Entering the Academy -- An Update

As a follow-up to Robin's article on entering academia, we received some helpful insight from Dr. Brian Leiter, the John P. Wilson Professor of Law and Chair of the Law Teaching: Placement of Graduates Committee at the University of Chicago Law School. Dr. Leiter pointed us in the direction of a helpful guide he prepared for prospective academics at this website. The guide is extremely informative, and we strongly recommend taking a look at it if you are at all interested in becoming a law professor.

Cheers!

Entering the Academy - One Step at a Time

Law schools work diligently to prepare students for rigorous careers in private practice, prestigious positions as judicial clerks, and/or rewarding opportunities to work in public interest. But if everyone is off practicing law, who will be left to teach it?

The students who often fall through the cracks in terms of career guidance are those who want to pursue academia. To address this problem, I spoke with Professor Richard Craswell of Stanford Law School about what law schools can do to encourage this career path and Professor Theodore Ruger of the University of Pennsylvania Law School ("Penn") to find out what law schools look for in a candidate.

Professor Craswell currently serves as the Chair of the Faculty Committee at Stanford in charge of helping students who want to enter the academy. He explained that Stanford assists students both while they are getting their JD as well as after they graduate. During law school, Stanford offers a seminar about selected topics in legal scholarship in which faculty members present topics that they are interested in each week and engage students in a discussion about current hot issues that scholars are writing about. Also, the administration encourages students to sit in on weekly faculty workshops in which similar presentations are given. Professor Craswell stressed the importance of these programs in that students can both start thinking about their own scholarly research and form informal faculty contacts. Finally, Stanford offers an introduction to teaching as a profession workshop on its website where it directs students to helpful and applicable resources.

After a student graduates, he or she can contact the faculty committee, and it will review resumes, offer advice for first round interviews, schedule practice interviews, and give extensive feedback to prepare the candidate to enter the job market. All of these resources enable Stanford to proudly send many graduates into the academy, and hopefully other schools will follow in its footsteps.

On the flip side, Professor Ruger addressed the hiring process from a law school’s perspective. Law schools hire on two different pathways--entry level and lateral. For entry level positions, the Association of American Law Schools creates a registry of candidates that are on the market in a given year. Candidates register their resume with AALS in August, and at the end of the summer, AALS distributes those materials to the member law schools. It then holds first round interviews in November in which representatives from law schools come and conduct 20-30 interviews with various professorial candidates. Schools then choose a handful of candidates to come visit for a callback, which consists of a full day of interviews and a “job talk” presenting a piece of the candidate’s written work.

When asked what top tier law schools look for in a candidate, Professor Ruger claimed that:

in the past 10-20 years, the bar has been raised dramatically in terms of expecting people to write and publish between the time they leave law school and the time they go on the market. Therefore, it would be very rare to hire someone based on nothing but a law school record.

In the time between school and applying for a position, Professor Ruger emphasized the importance of compiling scholarly work and estimated that for a school like Penn, 30 percent of new hires will most likely have either a PhD or another advanced degree along with a JD.

When asked what advice he would give law students who know they want to be academics, Professor Ruger claimed,

[l]aw schools are looking for people who have a real curiosity and spark- so try to find an area of law that really engages you.

He also emphasized the importance of developing strong relationships with professors who can serve as both mentors and references. Finally, he promoted doing as much writing as you can, whether in seminars, on a journal, or as a research assistant.

For those law students who do eventually want to enter the academy, I hope that your schools will effectively facilitate your career path, and I look forward to reading your scholarship in the future.

I'll be Taxed

Time for me to chime in on the tax reform proposals in the Golden State. California's budget system is broken. The recent patchwork by the legislature failed to fix the fundamental problem in California's revenue system: volatility.

California uses a steeply progressive income tax to generate the bulk of its revenue. In fact, the system is so progressive that:

More than half of California's income tax revenue is paid by those with incomes of $200,000 or more.

That is an awful lot of revenue generated from a very small group of people. That small group ("the Rich") tends to generate their income from volatile investment activities in the form of capital gains (i.e. gains on stocks, bonds, hedge funds, etc.). When asset performance degrades, the Rich tend to take the brunt of the losses and ultimately remit less money to the treasury. Conversely, when assets perform well, the Rich tend to make enormous gains and treasure flows from Sacramento to the rest of the State.

California (and to a similar extent, the federal government) have placed a leveraged bet on the Rich. When their income goes up, the State profits handsomely via capital gains taxes and high marginal rates while sparing the rest of the taxpayers. When the Rich's income declines, however, the leveraged bet collapses (a dollar lost on someone who is taxed at 20% is a bigger hit to the State than a dollar lost on someone who is taxed at 5% or has no capital gains income to tax at all). A downward movement in the Rich's income creates an enormous drop in revenue that devastates the State's finances.

This is exactly what happened this year in California. With the demise of the Rich, so went California's budget.

The proposed solution is a fairly simple one: abandon steeply progressive rates in favor of flatter rates on more types of income (e.g., instead of 20% and 5% income brackets on individuals income, have a 10% flat rate and add a flat tax on businesses). If the State had a broader tax base and a flatter rate, volatility would decline. Of course, the odds of giving the Rich a tax break during a fiscal crisis, particularly in California's notorious Legislature, seem like a snowball's chance in...well...you know.

Perhaps there is a better way. Professor Kirk Stark at UCLA School of Law has come up with a novel suggestion. To reduce volatility, require the State to apportion out capital gains taxes over a period of years. The Professor explains his idea quite elegantly:

But rather than reducing taxes on wealthy investors, why not just unhitch the timing of their tax payments from the boom-bust cycle of the market? This could be done quite simply by giving taxpayers who incur capital gains taxes the option of claiming a "capital gains tax credit" that would be recaptured over the ensuing three years. As an example, let's assume that the amount of the credit is 75 percent of the capital gains taxotherwise owed in the year of the sale. In our example above, Mickey would be entitled to a credit of $1,500 (i.e., $2,000 multiplied by 75 percent) in the year that he sells his Disney stock. His tax liability for the year of the sale would be $500 ($2,000 minus $1,500) rather than the full $2,000. This credit would then be recaptured (i.e., paid back) in three equal installments over the next three years, with the result that Mickey would add $500 to his tax bill for each of the next three years. The bottom line is that a $2,000 tax bill would be paid over a period of four years.

The net effect of this system - i.e., combining an upfront tax credit with a recapture rule - is that capital gains tax revenue would drip into the state in smaller increments rather than surging during the boom years and later drying up completely. It also bears noting that this system offers something of a preference for capital gains, since it operates like an interest- free loan from the state to taxpayers who would otherwise have to pay the capital gains tax upfront all at once.

Tax the rich, reduce revenue volatility, and entice people to invest? I think the Professor is onto something. Perhaps he should run for office.