Quantitative Methods for Lawyers Course – Access Syllabus, Full Course Slides, etc. [ Prof. Daniel Katz – MSU Law – Winter 2012 ]

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1. On my first day of Contracts, a suitably long time ago, my professor informed us:

If any of you could add, subtract, multiply or divide, you would be across campus at the business school.

During my years at a Big Law firm as a transactional lawyer, I was repeatedly admonished: Neither shall thou calculate a number from any other number, although thou mayst proof it at the Printers, nor shall thou attempest to replicate any calculation prepared by another, for that is the sole charge of the accountants, who shall provide the holy Comfort.

This became somewhat awkward when dealing with transactions in which the distinction between a million and a billion had some very direct relevance.

Fortunately for my clients, I was a disobedient associate and I would surreptitiously calculate order of magnitude checks on numbers. To escape detection, I would do this in my head or in faint pencil lines that looked like list numbers.

The trick is the minimum one that students should come away with before getting into more esoteric topics.

Consider the proposition: “The national debt is so large that our grandchildren’s grandchildren will never be able to pay it off.” Assume that the speaker is of an age to have grandchildren, say 50, and that the debt is \$11 trillion dollars and that its principal balance will be unchanged, in constant dollars, when the speaker’s grandchildren, now assumed to be infants have granchildren and those grandchildren, beginning 75 years from now, will have a working life from age 25-65, or 40 years. Finally, assume that the average number of that cohort in the period 75-115 years from now is equal to 150 million.

How much per year will each of those future workers need to pay in principal to retire the debt? In your head.

1/1.5 is 2/3 or 0.666

1 trillion = 10^12
150 million = 1.5*10^8

12-8 = 4

10^4 = 10,000

10,000*.6666 = 6,666 or 6.6*10^3

40 = 4.0*10^1

6.66/4 is about equal to 1.5
3-1 is 2

1.5*10^ = \$150

Backcheck: 150,000,000 workers times \$150 per year times 40 years:

15*15*4 = 225*4 = 900

10^8 * 10^1 * 10^1 = 10^(8+1+1) = 10^10

900 = 9*10^2, so the result is 9* (10^(2+10) = 9 * 10^12, or 9 trillion, slightly low, should be 11 trillion.

So, the answer is more than \$150 per worker per year over their working lives, but something less than \$200 per worker per year. Since the difference is a dollar a week, it is unimportant.

The ability to do that should be on every state’s bar exam.