Wednesday, November 30, 2011

Would you go to law school today?

Here's a question for everybody in the legal profession, from 1Ls facing their first exams to people who have spent decades practicing law (It should be especially germane to legal academics in particular):

If you were given what in our sandlot baseball games we used to call a do-over, would you go to law school today?  By this I mean, if you were in the same place in life you were at when you enrolled in law school, would you do it again, given what you now know both about this profession, and about the changes in the costs and benefits of entering it?

Monday, November 28, 2011

Back to basics

Legal academia is very much on the defensive at the moment, which is all to the good.   The mixture of outrage and pearl-clutching which greeted David Segal's latest entry in his series in the New York Times on the state of American legal education is a sign of, if nothing else, the extent to which law school faculty and administrators are finally noticing that we are dealing with that most dreaded of things, a genuine public relations crisis.  (Unlike the economic and personal disaster which has been overwhelming a growing percentage of our graduates for many years now, this is one crisis which cannot be ignored).

Given that reaction, this seems like a good time for a restatement of some fundamental points, to help avoid a deflection of the conversation into tangential issues such as the actual value of legal scholarship, how much law professors get paid, how much Socratic method nonsense still inhabits our classrooms, etc.  (Many thanks to Matt Leichter's invaluable Law School Tuition Bubble for collecting and analyzing much of the data cited below).

POINT ONE:  Over the past 20 years, the share of the nation's GDP attributable to the legal services sector has deteriorated significantly.  In the late 1980s, the legal services sector represented slightly more than 2% of GDP (the same percentage as in the mid-1970s).  As of 2009, that figure had declined to 1.37%.  Contrary to the standard narrative within legal academia, which assumes an increasing or at least steady demand for legal services relative to overall economic growth, the demand for legal services within the American economy has been declining, relative to the rest of the economy, for the past  two decades.  In other words, "law" (as an economic entity) appears to be a mature industry in relative decline.

POINT TWO:  The rate at which American law schools are producing aspiring lawyers far outstrips the demand for new lawyers, and this has been the case for many years now.  The Bureau of Labor Statistics estimates that the economy will produce an average of approximately 24,400 new jobs for lawyers per year over the next decade.  ABA-accredited law schools are producing 45,000 new graduates per year, while non-accredited schools produce several thousand more (Approximately 53,000 people pass state bar examinations each year).  An important sub-point about these statistics is that the BLS estimates are not for how many jobs will be filled by new law school graduates: they are for all new legal jobs.  What this means is one can't assume, for instance, that half the 50,000 aspiring lawyers (conservatively speaking) that enter the market each year will get law jobs within a year of graduation, since some of those new jobs are going to be taken by people already in the market for attorney jobs who were not currently employed as attorneys. Obviously, this problem gets worse over time, as the surplus of lawyers without law jobs continues to increase.

POINT THREE:  The cost of law school is, in economic terms, arbitrary.  Given the faith in well-functioning markets that well-functioning citizens in our society are expected to maintain, this point is extremely counter-intuitive, but it is, given points one and two, essentially undeniable.  For more than twenty years now, the demand for the services of American law school graduates has been declining relative to the demand for other economic goods (not constantly, of course, but the overall trend is clearly negative).  For much if not all of that same time, the output of American law schools has far exceeded the demand for that output, and now appears to be in a roughly two to one ratio.  Yet since 1985, tuition at private law schools has increased by 2.5 times in real terms, while resident tuition at public law schools has increased more than fivefold, again in real terms.  In other words, over the past quarter century, the relative change in the cost of acquiring a law degree has borne no rational relationship to the relative change in the value of a law degree.

POINT FOUR: There is, to this point, almost no sign that this arbitrary relationship between the change in the cost of acquiring law degrees and the change in their value is going to move toward a more orthodox economic relationship, in which the decreases in value trigger decreases in price.  Law schools continue to raise tuition at far faster than the rate of inflation, and the market for the graduates of law schools -- which it bears repeating has been bad relative to the rest of the economy for many years, for reasons that have nothing to do with the recession that began in 2008 -- continues to deteriorate.  An extrapolation of current trends into the very near future, i.e., four years from now, suggests that private law school tuition will average $50,000 per year, and will be more than $60,000 at some schools, while average resident tuition at public law schools will be as high as private law school tuition was in 2007.  This means that the total cost (tuition and related expenses, plus opportunity cost) of attending law school will be approaching $300,000 for many students and will be at least $200,000 for the vast majority. Meanwhile, it appears that around half these graduates will not have real legal careers, defined as long-term employment in jobs requiring law degrees, and that indeed for a significant percentage of them acquiring a law degree will have made them less employable than they would have been otherwise (In other words, for these graduates, law school will have turned out to have been a bad investment even without regard to the direct costs and opportunity costs incurred by attending it).

POINT FIVE:  These otherwise unsustainable trends are being maintained by a combination of unlimited federal educational loan money and, to a lesser extent, poor information regarding the actual relationship between the costs and benefits of acquiring a law degree.  Any significant change in either of these factors, but especially the first, will lead to a massive disruption in the current economic structure of legal education in America.

Sunday, November 27, 2011

Brave new world

This weekend the New York Times ran an editorial with a good first sentence ("American legal education is in crisis"). What followed was a rather confused analysis of that crisis, which failed to grapple with its essence, which is that the cost of acquiring law degrees from ABA-accredited law schools has gone through the roof at the same historical moment when the market for the services of the graduates of those schools has been contracting.  This is a very bad development for people with law degrees. Making law graduates more "practice ready" upon graduation would shift some of the costs of these developments somewhat among lawyers, i.e., from recent to older graduates, but it would not in itself make legal education any less expensive or any more remunerative for lawyers as a class.

The problem, in short, is that at present ABA law schools are pumping out two graduates for every available legal job, and that the cost of acquiring what jobs there are has gotten far too high. No amount of pedagogical reform by itself is going to change that.

Predictably, legal academics have jumped all over the Paper of Record for the editorial's short-sightedness.  Commenting on David Segal's article last week on the same subject, Larry Ribstein observes that an article he's written

Suggests that law schools should teach law students how to be architects and designers rather than mechanics.  The lawyers of the future will focus, more than today’s lawyers, on the building blocks of law. Computers and non-lawyers will handle the mechanical tasks. Training lawyers demands the sort of theoretical perspective that Segal disdains. * * * The real problem * * * is not that law professors are teaching theory rather than the way to the courthouse, but that their choices of which theories to teach pay insufficient attention to the skills and knowledge today’s and tomorrow’s market demands.
I agree with what I take to be one of Ribstein's implicit points here, which is that it doesn't make any economic sense to charge people $150,000 so that they can be licensed to perform routine tasks that can easily be outsourced to non-lawyers and even machines, and that an educational model based on doing so is unsustainable in the long run.

What this line of thinking doesn't acknowledge is that, to spin out Ribstein's metaphor, society (or if you prefer, "the market") doesn't need nearly as many architects and designers as it needs mechanics.  The Carnegie Foundation/McCrate Report criticisms that appear every 15 years or so point out that law schools aren't very good at producing legal mechanics, which is true.  Ribstein et. al. point out that, given the rapidly changing nature of the market for legal services, it's not an efficient use of social resources to dedicate three years of very expensive postgraduate education to producing legal mechanics, which is also true.

But does it follow from these criticisms that we ought to be trying to reconfigure law schools in their present form to produce 50,000 legal "architects and designers" per year, at an average cost, including opportunity costs, to these hypothetical proteges of the brave new legal world of more than $200,000 each? I don't think that follows at all (Of course all this assumes it would even be possible to restructure the American law school in such a way as to perform this impressive feat.  As the old econ joke puts it, assume a can opener).

A more realistic goal, in my view, is to focus first on producing fewer lawyers per year at a much reduced cost.  That goal requires less in the way of visionary speculation and more in the way of political will to face up to unpleasant facts.

Wednesday, November 23, 2011

The birth of a salesman

I've striven mightily over the past three months to avoid turning this blog into a forum for encouraging squalid little arguments between law professors, but Dave Hoffman's post on Concurring Opinions exhausts my capacity to avoid public exasperation, given how it attributes imaginary views and preposterous behavior to conveniently clueless straw men, before moving on to avuncular -- and shockingly self-revealing -- ruminations, intended to "help" the increasingly desperate and confused students paying his salary.

Hoffman claims that David Segal and I "argue (ironically) that law schools are contributing to the problems of the legal profession by not raising higher barriers to entry."  I don't know what would be "ironic" about that argument, but in any case I've certainly never made it, and if Segal has I haven't seen where (a link would be nice).  Hoffman then proceeds to fantasize about the idiotic behavior that I, apparently egged on by the nefarious Mr. Segal, must engage in when students ask me for career advice, early in the fall of their first semester of law school:

Monday, November 21, 2011

The cost of legal scholarship

Over the past few weeks I worked with David Segal of the New York Times to create estimates of how much tuition money ABA-accredited law schools currently collect, how much legal scholarship gets published, how much of the former is used to pay for the latter, and how these figures have changed over time.  It was an interesting and fun exercise, and some of the results were published yesterday.

In this post I'm going to review the raw numbers involved in the analysis, which are quite striking in a number of ways.

Sunday, November 20, 2011

Skin in the game

Akhil Amar and Ian Ayres have a piece in Slate that features an ingenious scheme for requiring law schools to tie their own financial welfare more closely to that of their graduates.  Amar and Ayres insist that if law schools want to continue to fund their operations via federal loan money, they should have to disclose the professional and economic status of their graduates -- and not merely after graduation, but for a decade afterwards.

The latter point is becoming more important all the time, as it becomes increasingly the case that even those "lucky" graduates (perhaps 15% of all law school grads) who acquire high-paying big firm jobs at graduation find themselves scrambling for much-lower paying and less glamorous positions a few years later, while still carrying educational debt loads that can no longer be managed on the salaries they'll now be making. (This assumes -- and with every passing year it becomes a more problematic assumption -- that laid-off big firm associates go on to get other legal jobs).

The authors also make an excellent point when they argue that schools should have to dis-aggregate graduate information in a way that would allow prospective students and people completing their first year to consider the long-term outcomes of graduates with records similar to their own (It's one thing to think you'll be the exception to the rule when you're making that bet in a relative informational vacuum: it's quite another when you realize before you enroll or after your first year that literally no graduate from your law school with your credentials is making as much as $60,000 per year three years after graduation).

But Amar and Ayres are well aware that greatly increased transparency only begins to address what they with refreshing straightforwardness call "the crisis facing legal education."  Their analysis recognizes that better information about employment and debt ties the financial fortunes of law schools to those of their graduates only indirectly.  Further, as long as law schools don't pay any collective price for the lottery ticket mentality of their more irrationally optimistic students, they'll have no self-interested reasons not to continue to cultivate that mentality.  Hence what's needed is a device that will both help more students sober up before tossing good money after bad, and hit law schools in their pocketbooks when students who should drop out are given some powerful incentive to do so.

Amar's and Ayres' refund proposal -- which would require law schools to give back half a student's first-year tuition if the student drops out -- does just this.  It's of course not the only way to force law schools to put more of their own skin in the game, but it's a thoughtful attempt to grapple with what is perhaps the most fundamental financial problem with the current structure of legal education: that the rewards that flow from the billions of dollars in federal government loans taken out by law students every year are front-loaded onto the current bottom lines of law schools, while the risks of those loans are back-loaded onto students and (eventually) taxpayers.

I'm also glad to see the authors deal head on with the question of a potential conflict of interest:

In making this proposal, we might be accused of having an institutional conflict of interest.  We’re pretty confident that few students at Yale (like few employees at Zappos) would take the bribe to quit early. But if we’re right, this is something about which to be proud. If 20 percent of the students at another school took the offer, applicants might think twice before enrolling. And if the percentage taking the rebate becomes too large, government should think twice before lending.
 Precisely. No one (as far as I'm aware) has yet argued that a JD from Yale Law School is, all things considered, a bad bargain.  On one level, the whole problem with contemporary legal education is that 199 other law schools are to greater and lesser extents trying to be Yale Law School, when it makes sense for perhaps five or ten of them to engage in that particular enterprise.  The Yale model appears to work, by and large, for Yale graduates.  A cheap knockoff (although cheap is hardly the right word) of the Yale model doesn't work -- in either academic or economic terms -- for the vast majority of law students who are subjected to it.

This article is a very encouraging sign that people at the top of the legal academic hierarchy are coming to grips with the extent to which the basic economics of law school no longer make sense. Even more encouraging is Amar's and Ayres' recognition that what they quite properly call the crisis of contemporary American legal education requires a much more creative response than the kind of mildly reformist tweaking almost always advocated by people at the top of the social heap.  That two people at the top of our particular heap have come up with such a response is very good news indeed.

Friday, November 18, 2011

Thinking like a lawyer

A reader makes a good point:

No one is talking about key data that has always been readily available that should create suspicion about law school employment figures. That data is each school's bar passage rate. I graduated from a law school with a 76% first-time passage rate and a 99% employment rate within 9 months of graduation.  This data tells me that it is highly unlikely that much more than 76% of the graduating class enjoys full-time permanent employment in a job as a lawyer.  Sure, some non-passers may be at firms that are willing to keep them on for another try.  On the other hand, an equal number, if not more, of those first-time passers likely went on pursue an LLM.

While more transparency is needed with respect to job and salary information, I don't think it was ever reasonable to believe that a higher percentage of law school graduates secured permanent, full time employment as lawyers than passed the bar exam on the first try. 

For a striking demonstration of this point, check out the remarkable differences between the nine-month employment rates and the bar passage rates in this table  (Note that the employment rates here are slightly higher than those published by USNWR in the relevant years, because they were the "raw" numbers reported by schools, before they were adjusted by USNWR, by treating the employment rate among graduates for which schools reported no data as 25%. Also, while it's true that it's possible for a law school grad to have a job with a legal employer without being licensed, few legal employers will tolerate that situation for long).

A related point is that the NALP data on how many graduates had full-time jobs as lawyers nine months after graduation (note this stat includes temporary as well as permanent positions, so it's a generously broad definition of what's a real legal job) has over the last decade consistently hovered around 65% to 70%.  While it's true this data is aggregated, i..e, it's still not available to prospective students on an individual school basis, you don't need to be a math major to figure out that if USNWR has been reporting nine-month "employment" rates of over 95% for the vast majority of schools in the top 100, and even quite a few in the third tier, something about these numbers has never added up.  (In the 2010 USNWR rankings, that is, well after the recession had gotten rolling, 73% of first and second-tier schools reported a nine-month employment rate of 95% or higher, and the lowest reported rate among these 100 schools was 89.5%).

So in a sense, it should have been easy for prospective law students, over the past decade, to figure out that the employment numbers being touted by law schools were essentially fake.  All they needed to do was to go into the process of researching law schools without making any prior assumption that anything law schools -- or the ABA Guide, or USNWR, or the Princeton Review, etc. etc. -- said about law school employment stats was actually true.  In other words, ironically enough, they just needed to be thinking like (good) lawyers.

Thursday, November 17, 2011

More signs of progress

(1)  U.S News & World Report is going to do an extensive story, which will be published as part of its annual March rankings issue, primarily regarding the factors prospective law students should consider before deciding to go to law school. I did a long interview with the story's author yesterday, in which I tried to explain the various reasons why, in my view, a large number of the people currently considering law school should do something else instead, as well as what factors people who do end up going to law school should take into account when choosing which school to attend.

The major points I emphasized were that, leaving aside conspicuous consumers of higher education, nobody should go to law school with any intention other than to practice law, and that this intention needs to be based on some sort of genuine knowledge regarding what practicing law entails; that 0Ls need to understand what non-dischargeable debt is; that they need to do serious research regarding the actual employment situation of recent law grads; and that they need to do all this before actually applying to any schools and ideally before taking the LSAT, so that they can get some sense of under what conditions it might make sense for them to go to school X, Y, or Z before they know how likely it is that they'll be able to get into one or more of those schools.

I also gave my views on how much weight students should give to scholarship money versus prestige (a lot), how much attention they should pay to claims schools make regarding the extent to which they actually prepare its students to practice law (none), and under what circumstances it makes sense for a student to pay full tuition to go to a middling or low-ranked school (very few). 

Afterwards the reporter sent me this request:

For any recent graduates or current students who might be interested in speaking to me, I’d really love the perspective from folks on why they chose law school (Colorado or elsewhere), how their expectations have or haven’t been met in the process, what their career aspirations are (or were), and any advice they might be willing to share about the law school process.  Again, my target audience is more prospective but some current law students.  I’d love to be as specific as possible in talking with a student about his or her experience, but only to the extent that he or she feels comfortable. 
If you would like to speak to the reporter, send me an email via this site and I'll put you in contact with him.  Obviously USNWR has at present a great deal of power in regard to how prospective law students will view the decision whether or not to go to law school, and I think it's a positive sign that the publication intends to do an in-depth story, accompanying its rankings (that placement will guarantee that almost every prospective law student will see it), which figures to be something other than an advertisement for law schools. 

(2) Via Paul Caron comes the interesting news that USC has decided to suspend indefinitely the launch of its tax LLM program, which was originally slated to start in the fall of 2010, "because of declining job prospects for tax LL.M. graduates in the Los Angeles area. USC Dean Robert Rasmussen reports that the school will continue to monitor the employment situation and will begin the program when it is confident that the career prospects of its tax LL.M. graduates would match those of its J.D. graduates."

I don't know anything about the institutional politics that drove this decision, but I do know that, especially for high-ranked schools such as USC, LLM programs have proven to be extremely tempting moneymakers. (Even a small LLM program will generate several hundred thousand dollars of extra tuition revenue per year, at very little marginal cost to the school).

The decision certainly suggests that the faculty members who designed it developed serious reservations about the program over the course of the last two years, perhaps because the applicant pool was weaker than they anticipated, and/or simply because they decided, as per the dean's statement, that USC shouldn't offer this additional degree, given the state of the employment market. Given that tax LLMs from top schools are often cited as smart investments, relative to LLMs in general, or even when compared to the typical JD degree, this is an interesting development, and may be evidence (again, I know nothing about the specifics of this particular decision) that some law faculty are pushing back against the administrative hunger for ever-more tuition revenue, irrespective of the state of the job market.

Wednesday, November 16, 2011

My son the lawyer

There's an old Jewish joke (it appears in Portnoy's Complaint)  about a woman running down a Florida beach and shouting "Help, my son the doctor is drowning!"  This joke wouldn't work at all if the son were an accountant or a businessman, let alone a policeman or a plumber. It would work -- although given the ubiquity of lawyer jokes in a somewhat ironic way -- if the son were a lawyer.  (Note how a businessman who flourishes in his trade is invariably described as "a successful businessman" while by contrast nobody ever refers to "a successful doctor", and only rarely to "successful" lawyers. That's because a doctor, unlike a businessman, is considered a social success simply by being a doctor).

While there's no question that in America today more social prestige attaches to doctors than to lawyers, doctors and lawyers are the two most commonly cited professions when people speak in an offhand way about social mobility in general, and more specifically about the relationship between educational opportunity and the American dream, so-called (if you type "a doctor or" into Google, the first auto-fill will be "a lawyer.")

There's a good deal of cultural cachet attached to the social identity of the lawyer, or more pompously "the attorney at law," which helps explains an internet thread like this one.  Executive summary: philosophy major with 3.8 GPA and bad LSAT score wants to know if he should go to Michigan State Law School ($36K annual tuition) if he wants to be a Chicago lawyer, or go to a currently lower-rated local law school (John Marshall, $40K) instead, given that in either case he can graduate debt-free. It turns out he can graduate debt-free because "my family is incredibly eager to see their only child+only grandson become a hot-shot lawyer. They do not understand the state of the legal profession, and no matter what horror story I tell them about the legal profession, they simply do not care."

In other words, somebody with a 60th percentile LSAT score and no apparent reason to go to law school beyond the realization that an undergrad degree in philosophy isn't particularly sought after on the job market at the moment is asking whether he ought to in all likelihood light $150K of his family's money on fire. He is advised against this particular course of action, but he's clearly finding it difficult to take that advice:

The one notion that still throws me off is how accessible information is about the "law school scam", and how so many people still attend law school. It makes me think the scam blogs represent those that simply couldn't hack law school, or are socially inept and simply couldn't interview. This is not meant to offend anyone, I'm just trying to gain a better understanding of the information available.
 I don't blame this kid -- and he does come off as a woefully naive young person, i.e., under present circumstances an ideal law school applicant -- for being confused.   "Everybody" knows that lawyers make lots of money and have interesting, sexy, high-status jobs. That's why this kid's family will spend six figures to send him to law school, when they would almost certainly consider the idea of just giving him $150,000 as seed money for living life as an adult to be a completely irresponsible thing to do.  Which, again under the present circumstances, seems more than a little ironic.

Tuesday, November 15, 2011

Sunday, November 13, 2011

The ABA's proposed new standard for acceptable default rates on law school loans

In July, Senator Charles Grassley sent a letter to the president of ABA, asking 31 pointed questions about the ABA's role in accrediting law schools. Stephen Zack, the ABA's then-president, responded with a 67-page memorandum, which was long on reassuring generalities regarding what a fine job the ABA is doing, and short on specific answers to the questions the Sen. Grassley actually asked. Sen. Grassley sent a follow-up letter with more questions a couple of weeks later, to which the ABA's new president duly replied at the end of August.

As far as I've been able to determine, the one concrete step that has so far come out of all this back and forth is a pledge by the ABA Section of Legal Education and Admission to the Bar to come up with a benchmark for what constitutes an acceptable default rate on law school loans by graduates of ABA-accredited schools.  To that end, the Section has published a proposed revision of Standard 510 of the ABA Standards for the Approval of Law Schools.

At present, Standard 510 requires ABA-accredited law schools to "take reasonable steps to minimize student loan defaults."  Reasonable steps shall include provision of debt counseling to students when they first take out law school loans and again before they graduate. (Question: Do any law schools actually provide debt counseling to law students, and if so what does this counseling include?).  "Reasonable steps" are not otherwise defined, so under the present rule it appears that law schools which make provision for debt counseling at the appropriate times, or belong to universities which at least nominally provide such counseling (see below), are in compliance with the Standard, as long as they don't fall afoul of Interpretation 510-1 of the Standard, which states vaguely that default rates "shall be considered" in assessing the extent to which schools are complying with this Standard.

So, in response to one of Sen. Grassley's many concerns, the Section is proposing adding a new Interpretation 510-2 to the Standard:

For law schools not affiliated with a university, the school’s student loan cohort default rate shall be sufficient, for purposes of Standard 510, if it is not greater than 10% for any of the three most recently published annual cohort default rates. If the school’s cohort student loan default rate is not sufficient under this Interpretation, the school must submit a plan for approval by the Accreditation Committee for coming into compliance with this requirement.
An anonymous commenter has pointed out on this blog and elsewhere that this interpretation of the Standard, if adopted, would allow law schools to advertise extremely low default rates. At present and for the foreseeable future almost all law school loans will be directly from the federal government, and since the students taking out these loans will be eligible for Income Based Repayment, people with no prospect of ever repaying back more than a small portion of what they owe can still avoid default, in the technical sense of default, by staying in IBR for 25 (soon to be 20) years.

The ABA's initial response to Sen. Grassley includes a chart of the law school loan default rates at the 19 independent -- that is, non-university affiliated -- ABA law schools. The overall default rate for the graduating classes of 2006 through 2008 was less than one per cent.  Given that these schools include several very low ranked, very expensive instiutions where we can be quite certain that large percentages of the graduating classes are not getting jobs that allow them to make the payments due on their loans, these numbers indicate that the percentage of law graduates in technical default on their loans is a very poor proxy for either the actual financial situation of these graduates, or the risk these loans pose to taxpayers. 

The comments here and elsewhere regarding this proposed revision to the Standards don't mention that this new benchmark for unacceptable default rates applies only to law schools not affiliated with universities, which means that 181 of the 200 ABA-accredited law schools would not have to worry about hurdling even this low bar.  Each of those 181 schools will be considered in compliance with Standard 510 if "the university, of which the law school is a part, provides to law students the reasonable steps described in this Standard."  What this means, I suppose, is that university-affiliated law schools are considered in compliance with Standard 510 if debt counseling is at least nominally available to law students somewhere within the universities with which the schools are affiliated.

I imagine the reason the ABA is considering applying nominally stricter standards to the 19 independent ABA-accredited schools is that those schools are subject to direct regulation by the Department of Education, in a way that university-affiliated law schools are not (I'm guessing that for federal regulatory purposes the default rates that count for university-affiliated law schools are the overall default rates of graduates the universities with which they're affiliated.  Hopefully people who know more about this subject than I do can clarify the situation).

Of course if the ABA Section of Legal Education and Admission to the Bar wanted to create benchmarks that would at least begin to measure the extent to which law graduates are having trouble paying back their loans, it could do so quite easily, by for example requiring law schools to report how many of their graduates are eligible for IBR nine months after graduation (at some schools this figure probably approaches 90%).  But the Section, whose membership features a large number of law school administrators and faculty members, doesn't seem interested in doing anything like that.  Instead it appears to be creating a new standard which, if adopted, certainly won't improve law school transparency, and may well harm it (if for example prospective law students end up interpreting very low default rates as good evidence for the value of law degrees).

In any event, the comment period for the proposed change to Standard 510 runs until Tuesday.  Anyone interested in doing so can email a comment to

Friday, November 11, 2011

Cooking the books

The University of Illinois Law School's latest admissions scandal is worth pausing over for a few reasons.  First, it's an illustration of the invidious influence the rankings obsession is having throughout legal academia.  Paul Pless, the "admissions dean"  -- the fancy title given to a U of I law grad who went to work in the admissions office of his alma mater, and eventually managed to raise his salary from $72K to $130K a year by generating (literally) incredible admissions numbers -- monkeyed with the admissions data to produce a median LSAT scores and GPAs that were higher than those actually possessed by enrolled students.  This fraud is part of the reason why Illinois rose from 28th to 23rd in the USNWR rankings between 2009 and 2011.

Thursday, November 10, 2011

Sin City

On the thirty-first floor
A gold-plated door
Won't keep out the Lord's burning rain

Last night's developments in the PSU scandal serve as a reminder that a sudden wave of cleansing wrath can wash away years of corruption in even the highest and most powerful places.  I'm not, of course, drawing a direct comparison between the law school crisis and the PSU's administration's (alleged) long-running coverup of Jerry Sandusky's (alleged) career as a serial child rapist.  The PSU scandal features a single, unspeakably monstrous villain, and a handful of enablers, whose despicable indifference to his depredations led to the swift firing of a university president, athletic director, and iconic football coach, as soon as public opinion grasped the enormity of the crimes that had apparently been committed and hidden.

It should go without saying that children who are raped by an old man suffer an injury which is different, not merely in degree but in kind, from law school graduates whose economic and social futures are damaged severely by the combined effects of systematic misrepresentation, and the enabling and encouraging of the financial recklessness from which law students have suffered and law schools profited.

Another big difference is that the law school scam lacks a conveniently small cast of characters and an unambiguously malignant motive: it's not as if a half-dozen people got together and decided to quadruple the cost of going to law school at the same time that the value of a law degree was undergoing a serious decline, while consciously constructing a nefarious scheme to obscure these two facts from prospective law students. Instead, you have rampant structural -- as opposed to primarily individual -- corruption, which makes it far easier for individuals to disclaim any responsibility to act, and indeed to fail to notice the existence of that corruption in the first place.

Such differences make it harder to envision just how one would go about unleashing a wave of purifying social outrage against the life-wrecking aspects of the contemporary legal academic system. And indeed reforming this system will almost certainly not feature some crystallizing, triggering event. Instead what we are seeing is a slow but steady consciousness-raising, as both cyberspace and the mainstream media become aware of the extent to which the current system of legal education in America is, every year, doing immense damage to the lives of yet another new group  of tens of thousands of mostly young people, by saddling them with enormous amounts of non-dischargeable taxpayer-backed debt, which finances a grossly inefficient pseudo-educational process, while continuing to mislead them seriously about their poor to non-existent legal job prospects.

In the next few days, a couple more major stories are going to be published in very high profile media venues, regarding various aspects of this crisis. These stories seem likely to get a good deal of attention both within, and more important outside, the law school world. (A little bird tells me that a couple of U.S. senators are now contemplating holding public hearings on the question of how the ABA has conducted itself regarding these matters). And they will no doubt elicit the usual defensive responses from the usual suspects.  Each such moment of public attention, however, creates more opportunities for both moral clarity and real action, inside of institutions where a status quo of deep denial and reflexive repression is no longer nearly as secure as it was even a year ago.

Speaking up is difficult, and only a child or a fool believes that virtue is generally rewarded. Doing the right thing isn't easy.  That doesn't make doing it any less imperative.

Monday, November 7, 2011

They write letters

This email from a 2007 graduate of a top ten law school -- that is, from someone whose fellow alums are on average better off than more than 95% of law students -- gives some indication of how much the present and future crisis for recent law grads stretches beyond the last couple of classes:

Friday, November 4, 2011

National Law Journal story on this blog

The National Law Journal's Monday print edition will run this story.

A point of possible interest: of the three law professors quoted in the story with critical things to say about the blog, two signed the Law School Transparency Petition after reading about it here (that is, without a personal request from me). The third hasn't, and in fact didn't even bother to respond to my personal email asking him to consider it.

You'll never fail like common people

Around 1999, at the height of the boom, Barbara Ehrenreich spent several months doing various low-paying service sector jobs, including waiting tables, working retail at Wal-Mart, and working for a maid service.  At the same time she tried to actually live on the wages she was making, which naturally she found extremely difficult to do.  She wrote a book about her adventures, Nickel and Dimed, which is well worth reading.  It's an exploration, more or less in the tradition of Orwell's Down and Out in Paris and London and The Road to Wigan Pier, of what it's like to be part of the working poor (Ehrenreich is perfectly aware that she can't really experience what that's like, since in the end it's impossible for an upper class person to understand an experience that she could always stop with a phone call.)

Still when I read something like this, I have a positively Maoist urge to force legal academics, and most particularly law school deans, to live life as it's lived by so many of their recent graduates, if only for a few months or weeks or days.

I do think that there are still many law jobs available—they just aren’t necessarily in the usual places that students look

Where are they?

Everywhere you look in society, it seems to me, there are people who need lawyers who can’t get them. Those may be people who are very poor and need public interest and pro bono lawyers, but they also may be individuals or families or small businesses that need lawyers and who are never going to be in a position to hire large commercial law firms.

The reason these people can't afford lawyers is because they don't have very much money.  They may not be "poor,"  but can't afford to pay $400 or $300 or $200 or $100 an hour for legal services, or at least not for anything that's going to take more than a few hours of a lawyer's time.  Dean Berman's point (I guess) is that maybe some of the more enterprising members of our legal proletariat ought to charge $50 an hour for their services. Except practicing law includes all sorts of fixed costs, and the more one tries to reduce those fixed costs by for example working out of one's home and meeting clients at Starbucks, the less likely it is that you'll have more than five clients a year, since even people who only have a couple of thousand bucks to drop on legal representation are understandably leery of paying somebody who doesn't really appear to be a lawyer to do legal work.

In addition, there are the enormous barrier to entry costs involved in being qualified to do even this, which in the case of Dean Berman's school are now running around 200K to 250K.  Here's part of an email I got a few weeks ago:

I just graduated from GW Law School in the top 10% of my class and am still looking for employment.  Needless to say, I can relate to many of the things you are saying and I appreciate voices like yours within the legal academy that are seriously addressing these issues.
 Dean Berman's school is ranked in the 90th percentile of the all-powerful USNWR list, so I guess his administrative predecessor was a big success, which I'm sure is some consolation to my correspondent.  Then there's this:

When thinking about loans, students need to consider that the legal education is meant to prepare them for 40 or 50 years of practice, not simply the first year out of law school. The loans are a significant issue, but students should take the long view and think about their earning power as lawyers over the course of an entire career.
 This is apparently becoming something like the company line among law school deans, as I've heard several say very similar things in the last few months.  I spent 15 minutes this morning reviewing all of the current job listings for alumni which are available through CU's placement office.   Guess what: there are no jobs.  Or rather, there are almost literally no jobs out there that don't require at least a couple of years of actual legal experience (not doc review).  And what jobs there are tend to be things like being an associate for a small family law firm, with a salary between 40K and 49K (and they want three years litigation experience).

Here's what the people selling the "lifetime value of a law degree" line don't or rather don't want to understand: The lifetime value of a law degree is going to be negative if you don't get a real legal job within a couple of years of graduating.   And more than half of ABA law school grads from the most recent classes haven't gotten real legal jobs.  The employment stats are fake: they include an enormous amount of stuff that doesn't involve practicing or learning how to practice law.  People doing those jobs are on their way out of a profession they never got into in the first place. In a year or two they'll be taking their law degrees off their resumes. It'll be as if they never went -- except for the six-figure non-dischargeable debt they incurred. That's what they'll have gotten out of law school.

Thursday, November 3, 2011

Shooting the messenger

A few weeks ago, Dean Larry Kramer sent Stanford Law School alums a state of the law school letter, which described that state as superb in every way, and poised to become even more wonderful, with the continuing financial help of the letter's recipients.

Dean Kramer dedicated a few paragraphs to relating the employment outcomes for the class of 2011, which he described in a markedly defensive tone:

Wednesday, November 2, 2011

What should the law school reform movement be about?

Attempts to reform American legal education feature both short-term and long-term goals.  In this post I'm going to summarize my views on what the most important short-term goals are.

(1) Transparency regarding immediate post-graduation employment outcomes, i.e., what people are doing nine months after graduation.  It can't be emphasized enough how misleading the information law schools advertise on this matter remains.  Employment numbers need to make clear what percentage of graduates are working in positions that are

(a) Full-time; and

(b) Require a law degree; and

(c) Permanent

(C) is a particularly crucial factor that at present is extremely difficult to disentangle from the rest of the available information.  NALP reports that 27% of all jobs filled by 2010 grads nine months after graduation are temporary. A third of these temp jobs are classified as clerkships of some sort, while 68% [!] of "academic" jobs were classified as temporary -- obviously most of these are positions invented by law schools for the purpose of fluffing up their employment stats.    But NALP does not, as far as I've been able to determine, publish disaggregated figures that would make it possible to say precisely, even at a national let alone at an individual school level, how many graduates have real legal jobs, as opposed to part-time and/or temp work.  Looking at the available figures, it's possible to ballpark the national figure as being in the neighborhood of 40% to 45%, assuming of course that the NALP figures themselves are accurate, which, given the methodology employed for collecting them (un-audited self-reporting) is a rather big assumption.

In particular, prospective law students need to be made aware that the salary data published by most schools is worse than useless.  This is the area in which schools have engaged in the most egregious misrepresentations, publishing "medians" and "means" that include only a small minority of graduates, while making no effort to disclose that crucial caveat.

(2)  Real information about longer-term employment outcomes.  From a risk-reward perspective, prospective law students would be much better served by information about what graduates are doing five years after graduation, rather than nine months out.  Five years out, most people who nine months after graduation were trying to piece together a legal career with fake as opposed to real legal jobs are going to have given up. At the more exalted end of the spectrum, a lot of people who got big firm jobs straight out of law school won't have them any more.  As fragmentary as the information is about the class of 2010, we have practically none about the class of 2006, who entered the market during what in retrospect are considered boom times. How many 2006 grads are currently employed in full-time permanent jobs requiring a law degree, and how much are they being paid?

(3)  Promoting a wider variety of models for legal education.  Contrary to the impression some people have gotten, I've got nothing against a graduate school model for legal education per se. I think the Yale Law School is a fine thing -- I just re-read Arthur Leff's essay "Unspeakable Ethics, Unnatural Law," which in my view has more value than 100 standard-issue doctrinal law review articles.  What I don't think is a fine thing is the current extremely half-hearted attempt to maintain 200 Yale Law Schools. We don't need 200 Yale Law Schools, and indeed I doubt we need ten. The Yale Law School is a terrific institution for producing law professors, but we need 400 new law professors every year, not 45,000. 

(4) Pursuing (3) in a serious way will make genuine cost control much more achievable.  The current arms race, triggered by a generation's worth of nonsensical obsessions over "rankings," is a product of the obviously absurd notion that every ABA-accredited law school ought to pursue several to some extent contradictory goals, namely edification, legitimation, social sorting, and last and very much least, teaching people something about the practice of law.  In other words law schools are supposed to be graduate schools, seminaries, prep schools, and vocational training facilities all at once. Accomplishing all four of these things simultaneously is probably impossible even in theory (for instance it's very difficult to critique the legal system in a serious way and legitimate it at the same time). What's not in question is that pursuing all these goals at once, as law schools must at least pretend to do, is fantastically inefficient and therefore far too expensive.

Tuesday, November 1, 2011

Talk is cheap, change is expensive

The National Law Journal is holding an internet forum on its Law School Review blog regarding the question of whether law schools are in crisis.  I particularly recommend:

(1) Brian Tamanaha's acerbic take on this issue, which points out that, for the present at least, law schools are "doing just fine, thank you."  It's only when one considers the situation faced by our recent graduates, well more than half of whom either don't have real legal jobs at all, or have legal jobs that don't pay anywhere close to enough to service the debt they've incurred as a consequence of our skyrocketing operating costs, that one might get the idea that all is not for the best, in this the best of all possible legal academic worlds.

(2) Bill Henderson's cold-blooded analysis of the long-term structural changes in the market for legal services, that helps explain why the situation Tamanaha describes has come about, and why those changes will eventually require law schools to make major, as opposed to cosmetic, changes in the way they operate. Henderson points out that there are enormous inertial barriers to such changes:

Institutional change is extraordinarily difficult.  But I think it is extra hard for law schools. Law faculty have little or no experience making high stakes business decisions, yet we control curriculum and appointments, which are the areas that need major rethinking.  Talk is cheap--and we specialize in talk.  Like any other industry undergoing structural change, we need to objectively assess our situation and be prepared to take decisive action despite painful tradeoffs and imperfect information.  For law faculty, our biggest risk factors are indecision and denial. 
Henderson argues that clients are shifting the cost of training lawyers onto firms, who in turn will find ways to put pressure on law schools to train people to be lawyers.  While this demand may seem outrageous on its face -- are we not meant for nobler tasks than mere vocational training? -- Henderson suggests that economic necessity will force most law schools, if only slowly and painfully, to surrender some of their more elaborate and expensive academic pretensions, despite the extent to which we've fallen in love with the flattering self-image those pretensions provide us (Nietzsche:  "A pair of powerful spectacles has sometimes sufficed to cure a person in love.").  

Henderson has a gift for asking the kind of simple, straightforward question whose answer is both so obvious and so disturbing that it never gets asked by those who should be asking it. For example: "In the year 2011, should the heavily indebted federal government underwrite the record production of law school graduates?"  And he points out that we law professors should be asking lawyers and law students these sorts of questions, rather than each other.