I am torn on this for the following reasons:
1. I think the vast majority of senior level law professors could not find jobs and salaries to match the ones they now hold if they resigned today and circulated resumes. Younger and less experienced professors could be hired to do almost the same thing at lower salaries. Why should stakeholders pay more than the least possible? Under this theory the seniors do not resign all at the same time.
On the other hand,
1. Something seems amiss about a salary scheme that encourages people to constantly be trolling around for a better offer in order to leverage their salaries up at their own schools. From a more economic perspective, schools require professors to absorb a search cost in order to qualify for salary increases. More importantly, it seems both unfair and to encourage disloyalty or at least a lack of personal interest in the long term development of the home school.
2. The people most likely to get the offer that permits leveraging are of the Making Nice, Knowing Better, Doing Nothing variety. Not exactly a great way to encourage faculty activism.
3. If one believes in a life-cycle wage theory senior level law professors are not overpaid but are drawing what is owed them.
So, Jim and others, what is the MoneyLaw position on salary compression?
(Sorry, No music link but I am humming Richard Thompson's 1952 Vincent Black Lightning.)