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Life of a Law Student, University of Houston Law Center

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Law Professor Returns Royalties to Class for Textbook to Avoid Conflict of Interest

By: Luke Gilman | Other Posts by
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In the blog post Ask Your Teachers for a Rebate, Yale Law Professor Ian Ayres notes his practice of returning the royalty he earns when students buy the contracts text he assigns in order to avoid the financial incentive of self-dealing.

Instead of just trying to get the best book for my class (and to do so I should weigh both quality and price), I might also consider assigning my own book and increasing my profit. This is a self-dealing transaction, which would be presumptively illegal if professors owed a fiduciary duty to students.

As he notes in Just What the Professor Ordered his practice of rebating royalties for assigning his own text goes back at least until 2005 and was inspired by the soaring costs of textbooks in a market essentially controlled by a cartel.

Many profs no doubt feel the power to assign their own text is simply the prerogative of their pedagogy. I’m not familiar enough with the textbook market to know what practical impact such a practice would have on the incentives to write a text, though I suspect the benefits for ones academic reputation are at least as much an incentive as the royalty check.

As a general rule, if any of the professors I’ve had has written a text on the subject matter, it’s been required – sometimes regardless of whether or not it was used in class. If they’ve taken the same principled stand Ayres has taken I’m unaware of it. So high praise for Ian Ayres, not only for recognizing and acting on the conflict of interest so many of his colleagues choose to ignore but for using it as a teachable moment, a concrete example that will no doubt be called to mind whenever one of his students is faced with the opportunity to self-deal when everyone else seems to be doing it with impunity. This, I think is the essence of professional ethics.

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