Law school cost, educational quality, and Felix Frankfurter's street car

A few years ago I was at a Colorado Bar Association annual meeting at which the guest of honor was a certain SCOTUS justice known for his remarkably high opinion of himself.  While there, I was told that, when the luminary of the local bar who was taking the justice from the airport to the mountain resort where the meeting was held showed up in a new SUV to pick up his guest, the justice balked at the idea that his legal personage should be conveyed in this fashion, and insisted that a limousine be sent for the purpose.


In 1952 the Supreme Court decided a case involving a first amendment challenge to a street car company's policy of playing radio programs of music and advertising in its cars.  Felix Frankfurter recused himself from the case, on the grounds that "my feelings are so strongly engaged as a victim of the practice in controversy that I had better not participate in judicial judgment upon it." 

I was reminded of these two contrasting tales (of course I'm not certain the first story is true, but the essential thing is that it sounded eminently plausible) this week, when doing some research at the University of Michigan Law School, which I attended in the late 1980s.  As a student over the course of my three years there I paid between $8400 to $9600 per year, in 2011 dollars, in resident tuition.  In recent years, as tuition at Michigan has risen at an astonishing rate -- resident tuition and fees are just under $47,000 this year -- I have felt increasingly fortunate to have gone to the school at such a reasonable price.  A bit of historical research reveals that I actually was paying much higher tuition than students had even ten years earlier, when in-state tuition was barely $5000 per year (again in 2011 dollars). And those students were paying much higher tuition than students ten years before that, who had been paying $3000 per year in current dollars. 


Now consider the changes in American median household income, in inflation-adjusted terms, over this period. In 2010 median household income was approximately $49,800, i.e., Michigan's annual in-state tuition was nearly equal to the average American family's entire annual pretax income.  In 1985 median household income was $46,900, which meant that tuition at UM Law was about 17% of that.   In 1975 median household income was $48,637, i.e., slightly more than ten per cent of tuition. And in 1965 -- 46 years ago -- median household income in America was $47,764 in 2011 dollars, meaning that the entire annual in-state tuition of $3,356 inflation-adjusted dollars at the University of Michigan Law school could be paid with about three weeks worth of the average worker's salary. (By the way the real GDP of the American economy has more than tripled over this time, even though median household income has barely changed).


I thought about these figures as I walked around the law school's new addition -- a $102 million-dollar project that is being built across the street the law quad, a beautiful 75-year-old structure built in the style of an Oxbridge college.  This is just one of the major building projects going on at the law school, which is spending another $40 million on renovating the Lawyers Club -- the residence facility that houses about a fifth of the school's students.  (Charles Munger of Munger, Tolles and Olsen and Berkshire Hathaway is paying for half this project, with the other half coming in unspecified fractions from the central administration and the fees paid by students who live in the Club, which currently charges $1350 or so per month for rent and 13 meals per week).  Indeed whenever I go back to Ann Arbor I'm always struck by the extent to which the shabby genteel town I remember as an undergraduate has over the past 30 years been transformed gradually into another playpen for the rich.

Of course in a university town all these things are always done in the name of educational quality.  That is the justification that's always given for the ever-increasing cost of higher education (Over the past 20 years undergraduate tuition has increased by about 78% in real terms, while law school tuition has increased by more than 300%).  A couple of days ago, a graduate of the George Washington Law School class of 2011 -- this graduate says he finished in the top 10% of his class at a school which is currently ranked 20th by USNWR, yet he doesn't have a job -- sent me a link to its new dean's explanation for why law school tuition is so high, and why it's difficult for schools to address the problem individually. 


I'm not going to go over the dean's argument in detail, because pretty much everything he says has already been addressed on this blog. Instead I'd like to pose a simple question, which is really the only question that matters in the face of claims that by its nature a "top quality" legal education costs a lot.  Is the University of Michigan Law School providing a legal education that is six times better than that which it provided 25 years ago? Because that's how much resident tuition has gone up in real, inflation adjusted terms.  And before you get to that, we can put aside for the moment the whole question of taxpayer support for legal education by noting the quasi-private tuition paid by non-resident UM students has nearly tripled over the same time.  Indeed 25 years ago Harvard and Yale and Stanford charged tuition figures that would, in constant inflation-adjusted dollars, make them among the cheapest law schools in the nation today.  Apparently in the 1980s HYS grads -- let alone Michigan grads -- were getting a much worse legal education than what the average law student at a second or third-tier law school receives today (which is a shame given that these are the very people running today's law schools, not to mention the US government).

In other words, the "legal education is very expensive by nature" excuse is obviously bogus on its face. Now no one would deny that some of the things law schools are spending all this extra revenue on have a certain educational value.  The question, however, isn't whether more clinics and more small section classes and the like are educationally worthwhile. The question is whether the value they add comes anywhere close to justifying the added cost.  But beyond this, a great deal of the skyrocketing cost of contemporary legal education is a product of things that have little or nothing to do with educational quality.  Pharaonic buildings, fancy student amenities, gigantic administrative staffs, bloated salaries -- Michigan's dean is paid three times more in real terms than his predecessor was 30 years ago, while the faculty's average salary has doubled -- what do any of these things really have to do with the basic quality of education students receive?  


All of this is part and parcel of the transformation of higher education into a consumer-driven status game, in which the buyers are insulated from the consequences of the absurd prices they pay for the services they're buying until it's too late for them to recognize that they're seriously overpaying for what they're getting.  Of course if you're rich enough, then the idea of overpaying for a status good is almost a contradiction in terms -- the whole point is that you are flaunting your ability to pay for something that costs a ridiculous amount of money.  In this sense, the USNWR rankings are merely reflecting social reality when they use expenditure per student as a straight line proxy for the quality of the education students are getting (A characteristic sign of the times: at Stanford, there is now apparently strenuous competition among the various student living facilities to acquire the best "chef" on campus).


This, at bottom, is what fuels the over the top spending of universities in general and law schools in particular.  And that brings me back to Felix Frankfurter riding the Washington DC street cars in the 1950s , when a few decades later one of his successors would be insulted by the failure to provide him with a private limousine to transport him to an event at which he was the honored guest.  Frankfurter -- who had one of the best academic records ever at HLS;  who was Henry Stimson's personal assistant at the age of 23; and who had a chair created for him on the Harvard Law faculty, before he went on to become one of the architects of the New Deal -- would never have been mistaken by anyone for a humble man.  But he lived in a country where it seemed natural to him that he should ride the street car to work, even if his job happened to be United States Supreme Court justice.  He did not, in other words, live in a plutocracy.  It's a small detail, but it's the kind of thing that in its own way helps explain how law schools -- and not just law schools -- have gotten into the mess they're in today.