Gresham's Law in Legal Education

Abstract:     
Legal education can learn important lessons from Gresham's Law. (That law is informally stated as "bad, or debased, money tends to drive good, or full value, money out of circulation.") When the intrinsic value of something can be separated from the nominal value, as is true with money and law degrees, some people will seek the benefits of the nominal value without "paying the cost" of the intrinsic value. A nominal value of the law degree is the ability to take the bar exam or be licensed; the intrinsic value is the education and skills expected of one who has the degree. In turn, such a separation of values can put pressure on "good" education to compete with debased education, since both carry the same nominal value for licensing. Accreditation can serve the purpose of ensuring that the nominal value of a law degree reflects true educational value and the accreditation Standards of the ABA should be directed toward that end. Because the ABA intentionally ties its accreditation to licensure, its touchstone should be the public interest served by licensure. The Standards can be justified only if they contribute to this interest in an effective and efficient way. The AALS membership process, on the other hand, has other goals and some of its membership requirements are legitimately directed to academic and faculty interests.

Keywords: law schools, accreditation, ABA standards

JEL Classifications: K0, K10

Accepted Paper Series