Every law school has undergone grade inflation. At my school, like almost all others, an average exam gets a B+. Also, like my school, virtually every school I have examined has more than one tier of grades. Large sections are subject to a lower curve and small sections, seminars, or other courses qualify for a higher curve.
Law schools have, in effect, created a shopping opportunity. Students must make the not so hard decision -- do I take a course with a B+ average grade or one that has an (almost) A- grade. I think most would agree that choosing a course based on the curve is not consistent with taking courses that are the most helpful in terms of preparing for 40 or so years of practicing law.
To overcome shopping you need to have one curve for all courses (or perhaps a limit on the number of high curve courses taken). At my school where the "low" curve is 3.2 and the high one 3.6 this would seem to mean meeting somewhere between the two. But here is where honest differences in opinion combine with self interest and a form of free-riding to make things difficult. While nearly everyone agrees there is a problem and understands the solution, many people do not want to give lower grades. In a sense they do not want to make a contribution to the cause.
Sometimes the reasons are well intended and stated. Others are not stated. For example, suppose you teach a vanity course (a course that disappears if you do). And suppose you are able to get a small group to register. Further suppose that the reason they register at all is because the class is small and subject to the higher curve. I think you catch my drift here -- lower grades may mean the vanity course is not offered at all. Say you teach "Law and Really, Really Deep (So Deep it is Hard to Think about Them) Feelings." It might occur to you that unless you can give an almost A- average you might find yourself teaching Civil Procedure instead.
Maybe people think giving an almost A- means better teaching evaluations. I have no idea if this is true but my hunch is that the high curve means a less competitive experience and that students are likely to enjoy that atmosphere.
And then there is the most discouraging rationale of all: "Some" students may not have done well in large courses and they need the smaller ones with higher curves to address GPA issues. Recently the word around the halls is that "some" refers to minority students. I cannot verify that this is the unstated rationale because this is always said privately. Is it really OK to assume minority students will not do well? As an informal empirical matter, in the classes I have taught that would be the wrong assumption. There is no difference in performance that I have noticed or been told about.
This leads to a more interesting question. What do people who make this assumption and then act on it get out of it? It has to be something they get because the notion that they are "helping" someone else, if ever true, is woefully outdated.