Category: Law School

The Larger Debate on Federal Credit Programs

Earlier today I criticized a New York Times proposal regarding law school loans. Whatever you think about the proper cost of legal education, the NYT is off-base, because it ignores the role of private finance in our economy.

Education finance policy is difficult because it raises fundamental issues in political economy and public finance generally. It also only makes sense with some historical context.

Back in the 1970s and ’80s, an anti-tax coalition operated on the presumption that state support for education had to drop. Financialization plugged the resulting hole in funding: responsibility for paying for school shifted from (relatively well-off) taxpayers to students. By the 1990s, private lenders realized that they could make tremendous profits from such loans–particularly if they could privatize profits, while sticking the government with losses. That arrangement became so scandalous by 2010 that it was curtailed as part of PPACA. The federal government directly offers many loans now.

But the private lenders did not simply give up. Current efforts to “reform” federal student loans are part of their much larger effort to shrink federal credit programs. The basic idea is simple: to force the US government to account for its credit programs as if it could and should charge interest rates (and impose terms) prevailing among private lenders.

It’s a strange move, especially since, as Matt Yglesias states, “costs reported in the budget are generally lower than the costs to the most efficient private financial institutions because the government’s costs of funds are in fact lower.” David Kamin has also questioned this accounting tactic. But if it succeeds, there is little rationale for any federal credit program–it will simply duplicate extant private lenders’ work. That redundancy will lead to further privatization of federal credit programs, raising costs to borrowers and diverting more money to the finance sector. It’s not a great outcome for students–but it is a logical outgrowth of reflexive hostility to the type of state intervention that actually could improve students’ finances while maintaining quality.

Dulce et Decorum Est: Critics of Student Loan Forgiveness Rally the Troops

For years, critics of loan forgiveness programs for students have argued that they are a form of “welfare,” when in fact they’re a necessary corrective to the excessively harsh bankruptcy regime imposed on student debt. But the critics are getting a hearing, and guess where the money is probably going:

[A]t some point, there is going to be a deal on appropriations and raising the debt ceiling. There is a lot of pressure to raise defense spending. Some of these student loan items [like the Public Service Loan Forgiveness Program] could wind up on the table in such a deal.

We’ve seen this pattern again and again: 1) create a scare about excessive “entitlement” spending, 2) spur either tax cuts for the rich or reallocation of “entitlement” money to the force or finance sectors, and 3) repeat once excess military spending once again drives budgetary imbalances. The PLSF is a low-cost program designed to promote provision of important services to the underserved. It’s amazing to think, of all the expenditure lines that could be attacked, this was the one chosen. But it is of a piece with larger social trends to shift money away from human services, and toward force and finance.
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The New York Times’ Curious War on Traditional Higher Education

It’s a strange position for America’s “paper of record” to take. Despite its largely traditionally-college-educated readership, the New York Times is constantly publishing articles attacking the value of university degrees. Tom Friedman dismisses them as expensive merit “badges” oft-unrelated to the exact qualifications needed for jobs. The ubiquitous Tyler Cowen blasts ed sector costs and inefficiencies, despite international acclaim for US universities. The author of The End of College has had a high-profile platform at the Times‘s Upshot blog.

All three men tend to characterize traditional college degrees as mere signals, barely (if at all) related to the actual skills, habits, and qualities of mind and character that lead to successful, fulfilling lives. I’ve never seen them grapple with the extensive empirical literature on why education increases earnings. Nor do they tend to respond much to the hard data that their colleague David Leonhardt provides on the costs and benefits of college.

Sadly, there’s just too much money in education disruption narratives for the Times‘s most prominent writers to give up on them. Critics have documented how “influence moved from the $795/$495 per person corporate-sponsored [New York Times Schools for Tomorrow] conference [with the theme Virtual U: The Coming Age of Online Education] to the pages of the newspaper of record.” As Facebook and other tech firms angle to squeeze ever more control over (and compensation from) their “content partners,” those partners in turn seek advertising from similar tech firms in other sectors. That’s one reason you’ll see, for example, long stories (aka “earned content”) about legal technology “disruptors” in legal trade publications, near paid ads for the same firms elsewhere on the magazine or website.

I’ll make one grudging concession to Cowen: he’s long argued that marketing is set to become a much larger part of our economy, and you can see its dominance congealing in the ed space now. “Disruptive innovators” push for more for-profit schools and nano-degrees–even though the former have seen so many scandals, and the latter have barely been tested. But what these newfangled entrepreneurs lack in quality, they make up for in marketing budgets. The figures exposed a few years ago were shocking:

At the end of July 2012 the Senate Committee on Health, Education, Labor and Pensions presented an 800-page report, the culmination of a two-year investigation into ‘for-profit’ higher education institutions.​ The senators found that at such institutions a mere 17.4% of annual revenue was spent on teaching, while nearly 20% was distributed as profit (the proportion spent on marketing and recruitment was even higher).

All those marketing dollars, flowing to Google or Facebook as conduit, or publications like the New York Times as content, get attention. It’s no wonder why leading technologists and journalists think it’s so important to promote the disruptors. But they may find their own brands tarnished as the harsh realities of techno-utopian ed reform gradually become more apparent.


LSA Retro-Recap Day 0: I Miss My Friend

Hello from Seattle! Over the next few days, I will describe some of the best things I saw at the 2015 annual meeting of the Law and Society Association (which was held from May 28-31). As I did back in 2013, my plan is to discuss one or two papers with high VOSFOTWOAS— Value Over Season Four Of The Wire Or A Separation.

Before getting to the recap, though, I want to remember Dan Markel. I did not know Dan very well, nowhere near as well as many other law professors or most of the folks who blog here. I met Dan in person exactly 5 LSA’s ago, in Chicago. I can remember the moment when I first saw him. He walked into a conference room with what I instantly recognized as the sleep deprivation that affects all new parents (and the glow that demarks the good ones). His hand was the first in the air during the questioning period then, as it was in nearly every other session I saw him at. I made a game to myself of trying to beat him to the punch in asking a question; I always lost.

I once read a piece in the New Yorker that, to my memory, said something like: people worry that caffeine will interfere with the real you, but after a while the person you are on caffeine is the real you.* I like to imagine (perhaps without warrant) that the person Dan was at conferences, Conference Dan, was the real Dan. Intense. Reveling in the attention of friends. Generous in facilitating connections. Enthusiastic about your ideas to the point of disregarding the rules of social comportment.

As the yahrzeit of his death approaches and I sit in a bustling hotel lobby, I miss Conference Dan, although this sense loss is infinitesimal compared to the ache that I feel for his family. I wish I had been able to better know Dan outside of these conferences. I still flip through the conference program to see what he is presenting. I schedule time for a Prawsblog happy hour that will not happen. I rush to raise my hand after the chair asks for questions, only to realize that it is alone in the air.


*A quick Googling suggests that the line closest line to the one I (mis-)remembered is this one by Malcolm Gladwell: “Part of what it means to be human in the modern age is that we have come to construct our emotional and cognitive states not merely from the inside out–with thought and intention–but from the outside in, with chemical additives. The modern personality is, in this sense, a synthetic creation: skillfully regulated and medicated and dosed with caffeine so that we can always be awake and alert and focused when we need to be.”


The Civilizing Effect of Legal Training

The cultural cognition project has a new article out on how motivated cognition interacts with professionalism:

This paper reports the results of a study on whether political predispositions influence judicial decisionmaking. The study was designed to overcome the two principal limitations on existing empirical studies that purport to find such an influence: the use of nonexperimental methods to assess the decisions of actual judges; and the failure to use actual judges in ideologically-biased-reasoning experiments. The study involved a sample of sitting judges (n = 253), who, like members of a general public sample (n = 800), were culturally polarized on climate change, marijuana legalization and other contested issues. When the study subjects were assigned to analyze statutory interpretation problems, however, only the responses of the general-public subjects and not those of the judges varied in patterns that reflected the subjects’ cultural values. The responses of a sample of lawyers (n = 217) were also uninfluenced by their cultural values; the responses of a sample of law students (n = 284), in contrast, displayed a level of cultural bias only modestly less pronounced than that observed in the general-public sample. Among the competing hypotheses tested in the study, the results most supported the position that professional judgment imparted by legal training and experience confers resistance to identity-protective cognition — a dynamic associated with politically biased information processing generally — but only for decisions that involve legal reasoning. The scholarly and practical implications of the findings are discussed.

Kahan and I have gone back and forth about how best to characterize the results of the study. He, modestly, seeks to constrain the inferences to the data and to a push back against the vulgar understanding of the judiciary as merely housing politicians in robes.  I think the study speaks to something larger still — the value of legal education & experience in producing situation sense, which enables lawyers and judges (and, to a lesser extent, law students) to agree on the results of legal outcomes notwithstanding their political and ideological priors. Such legal judgment is, after all, one of the practical skills that law school conveys, and which it ought to boast about.

Taking Human Capital Theory Seriously: Simkovic on “The Knowledge Tax”

Graduate professional education in the US is facing a financing squeeze. Some argue that those learning to become doctors, nurses, engineers, lawyers, and the like should get no help from the federal government, because they tend to earn higher incomes than average. Others question that premise, arguing that past results of grad degrees are no guarantee of future performance. They believe that an impending wave of defaults on federal student loans will raise the cost of federal credit programs.

Nevertheless, each side argues for policy with convergent outcomes. The “grad students will be rich” camp argues for curtailing federal loans, since they believe professionals can handle the higher interest rates on the private market. The “grad students will be poor” camp wants to raise the rates on federal student loans, to build up the already hefty surpluses the government is now making, to prepare for the putative future defaults. In the eyes of both, graduate students are the undeserving recipients of government largesse.

I’m not convinced by either: the “too rich” camp fails to value professional services properly, and the “too poor” camp is relying on controversial accounting techniques. But until I read Mike Simkovic’s recent paper “The Knowledge Tax,” I’d never thought of an even more fundamental distortion at work here: tax policy. Simkovic lays out the problem with characteristic clarity, considering a hypothetical college graduate deciding on (1) attending medical school and practicing medicine; or (2) purchasing a small vacant building and converting it into rental apartments:
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Buffett on Family Business: Beat the Third Generation Curse

warren buffettWarren Buffett is very good at spotting great family businesses. What does he look for? How can his filters help family businesses prosper?

For one, they can mitigate one of the greatest dangers: the third generation “curse.” This refers to how few family businesses survive beyond the third generation, let alone prosper.

An under-appreciated fact about Berkshire Hathaway, the conglomerate Buffett built: virtually all its family businesses boast second or third generation descendants who rival or outshine previous generations. That is rare among family businesses.

So while every family and business situation differs, Berkshire’s two dozen family companies are a good place to look for insight about multi-generational prosperity in the family business.

Studying Berkshire’s family businesses, I found that they are united by the following values. These values are important factors in their success, in the founding generation and subsequent ones.

Family business members, and their professional advisors, whether in law, accounting, or other fields, would do well to ponder these points.

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Is Using USNews Ranking in Making Hiring Decisions Discriminatory?

That’s what Drexel 3L William Hanrahan claims in a newly filed complaint against Dechert LLP.  According to Hanrahan, though he ranks #4 in Drexel’s class, Dechert (and other large firms) hire disproportionately from higher ranked schools, and consequently refused to hire him.  Why is that a problem? Well, here’s what the complaint says:

screenshotHanrahan, who suffers from “Asperger’s Syndrome, an Autism Spectrum Disorder, and a concomitant non-verbal learning disability,” also argues that Drexel accepted more students than other local schools with disabilities, and that refusal to hire from Drexel tends to disproportionately screen out non-disabled candidates.

I’m not an expert in this area of the law, but I thought the complaint provided an interesting set of facts for discussion. My uninformed view is that the chain of causation (disability –> lower LSAT –> lower-ranked school –> fewer job offers) isn’t incredible, but that it’s hard to imagine a judge forcing firms to discount rankings (which, after all, aren’t entirely or even mostly based on student credentials) when making hiring decisions.



Meat Market Ruminations

So, to all of those who are braving the Marriott today: welcome to the first step of a profession that can be personally satisfying, enriching, and challenging.  I thought I would capture a few thoughts about faculty hiring.
First, it is quite true that faculty hiring has become a bit of a pro-am conflagration, where many of the candidates that appear in the market show up with numerous significant publications and significant teaching experience to add to their already impressive credentials.  This is neither a bad thing nor a good thing, but rather a point in time where the hiring market has been unable to absorb many of those candidates in prior years into permanent tenure track position.  (We are all hoping for a turn around).  The outcome is that there are far more VAPS, Fellows, and other non-traditional academic positions that have been filled over the years, where people sit in waiting for a tenure track position. I would not be honest if I did not admit that they have a significant advantage over people who are coming out of law practice.   The presence of mentors on the host institution’s faculty, daily advice about the meat market and how to approach it, as well as time to think about how to make the best impression in a thirty minute screen are just advantages in an already competitive market.

However, even the best placed people blow it from time to time.  I recall overhearing from the hallway in the Marriott (the interview room I was going in left the room door cracked) someone in front of me say to the interview team “How do you handle teaching students who are significantly less intellectually equipped than you?”  I remember thinking — that was your one question. I don’t know what happened in that person’s case, but I can’t imagine they got the call back.  No one (and I mean NO ONE) wants to hear from someone on the outside that their students are less than adequate.  Sure we might talk about how they disappoint us in various ways.  But we never want to hear an outsider (much less someone we are interviewing to join our community) start that relationship by criticizing a major component of who we are.   Inferring that the students you propose to work with are anything other than thoughtful, astute and prepared to wow everyone they come into contact with comes off as arrogant and uninformed — after all, you probably haven’t even met a student from that school yet.

Second, personality matters way more than you think in these processes.  If you are someone that the faculty thinks it would like to have around on a daily basis, have big ideas about your area of expertise (whether its property, torts, or legal writing) and seem to be a serious, productive, and positive person, you are in the conversation.  The fact that you made it in the room signals that something on your CV made the committee think that there is something about this person that they would like to find out more about.   The best you can do is be yourself and play to your strengths.   I remember talking with someone who has become a good friend since I started teaching who had interviewed me at the Marriott several years ago.   That evening we ended up in a social setting and had a great conversation.  Since that time that person has told me that the person at the bar is someone they would have loved to get to know — the one that showed up in the room — the super serious, trying too hard candidate, not so much.  On this side, I completely see what he meant.

My last piece of advice relates to after the meat market.  Whether you land the job you want, a fellowship or just return to practice, find someone on the inside (preferably on your faculty that you are working with) to be a mentor.  Everyone can learn something from someone else.  It doesn’t matter if you are a Ph.D. that is several years older, the people in your new institution offer insights into the process and the views of faculty governance that you don’t have access to.

In short — Have fun.  Good luck.  Be you (unless you are someone that is imminently unlikable — then be someone else).

Enter Privacy Profession 01

Advice on How to Enter the Privacy Profession

Over at LinkedIn, I have a long post with advice for how law students can enter into the privacy profession.   I hope that this post can serve as a useful guide to students who want to pursue careers in privacy.

The privacy law field is growing dramatically, and demand for privacy lawyers is high.  I think that many in the academy who don’t follow privacy law, cyberlaw, or law and technology might not realize what’s going on in the field.  The field is booming.

The International Association of Privacy Professionals (IAPP), the field’s primary association, has been growing by about 30% each year.  It now has more than 17,000 members.  And this is only a subset of privacy professionals, as many privacy officials in healthcare aren’t members of IAPP and instead are members of the American Health Information Management Association (AHIMA) or the Health Care Compliance Association (HCCA).

There remains a bottleneck at the entry point to the field, but that can be overcome.  Once in the club, the opportunities are plentiful and there’s the ability to rise quickly.   I’ve been trying to push for solutions to make entry into the field easier, and this is an ongoing project of mine.

If you have students who are interested in entering the privacy law profession, please share my post with them.  I hope it will help.