Getting law school costs under control

Any discussion of the explosion of the cost of legal education has to grapple with the fact that law schools face various regulatory barriers to change, as well as serious collective action problems. The latter are mostly products of the invidious effect of the law school rankings.  Perhaps the most absurd feature of the U.S. News & World Report rankings is that expenditure per student is used as a proxy for educational quality. This of course is a powerful incentive for law schools to go on unrestrained spending sprees, which they have proceeded to do.

Law school deans routinely shake tuition hikes out of their universities' central administrations by arguing that, given the way the rankings are structured, not raising tuition will make it difficult to spend as much money as the school's competitors, which will then hurt the school's ranking. When you think about it this makes about as much sense as not raising a car's price because failing to do so will hurt sales.  (In economics a commodity that behaves in this way is known as a Veblen good, and apparently some luxury goods that confer status precisely because they are high-priced do produce this kind of at least partially inverted demand curve).

A realistic discussion of what any particular law school should do to get costs under control must recognize the collective action problem the current perverse incentive structure creates.  It also must recognize that the present  ABA accreditation standards limit what ABA-accredited schools can do (For example the standards strongly encourage a student to full-time faculty member ratio of no more than 20 to 1, and forbid a ratio of higher than 30 to 1. For the purposes of this calculation non-tenured full time faculty count as .7 of a faculty member, and adjuncts count as .2.  This of course severely limits the number of adjuncts law schools can use).

Discussions of reform can therefore be divided usefully into short-term and long-term proposals. Short-term proposals are based on what's permitted and encouraged under the existing ABA rules and USNWR rankings.  Long-term proposals can look to changing those rules and de-emphasizing or, ideally, eliminating the rankings.

What can law schools do under the present circumstances to stop costs from continuing to spiral out of control?  This may seem too basic to even mention, but having sat through well north of 100 law school faculty meetings over the years, I can assure you it needs to be said, over and over again:  It makes no sense to talk about the benefits of doing something without talking about the costs of doing it as well.  Incredibly enough, in my experience, fundamental issues as "should we increase the size of the tenure-track faculty?" are discussed in such meetings with literally no consideration for the costs of doing so.  Faculty will have tremendous battles over which person to hire for this or that tenure-track "slot," but even raising the question of whether that slot should be filled at all is considered close to incomprehensible (believe me, I've tried). The attitude is, what do you mean should we fill this slot? We have a slot! We've been authorized to spend this money! Don't you understand that if we don't spend this money the university will just take away our slot? And we desperately desperately need a tenured person to teach a class in [fill in your favorite arcane sub-field]!   Do you realize that class has been taught by an adjunct for three years now?  (Another thing that will get you identified as an obviously crazy person is if at this point you ask if the adjunct is doing a good job).

All of this is a function of the fact that law school faculty often know little or nothing about their school's budgetary process.  At my school, we recently had a meeting to discuss budgetary matters in general and rising tuition in particular (the first such meeting that had ever taken place during my tenure there), and it could not have been clearer that several senior members of the faculty were completely unaware of what our tuition was. (You could tell because of the shock they exhibited when this highly classified piece of information was revealed to them).  Another thing that was clear was that no one on the faculty (other than the dean, and a couple of non-faculty administrators) had the slightest clue what the school's ratio of revenue to expenditures was, let alone where the money was coming from and where it was going.

This not what you would call an atmosphere that lends itself to rational cost-benefit calculations.  For many law school faculties, step one in regard to getting costs under control could not be more basic.  Faculties need to educate themselves regarding how much all these fancy new toys they want to buy cost, and then have a serious discussion about whether they're worth buying under the present circumstances.

I wish I had a dollar for every time I've heard the word "quality" invoked to short-circuit any potential discussion of these matters.  It's as if arguing that spending X will improve the quality of legal education at Our Great School is sufficient justification for anything: for building a $100 million new building, for increasing the size of the tenure track faculty by a third, for opening up three new clinics, for lighter teaching loads, more research leaves, more people in the placement office to help students not get jobs -- indeed for everything in the world you could possibly imagine.

If I were the king of the forest, I would require any faculty decision involving the potential for significant expenditure to consider explicitly the per student cost of that expenditure.  Is it worth charging every student $700 more per year in perpetuity to do X? Why? What are they going to get out of it that makes it a good idea to force them to reach into their pockets to pay for (or more realistically to debt finance) this? Because it will improve the quality of their legal education? Wrong answer! Please be specific and cite examples.

We wouldn't let our students get away with answer like that. Would we?