Adam Chilton, Peter Joy, Kyle Rozema, and James Thomas have written an excellent, careful new paper entitled "Improving the Signal Quality of Grades." The central claim is that some law professors are better graders than others, where a better grader is defined as one whose grades correlate more with the law student's final GPA. Some top students thus have the misfortune of having their records tarnished by a professor whose grades are relatively arbitrary. They then miss out on opportunities, such as law review and judicial clerkships, that are granted relatively early, based on a small subset of the students' law school portfolio. The authors then think about various possible remedies for noisy signals, such as kicking bad graders out of the 1L curriculum and adding more gradations in grading levels.
A preliminary question might be whether law schools really want to improve the signal quality of their grades. It may be fair to say that law schools probably don't care all that much. For every student denied a clerkship in a pure meritocracy is another student who lucks into one. It seems doubtful that a law school that did implement a better grading system would become more attractive to applicants. Indeed, aren't students attracted to the lax grading systems at places like the Yale Law School?+
But there is an argument that they should care, at least as to their strongest students. After all, judges and top law firms are in a repeat relationship with the law school, potentially hiring students year after year. If they have a great experience, they will be more apt to return and hire more students. When a student lucks into a job and doesn't perform well, then the employer is less likely to hire students in later years. The stronger the signal, the more employers can rely on it. And so, for employers who are willing to hire only the best students from a school, a strong signal is important.
Read more at Reason/The Volokh Conspiracy