Institutional Engineering

Picker Address

Convocation Address

June 13, 2008

Congratulations. Welcome. Welcome to the profession of law. Welcome also to the family and friends who have joined us today who have helped to make this day possible.

I want to talk about ice. On a day like today, I don’t know if that is cruel or optimistic. If we graph the states of water on the y-axis against temperature on the x-axis, we will see a well-known pattern. For substantial temperature ranges, we see no changes at all. Water remains solid—ice—below 32°F; between 32°F and 212°F it exists as liquid; and above 212°F it becomes a gas, steam. Over very narrow temperature regions, as we move from 31°F to 33°F and again from 211°F to 213°F, we see sharp changes in state. These are phase transitions.

That is what I want to talk about today. I have studied phase transitions of this sort professionally in computer simulations that I did on game theory and the law. I was trying to get a sense of where individuals could order their affairs sensibly and where they might get stuck in inferior outcomes. In doing that research, I found emerging exactly the sharp phase transitions we see in water. That is the joy of discovery and it happens every day in academic institutions. New ideas, new thoughts, new discoveries, those are one of the essential tasks of universities and our Law School in particular.

But I have been studying phase transitions this week in a more directly empirical way. I have three kids and two of them had graduations this week. I went to my son Adam’s eighth grade graduation on Tuesday and that was an appropriately modest affair. Yesterday, I was here attending my son Ben’s high school graduation. Ben was born roughly two weeks before I started teaching at the Law School. High school graduation is a more substantial transition point, but the business of college—day-to-day learning in the classroom—is very much what he has done since he started nursery school a block away from here many years ago.

That is what makes this graduation so different, as this commemorates what is now the start of a sharp phase transition. For most of your lives, you have gone to school each day. The actual mix of your day has changed somewhat over time.We don’t have recess at the Law School—fire alarms going off in the middle of class don’t count really—and very few nursery school teachers use the Socratic method, though maybe they should.

Think about it: for the last two decades, each day you have dedicated yourselves to the task of classroom learning. Today, for most of you at least, you have completed that phase.We should commemorate and celebrate that change. Graduating from the University of Chicago Law School is a substantial accomplishment. It is important that we capture that moment and appreciate all the hard work that you and your families have done to reach this point.

But we do more than that today, and this is the nature of the phase transition. For as we celebrate the end of the first phase, we now start the second. We produce two things at the Law School: ideas and students. For the faculty, today is product launch day, a day on which we send out into the world great students ready to become great lawyers.

I think that we are pretty good at product launches at the Law School. One part of a product launch is showbiz and razzmatazz.Watch Steve Jobs do a product launch.

Graduation is usually a very nice day, the hooding ceremony gives us a chance to come together as a group, and the party afterwards—this year in our newly completed space—is a chance to talk and reflect on the day. I graduated from our Law School in 1985. One of my favorite photographs is a picture of my wife Gretchen and me, arm in arm, at the post-graduation party at the Law School.

But the more important part of a product launch is to have the product ready. As I hope the friends and family gathered here together today appreciate, we have worked hard together with your sons and daughters over the last three years. Our students bring a seriousness of purpose to their education that I admire. You can go to any law school in the country and can count on first-year students to be ready to learn. But we may be the only law school in the country where you can rely on that same level of engagement from third-year students in their last quarter of education. So today, we the faculty launch you into the world. You are, in a very real sense, the faculty’s representatives in the world. You are ready for the next phase, ready to become great lawyers.

As is traditional in speeches of this sort, I should offer some advice on this next phase. You should, in the words of the bumper sticker, practice random acts of ... social welfare maximization. Nothing against kindness, but you should maximize social welfare. That is what the bumper stickers at the Law School say at least. That isn’t true actually. Two of my colleagues have their own bumper stickers. Geof Stone has a bumper sticker that says “dissent in wartime can be the highest form of patriotism.” That’s a pretty good bumper sticker. And I see a few bumper stickers for another of my colleagues, a senior lecturer whose leave from the Law School is at risk of becoming permanent. So practice random acts of social welfare maximization. That is how a law-and-economics person says go out and do great things. Make the world a better place. Random acts of social welfare maximization. No, that isn’t quite as catchy as the original and it doesn’t seem quite right. You should maximize social welfare at all times and should act randomly only when it is optimal to do so, such as if you are running a police force and want to catch criminals.

But all of that is a little general and says nothing about the distinctive role of lawyers. Lawyers are institutional engineers. Our tools have changed somewhat over time— from quill pen and parchment to the laptop and the Blackberry—but the central role that lawyers play in creating new institutions has remained constant.

Institutional engineering takes place at all scales. The United States Constitution is an exercise in engineering, in building an institutional structure that has survived through great stresses and over many different times. Compare the Constitution with the Articles of Confederation as an exercise in building durable institutions. It is hard to understand how we engineer institutions without looking at both the successes and the failures, by looking at the institutions that have stood strong in high winds and those that toppled over at the least bit of pressure.

Now if all goes well, we won’t get too many exercises in constitution making in this country. But the good news is that building institutions is the day-to-day life of the lawyer. Lawyers construct new institutions and new regimes each time new legislation is created, each time a deal is closed and a conference roomful of contracts are executed. I have participated in both of those activities—often in the wee hours of the morning—and know the feeling of great satisfaction that comes from participating fully as a lawyer in building institutions. But we do more than that today, and this is the nature of the phase transition. 

So today we celebrate the completion of one phase in your lives and the start of a second. Speaking for the faculty, we share the pride that your gathered friends and family feel in having reached this moment. You now join the generations of graduates of the University of Chicago Law School who have come before you and those who will follow you. That status is a shared, collective good. You are our representatives. Take that seriously. Make us look good. I know you will.

Thank you.

Randal C. Picker is Paul H. and Theo Leffmann Professor of Commercial Law at the University of Chicago Law School.