FIRST IMPRESSIONS

Reflections on the End of the Federal Law Clerk Hiring Plan

Aaron L. Nielson

As applicants, federal judges, and law school career counselors everywhere frantically come to terms with the new clerkship landscape, one truth is inescapable: the Federal Law Clerk Hiring Plan ("the Plan") is dead. On January 29, 2013, the D.C. Circuit-the Plan's last and best defender-announced that it would no longer follow the Plan. The consequences of that announcement have been swift. For the last several months, months earlier than almost anyone expected, untold numbers of federal judges across the country have been rushing to hire law clerks. For these judges, the unregulated clerkship market of the pre-Plan era is back.

Although the sudden change is unfair to current applicants, no one should shed a tear that the Plan has effectively finally come to an end. Even at its best, the Plan never brought order to the clerkship market. And if mission failure were not bad enough, the Plan also created serious unintended consequences. By any measure, the D.C. Circuit's decision to abandon the Plan was the right thing to do. If anything, the D.C. Circuit should be faulted for participating in the Plan in the first place.

Just because the Plan failed, however, does not mean that its legacy must solely be one of failure. We can learn much about regulatory design from the Plan's collapse. These lessons are not limited to the parochial question of how to hire law clerks-a question that only a sliver of the bar has any reason to care about. Instead, the Plan's failure illuminates more transcendent lessons for innumerable contexts. By highlighting these lessons, the Plan's death can help society avoid more dangerous failures in the future.

I. The Rise and Fall of the Law Clerk Hiring Plan

Much has been written about law clerk hiring. Suffice it to say, clerkship competition is intense for applicants, judges, and law schools. Not all clerks are equal, nor are judges fungible. Judges try to hire the best applicants, and applicants try to get hired by the best judges. And all the while, law schools fight hard to place their students-after all, schools that produce more clerks recruit better students and end up with a larger pool of well-heeled alumni, especially when their students clerk for prestigious judges. With so much at stake, competition is cutthroat.

Without regulation, this competition leads to certain market outcomes, two of which have caused considerable consternation. First, some judges are "early movers," snatching up particularly attractive applicants before other judges can interview them. Judges who lose out on desirable clerks thus push forward their own hiring. The early movers then hire earlier still. And so on. Many clerks are thus hired early in their law school careers-often as 2Ls.

Second, the hiring process is chaotic. Judges ask applicants to fly around the country with little notice. And after interviews, many judges make "exploding offers," requiring "candidates to accept or decline a job offer on the spot (and it's a ‘Godfather'-style offer: one they can't really refuse)."[1] In light of this, many have condemned the unregulated clerkship market as inefficient and unseemly.[2]

Beginning in the 1970s, judges and law school administrators attempted to regulate the clerkship market. These efforts failed. Judges either ignored the attempt or backslid from it. Regulation did not work in 1978 when the American Association of Law Schools created guidelines; in 1983 when the Federal Judicial Conference requested that judges move their hiring dates back; in 1989 when then-Judge Stephen Breyer and Judge Edward Becker tried to gather support for greater uniformity in hiring; in 1990 when a prominent group of judges attempted coordination; and in 1994 when Breyer, Becker, and now-Judge Guido Calabresi tried again.[3]

Despite those failures, a new regulatory effort was launched in 2003. Backed by an impressive academic study on the characteristics of the clerkship market (although the study's ultimate recommendation that there be a "modified medical match" system, it should be noted, was not followed) and with buy-in from many stakeholders, the Federal Law Clerk Hiring Plan was born in 2003.[4] As in the past, the Plan set fixed dates for hiring; judges could only hire clerks after they had entered their third year of law school. In a new twist, however, the federal judiciary also implemented an online system to facilitate the application process. The online system reinforced the Plan's calendar-judges who wanted to use the convenient online system could not easily defect from the Plan's hiring dates.

Even with the online system, however, the Plan failed. From the beginning, a handful of judges simply refused to comply. No one voted on the Plan, it favored judges in locations where applicants could complete multiple interviews on the same day, and it made the hiring process complicated and expensive for applicants who had to dash around the country for interviews.[5] Many judges who initially accepted the Plan, moreover, became disillusioned as every year judges hired more clerks before the Plan allowed. As each application cycle more and more judges opted to "cheat" and hire early, the Plan's collapse became a certainty.

The primary force preventing the Plan's complete collapse was the D.C. Circuit. The D.C. Circuit largely stuck to the Plan. Banking on that fact, many applicants waited in hopes of clerking for that particularly prestigious court. But after a while, even the D.C. Circuit could not anchor the Plan-too many top applicants accepted offers before its judges could interview them. Tired of losing out, the D.C. Circuit finally had enough. With the D.C. Circuit's decision to withdraw from the Plan, the dam burst. Since the D.C. Circuit's decision, it has become abundantly clear that for countless chambers, the unregulated market has returned.

II. Why the Plan Collapsed

The Plan's collapse was inevitable. For it to work, judges had to agree to compete less vigorously, just like participants in a cartel. It ignores decades of antitrust insight, however, to think that massive coordination could be sustained in a market with hundreds of competing judges, little transparency, and no enforcement mechanism.[6] Of all people, federal judges-who actually preside over antitrust trials-should have recognized that the Plan simply could not work. The fact that the Plan also created serious unintended consequences further sealed its fate.

Antitrust law teaches that cartels are only sustainable in highly concentrated markets. For the Plan to work, however, hundreds of judges had to abide by it to the letter. That was a tall order, especially because the clerkship market is incompatible with collusion in others ways. For instance, the clerkship hiring process is far from transparent. It is not public knowledge who judges hire or when they do so. Because judges could hire before the Plan allowed without fear of detection, many did. The Plan also had no real enforcement mechanism. The only thing judges had to worry about if they ignored the Plan was their reputations. But detection was unlikely, and judges who thumbed their noses at the Plan were hardly pariahs; indeed, many of the most prominent judges were willing to hire early. The Plan thus was doomed.

But the Plan's flaws ran deeper. Perversely, instead of curbing exploding offers, it encouraged them. In a compressed hiring season, judges must hire quickly-hence more exploding offers. The Plan also created the "graduate loophole." Many judges began hiring graduates (who were not regulated by the Plan) instead of law students (who were) because hiring a full cohort of clerks on a single day is difficult. In other words, the Plan did not simply direct when hiring would occur; it sometimes changed who judges hired in the first place. Many judges were unwilling to accept these consequences, especially for a Plan that did not even work as intended.

Needless to say, the Plan's collapse has been terribly unfair for current clerkship applicants. It is hard to know when judges now interview; indeed, judges themselves are still reacting to the changing marketplace. Students at schools that do not place a lot of law clerks have surely been particularly disadvantaged because they do not have as much informal information about how clerkship hiring works. Nevertheless, the Plan's collapse was certain. What cannot go on forever, won't.[7]

III. Lessons to Be Learned

Now that the Plan has failed, it is time for a postmortem. The Plan's collapse, although affecting only a small percentage of lawyers, should be of general interest. The sad truth is that the regulatory flaws that undid the Plan are not unique to it. Thankfully, this time, those flaws manifested themselves in a relatively benign context. But similar flaws arise in other contexts, often with catastrophic consequences. The Plan's collapse can therefore teach lessons to help us avoid much more dangerous future regulatory failures.

A. Not Every Problem Is Worth Solving

Most obviously, the Plan's collapse confirms that we should only solve problems if the solution's benefits outweigh the costs. A persistent regulatory problem is "tunnel vision"-a myopic focus on fixing a problem without appreciating trade-offs.[8] The reality is that although it is imperfect, the unregulated clerkship market works pretty well.

As George Priest explains, the unregulated market is not that bad.[9] As to efficiency, the problem of hiring "too early" should not be overstated. To be sure, it is inefficient to hire clerks too early in law school. But before the Plan, judges very rarely hired until applicants had completed at least the first semester of their 2L year. Without more knowledge, the risk of a "dud" was simply too high. In other words, although they might prefer more than three semesters of grades and the results of law review elections, judges-experts at hiring clerks-have enough information at that point to make a workable decision.[10] Indeed, even proponents of the Plan do not take their efficiency argument to its logical conclusion-that hiring should occur after graduation. Instead, they merely push for hiring to occur after applicants' 2L year. Everyone thus agrees that hiring based on incomplete information isn't the end of the world.

On the other side of the ledger, for regulation of the clerkship market to actually work, the price would be very steep. This is especially true if the goal also includes fixing the chaotic nature of clerkship hiring, a problem the Plan actually exacerbated by incentivizing exploding offers. For regulation to succeed, there would have to be much more transparency and a powerful enforcement mechanism. Neither comes cheap.

One recent clever proposal for an updated clerkship-hiring plan is for "Congress [to] condition salaries for law clerks upon them being hired in compliance with the judicial hiring plan."[11] Leaving aside the Plan's other flaws, if the major concern is that judges hire too early, such a proposal may be worth pursuing-if it were costless. But it is not. Even on the dubious assumption that creating such a program would be the best use of Congress's time, we would need an enforcement apparatus to ensure compliance with a new law. That would be expensive. In any event, judges would be sorely tempted to skirt the spirit of such a law. If the past is predictive of the future, many judges would enter into informal agreements with applicants but hold off making actual offers until allowed by Congress. As a practical matter, little would change.

In short, when we compare the relatively minor benefits associated with regulating the clerkship market with the steep costs of doing so, regulation makes no sense. Not every problem should be solved.

B. Accept Human Nature

Another common regulatory problem is failing to accurately predict what real people are likely to do.[12] For regulation to succeed, it must be consistent with human nature. Here, the Plan simply failed to account for who federal judges are.

Ask yourself this: What does a federal judge really want? Among other desires, one is to be a master of the judicial craft. This desire is socially beneficial-it is an important reason Article III judges work hard (and they do), even though, with life tenure, no one forces them to. Federal judges also tend to be unusually competitive. They did well in law school, had successful legal practices, and survived the confirmation process. Federal judges inevitably strive to succeed.

The socially beneficial desire to be a talented judge is at loggerheads, however, with the Plan. By definition, not all judges can be the best. Federal judges thus compete to get impressive clerks because, all else being equal, a judge with better clerks will do a better job. It is impossible to separate the useful desire to do great work from the desire to hire great clerks.

C. Expect Things to Go Wrong

All too often, regulators forget that "government regulation that is amply justified in principle may go terribly wrong in practice."[13] Like many other regulations, the Plan was plagued by unintended consequences, such as the incentive to make exploding offers and the emergence of the graduate loophole. That should not come as a surprise-unintended consequences are part of life. Because unintended consequences are unavoidable, however, regulation should be introduced slowly and only when the prospective benefits sufficiently outweigh the prospective costs.

That anything complicated works is a marvel. Before a company brings a new product (say, a computer operating system) into the market, it subjects the product to countless tests. Even so, there often are glitches, sometimes serious ones. This makes sense: most new ideas do not work. The problem of unintended consequences is particularly acute in the context of new policy ideas. Unlike an operating system, there is often not an opportunity to test a policy until people are playing the game for keeps. Prudent policymakers must plan for this reality. Even though they do not know what it will be, something will go wrong.

The Plan never adequately accounted for unintended consequences. To succeed, the Plan needed to change the hiring practices of hundreds of judges scattered throughout the country, each facing different circumstances. The more a regulatory scheme is asked to do, the more likely it is that problems will emerge. The Plan was always doomed to failure because it ignored antitrust principles. But when the added threat of unintended consequences was thrown into the mix, it should have been obvious that the Plan had a rough road ahead of it.

D. Admit Mistakes

Finally, a serious regulatory problem is that counterproductive regulations persist longer than they should.[14] Regulators, regularly the most zealous advocates of regulation, are often loath to admit that a scheme is sputtering. The result is that once a regulation is in place, it is very hard to eliminate, even if it does not work.

The Plan was no exception. Insiders knew for years that the Plan was failing. Rumors about judges who hired early but did not want others to know were everywhere. Law students who trusted the Plan were at a serious disadvantage. The lack of transparency was not fair to anyone. Getting a clerkship is challenging enough even with accurate information; it is almost impossible without it. The Plan was publicly available but not universally followed. It is a serious problem when official government websites cannot be trusted.

The D.C. Circuit's announcement that it will no longer follow the Plan is a welcome dose of honesty. Now, at least everyone knows what the clerkship market is really like and can compete on an equal footing. (This will be especially true next year, after the transition.) Although it would have been better if the D.C. Circuit had made its announcement years ago (or better still, refused to go along with the Plan at all), the court's frank acknowledgement that the Plan did not work is a good example of what administrators should do in the face of regulatory failure.

Conclusion

Despite good intentions, the Plan was always destined to fail. Although the transition period is unfair for current applicants who must suffer for the mistakes of others, the hiring process will now at least be honest. The Plan's failure, moreover, illustrates important lessons about regulatory design. By applying these lessons, society can avoid similar regulatory failures in much more critical contexts. And that is a failure worth celebrating.


     *      Associate Professor, J. Reuben Clark Law School, Brigham Young University. The author thanks the federal judges, clerkship applicants, and faculty members who have provided real-time information about clerkship hiring this year. The normative views expressed in this Essay, however, are the author's alone.

          [1].     Catherine Rampell, Judges Compete for Law Clerks on a Lawless Terrain, N.Y. Times, Sept. 23, 2011, at B1, available at http://www.nytimes.com/2011/09/24/business/judges-compete-for-law-clerks-on-a-lawless-terrain.html.

          [2].     See, e.g., Christopher Avery et al., The Market for Federal Judicial Law Clerks, 68 U. Chi. L. Rev. 793 (2001) (discussing the problems with judicial clerkship hiring and proposing a solution).

          [3].     George L. Priest, Reexamining the Market for Judicial Clerks and Other Assortative Matching Markets, 22 Yale J. on Reg. 123, 129-33 (2005).

          [4].     See id. at 134, 140, 142 (citing Avery et al., supra note 2).

          [5].     See, e.g., Howard Bashman, 20 Questions for Circuit Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit, How Appealing (Feb. 28, 2003, 8:27 AM), http://howappealing.law.com/20q/2003_02_01_20q-appellateblog_archive.html.

          [6].     See generally George J. Stigler, A Theory of Oligopoly, 72 J. Pol. Econ. 44 (1964) (discussing the operation of and problems with cartels).

          [7].     To be sure, the Plan has not yet entirely gone away. In an effort to stay relevant in the wake of the D.C. Circuit's decision, the OSCAR Working Group judges reset the Plan's critical date to June 28, 2013. Federal Law Clerk Hiring Plan Date Change, OSCAR (Apr. 10, 2013, 4:30 PM), https://oscar.symplicity.com/blog_post/_1/14/hiring-plan-date-change. Although this may both help mitigate some of the chaos of this particular hiring cycle and be attractive more permanently for certain judges, the reality is that many judges now hire their clerks before the summer begins, as judges did before the Plan.

          [8].     Stephen Breyer, Breaking the Vicious Cycle: Toward Effective Risk Regulation 10-17 (1993).

          [9].     See generally Priest, supra note 3.

        [10].     See id. at 163-76.

        [11].     Aaron Zelinsky, Fixing the Judicial Clerkship Crisis, The Huffington Post (Jan. 30, 2013, 2:54 PM), http://www.huffingtonpost.com/aaron-zelinsky/fixing-the-clerkship-cris_b_2583485.html.

        [12].     See, e.g., Robert Pear, Some Employers Could Opt out of Insurance Market, Raising Others' Costs, N.Y. Times, Feb. 17, 2013, at A9 (explaining that companies with healthy employees may self-insure, which is cheaper but threatens the overall scheme), available at http://www.nytimes.com/2013/02/18/us/allure-of-self-insurance-draws-concern-over-costs.html.

        [13].     Cass R. Sunstein, Political Equality and Unintended Consequences, 94 Colum. L. Rev. 1390, 1390 (1994).

        [14].     See, e.g., Jared A. Favole, New Order to Nix Bad Regulations, Wall St. J., July 11, 2011, at A3 (explaining that many independent agencies did not enthusiastically accept President Obama's call to identify outdated regulations), available at http://online.wsj.com/article/SB10001424052702304584404576438282112622342.html.

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