Category: Behavioral Law and Economics

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Randomization, Intake Systems, and Triage

Thanks to Jim and Cassandra for their carefully constructed study of the impact of an offer from the Harvard Legal Aid Bureau for representation before the Massachusetts Division of Unemployment Assistance, and to all of the participants in the symposium for their thoughtful contributions.  What Difference Representation? continues to provoke much thought, and as others have noted, will have a great impact on the access to justice debate.  I’d like to focus on the last question posed in the paper — where do we go from here? — and tie this in with questions about triage raised by Richard Zorza and questions about intake processes raised by Margaret Monsell.   The discussion below is informed by my experience as a legal service provider in the asylum system, a legal arena that the authors note is  strikingly different from the unemployment benefits appeals process described in the article.

My first point is that intake processes vary significantly between different service providers offering representation in similar and different areas of the law.  In my experience selecting cases for the asylum clinics at Georgetown and Yale, for example, we declined only cases that were frivolous, and at least some intake folks (yours truly included) preferred to select the more difficult cases, believing that high-quality student representation could make the most difference in these cases.  Surely other legal services providers select for the cases that are most likely to win, under different theories about the most effective use of resources.  WDR does not discuss which approach HLAB takes in normal practice (that is, outside the randomization study).  On page twenty, the study states that information on financial eligibility and “certain additional facts regarding the caller and the case”  are put to the vote of HLAB’s intake committee.  On what grounds does this committee vote to accept or reject a case?  In other words, does HLAB normally seek the hard cases, the more straightforward cases, some combination, or does it not take the merits into account at all?

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Mandatory (Randomized) Clinical Trials For Law Schools

Clinics Should Take Their Chances

I’m really proud that Concurring Opinions is hosting a symposium today and tomorrow on What Difference Representation.  I think the piece offers a timely and provocative thesis, and we’ve assembled a near-ideal group of folks to engage with the topic.  I look forward to seeing what the group comes up with.  A big thank you to Jaya for organizing with me, and of course to Jim and Cassandra for agreeing to hold up their work to public scrutiny.

I’ve been thinking over the last several weeks about what I could say that would be distinctive. Here’s what I came up with.  That selection makes hay of our ability to study lawyering in the wild is obvious – and Representation’s focus on the hazards of previous work in the field an important contribution.  Generally, selection–  in various guises — produce one of empirical legal studies’ true wicked problems. It shocks me how many quantitative and qualitative papers proceed as if it it were a molehill to dismiss, instead of a mountain to climb. Randomized trials promise a solution — really, the only way we can know if legal policies are having the effects that we hypothesize.

Law school clinics offer one of the few fora where randomized trials would be ethically & practically feasible.  It is true that no law school clinic experiment can fill the offer/representation gap that bedevils the paper.  But comparison across clinics might shed light on the effect of resources, client characteristics, clinic structure, and legal regime on the offer-making outcomes that the paper discusses.  (Whether you a comparison of like-clinics would enable a better estimate of the representation effect than the methods employed on pps. 39-42 is an open question.)

Given that more data would permit better resourcing decisions, should law school clinics be expected to engage in randomized trials when offering representation? My tentative answer to this question is yes. Law school clinics are subsidized by student tuition dollars (and sometimes the public too).  This doesn’t and shouldn’t mean that pedagogical clinics should refrain from zealous advocacy.  But it does suggest, I think, that their mission should be informed and guided by the values of the University: openness to criticism, the expectation that participants will produce generalizable and socially useful knowledge, and measured transparency. Those values would be served if clinics participated in randomized testing to see if, and how, they are helping the recipients of their services.  Like Abramowicz, Ayres and Listokin, I endorse randomization before determining the effect of legal policy.  To my knowledge, not one law school clinic in the country engaged in  a randomized trial before engaging in lawyering services.  Doctors no longer practice this way – lawyers shouldn’t either.

It would be much better if this participation in research occur voluntarily, without resort to our accrediting agency, or, worse, the politicized and meddling hands of various state-related funding bodies.  I think moral suasion is the best route – hence, this blog post.  We’re anticipating that many clinicians will read this symposium.  To them I pose the following challenge: why not randomize and see what effects your offers are having on client outcomes?  Maybe, in the aggregate, we’ll learn something about representation.

While you are mulling that over that modest proposal, I hope you will enjoy the rest of the symposium.

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Uncompensated Torts

There’s a fantastic new article out by Rick Swedloff (Rutgers-Camden) called Uncompensated Torts.  Swedloff examines the obstacles (largely insurance-related) to victim compensation for intentional torts, and offers a sobering take on possible solutions.  The one that most interests me is an insurance mandate.  Though I take it from Swedloff’s article that these kinds of mandates are perhaps less popular than the used to be?  Anyway, the whole thing is well-worth checking out.

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What Difference Representation: Introduction to the Symposium

Should Law School Clinics Select Clients by Roulette?

I am delighted to announce that Concurring Opinions will be hosting a symposium next Monday and Tuesday on What Difference Representation? Offers, Actual Use, and the Need for Randomization, the forthcoming Yale Law Journal article by Jim Greiner and Cassandra Wolos Pattanayak.  [Update: You can read all posts in the symposium by clicking on this link.]  As you may recall, What Difference has already caused quite a stir in the clinical and legal aid communities. Given our shared interest in questions of empirical methodology, and Jaya’s background in clinical legal services, we decided that bringing that debate to CoOp would be an excellent use of our time and energy. Here’s the (revised) abstract) – though you should download the article if you haven’t already:

“We report the results of the first in a series of randomized control trials designed to measure the effect of an offer of, and the actual use of, legal representation. The results are unexpected. In the context of administrative litigation to determine eligibility for unemployment benefits, a service provider’s offer of representation to a claimant had no statistically significant effect on the claimant’s probability of a victory, but the offer caused a delay in the proceeding. Because a substantial percentage of the provider’s client base consisted of claimants who were initially denied benefits but who would later have that initial denial reversed as a result of the litigation, the offer of representation inflicted a harm upon such claimants in the form of an additional waiting time for benefits to begin, this with no discernible increase in the probability of a favorable outcome. In other words, within the limits of statistical uncertainty, these claimants would have been better off without the offer of representation. The size of the delay (around two weeks, depending on how measured) was not large in absolute terms, and would have been negligible in many other legal settings, but was relevant in the context of this particular administrative and legal framework, one in which speed has remained a special concern for decades. Moreover, in a small number of cases with a certain profile, the delay caused the unemployment system to continue paying benefits erroneously for a longer period of time, potentially imposing costs on the financing of the unemployment system. We were also able to verify a delay effect due to the actual use of (as opposed to an offer of) representation; we could come to no firm conclusion on the effect of actual use of representation on win/loss.

We hypothesize three potential explanations for our findings (and acknowledge that others are possible). First, it is possible that the client base that reached out to the service provider (and thus was subject to randomization) was a specialized subset of unemployment claimants, a subset that did not actually need legal assistance. This theory suggests special attention to provider intake systems. Second, it is possible that the administrative adjudicatory system at issue, with its semi-inquisitorial style of judging, is pro se friendly. Third, it is possible that the subject matter in dispute in these cases is less legally, factually, or procedurally complex than in other settings.

We caution against both over- and under-generalization of these study results. We use these results as a springboard for a comprehensive review of the quantitative literature on the effect of representation in civil proceedings. We find that this literature provides virtually no credible information, excepting the results of two randomized evaluations occurring in different legal contexts and separated by over three decades. We conclude by advocating for, and describing challenges associated with, a large program of randomized evaluation of the provision of representation, particularly by legal services providers.”

We have assembled a terrific group of symposiasts, mixing clinicians, academic empiricists and practitioners. Besides Jim, Cassandra, Jaya and me,  the group includes twelve contributors, lauded in detail after the jump:

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Law & Econ’s Influence on Law & Accounting

The hottest book of the century, on corporate law, is in production, thanks to editors Brett McDonnell and Claire Hill, both of Minnesota. As part of a series investigating the economics of particular legal subjects, overseen by Richard Posner and Francesco Perisi, this Research Handbook on the Economics of Corporate Law, promises a comprehensive canvass of the broadest definition of this field of law as it has been structured by economic theories over the past forty years.

My contribution addresses the influence of law and economics on the sub-field of law and accounting, which I suggest takes the form of “two steps forward one step back.”  You can read a draft of my chapter (comments welcome!), available free here, accompanied by the following abstract:

Theory can have profound effects on practice, some intended and desirable, others unintended and undesirable. That’s the story of the influence the field of law and economics has had on the domain of law and accounting. That influence comes primarily from agency theory and modern finance theory, specifically through the efficient capital market hypothesis and capital asset pricing model. Those theories have forged considerable change in federal securities regulation, accounting standard setting, state corporation law, and financial auditing. Affected areas include the nature of disclosure, the measure of financial concepts, the limits of shareholder protection, and the scope of auditor duty.

Analysis reveals how agency theory and finance theory often but not always point to the same policy implications; it reveals how finance theory’s assumptions and limitations are often but not always respected in policy development. As a result, while these theories sometimes produced policy changes that were both intended and desirable, some policy changes were both unintended and undesirable while others were intended but undesirable.  Examination stresses the power of ideas and how they are used and cautions creators and users of ideas to take care to appreciate the limits of theory when shaping practice. That’s vital since the effects of law and economics on law and accounting remain debated in many contexts.

Other contributions to the book similarly available in draft form are by Matt Bodie (St. Louis), David Walker (BU) and Charles Whitehead (Cornell).  The following scholars are also contributing chapters: Bobby Ahdieh (Emory), Steve Bainbridge (UCLA), Margaret Blair (Vandy), Rob Daines (Stanford), Steve Davidoff (Ohio State), Jill Fisch (Penn), Tamar Frankel (BU), Ron Gilson (Stanford/Columbia), Jeff Gordon (Columbia), Sean Griffith (Fordham), Don Langevoort (GT), Ian Lee (Toronto), Richard Painter (Minnesota), Frank Partnoy (SD), Gordon Smith (BYU), Randall Thomas (Vandy), and Bob Thompson (GT).

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Cognitive Illiberalism and the Speech-Conduct Distinction

The partisanship and bad faith of judges who disagree with us has never been more obvious, or more pernicious. For many, the most irritating personality flaw of judicial politicos (and their fellow-travelers) isn’t the bottom-line results of the opinions themselves, it is that judges refuse to acknowledge their own biases, though it’s evident that they aren’t neutral umpires, but rather players in the game.  Indeed, almost every decision you read about these days comes accompanied by a reference  to the political party of the appointing President – as if you needed the help!  As Orin Kerr has brilliantly pointed out, “people who disagree with me are just arguing in bad faith.”

For the Cultural Cognition Project, the way that we talk about legal decisions – and decisionmakers – is a subject of study and concern.  We decided to take a careful look at this topic — which we’ve previously touched on in work like Whose Eyes Are You Going To Believe. Our motivation was to investigate how constitutional norms requiring neutrality in fact finding interact with individuals’ tendencies to perceive facts and risks in ways congenial to their group identities.  Building on Hastorf/Cantril’s social psychology classic, They Saw a Game: A Case Study, we’ve written a new piece about how motivated cognition can de-stabilize constitutional doctrine, render legal fact-finders blind to their own biases, and inflame the culture wars. Our resulting paper, “They Saw a Protest”: Cognitive Illiberalism and the Speech-Conduct Distinction, results from my collaboration with Dan Kahan, Don Braman, Danieli Evans, and Jeff Rachlinski.  The paper is just up on SSRN, and I figured to jump-start the conversation by using this post to talk about our experimental approach and findings.  (I think that Kahan is blogging on Balkinization later in the week about the normative upshot of Protest.)

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The Representation Debate Continues

Jim Greiner and Cassandra Wolos Pattanayak have emailed me a reply to the Harvard Legal Aid Bureau’s comment on What Difference Representation. Since the topic has been the subject of several posts here, as well as some off-line communication from interested readers, I figured that I owed Greiner/Pattanayak a public space for reply.  It consists of a bit of introductory text, and a longer (9-page) paper.

“We recently became aware that HLAB President Rachel Lauter and HLAB Faculty Director David Grossman had written an email to the clinical listserve addressing our paper “What Difference Representation?”.  The email has been posted to various locations in the blogosphere.  Because the email expresses criticisms of the paper that we also have received from one or two other sources, we thought we would take the opportunity the email presented to clarify certain issues.  For example, President Lautner and Professor Grossman echo reactions we have received from another legal aid provider when they say that our study produced “only limited information,” and that more (and more useful) information would be available if we would just analyze the data properly.  We explain here that the analysis the email (and one or two other legal services providers) have advocated is statistically invalid, and that in any event the data required for it do not presently exist and cannot at this time be ethically collected.  As ought to be clear by now, we have the greatest respect for the students of HLAB, including President Lautner, and HLAB’s clinical faculty, including Professor Grossman.  We are using President Lautner and Professor Grossman’s email as a convenient foil representative of a few other comments we have received.

The substance of our response can be captured in the answers to two questions.

1.  Why study the effect of offers of HLAB representation?  All agree that the effect of actual use of representation is interesting, although as we will explain, perhaps less so than one might think at first.  But why study the effect of HLAB offers?

2.  Why not compare those who got offers from any source, not just HLAB, to those who did not get any such offers?}  This is what President Lauter, Professor Grossman, and a few others have suggested.  Why not make this comparison?

We also answer one final question:

3.  So how can we find out about the effect of offers from other service providers?”

To read the full response, click here.

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Wikipedia’s First Lawyer

In Wikitruth Through Wikiorder, Salil Mehra and I detailed the history of Wikipedia’s dispute resolution process.  We highlighted the role of Alex Roshuk, a Brooklyn lawyer and site volunteer who played a key early role in the process by suggesting that the site’s dispute resolution process should look like a “very simplified version[s] of the commercial or international arbitration programs of the American Arbitration Association.” When writing the article, I confess I found it ironic that a lawyer proposed such a formal process, and believed that it was evidence that legalism is an inescapable (and dominant) part of American society.   I just found Roshuk’s response to our article online.   He offers a stinging indictment of the Wikimedia foundation, and what’s come of the dispute resolution system.  As he argues:

While I originally suggested in the fall of 2003 that Wikipedia have a structured dispute resolution process, instead of making this process simple and straightforward, ADR atWikipedia has become a complex system that has all kinds of hard to understand rules.  Perhaps it is the management of this dispute resolution process (or lack thereof) is what has caused or contributed to a lot of Wikipedia users leaving the project and the ripple effect this system has on the general behavior of editors and administrators whose behavior is mediated by this process . . . After seeing the discussion develop at Wikipedia in the fall of 2003 I saw that there were a lot of people who misunderstood the idea of arbitration, They wanted to make it something formal, like a Wikipedia court system, the ArbCom, as it was called became a place where someone could obtain status in the Wikipedia community, originally by being appointed by Mr. James “Jimbo” Wales, one of the founders of Wikipedia, and later by election. When I suggested this kind of system my intention was to get people to talk, mostly through mediation by a neutral third party, to come to a mutual understanding that editors were all contributing knowledge, not fighting against each other to be “right” or “wrong”.

This view of the pathologies of the Arbitration system isn’t, of course, unique to Roshuk, nor is it really in tension with the story Salil and I set out in Wikitruth.  But it is notable that Roshuk has such a dim view of the site’s excessive legalization, and that he attributes the dominance of law to a desire for status and hierarchy, instead of the formal structure of the process itself.

(Image source: Wikilove.)

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Harvard Clinic Responds to Greiner Study

Following up on my two posts on Jim Greiner’s study on attorney representation effects, I was just forwarded the following email from Rachel Lauter, President, Harvard Legal Aid Bureau.  It’s illuminating — of the study’s limitations and of the pressure that the Harvard Legal Aid Bureau is feeling to defend participating in research about the efficacy of its representation.  It’s a long email, so if you are interested, follow me after the jump.
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Bubble Warning on Facebook, Groupon

The mysterious ways of financial valuation manifest daily. One mystery: Facebook, the social network business, and Groupon, the buying network company, both generate annual revenues of about $1 billion. Yet reported private stock trading indicates that traders are pricing Facebook at about 50 times that while pricing Groupon at about 5 times that.

Perhaps this is attributable to analytical factors, such as observed user growth rates, potential market and revenue sources, perceived capacity to convert the revenue into earnings, competitive threats—or negotiating skill in trading of privately-held shares. But given the wildly varying pricing traders give enterprises like this in recent years, it could be a sign of a bubble.

Financial bubbles recur as a natural, inherent product of human behavior in capitalist economies—from the recent real estate bubble, to the dot-com bubble a decade earlier, and stretching back to the tronics bubble of the 70s and back to Amsterdam tulip bulbs centuries ago.  (I wrote a trade book about this after last decade’s bubble burst.)  By definition, a critical mass cannot recognize the bubble as it is in inflating, though invariably some pessimists detect something. Read More