Mistaken beliefs about the crisis of the American law school: "It's the economy"

Recently I had dinner with a friend who teaches at a top ten law school.  He's well aware of how bad things have gotten, comparatively speaking, for his school's graduates, and spoke candidly about the extent to which his school and others like it are resorting increasingly to hiring their own graduates into short-term post-graduate positions. (Some numbers:  Cornell hired 6 of its own grads in 2010 and 26 in 2011. Columbia hired ten grads in 2010 and 38 in 2011. Virginia hired 10 grads in 2009, 40 in 2010, and 64 -- 17% of its class -- in 2011.)

I noted his school had once again increased tuition in real dollars (that is, more than inflation) for 2012, and asked him if he had any idea what his school's administration was thinking.  He told me they're thinking that this is all a temporary blip, driven by the recession, and that "soon" the big firms will be hiring as many entry-level associates as they were five years ago, and we can leave all this unpleasantness behind us (he himself is skeptical about whether this will actually happen).

I run into this line of thinking all the time, including at schools where it doesn't even make superficial sense -- which is to say at the 80% of law schools which at no time have sent more than 10% of their grads to big firms.  This is just the most obvious problem with the "it's the economy" response many legal academics and especially law school administrators tend to have when confronted with the increasingly dire employment and salary statistics of their graduates.

Columbia and Cornell and Virginia may be able to rationalize their current tuition structure if and when big firms get back to hiring as many entry-level associates as they were hiring five years ago (although even most elite schools must be approaching tuition levels that can't be raised much above inflation going forward -- is Cornell really going to be charging $78,000 per year by the end of the decade?), but what about the dozens and dozens of schools that decided they could charge nearly as much as the elites, even though even at the best of times only a handful of their graduates were getting jobs that justified such prices?

Here's another big problem with the "it's the economy" excuse for doing nothing, or burbling about helping graduates pursue (largely imaginary) alternative careers outside of traditional legal practice:  A general economic recovery, to the extent one takes place, is likely to hurt legal academia's bottom line more than it will help it.  To see why this is the case, consider this story, which indicates that for college graduates the opportunity cost of going to law school remains at something approaching an all-time low.  If more than half of all recent college graduates are un- or under-employed, this should be a positive boon to law school admissions numbers, since the real cost of going to law school is much lower than it would be if applicants could get decent jobs upon graduating from college.

Instead, despite the awful employment market for new college grads, the applicant pool for law school is crashing.  Now what do you suppose is going to happen to law school applications when, in the context of a general economic recovery, recent college grads consider whether they want to take a $40,000 job doing 40 hours of boring work per week, or whether, in the alternative, they should pursue the "prestige" inherent in a job that pays about the same salary, but requires 60 hours per week of equally if not more unpleasant work, but which also requires removing yourself from the labor market for three years and taking on $150,000 of high interest debt for the privilege of acquiring it? Which is to say that if the opportunity cost of going to law school rises more quickly than whatever job and wage growth takes place in the legal sector, then such growth as does take place is not going to help law schools out of their current predicament.

Put bluntly, nobody who has anything resembling a halfway decent alternative is going to sign up for the kinds of legal jobs most law graduates who are even getting legal jobs at all are currently getting, and likely to get going forward.  In other words, if and when the overall economy gets significantly better than it is now, the cost-benefit structure of legal education will appear absurd on its face to even more potential applicants than it does at present.