Monochromatic Oeuvre wrote:I totally do not understand how a professor market wage could be so high. If you were ten years into your career, how much would it take to pull you from a $125k job that you lateraled into from Biglaw, given that you would only have to work 40-45 hours a week, you'd get summers mostly off, and you might get the job for life? I would take that job if it paid two-thirds what I could make elsewhere, wouldn't most people? So it only makes sense for professor wages to be so high if schools have to pick off people who could've been partners or counsel. But do schools really need those people? Couldn't a school cut its tuition by $5k if it could hold faculty salaries to an average of 100k?
It reminds me of AT&T in the early '80s, when it was a regulated monopoly with a mandated 7% profit margin. To maximize profits, they went and maximized their costs, so they would create artificial expenses that could escape an audit, like giving out boxes and boxes of pens during meetings. It was an awesome time to work for AT&T, because salaries were artificially high--the company had no incentive to keep them down. I'm wondering if the same kind of misaligned incentive thing happens in law school. The schools get paid whether their graduates sink or swim, and as long as the feds cover your shortcomings applicants will pay any price. Because their potential revenue is virtually limitless, administrators can pay themselves/faculty more and more and it won't matter.
You see the same dynamic throughout the legal profession. There's no real reason biglaw firms ought to pay first year associates $160k in this economy. There's obviously a surplus of qualified candidates, even if you set the bar pretty high, like only considering T14 grads. And even if market pay for law firms was $125,000, the vast majority of biglaw associates would still go to biglaw because it would still be by far their most lucrative option. But it's hard for any one firm to reduce salaries without completely destroying their recruiting.
Basically this is what happens when there's no way to ascertain value in an industry except various arbitrary shades of prestige. There's only so many SCOTUS clerks to go around on law school faculties, so you buy them brownstones, because otherwise you wake up in ten years and your school isn't elite anymore. There's only so many cum laude T6 grads to go around so you pay them $160k because otherwise you wake up and your firm isn't elite anymore. Nothing to do with anything except the echo chamber of the profession.