Mid game

Several commenters have asked me whether faculty are discussing the issues raised in this blog and, if so, what any of us see as the endgame. At mid-week, it's relaxing to write a post that's all speculation--none of those pesky facts or studies! So here are my thoughts.

First, I do know quite a number of faculty--at my school and elsewhere--who are discussing these issues. Their views and awareness differ, but the comments arise far more frequently in conversation. There's still a tendency everywhere to think that "our school is different," but there is steadily growing concern.

As for predictions, I can't see the endgame from here; the economy and profession are changing too rapidly. But here are four predictions about what might happen by the end of the game's first quarter (roughly within the next two years). I offer these with the hope that I won't be much further off than the average sportscaster:

1. This summer will produce shock waves at almost every school. Applications are down, including among those who scored highly on the LSAT.  In addition, based on comments at sites like top-law-schools, 0Ls are much more reluctant to pay sticker price outside the T14. Even some applicants with multiple offers in hand are still weighing whether to attend law school at all.

Schools outside the T6 almost certainly will have trouble filling their seats with applicants as qualified as the ones they currently enroll. The challenges may be greatest at schools ranked roughly 15-100, who will face pressure on three fronts: (a) fewer applicants in their original pool, especially at the higher LSAT levels; (b) more competition from schools ranked just above each of them, who are dipping further into their own pools; and (c) more competition from the schools ranked just below each of them, whose scholarship offers will be more tempting to applicants than in the past.

A significant number of schools at every level may pare class size to maintain LSAT and GPA levels. Alternatively, they may end up inadvertently under-enrolled because students change their minds in late summer. This summer probably will be a volatile one for admissions, with lots of students admitted off waiting lists who leave gaps at other schools.

The schools that do cut class size may face a sobering outcome: the unfilled seats are likely to be full-price ones. I suspect, in other words, that schools will continue offering scholarship money to attract the best students; they may even push those budgets to maintain their entering-class profile. When classes start in August, the missing bodies may be ones who would have paid full tuition. Losing 10-25 students at the "average" seat cost isn't too bad; losing 10-25 students who would have paid full tuition for three years is a bigger blow.

If shocks like this occur, then many more faculty will start talking about tuition, job outcomes, and other issues on this blog.

2. Tuition won't rise nearly as fast as it has in recent years. Some schools may even freeze tuition to attract students, although I think few will go so far as to roll back sticker price. Instead, schools may try to increase scholarship offers, de facto lowering tuition. Scholarships are an appealing way for schools to cut tuition, because they can differentiate among applicants.

Some schools may find other ways to court students by cutting students' anticipated costs. A thoughtful school, for example, could guarantee all of its students "scholarships" for credit-earning summer externships. Essentially, the school would say to applicants: "If you attend our school and don't find a paying job after your first or second year, you will be able to enroll in our summer externship program without charge. That summer externship will help you learn skills, make workplace connections, and build your resume--and you'll get free academic credits to boot!" This would be attractive to students, and would not cost schools very much. Externship programs are inexpensive to run, and most students pay for a full six semesters of law school even if they earn some credits one summer. A creative student in my "Business of Law" seminar wrote a paper developing this idea.

3. Schools will begin looking for new sources of revenue. They are likely to admit more international students to both LLM and JD programs. They may also create revenue-generating courses targeted at practitioners. These courses would offer more depth than CLE workshops, but without the commitment of full degree programs. Despite often-justified criticisms of law professors, every school has at least a few faculty who have useful technical knowledge and decent presentation skills. As law firms and other organizations become leaner, they may find this type of training increasingly cost-effective.

The internet may help schools tap some of these revenue sources. A few schools have already started offering internet-based courses to LLM students in other countries. Practicing lawyers and professionals in allied fields (e.g., human relations) are also excellent targets for internet-based training.

4. Schools, students, and employers will adapt to new hiring patterns. I don't think the boom times of 2007 will come back--certainly not within the next two years. The new patterns will vary by law school prestige and geography, but some likely overall trends are:

(a) More externships, volunteer positions, and fellowship-funded positions during the 1L and 2L summers. These positions will give students useful practice experience, but at a worrisome financial cost: the rise in student debt flows, not only from increased tuition costs, but from a decline in paid employment during law school.

(b) More staff attorney, career associate, contract attorney, and other "alternative" positions at law firms of all sizes. Some of these positions will have positive features: Full-time staff attorneys and career associates may handle interesting work, while maintaining more regular hours than partnership-track peers. At least some of these full-time positions pay better-than-average salaries, and the full-time jobs usually include benefits. But even the most desirable jobs in this category make it difficult for graduates to pay down their law school debt. The increasing number of these jobs will challenge law schools to address tuition costs and debt; the question is whether schools will rise to that challenge.

(c) Much more mobility and part-time work during the first 2-3 years after graduation. The job market overall is unstable, and new lawyers clearly are having a hard time establishing themselves. We'll continue to see graduates moving among contract positions, government jobs, fellowships, and law firms. My informal contacts suggest that this movement is multi-directional. Some BigLaw hires are downsized to less remunerative work within two years of graduation. Other graduates who initially took fellowships or part-time gigs have landed associate jobs at solid law firms.

(d) Increased emigration. American JDs have value abroad and, as the domestic job market remains rocky, foreign jobs may become more attractive. US firms are also continuing to expand overseas offices. Law students, meanwhile, are increasingly likely to have lived or worked overseas, to have friends in other countries, and to feel comfortable relocating to another nation. Whether employed by a US firm or an overseas organization, we may see more alumni skyping into reunions.

Whatever the trends, we'll know much more about them in two years than we do now. I'm starting to research new career paths among our graduates, and I suspect faculty or administrators at other schools are doing the same. That research, if it happens, will be very beneficial to current and future students--and even to some alumni.

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Notice that my "first quarter" predictions do not include massive closings of law schools. It's possible that some law schools will shutter, and I think that would be a good result. But law schools have a lot of resources and considerable fat to pare from their budgets. Meanwhile, although the applicant stream has diminished, it is still large enough to fill all existing seats at law schools. At least during the next two years, I think we'll see reduced class sizes rather than closures. What happens after that may depend on how schools themselves react during the next two years, especially on predictions 2-4. Will we find ways to attract more students by cutting some costs? Will we find new sources of revenue? Will we place more of our graduates abroad? Will we find out more about the new job market so that we can help our graduates better navigate those waters? 

Somewhere in there, I also hope that schools will modify parts of their academic programs. Relatively modest changes could make a significant difference in preparing professionals--and perhaps even in placing them in better jobs. But that's a matter for another post.