Thursday, December 8, 2011

Options for law schools

It's becoming increasingly clear that, for a very large percentage of recent law graduates (perhaps an actual majority) the expected return on investment on a license to practice law hasn't been worth the cost of acquiring one, and that, given ongoing structural changes in the economics of the practice of law, and the rapidly increasing cost of legal education, this problem is only going to get worse going forward.

Legal academia has several options in regard to how it's going to deal with what appears to be a growing crisis in regard to its long-term financial viability. Now it's probable that, even given these ongoing changes, a handful of law schools will still be able to provide a reasonable ROI for a large enough percentage of their students to allow these schools to continue to operate without any significant change in the way they currently do business.  But it also seems probable that, for the vast majority of schools, that won't be a viable long-term option.

(1) Denial 

This is by far the most popular option at present.  It takes the form of treating changes in economics of law practice as temporary rather than structural, ignores the fact that even prior to the recession a third of law grads weren't getting law jobs, and treats the skyrocketing cost of legal education as a product of forces beyond legal administrative control.  The upside of this approach is that it doesn't require anyone to do anything. The downside is that, except for a handful of elite schools, this approach won't be sustainable in the face of economic reality.

(2)  Moving to a consumption model of legal education

A consumption model of legal education assumes that there are a sufficiently large number of students for whom legal education can be modeled as consumption rather than investment.  Schools operating on this model will have a large number of students who are treating law school in the way that affluent families have traditionally treated undergraduate education, that is, as a kind of high-toned finishing school whose main functions are social signaling, networking, and conspicuous consumption, rather than as a way to acquire more straightforwardly marketable skills.  (That undergraduate tuition seems to have some of the characteristics of a Veblen good suggests that this model is in fact quite viable for elite undergraduate institutions).

Given the social cachet still associated with the identity of the lawyer (which can of course be overstated and may be deteriorating) this model may be viable for some schools.  This approach could prove particularly successful for schools located in places where rich people and their children like to congregate -- for example wealthy college towns with good weather, excellent restaurants, and easy access to first-rate ski resorts  -- although needless to say the supply of reasonably literate trust fund slackers seeking more respectable social identities is, even in contemporary America, somewhat limited.

(3) Reform

The third option for schools outside the charmed circle of the elite is to change or (eventually) die.  Change will come in the form of cutting operating costs significantly, and restructuring what law schools do in ways that will allow them to take advantage of new sources of operating revenue, such as for example contributing to undergraduate education, and selling new degree programs catering to people who want to do something other than practice law.

Operating costs can be cut in many ways, some of which will probably include larger teaching loads for tenure track faculty, larger percentages of classes taught be adjuncts -- ABA accreditation standards currently put strict limits on this option, but those are likely to give way in the face of economic pressure -- serious cutbacks in law library budgets, less extravagance in regard to physical plants, and a reduction in an administrative class that has more than tripled in size at law schools over the course of the last decade.

All of these changes will be painful for people currently working inside of law schools, so little can be expected to happen in this regard until the scope of the growing crisis makes it clear that  option (1) is no longer viable.  How long that will take is difficult to predict, and of course is likely to vary a good deal depending upon a school's position in the legal academic hierarchy.


  1. Law school libraries cost students about $1200 just for librarian and staff salaries, not including benefits or any other overhead (like the space itself).

    How is that even remotely justified?

  2. Excellent post. I think it's possible that the crunch could start as early as this spring. This year, the "scholarship wars" may go relatively well for schools. Applicants are much more aware of the problems in the legal market, the generally poor economy, and the scam issues--so they may be very responsive to scholarships from lower-ranked schools to which they are admitted.

    But meanwhile, most schools are economically dependent on the bottom quarter to half of the admitted class: The ones who pay full tuition. As the admissions season moves on, a lot of schools may have trouble filling those seats. At the same time, they'll be struggling to keep their entering credentials up. Since credentials are measured 25/50/75, admitting just one or two more students can have a big impact on those numbers.

    What I think should particularly scare schools is that the impact is likely to be lumpy and unpredictable. Schools in the top 100 can't assume that they will be able to pull up as many students as they want from the bottom 100 (especially not ones with scores they want for the US News rankings). Many of those students will be pleased with the scholarships they have and won't give them up to pay full tuition at the higher ranked school.

    Most law schools also have a particular market from which they draw students off their wait list. E.g., when I was chair of admissions at Illinois years ago, our class would jump all over the place depending on what Northwestern did. One year NW admitted too few students initially, then drew heavily from their wait list in mid summer. That took a big chunk out of our class and we had to scramble.

    My Cassandra thought of the day is: That scramble may be very ugly and unpredictable this year, and it may leave some schools short enough on tuition dollars that they will begin to realize that change is essential.

  3. Just about every law school is going to (assuming your list of 3 choices) choose option number one.

    Why wouldn't they? From their perspective, "If it ain't broke..." For the law schools, it simply ain't broke, yet.

    Nobody is going to voluntarily stop milking the cash cow as long as there's free flowing milk to be had...might not be "right" but it is the reality.

  4. All of your choices fail to impute the proper mens rea to the law schools. You act like they're innocent or naive. But this all exists by a very intentional scheme to profit at the expense of students and taxpayers. Thus I offer option 4:

    (4) Continuing the scam like they've done for the past ten years by falsifying the job placement data as much as possible, vigorously fighting any attempt to stop them (e.g. see law schools' aggressive responses to the Cooley / NYLS lawsuits), continuing to coopt the ABA, continuing to abuse students . . .

  5. DJM, a friend of mine who has done a lot of admissions work echoes your point about the volatility of admissions numbers -- that at many schools the crucial median LSAT score depends on the eventual decisions of a handful of admits, and that even a slight change in the overall market can cost a school a precious point or two. So as you say, change may be coming sooner rather than later. (I will be particularly interested to see what the total number of applications to law schools look like in March. The bulk of the high profile mainstream media critique has taken place after this year's 1L class was mostly in the pipeline).

  6. More and more law professors writing about ever more arcane topics that have no use in the real world. I'd rather have our tax dollars go scientific research to help find better treatments for cancer than fund some of the sophist babble nonsense Professor Leiter rambles on about. What a #$*&^%$ waste!!!!!!

  7. or just do what Paul Pless did, make the number up.

  8. I'll chip this in as I get ready to meet my daughter at school for lunch (a benefit of my current situation) - the change I see coming will concern those school which are private and with lower in the USNWR rankings. They will feel the crunch. HYS will not, at least not as directly. My blessed alma mater is among those private institutions that must dance for their dollars. And dance they will.

  9. So, what is the real effect if applications dip anyway?

    There will be a smaller pool of applicants at each school, on average, but still more than adequate.

    Average GPA and LSAT could drop...why does this really matter, in the larger scheme of things? Obviously one does not need to be increasing in the rankings to charge $30 or $40k per year in tuition. Plus, since specific law schools aren't being singled out so much, if most of the schools take lower numbers, how much will change in the rankings anyway?

    Shit, this might end up ensuring that the schools have LESS applicants that qualify for merit scholarships. That way they'll actually net even more tuition dollars per year!

    Totally anecdotal, but I've already seen hundreds of "wannabe 1Ls" going on tours of my local law school for next year...and it's only December!

  10. Crux, a very interesting question is how far inland the tsunami is going to go. HYS is one group, but what about the rest of the top ten? I've heard lots of bad things about life in the bottom third of the class for people at other top ten schools. Then what about your Northwesterns and Georgetowns? Can they keep living the high life more or less indefinitely? (I think it goes without saying that the current model won't continue to work for anybody outside the top 15 or so).

  11. I would expand on option (2) further by saying that many law schools will heavily recruit foreigners. There are tons of them who come from families who can pay cash in full and are willing to do so for the reasons cited.

    Although there may be a limit to the number of Americans in this position, there are a lot more foreigners to be scammed.

  12. When the number of LSAT takers declines low enough, then there will be empty seats in law schools. That is when you will see realy change happening.


    The number of LSAT test-takers was down 16.9% in October compared to the previous year. And it was the fifth straight LSAT administered to show a substantial decline from the same test the year before. The two most recent exams—June and October—had the largest year-to-year declines, 18.7% and 16.9%

    Only around 63% of the people who took the test applied to law school

  13. "So, what is the real effect if applications dip anyway?"

    Now law schools only have to turn away 90,000, instead of the previous 100,000, applicants.

  14. 11:12: This past year there were 78,900 applicants for approximately 50,000 spots at ABA schools. Since a very large percentage of applicants are not willing to apply to schools below various ranks, it's quite likely that lower-tier schools will soon have trouble filling all their seats. Indeed at least a couple of lower tier schools have already reduced their incoming class size for next year.

  15. It's already happening in the rest of higher education:

    "About 57,000 Chinese undergraduates, most paying full tuition, attended U.S. colleges in 2010-2011, six times as many as in 2005-06."

    As colleges continue to expand and grow like bunnies in heat, as the ranks of administrators and professors continue to swell, the only way to keep the whole system from collapsing is the ever continual need to pump an ever greater number of people into the system. Visa restrictions and red tape might hamper this for awhile, but that is why the ABA is quickly getting started on accrediting more schools in such politically repressive places as China. The American Bar Associatiion, "Defending Liberty, Pursuing Justice."

  16. 10:58 brings up an important point and one that is becoming a more visible factor in the dynamics of higher education in this country. Specifically, it is likely that foreign students - most likely from China - will increase their numbers in US law schools as they are in US undergraduate institutions.

    It's certainly an unknown as to how many will do this, but the fact remains that there are significant numbers of potential Chinese students who have parents with the resources to pay cash for additional education, and the perception is that the quality of education in the US is far better than what they can receive in China.

    What I've described has been going on in the housing market for years - if not decades - and is now happening in the market for undergraduate education. There's nothing o prevent this from spilling over into law school.

  17. Lawprof @11:52 - don't you think the more likely scenario is that those lower schools will keep lowering their standards until pretty much anyone with a heartbeat can get in a la the University of Phoenix model?

  18. When does it become a farce? I mean the professors (even at dumps like Cooley and Touro) are reasonably smart people. When does it become so bad and the teaching become so pointless that you need to run out of the classroom screaming? There comes a point where the troglodytes you are teaching can't even write on a high school level, or grasp even the most basic of concepts. I wonder how frustrating it must be to teach basic legal writing at one of these tier 4 dumps.

  19. Prof. Campos, seriously curtailing the number of new graduates seems the only option to better the economic lives of current and future attorneys. I am unfamiliar with the ABA policies, but what would be required to simply get rid of the bottom 100 schools. The surviving schools could be divided up by reserving one public school for each state (including reserving one blank spot on the rolls for states that don't currently have a public school like DE), allowing the Tier 1 private institutions to continue, and then dividing up the remainder by state population for additional public schools. Why do we allow the existence of those private law schools charging the equivalent of Yale or Harvard that flood the market with desperate new JDs?

  20. Sorry, should have been "Tier 3 and 4 private schools charging the equivalent of Yale or Harvard".

  21. So you're proposing that we should use US News Standards, which spurred a lot of the problems we see today, to decide which law schools to close?

    If that's the case, then I guess all that number fudging and those tuition raises to "spend more per student" were worth while after all.

  22. Yes, I'm proposing that we use the US News standards. If law schools are willing to grossly contort themselves to live up to those standards using our tuition dollars, why can't we use them as a quick shorthand? My only intent was to move the conversation along without having to create a new rating system from scratch. My main point is that we need to get rid of a ton of law school seats and this was a simple way of starting a conversation. Sorry if I offended.

  23. 12:02: Cutting standards even further exacerbates another problem, which is that a larger and larger portion of a school's class isn't able to pass the bar. My understanding is that the least-qualified (in terms of admissions numbers) students at some lower tier schools have extremely low bar passage rates, and in fact I've been told that some schools will admit people who have numbers that predict a 0% chance of passing, for example, the California bar. That seems like another thing that schools should be required to disclose before they take someone's money.

  24. My point was that law schools don't care as long as they get their money. Currently these schools don't care that they send off their students into a lifetime of debt and very little in job prospects while, as you point out, their bar passage rates are already rather low. As all evidence suggests these schools aren't going to really be concerned if standards are lowered that much more.

    As a side note, and adding to what has already been discussed, law schools don't really prepare you for passing the bar anyhow. I have a good friend who went to NYU and din't pass the bar the first time around because he was focussing on a different career path and didn't have time for barbri. The second time around he [aid for the course and passed with flying colors.

  25. It seems to me presently and has seemed to me for years that the only sane and responsible answer is indeed to remove at least half, and more honestly two thirds, of the law school seats by whatever mechanism is necessary (whether ABA governance, federal government direct intervention or denying federally insured student loans to students at most law schools). Any other proposed solution is merely suggesting a bandaid for a wound that needs a lot of stitches.

    I refer to another link from a respected and genuinely concerned legal consultant advocating the same:

  26. Unfortunately we all know how the ABA operates so I think the biggest hope is the federal loans route. The banks are no longer involved so lobbying and political capture is not as much of a worry.

  27. *flexes in the mirror*

  28. Actually, do any of us understand how the ABA operates? I think we have a good idea of what it does (and doesn't do), but how does it actually operate?

    Anyone know, for instance, how the ABA President is chosen?

  29. I imagine it's competitive because the ABA Pres makes like 600k.

  30. It's the executive director who gets $600k, not the President. But, that just lays on more layers. How is this guy chosen? What are his duties? What exactly does the ABA President do? How are the key committees selected? And who keeps sticking those annoying stickers on the magazine telling me to pay my dues?

  31. 12:16: They don't have to care about the declining quality of their students because under the Langdellian/Socratic system of law school they never have to engage with them. Students are evaluated on the basis of a single curved exam at the end of the semester. Once the grading is done and the scores sent to the Registrar to be curved professors can forget about all but the top students. The school sets the curve, so the professor really can't do any "favors" by failing out students who aren't likely to pass the bar or get jobs. And since a curriculum that involves students working closely with the professor to improve on their work would cut into their scholarship, professors have no incentive to deviate from the traditional Langdellian model.

    In the end, despite all the lofty rhetoric and defense of a system of law teaching and evaluation over a century old, the simplest explanation for the durability of the Langdellian model is that it allows professors to teach large classes of students without having to design new lesson plans each year or provide students with feedback. This allows the school to keep the number of tenured faculty low and allows faculty to devote most of their time to scholarship.

    I find it interest that at my law school, any course where the teacher is expected to give feedback and edit student work, like Legal Research and Writing, Trial Practice, Deals, Negotiations, clinics, and other simulation courses, are taught by adjuncts, clinicians, and post-grad teaching fellows.

  32. Has anyone looked into the disconnect between the American Bar Association whom grants accreditation to a law school and the respective state bar associations whom make the determination if a graduate of one of these "accredited" schools is competent in the subject matter? It is only with passing the bar exam (and associated C&F) that the graduate may legally employed in that state as an attorney. If The ABA is accrediting schools that either accept students with no reasonable chance of passing the bar, or simply fails to educate them properly leading to the same result, what gives? This creates a population of graduates whom cannot work and therefore cannot pay back their loans. I can't make sense of it, but apparently this is the status quo.

  33. Crux, I'm not really sure what you're getting at.

    The ABA certainly shouldn't have the final say on whether you're fit to practice, the bar exam has a use. And, states certainly have an interest in saying the bar exam isn't the only criteria, you also need this education on top of it. But, it doesn't make sense to have 50 different state accrediting bodies, which would create different standards; a central body makes more sense.

    Now, it would probably be more logical for the ABA accrediting committee to be selected by the state bars.

  34. The ABA does have criteria for bar pass rates. Schools are supposed to maintain bar pass rates within a certain percentage of the statewide average. If the pass rates drop too low, then they lose their ABA accreditation. This does happen: the University of La Verne Law School (in California) lost its ABA accreditation earlier this year for just this reason.

    If this rule is rigorously enforced over the next few years, then it has the potential to endanger a lot of low-ranked law schools. They may have to lower their admissions standards to keep their enrollments up, but in this case their bar pass rates will likely fall as well.

    On the other hand, the rule may not be rigorously enforced. For example, La Verne is re-applying for provisional ABA accreditation, and ABA is reportedly "fast-tracking" their application. For now, La Verne is operating as a state-approved school; their graduates are eligible to take the Bar in California, but not necessarily anywhere else.

  35. For details, google "ABA Standards for the Approval of Law Schools, Interpretation 301-6"

    The ABA basically wants to see a pass rate of at least 75% for all takers. Or a pass rate within 15% of the statewide average for first-time takers.

  36. My comment at 6:58 PM was, upon a second reading, inarticulate at best. I was thinking of those recent law school graduates who do not pass the bar. I have read that many state's pull back the reigns on attorney admissions during economic downturns, essentially failing a greater percentage of applicants. If this is true, what happens to that population of graduates? They cannot practice law (assuming a job is available or offered) and they have loans to repay. Seems a tight spot to be putting people in.

  37. Do I really have to pay them back even if im not the "bad guy?"
    What is the fastest, and easiest way to get past this?
    Also, MOST IMPORTANTLY, I am a law student. I didn't disclose this on my application for admission into the law school (but in all fairness the questions didn't really ask). Could I get through the bar admission application (character & fitness) process with this in my history? (im assuming they will likely find this out)

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