Law Librarian Blog

There's No Business Like Law School Business

In his June 16, 2011 NYT Business Day article, David Segal observes that the basic rule of supply and demand does not apply in the legal academy.

Legal diplomas have such allure that law schools have been able to jack up tuition four times faster than the soaring cost of college. And many law schools have added students to their incoming classes — a step that, for them, means almost pure profits — even during the worst recession in the legal profession’s history.

It is one of the academy’s open secrets: law schools toss off so much cash they are sometimes required to hand over as much as 30 percent of their revenue to universities, to subsidize less profitable fields.

In short, law schools have the power to raise prices and expand in ways that would make any company drool. And when a business has that power, it is apparently difficult to resist.

How difficult? For a sense, take a look at the strange case of New York Law School and its dean, Richard A. Matasar.

For more, see Segal's Law School Economics: Ka-Ching! [JH]

Near Real-Time Link Rot, AALL-Style: Time to Bury the Antitrust Compliance Policy Statement: Talk about Transparency and Accountability!

Since Library Consumer Advocacy Caucus Chair Michael Ginsborg posted his link to AALL's AALL Antitrust Compliance Policy, which was live earlier this morning when his post was republished on LLB, the link is now dead. It will send you to the Board’s posted agenda for the July 21st E-club meeting. Hat tip to eagle-eye Cinci Law's Ken Hirsh and incoming Board member Greg Lambert for noting that the Policy statement is included after the agenda and in the Board Books for the Summer meeting. (See comments for links) The link provided in Ginsborg's post for the July 21st agenda will produce a "File not found" message!

Watch-guarding AALL official communications. Talk about transparency and accountablility in the conduct of AALL business. Is it just me or are you also thinking AALL's Old Guard believes its members are just as inclined as they are to welcome the darkness that is being asleep at the wheel by following the switcheroo practices of some of our major vendors, in this instance by linkage switcheroos [JH]

Tiananmen Square, AALL-Style: AALL's Proposed Antitrust Compliance Policy, Consumer Advocacy Initiatives and the First Amendment to the US Constitution

It appears Round 2 of AALL's antitrustism will commence at our association's July 21, 2011 Executive Board meeting. On the Library Consumer Advocacy Caucus blog, Caucus Chair Michael Ginsborg reports on recent developments. His July 17, 2011 post is republished below. It deserves a very close reading.

Can AALL Members Organize For Consumer Advocacy If AALL’s Executive Board Adopts A Proposed Antitrust Compliance Policy On July 21st?

The AALL Executive Board is about to act on a proposal that may prevent this Caucus from organizing in any form, whether within AALL or independently. The Board will vote on a proposed “AALL Antitrust Compliance Policy” at its July 21st meeting in Philadelphia. (I have culled this document from the Board’s posted agenda draft of June 15, 2011.) We ask that the Board delay a vote on the policy, whose consequences will affect all AALL members, not just those who belong to our Caucus.

The policy represents an interpretation of Section 1 of the Sherman Antitrust Act, banning concerted action in restraint of trade. Its drafters target price-fixing as a special concern. According to their “Antitrust Guidelines,” “[p]rice-fixing is a very broad term which includes any concerted effort or action which has an effect on prices, terms or conditions of trade, or competition.”

To enforce compliance, the policy requires rigorous oversight of all AALL entities. AALL entities must submit meeting minutes “to the AALL office” and provide to the Executive Board “written periodic reports” on “all pending matters, requests for action and approvals for preliminary decisions.” AALL members can not have “any discussion which may provide the basis for an inference that the members agreed to take any action relating to prices, services, production, allocation of markets or any other matter having a market effect.” (AALL initially asked members to follow a similar restriction when joining AALL’s digital “communities.”) Members can not have prohibited discussions at “formal meetings and informal gatherings. In fact, informal gatherings of association members are often looked upon with suspicion by the government.”

The policy also includes “some examples” of what AALL members can not discuss – “either virtual or live” – at Association meetings. Among other examples, members may not “discuss current or future prices,” and we must “be very careful of discussions of past prices.” We may not discuss “pricing procedures.” It is unclear whether, or when, informal member discussions – “live or virtual” – would also trigger these and other of the specified bans. Even the possibility of violating these restrictions would have an obvious chilling effect on informal discussion by members who wish to retain their membership. They could secure advance authorization from AALL headquarters whenever they discuss business practices of legal-content vendors. “It is important that members contact the association for guidance if they have even the slightest qualms about the propriety of a proposed activity or discussion.” But how can members anticipate whether they should have qualms of the kind AALL’s counsel would have? As a result, members would have at least an incentive to avoid such informal discussions altogether. (Some members may, of course, prefer to risk disciplinary actions up to revocation of their membership, though the policy has no provision on member penalities.)

The policy appears to have at least two antecedents. The first involves a canceled, SCCLL-SIS program that Ken Svengalis was to present at the 2007 Annual Meeting. The program concerned recommended responses to skyrocketing prices in the legal publishing industry. Ken expected to include economist Mark McCabe, who received AALL’s support for his research on anticompetitive pricing effects of the Thomson-West merger. AALL canceled the program because its description had the word “boycott”: AALL’s counsel found that any boycott reference in an AALL program incurred significant risk of antitrust violation. (Betsy McKenize describes the details here. Commenting on the program’s cancelation, Ken said he talked to Department of Justice Antitrust Division attorneys, and they advised him that the Department would intervene only if AALL members undertook to organize a boycott. ) Responding to member inquiries about the cancelation, AALL described its broader antitrust concerns with language later used in the policy. Our Caucus may have also influenced the policy’s development. We submitted our initial statement of purpose in May 2011. AALL raised policymaking and antitrust objections that the policy appears to formalize.

At our July 25th meeting, our Caucus had plans to decide whether to stay within AALL or to organize independently. If we decide to become an AALL Caucus under a new statement of purpose, we would recommend that AALL petition government bodies for remedies of antitrust and unfair business practices by specific legal information vendors. Although AALL has conditionally approved this statement of purpose, the policy suggests that AALL would render it moot. Our recommendation of a petition may never receive approval as an agenda item for a Board meeting. The Board can discuss “only approved agenda items.”

A reasonable interpretation of the policy shows how it would be pointless for us to organize as an AALL Caucus, unless the Board clarifies the policy or we plan to change it by a membership resolution. If successful, any petitioning we recommend to AALL would have a proscribed “effect on prices, terms or conditions of trade, or on competition.” Under the policy, we may be understood to recommend collective action with an intention to influence market conditions or competition – not directly, of course, but through government intervention. To prepare our petitioning recommendation to AALL, we would risk violating the policy, because we would need to discuss past, current, or future prices of legal subscriptions, among other “conditions of trade.” How could we prepare a recommendation under this circumstance? And even if we organized independently, as AALL members we would be associating “informally” to undertake actions, such as government petitioning, that the policy may be understood to prohibit. We would then risk AALL’s refusal to allow our preparations, disciplinary warnings, or revocaion of our membership.

A body of case law – the “Noerr-Pennington doctrine" – establishes our right to petition our government even if market participants perceive our petitioning as a restraint of trade under the Sherman Antitrust Act. Although the doctrine has exceptions, they do not apply to the action we would pursue as an AALL Caucus.

A recent Vendor Colloquium Action Plan includes a recommendation to develop “an AALL Vendor Relations policy related to antitrust law,” and to engage “outside counsel as needed.” We had no advance notice that the Board would vote on such a policy so soon; in fact, we did not become aware of the policy until July 16th, a day after the deadline for members to comment on the Action Plan. Of course, we do not know that we have correctly interpreted the policy. Yet a reasonable interpretation raises troubling questions. We therefore ask that the Executive Board suspend any action on the policy until AALL’s members have full opportunity to request clarifications and to submit comments on its ramifications.

Michael Ginsborg
Caucus Chair

When the Old Guard can craft agendas on the fly. ... they can get their Peeps on the same page . There is a bunch of E-club meetings scheduled a wee bit ahead of the official meeting that is Philly 2011: Cream Cheese, Cheesesteak or Karaoke. So, damn if I know when new Board members officially replace out-going members. Will recently elected Board members get the opportunity to vote on this or do they inherit the July 21st expression of offical antitrustism for their watch?

The Board's not-behind-closed-door General Business Meeting and Members' Open Forum is scheduled for Monday July 25, from 3:45 PM to 5:30 PM. That's four days for our elected officials to get their peeps lined up in a row. Remember, peeps are chickens, not ducks!

In case AALL's Old Guard has forgotten. In addition to Noerr-Pennington doctrine cited above, there is something called the First Amendment to the US Constitution. Under the rationale of our association's antitrustism, it would appear that exercising our freedoms of speech and press and our rights to peaceably assemble and to petition our government for a redress of grievances along with the implied right of association just might require NOT belonging to AALL.

Brilliant! Sounds like AALL's Old Guard is looking for a way to maintain the status quo by removing "rebellious" law librarians from the rolls of dues-paying members so the Old Guard can return to their comfortable Rip Van Winkle dogmatic slumber.

So if enacted on July 21st, will our elected officials send "FTC tanks" to break up the Caucus meeting attended by AALL members in Tiananmen Square fashion? Save the date and time to find out:

The Library Consumer Advocacy Caucus meeting is scheduled for 12-1 p.m. on July 25th at the Philadelphia office of Drinker Biddle (One Logan Square, Ste. 2000, at the corner of 18th & Cherry Streets.)

See today's follow-up posts: Near Real-Time Link Rot, AALL-Style: Time to Bury the Antitrust Compliance Policy Statement: Talk about Transparency and Accountability!  and Janto Predicts Proposed Antitrust Policy Provided by AALL Legal Counsel Will Not Be Adopted as Currently Drafted. [JH]

A Haiku in Response to the Vendor Colloquium "Action Plan" Draft

I invite you to submit your comments on the Vendor Colloquium Action Plan draft by July 15.  --  Margie Maes, AALL Vendor Liaison (quoting from the multiple AALL listserv broadcasts -- oops, almost wrote "spam" -- dated July 6, 2011).

So ... did you respond or write it off as an intergalactic waste of time?

Inspired by the emerging trend in haiku law blog posts, this is how I would have responded had I not thought AALL's latest statement of hallow words was so devoid of substance by failing to address the real world as in big picture issues of instituional buyer-members any effort to respond was just an utterly useless activity. This conclusion, after reading the specious string of characters called the "draft action" plan. My response in 17 syllables:

Partners in estoppel
aspire for cash,
pay invoices, pay dues

Solving the Secret to Intergalactic Success, AALL-Style. The first part of the two part so-called "action plan" ranges from the great abyss "goal" of  "Reinforce[ing] our commitment to the Fair Business Practices Guide" (and even wasting time to revise these unenforcable words by way of an action step to revise the Guide) to such minutiae like "Identif[ing] invoicing best practices, including critically important elements of an invoice."

Really? Is this fundamental to really transforming the institutional buyer-vendor relationship? Even CRIV-Lite can address those Munchkin-land matters. Oops, perhaps not.

The second part of the so-called "action plan" (note to readers, I'm reminded of the Stalinist 5-year economic plans and associated propaganda) comes from the "realization" that AALL officialdom doesn't know how to communicate with its members. Dah.

This is actually a step in the right direction since I'm not all that sure the Old Guard wanted to waste its time by communicating with its members. Of course, this communications thing really has nothing to do with addressing the vendor-institutional buyer relationship that the membership spent $27K to conduct behind closed doors for the Vendor Colloquium.

My bad, there is actually a third part: "Other Issues to be Developed for Future Consideration"

Collaborate with vendors on effective training programs
Address issues related to the open access movement
Establish a format and rotation for future colloquia

Ah, well what's spending $27K among "partners." Can you say "diversion." [JH]

Libraries Are Doctor-Recommended

"Kitsap Regional Library is working with health clinics and the nonprofit organization Reach Out and Read to promote early literacy this summer through a program called Libraries Are Doctor-Recommended. ... The new program was created to engage children who might have never used the library. In addition to following the Reach Out and Read model during their appointments, participating healthcare providers give families a brochure about the library and a coupon that can be exchanged for a free book." Quoting from Doctors prescribe regular library visits.

Hat tip to LISNews. [JH]