Stanford Law School officials announced Thursday that the faculty will reform its grading system in order to adopt an honors, pass, restricted credit, no credit grading system.

Since Yale Law School has had a similar system for decades, the move means that Harvard is the only one of the top three law schools that has not moved to such a grading system, which has proved to be more popular law among students and has been praised for deemphasizing competition.

With talks beginning as early as last year, Stanford Law School Dean Larry D. Kramer said in a telephone interview Friday that the reforms were driven by growing faculty and student discontent over the existing grading system.

“We had created a false sense of precision and drew distinctions among students that weren’t really valid,” he said. “The biggest desire was that we wanted people to pick classes based on what they wanted to learn and not on grades.”

The decision—which was made on Wednesday—received strong support from the faculty.

Kramer said that law school officials have talked to a large number of individuals from Yale in designing the new grading program.

“We wanted to get a better sense of the consequences,” Kramer said. “I think the main benefits are it reduces exam pressure inside so that students can focus less on grades and more on the subject.”

Students were notified of the decision in an e-mail by Kramer on Thursday.

“No grading system is perfect, but the consensus is that the reform will have significant pedagogical benefits, including that it encourages greater flexibility and innovation in the classroom and in designing metrics for evaluating student work,” Kramer said in the e-mail.

The faculty has not determined when the transition will be made, but the “latest would be a year,” Kramer said.

In response to Stanford's decision, Harvard Law School spokesman Michael A. Armini said, “Many law schools, including Harvard, are looking at ways to simplify grading. We’re not at all surprised by Stanford’s decision.”

Armini declined to comment on specifics about Stanford's decision or how the announcement will impact the grading system at Harvard, though Dean Elena Kagan has said in the past that Harvard has "no plans" to move to a grading method similar to Yale's.

In other law school news, Kagan announced this week that the Law School had raised over $450 million in its capital campaign, intended to finance an ambitious agenda that includes new buildings, an expanded faculty, and more generous financial aid programs.

The five-year campaign, which had a target of $400 million and was launched in the summer of 2003, is the largest fundraising drive in the history of legal education.

—Staff writer Kevin Zhou can be reached at kzhou@fas.harvard.edu.