Photo by Michelle Nolan.
One can only imagine breakfast in the Posner household: “Son, give some thought to that box of Wheaties – the costs of labor to make each piece and the barriers to entry to keep the costs low in producing the box,” Richard might have instructed his son Eric.
So it was no surprise that Eric Posner became one of the world’s most admired legal scholars in an astonishing range of subjects. His books alone range from “Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives” to “Climate Change Justice” and his upcoming “American Demagogue.”
What’s unusual, however, is Eric Posner’s determination to step away from the Ivory Tower of University of Chicago Law School from time to time to dabble in the real world. He formed his thoughts about the utility of a professor with real-world ties as a student at Harvard Law in the early 1990s, watching the rise of cross-disciplinary studies in fields such as economics and law. Attorneys would master the methodology of one practice and apply it to another. “That was kind of a model; there were lots of people who did that,” Posner recalls. “I found that appealing.”
Throughout his academic career, he has taught any class that needed teaching. His father, the prolific author and former 7th U.S. Circuit Court of Appeals Judge in Chicago, taught and wrote while serving on the bench. Since 2010, Eric has been counsel to private law firms. He recently joined MoloLamken as counsel after six years with Boies Schiller Flexner.
MoloLamken has proven a great fit for Posner, who was attracted to the people and quality of the practice at the innovative boutique. Established in 2009 by powerhouse trial lawyer Steven Molo and appellate standout Jeffrey Lamken, the firm has grown from five lawyers to 35 on the back of noteworthy trial court and U.S. Supreme Court victories. The firm is particularly noted for its work in bet-the-company cases in matters ranging from international arbitration to white-collar crime and massive shareholder claims.
“Innovation is in our DNA,” says Molo. “We formed MoloLamken to create a new approach to litigation and Eric joining us adds another high-impact player who can help us achieve uniquely great results for our clients.”
While Posner’s role in academia has informed his work in the private sector, the reverse is also true, he says. His experience with law firms increased the quality and relevancy of his classroom instruction and enhanced his ability to connect with students planning their own careers.
“I realized that I was able to give them a lot better advice about what the world was like,” Posner explains. “It’s not just the teaching - it's also that most of my students are going to end up at a law firm.”
Lawdragon: Tell me a little more about your pathway to joining MoloLamken.
Eric Posner: In some ways it's a long story; in some ways it's a short story. I've been teaching for about 25 years, and I did not practice much before I started teaching. I was in the government for a year only and I always felt that lack of practical experience, both for teaching and for research.
Many law professors, maybe most, don't have much actual practical experience and sometimes that's thought of as a qualification rather than a detriment, but I think it's a serious detriment. I think that professors should have significant practical experience and should try to maintain their relationship with the bar and with the world of practice.
LD: And had you thought that throughout your academic career?
EP: Well, no, I think that now. I had done a little bit of consulting for Boies Schiller, and I became friendly with one of their partners, Bob Silver. I was counsel there until he passed away. He was a terrific person.
LD: He was always called David Boies' brain, right?
EP: He was a brilliant guy and fascinating. He thought in a very academic way but made it work for practice. We worked a lot together but because the firm did not have an office in Chicago, I worked remotely and didn't see much of the rest of the firm. It was kind of an odd experience because while I got a lot of exposure to litigation and the cases we were working on, I didn't really get a law firm experience. Bob and I had, I guess, a very similar sense of humor and an odd way of looking at life. So we worked well together.
LD: He was rare for law firms. To be this kind of genius guy you never saw who would go and think, but not be really a law firm person.
EP: Definitely. He was a very unusual person. I do think he was brilliant. He'd work on cases where our position seemed hopeless, and he was really ingenious. The thing that struck me was that he was such a legal realist. He would try to figure out how to put the client's position in the most appealing light from a policy perspective. A lot of this concerned financial markets, which are very complicated. And then we would try to figure out some legal basis for the argument.
This is something I've been struck by, watching people at this firm and others. There is this real tension between the legal forms, the official arguments that you're allowed to use, and the underlying facts and policy and moral arguments and so forth. I think it's a real struggle. And Bob's particular take on it I found fascinating.
LD: In many places now, law is practiced in this very strict way that is commoditized and you don't think about big issues. So to get in and really be able to - as Bob did and as a few firms including MoloLamken do and as you do as an academic - turn things around and look for what the right answer actually is and the path to get there, which is not a billable-hour equation, is very important.
EP: I think so. After Boies Schiller, I spent a few years of just being an academic again, and I really felt the absence of practice. I realized there were a lot of ways in which it helped me. One simple way was it gave me great ideas for exams.
Another way was for teaching. I teach a class in financial regulation and one of the cases I worked on at Boies Schiller was the litigation about Libor [the London Interbank Offered Rate, a benchmark lending rate for global banks]. When you teach a case that you worked on, you can convey the complexities much better than when you teach a case that you have merely read about.
I also wrote about some of the cases I worked. In my book, "Last Resort," I discussed the AIG bailout litigation, which was both fascinating and important.
LD: So for teaching and scholarship, your law firm experience proved very helpful?
EP: Right, and for advising students as well. So I felt that I should plunge back into practice. In mid 2018, I started looking for a new position. I wanted something in Chicago because I wanted to be able to interact with the lawyers. And I really liked the idea of a small firm because large firms are bureaucratic and, oddly, even though they have so many resources, you can get a little bit lost. Everybody has kind of a silo that they're working in.
I ended up at MoloLamken because one of my lawyer friends was wildly enthusiastic about this place and suggested I talk to them. He put me in touch, and I went through interviews, just like everybody else.
I have learned a lot since I came here and I feel that I have been able to offer a helpful perspective in return. I've worked on cases that I find fascinating, and I greatly enjoy learning from brilliant lawyers, many of whom are decades younger than I am. Several cases involve antitrust law, a new interest of mine. Market concentration is a huge problem right now.
LD: Can you tell me a bit more about what you’re seeing in the antitrust field now?
EP: There is a great deal of ferment at the moment. Many people – including academics, lawyers, and policymakers – have begun to realize that market concentration is a far more serious problem than was believed just a few years ago. Product markets have gotten significantly more concentrated over the last several decades. Labor markets are also far more concentrated than people had realized. As a result, prices are higher than they should be, and wages are lower. This has contributed to slow economic growth, widening inequality, and a host of political problems in our country. And then there are all the problems being created by the newly dominant tech firms like Google and Facebook, which have been able to exploit network effects that are inherent in the internet. In the world of antitrust, scholars are revisiting the settled wisdom and trying to figure out new ways to press the antitrust laws forward.
LD: There is such a huge disconnect between the life of a law student, in general, and firms. Even though it's been talked about for decades, firms are still just kind of monochromatic when you're a law student. To actually be in the position where your students, current and past, can talk to you as somebody who goes to work in a law firm and also teaches, it's super cool. There’s also that engagement in real time as you're trying to bring new theories to cases.
EP: Well, the lawyers do consult academics quite a bit. But the academics, almost all academics, are very narrow. The firms will consult an academic about some particular thing like fee arrangements in a class action. And this will give the law professors a little bit of insight into practice, which they can share with students. But it’s not a deep understanding. One of the interesting things about being part of a firm is that I have more insight into how everybody works together, and I'm getting a little exposure to how firms select cases, the risks they're willing to take. How they evaluate cases. And I think I can also contribute because at least in my work, I've tried to write in and talk to people in lots of different fields. I collaborate a lot with people.
LD: Was that inspired at all by your father?
EP: It was a little bit him, but it was mostly from when I came of age academically in the early ‘90s. There are lots of fields like law and economics, for example, or critical legal studies and feminist legal scholarship, where people would master the methodology and then apply it to different areas of law. There were lots of people who did that. My father was one, but there were other people. Without really thinking much about it, I found that appealing.
LD: What areas of the law, what trends, are most intriguing to you now?
EP: One thing I've noticed with antitrust law is that economists in particular, and some law professors, are always on the lookout for new types of anti-competitive behavior. And if you can turn that into a case, the litigation can help advance academic understanding while the academic theory can help guide and enrich the litigation.
One thing I have learned is that you can't bring a case just because it sounds like a good idea. There has to be a reasonable level of certainty and some financial support. And all those pieces are complicated.
LD: On the academic side, what courses are you teaching right now?
EP: I just finished teaching a seminar called demagoguery and executive power. And I finished a book, recently, called “American Demagogue.” I recently turned in the manuscript and it should be published in July 2020. It’s about the history of demagoguery in the presidency and southern demagogues, like Huey Long.
EP: Yes, it's timely. Everybody's writing a book about Donald Trump, so I am, too. But it has a different angle. There's a historical context that people need to understand. I'm also going to be teaching foreign relations law soon, which I've taught before, and I'm hoping to write some articles that are related to antitrust law in various ways. MoloLamken does a great deal of cross-border work, even though our three offices are in the United States.
My biggest interest right now is monopsony, and labor market monopsony and the problem of firms that have monopsonies over types of workers in certain areas and are underpaying them. This is something that brings together my interest in practice and my interest in academic work. On the academic side, what happened is a couple of years ago, labor economists began publishing these papers that suggested employment markets are frequently uncompetitive; wages are suppressed by monopsonies.
This has been kind of a revolution in labor economics because before these papers were written, economists tended to assume that labor markets are competitive with the only exception being the classic company town, like the Pullman town. In textbooks and in general discussion, people would say, “Sure, Pullman set up its own town and put its employees in it and they had monopsony power over their employees, but that was an isolated thing.” But just over the last couple years now, that's become thought of as possibly a new norm.
So I wrote a paper with a labor economist and an industrial organization economist, in which we argued that the government should review mergers for their effects on wages. One thing we had discovered was that when the Justice Department and the Federal Trade Commission review mergers, they don't look at labor market effects of mergers. They look at whether prices are going to go up, but they don't look at whether wages will go down and that’s equally bad. We said they should, and we wrote a long paper that lays out how they could do it.
LD: Fascinating. So are you looking for a monopsony case?
EP: I realized as I did research that there are very few labor monopsony cases. In the classic monopoly case, you have somebody with 90 percent of the market who engages in abusive behavior like forcing customers into exclusionary contracts. But there are virtually no labor cases like that even though, if you believe what these economists are writing, this activity is happening all over the country all the time.
Why are there so few cases? One of the problems is that monopsony is usually local. So when Walgreens and Rite Aid merged, everybody understands prices might go up, so the government knows to review the merger. But if two small farm-equipment manufacturers merge, that may not attract scrutiny. You have to consider each labor market, of which there are thousands. And ask whether in each one of those, is the merger going to mean there are fewer jobs for the people working in those areas?
So, to answer your question – yes. I’m looking for a monopsony case – one that would both advance the law and help workers who are being underpaid. I know they’re out there.
About the Author: Katrina Dewey (email@example.com) is the founder and CEO of Lawdragon, which she and her partners created as the new media company for the world’s lawyers. She has written about lawyers and legal affairs for 30 years, and is a noted legal editor, creator of numerous lawyer recognition guides and expert on lawyer branding. She is based in Venice, Calif., and New York. She is also the founder of Lawdragon Campus, which covers law students and law schools.