résumés?: The Underexplored Linkage Between Human Resource Systems and Firm-Specific Capital," I posit that the runaway $160K mode is a confluence of two factors:  (1) the continued growth in the corporate legal services market, primarily due to the growing scale and scope of transnational corporate activity; and (2) law firms' nearly universal adherence to the "Cravath system," which purports to hire the best graduates from the best law schools and provide them with the best training.  More after the jump. ...

How has the Part-Time "Loophole" Affected Part- and Full-Time Enrollment? The Data

[UPDATE: An astute reader in comment #1 pointed out that Thomas Cooley's large part-time program could be skewing the data.  That commenter was right.  Thus, I have changed the analysis from the original post.  wdh]

According to Bob Morse's post at Morse Code, law school deans are very unhappy about the proposed change in the U.S. News rankings methodology.  If the changes go into effect, these deans suggest that part-time program will shrink; in the process, students with no other options will be shut out of law school.

There is another way to evaluate this claim.   Is the number of part-time slots propped up by the U.S. News rankings methodology?  In other words, what is the effect of the part-time loophole? 

The table below summarizes changes in 1L full-time and 1L part-time enrollment  between fall 1991 and fall 2006.  (Note that U.S. News debuted its rankings for all law schools in 1992.)  These schools fall into four categories:  (1) schools with FT-only in 1991; (2) schools with FT/PT in 1991; (3) school approved by the ABA-approved since 1991; (4) Thomas Cooley, which has unusually large PT and FT enrollments.  I separate out Cooley because it skews the data (thank you to comment #1 for bringing this pattern to my attention).

Overall, there is a strong tilt toward part-time, but the dynamics are complex.  Here is a summary of the relevant changes (excluding Cooley except where noted):

• Between 1991 and 2006, the number of full-time slots at ABA-approved law school increased by 6.0% (+2,220) while the number of part-time slots increased by a 25.2% (+1,288).  (If Cooley is included, these figures jump to 6.9% and 34.7% respectively.)
• Among the 99 schools with no part-time programs in the pre-ranking era, 14 started part-time programs since 1991 (+497 PT 1L students).  Yet, among the 75 schools that had part-time programs in 1991 (excluding Cooley), the number of part-time slot increased a mere 16 students. 
• Overall, the shift is clearly away from full-time and toward part-time.  Among the 174 schools that were fully ABA-approved in 1991 (again, excluding Cooley), full-time 1L slots fell by 743 students while part-time increased by 513.

Why such a small increase among schools with pre-existing PT program?  There is heightened competition from the new PT programs: during this time period, other law schools added 1,272 more PT seats (excluding Cooley).  Further, schools with higher ranks--and hence more market power--were much more likely to increase their PT enrollments.  Among the 174 schools that were fully ABA-approved in 1991, PT 1L enrollments in Tiers 1-2 climbed by 688 while FT 1L enrollments in declined by 518.  In Tiers 3-4 (excluding Cooley), there was contraction in both FT (-224) and PT (-175) enrollment. 

Let's not kid ourselves. Quite a few students have been shunted into PT programs so a school could drive up its US News numbers.  In my research for an upcoming Southeastern Association of Law Schools (SEALS) presentation, I was shocked by proliferation of so-called "part-time day" programs--which, obviously, do not require professors to teach at night.  These students appear to eventually transfer into the full-time day program; unfortunately, they have to take overloads or summer courses to graduate in three years.    

So here is the bottomline:  Whatever the ranking methodology, a large number of law schools are going to make resource allocation decisions based on rankings.   If  Bob Morse changes the methodology to get rid of the part-time loophole, we can expect many law schools to throw their part-time students overboard--that is a fact, and it is not Bob Morse's fault.   In this US News conundrum, both people and our alleged principles are guaranteed to get hurt.   

The first step toward solving this ongoing embarassment is admitting that we indeed have a problem.  This task should, in theory, fall to the ABA Section on Legal Education and Admission to the Bar, which meets in NYC next month. 

As Andy Morriss and I argued in Measuring Outcomes: Post-Graduation Measures of Success in the U.S. News & World Report Rankings, 83 Ind. L. J. 791 (2008), legal educators can completely eradicate this terrible tail-wagging-the-dog dynamic by releasing school-level data (in spreadsheet format) that reveals detailed information about what students care about: employment by practice setting, salaries, interviews, and bar passage.    Right now, this information is aggregated in ways that impede intelligent decision making by students.   Many schools would be hurt by this approach--but they are not the only constituency that matters.   Students and lawyers are not well served by the opaqueness of the current system. And it is this opaqueness that gives U.S. News rankings so much power.

Empirical Literature on Punitive Damages Cited in the Exxon Case

Today’s Supreme Court decision in the Exxon case relies heavily upon the empirical literature to punitive damages to evaluate the availability and scope of punitive damage awards under maritime law.  See footnote 13 (citing several studies shows that punitive damages were on the rise between the 1960s and 1990s but acknowledging more recent research, including Eisenberg, Heise, et al., Juries, Judges, and Punitive Damages: Empirical Analyses Using the Civil Justice Survey of State Courts 1992, 1996, and 2001 Data, 3 J. OF EMPIRICAL LEGAL STUDIES 263, 278 (2006), which document flat or decreasing punitive damage awards).

After a review of the empirical literature of punitive damages, including the relationship between punitive and compensatory awards, the Court concluded that the real issue it confronted was the "stark unpredictability of punitive awards."  The Court continues, "We are aware of no scholarly work pointing to consistency across punitive awards in cases involving similar claims and circumstances."   There are, however, studies based upon mock juries; the Court dismissed them because they were funded in part by Exxon.  See footnote 17. 

Over at the Election Law Blog, Rick Hasen questions the wisdom of this approach.

[I am familiar with many of the authors and studies cited in footnote 17and it] is really top notch work. So I find this footnote troubling. There will be cases (including election law cases) in which there are no extant studies on an empirical question at the heart of a case. At that point, it makes sense for litigants to fund such research. Indeed, when such research appears in an expert report subject to cross-examination, I assume the Court has no problem relying upon the evidence. So why should it be different when a litigant funds the research, particularly if the research has gone through peer review and of course if the funding source is disclosed so that the opposing side may probe for bias?

Good question.

New York Police Department (NYPD) Stop, Question, and Frisk Database, 2006

ICPSR's recent data releases are online here.  Here is the summary of the New York Police Department (NYPD) Stop, Question, and Frisk Database, 2006, which looked interesting:

These data were originally collected by New York Police Department officers and record information gathered as a result of stop question and frisk (SQF) encounters during 2006. These data were used in a study carried out, under contract to the New York City Police Foundation, by the Rand Corporation's Center on Quality Policing. The release of the study, "Analysis of Racial Disparities in the New York Police Department's Stop, Question, and Frisk Practices" (Rand Document TR-534-NYCPF, 2007) generated interest in making the data available for secondary analysis. This data collection contains information on the officer's reasons for initiating a stop, whether the stop led to a summons or arrest, demographic information for the person stopped, and the suspected criminal behavior.

Transfer Students, Part-time Programs, and US News Rankings: A Response to Ribstein

Larry Ribstein and I are having an exchange on the facts and significance of law school transfer policies.  Following up on my prior post, Larry takes me on over at Ideoblog.  Note that Brian Leiter got the ball rolling yesterday with this post.   Larry is such a formidable intellect that I will surely lose this debate if I remain cornered in his comments section, where I cannot effectively present more data.   Sometimes your own blog comes in handy.

In a nutshell, here is Larry's argument:  I don't have solid evidence that a large number of schools have embraced a class-shrinking policy; further, a .37 gain in a school's median LSAT in exchange for a 10% decline in full-time class size is too big a price for too small a prize [no one had these parameter estimates at the time!].  Hence, the existence of the transfer gaming strategy is speculative.  Since all law schools are trying to be as selective as possible on entry level LSAT scores, why not compensate for some of this underinclusion of qualified people by admitting proven performers as transfers?  If we fully disclose and understand the risks, the costs will be properly internalized by prospective transfer students and law schools.  Under this analysis, Larry surmises there is no obvious right answer on transfer policies.

Larry underestimates the data.  Before reviewing the significance of the statistics in the table below, it is important for readers to understand the basic calculus for gaming the US News LSAT variable:   

• The median for full-time enrollment is the only measure that matters.  PT and transfer statistics are irrelevant.
  
• Most schools are tuition dependent and cannot afford to shrink the 1L class without a countervailing revenue stream.
• One revenue neutral strategy is starting or expanding part-time programs, applying less stringent standards to PT admits, and letting students transfer to FT after the first year.  This strategy, however, is not going to be very effective for a non-urban law school.
• Another is constricting the 1L class (to get the credentials boost) and making up the revenues through more liberal transfer policies.  This strategy, however, only works if a school has plausible lower ranked schools to draw from.  Florida State, with cheap in-state tuition and many lower ranked schools in the state,  fits this profile, though the magnitude of their transfer program (#1 on Leiter list at 24.6%) is pretty shocking.
  

Knowing that shrinking FT 1L enrollment is the lynchpin of the gaming strategy, here is the mean and "left side" of the FT% change distribution--i.e., the schools with lowest growth/largest shrinkage in full-time 1L enrollment.

Note that the data are compiled by quartile because the first full USNWR rankings predated the current "tier" format.  Some observations:  (1) the average change in FT 1L enrollment was positive throughout the law school hierarchy; (2) nonetheless, in each quartile, 25% or more of all law schools shrank their 1L FT class between 1992 and 2004; (3) schools with part-time programs tended to have the largest declines/smallest growth in full-time 1L enrollment, presumably because transfers AND part-time gaming were available to them; (4) the minimum FT% change variable is very low in most cells--why?  I have heard of schools that created "special" summer programs that excluded large numbers of full-time students from their ABA and US News numbers.   If all the surrounding facts became know regarding these programs, it may shock the conscience of most readers, including us lawyers.

The bottomline is this:  64 law schools shrank their 1L full-time entering class between 1992 and 2004, 27 by more than 10%.  At the same time, PT enrollment has boomed and the number of PT programs has grown (by 10 in quartiles 3 and 4).  We don't have transfer data for 1992 to 2004 because the attrition data was only published beginning in 1997, when the ABA-LSAC Official Guide began publishing in a standardized format to respond to pleas from US News that law schools were lying to them.  See Measuring Outcomes, at 11-12.  But the 1997 to 2005 data shows large increases in non-academic 1L attrition, which is the category that includes outbound transfers.

With these trend lines in place, it is easy to see the flaw in Larry's normative defense of liberal transfer policies:   

[Because we have no solid evidence of class shrinkage policy,] the overall conclusion is much more ambiguous than the one Bill draws. The tradeoff would seem to be one of adverse social impact for more opportunity for students who prove themselves to "trade up." With adequate disclosure of the risks, those tradeoffs are internalized by the students and the schools.

Because it is harder to get admitted as a full-time 1L at many law schools (because the entering FT class has shrunk),  these displaced students will be pushed into the transfer market to upgrade the pedigree of their JD degrees.   Sure, we can disclose the risks identified by LSSSE (we could but we generally don't) and presume that our students are all adults and thus can weigh the costs and benefits of transferring.   But collectively, the shrinking supply of 1L FT slots, at least at schools with some regional or national market power, has forced these trade-offs on a larger number of students.  In light of the LSSSE data, more 1L admissions under whole person review (and thus fewer slots for transferring 2Ls) would improve the social networks and law school experience of many students.   Further, the creaming of transfers saps the ability of lower ranked schools to reap the benefits of their innovations.   

Frankly, I don't see any plausible reading of these facts that make students, as a group,  or legal education as a whole (rather than individual, higher ranked law schools) better off.   

Behavioral Economics Primer

I recently ran across this audio file of a talk given at Harvard Law School in 1995 by Charles Munger, entitled "Causes of Human Misjudgment."   Munger is a Harvard Law alum and a founding partner of the L.A. law firm of Munger, Tolles & Olsen.  He later left the firm to run an investment fund.  In the mid-1970s, he joined Berkshire Hathaway to serve as Vice-Chairman with Warren Buffett.

Make no mistake:  Munger is explicitly talking about the intersection of economics and psychology, acknowledging that the nascent (at the time) field of behavioral economics was on the right path and citing insights of Daniel Kahneman and Amos Tversky (note seven years before Kahneman won the Nobel Prize).

I am particularly interested in applied behavioral economics.  And here I don't mean writing papers on the topic;  rather, I mean honing my own decisionmaking processes to eliminate bias and susceptibility to manipulation.  For this purpose, I doubt I will ever find a better resource.  A written version of this talk, including an interesting preface, is online here.   It has quite a few things to say about academia and the pervasive problem of the "truffle hound."  (You will have to read/listen to the links to figure out the truffle hound reference.) 

Finally, Munger's remarks inspired Paul Brest (Hewlett Foundation, former dean at Stanford) and Laura Hamilton Krieger (UC Berkeley) to create a law school  course on professional judgment and decisionmaking at Stanford Law.  The course began in the early 1990s and continues to this day (materials are online at www.professionaljudgment.org).   Several prominent behavioral law & econ scholars took this course while students at Stanford, including Russell Korobkin (UCLA), Jeff Rachlinski (Cornell), and Chris Gurthie (Vanderbilt).    In case there was any doubt, cornerstones of the course appear to be empiricism, applied probability theory, and due attention to disconfirmatory evidence in the face of cognitive biases.  Great stuff.