Toxic assets

Three months ago George Washington Law School suffered something of a PR embarrassment when the school attempted to unilaterally alter the terms of its "Pathways to Practice" program.  Like many higher-ranked law schools, GW has over the last few years started paying a modest post-graduation stipend to new graduates who acquire volunteer positions with non-profit employers.  In GW's program, the graduates are required to touch base with the school's CSO once per month, either in person or by phone, until they either get a paying job or their enrollment in the program expires after one year.  The graduates are paid $15 per hour for up to 40 hours per week of work.

GW attempted to lower this to $10 beginning in December 2012 as an "incentive" to malingerers who were supposedly turning down paid work because they preferred to stay in temporary volunteer positions in exchange for the $15 per hour stipend.  This action raised enough of an outcry that in less than 24 hours the school dropped the prospective change to the program.

These programs have two purposes.  The benign one is to give otherwise unemployed graduates some minimal financial support and a bit of resume burnishing while they look for jobs (Ideally of course a volunteer position may turn into paid work, although the increasingly stiff competition for scarce non-profit work, which makes those who get it eligible for PSLF's ten-year loan forgiveness, makes this an unlikely outcome). 

The less benign purpose, naturally, is that it allows schools to massage the employment stats they report to NALP and the ABA (Note that a graduate who stays in a program of this sort for a full year is counted as someone employed in a full-time long-term position requiring bar admission. In what seems to me a mistake, LST is currently counting such positions as part of its core employment rate.).

At the time that GW's attempted revision of its program came to light, I speculated that the number of 2012 graduates enrolled in it must be quite large, given the school's eagerness to start saving five dollars per hour in December.  Yesterday those GW graduates currently enrolled in the program -- this group does not include graduates who were enrolled in the program and subsequently got jobs -- received an email reminding them to turn in their timesheets.  Through an oversight whoever sent the email failed to bcc the addresses of the recipients, meaning that it was possible for everyone who got the email to see who else is currently enrolled in the program.

It turns out that, as of yesterday, 114 people -- 21% of the total graduating class -- were enrolled.  My source remarks that "some of the email addresses that I recognize were those of quite good students: honors (maybe even top 15%, if my memory of the commencement handouts serves me right) and law review."  

A few notes:

(1)  This number does not include unemployed GW graduates who either refused to enroll in the program or were unable to find volunteer positions that made them eligible for the stipend (My source does not know how many graduates, if any, are in either category, but it seems conservative to estimate that, as of nearly five months after graduation, fully a quarter of the graduating class of the nation's 20th ranked law school remains essentially unemployed).

(2) It will be interesting to see how this number changes between today and February 15th (the nine-month NALP reporting deadline).  In February 2011 GW reported 26 graduates were being paid by the school, while this past February the reported number to NALP was 81. Schools with similar programs report radically different results in this regard.  For example, last year Michigan was employing 75 of its 2011 graduates in the fall, but only eight were still employed by the school as of this February (54 had gotten jobs of some sort while 13 others were neither employed by the school nor anyone else).  By contrast, all 38 of Columbia's 2011 grads who were employed by the school post-graduation were still employed by the school in February, and indeed 34 of the 38 were still employed by the school in May.

(3) George Washington took in 97 transfer students in the fall of 2010, and 104 in the fall of 2011.

All of the above information emphasizes the need for longer-term employment data than that which schools currently collect per NALP and ABA requirements, and which is gradually being extracted from them for public consumption.  These sorts of post-graduate employment programs are of course beneficial in a short-term way to graduates, but they, along with other forms of statistical legerdemain, allow schools to treat un- and underemployed new graduates as the equivalent of toxic assets on a corporation's balance sheet, to be unloaded as quickly and expeditiously as possible.  (BTW it's important to emphasize that corporations and law schools that behave in this way are merely behaving in exactly the way one would predict they would behave, given the rules of the economic and professional games which the corporations and schools are structurally required to play. Thus rather than focusing on condemning individual institutional actors for their behavior, it's more useful to focus on changing the structural rules of those games).

What we really need to know is, where will these 114 people (and the 20,000-25,000 or so similarly precariously positioned graduates of the national law school class of 2012) be two and three years from now, when no one -- as of now -- will be paying any further attention to the state of their putative legal careers?

No further comment

From the Arizona Republic:

As Arizona State University considers moving its law school from Tempe to downtown Phoenix, ASU officials say that for the plan to be financially feasible they would have to significantly increase law-school enrollment, raise tuition, enhance quality and launch a series of master's-degree programs.

ASU President Michael Crow said officials are weighing whether a new, downtown Sandra Day O'Connor College of Law would make financial sense. Crow said the university will move forward only if officials have a "high confidence" the project will succeed. "Otherwise, we're not going to do it," Crow said Wednesday.

As ASU contemplates raising law-school enrollment, many schools are moving in the opposite direction, shrinking incoming classes as the economy has made it difficult for law-school graduates to get jobs and repay student loans.

As a planning step, ASU officials today will ask the Arizona Board of Regents to approve a three-year capital-improvement plan that includes $129 million toward construction of a 294,000-square-foot law school in downtown Phoenix. The complex would be built on a parking lot that formerly was the site of a Ramada Inn, at Taylor and First streets.

"This is essentially one step in a multistep review-and-approval process," said Lorenzo Martinez, the regents' associate vice president for finance and administration.

No timetable has been set, although the plan presented to regents outlines five proposed ASU projects for fiscal 2014, including the law school. Other projects include renovating Hayden Library, upgrading labs and other improvements.

Even if the regents OK the plan, university officials could decide to postpone or cancel the project. Once construction began on the law school, it would likely take 30 months to complete, said Rich Stanley, ASU senior vice president and university planner. The move would put the law school in the heart of the legal community, because federal and county courts and many big law firms are downtown.

"There are a lot of benefits to our students being nearer that action," Stanley said.

In documents being presented to regents, ASU said the goal is to increase law-school enrollment and degrees by 50 percent. The Tempe campus cannot accommodate that growth, the report says. The law school's current enrollment is between 650 and 700 students and its space on the Tempe campus is about 165,000 square feet.

Proposed plans for the school include classrooms, an auditorium, offices, a 230-space parking structure, a law library and retail space. ASU also wants to host more continuing-education programs for attorneys.

In an e-mail to The Arizona Republic, law-school Dean Douglas Sylvester said the college has "no current plans to grow our J.D. (Juris Doctor) class beyond its historical size and beyond the capacity of the college to continue to find productive employment for all of our graduates."

In recent years, ASU's law school has raised its national profile, climbing in annual college rankings such as U.S. News & World Report. A few years ago, the school was in the 55th spot among law schools nationwide. The most recent list ranks ASU 26th, which is 14 spots higher than the previous year. Among public law schools, ASU is ranked eighth in the annual survey.

ASU also is moving to make the law school financially self-sufficient so that it doesn't rely on state funding, a shift that has led to higher tuition. The idea is that state money previously spent on the law school will go to other university programs.

A handful of business and law schools at other public universities have already gone this route. The move has been controversial at ASU, with some students complaining about tuition costs rising each year.

Total number of ASU graduates in the Class of 2011: 201

Total who obtained jobs with firms of more than ten attorneys: 21.

Bad deal book

Ohio State law school professor Steven Davidoff has written an analysis of the economics of law school for a New York Times' Deal Book "special section" on "the future of Big Law."

Davidoff begins by noting that veterinary schools aren't being called a scam or a bubble even though veterinarians make less than lawyers and pay even more to go to school.  I suspect there's a simple explanation for this: people who graduate from veterinary school get to be veterinarians.

Veterinary schools in the US produce just 2500 graduates a year (Harvard, Columbia, NYU, Georgetown, and George Washington by themselves collectively produce more lawyers), and the number of jobs for veterinarians is projected by the BLS to increase by 38% over the course of this decade.  I gather from several minutes of internet research that, to the extent that vets face any employment difficulties, this is a product of the fact that more prefer to be pet doctors rather than large animal vets relative to the available job opportunities. But if you graduate from veterinary school and want to be a veterinarian, you get to be one. In this regard, veterinary school graduates resemble medical and dental school graduates, who get to be -- check this out -- doctors and dentists.

Davidoff's whole analysis is premised on a fundamentally faulty assumption, which is that law school graduates get to be lawyers.   Law professors, still stuck in their world of Columbia law degrees and federal appellate clerkships and Shearman & Sterling associate gigs, constantly make the mistake of thinking -- well not really thinking, but rather semi-consciously assuming -- that their students are going to be lawyers.  This assumption is going to be wrong in regard to an enormous percentage of people currently enrolled in ABA-accredited law schools -- even at "good" law schools like the one Davidoff started teaching at this past year (previously he was at Wayne State and UCONN, where he taught lots and lots of students who did not become lawyers). Any analysis of the situation that fails to grapple with this point is missing the central fact regarding the crisis of the American law school.

Davidoff examines the idea of controlling law school costs by making law school more skills oriented and by cutting faculty compensation. As to the first alternative he points out that more clinical courses will actually drive up costs, which is certainly true assuming one were to maintain the current structure of American legal education (that this structure could be dispensed with altogether at little or no cost to anyone other than law professors is not a thesis Davidoff appears willing to entertain).

As to the second alternative, Davidoff's argument comes down to the claim that law professors don't make much in comparison to "law firm partners," and that if we were to cut faculty compensation this would lead to faculties being staffed by less "qualified" people.  This part of Davidoff's analysis is especially sloppy, so I'm going to spend a bit of time on it.

Note that Davidoff cooks his numbers quite a bit:

The average senior law professor who is not at a top-ranked school makes $130,000 to $150,000 according to a survey by the Society of American Law Teachers. It’s a nice salary, but certainly not comparable to what a law firm partner earns.

This assertion plays very fast and loose with the definition of both "top ranked law school" and (especially) "law firm partner."  Unless "top ranked law school" is a category that includes half the law schools in the country, the assertion about average compensation levels for senior professors is seriously understated, as a glance at the salaries of the senior faculty at his own school reveals. Indeed $130,000, or something fairly close to that, is now the starting salary for tenure track professors at many law schools that nobody would consider particularly elite.  (Starting salaries at top schools are quite a bit higher).

But the bigger problem with Davidoff's assertion is that "law firm partners" make far more than $130,000 to $150,000 per year.  This is obviously not true, unless by "law firm partners" one means primarily "partners at national law firms," who of course make up a tiny percentage of all law firm partners, let alone all practicing lawyers.  Davidoff is in effect comparing the lowest-paid law professors to the highest-paid lawyers.  Law professors, even law professors at other than "top ranked" schools, have higher average salaries than "law firm partners," and the only way one can miss this fact is by, characteristically, focusing on only the very top of the legal employment pyramid.

This is precisely what Davidoff does, when he asserts that cutting faculty salaries will make it much harder to recruit good faculty because "good practitioners are likely to be even more expensive than law professors. After all, the average partner at a big law firm can make well over a million dollars a year."  This is absurd.  It assumes that "good practitioner" is a category that's exactly co-extensive with "partner at a handful of elite law firms" (at how many law firms in this country does the "average" partner make "well over a million dollars a year?").  It also assumes that a common alternative career choice for law professors is to stay at an elite law firm and make well over a million dollars a year as an equity partner.  (Otherwise what possible relevance does the average partner draw at, say, Shearman & Sterling, have to the recruitment of future law professors?).

It's hard to say which of these assertions is more ridiculous: let's call it a tie.

Moving right along, when considering different types of law schools Davidoff engages in more analytical sleight of hand:

There is . . .  a qualitative difference between the top 15 law schools and the rest. These elite schools charge sky-high tuition that can exceed $50,000 a year. But graduates have a good chance of securing a coveted job with a starting salary of $165,000 a year — a salary that is likely to improve as the economy does. For a 26-year-old, that’s certainly good money. Duke, for instance, which was No. 11 on the U.S. News rankings, said its graduates had a 95 percent employment rate last year, with an average private sector salary of $160,000.

There may be valid criticism about lower-ranked law schools, particularly those U.S. News places in the third and fourth tier. Such private schools often charge significant tuition but do not obtain the same employment outcomes. The question is whether changes can be made to lower their costs, and whether this will lead to better opportunities for their graduates.

It's unclear what Davidoff means by "a salary that is likely to improve as the economy does." Is he arguing that starting big law salaries are going to go up eventually in real terms?  If so, this is far from clear, and even if it is it will remain irrelevant to the 85% to 90% of law school graduates who will never be in such a job, including in particular the 85% to 90% of Davidoff's own OSU students who won't get such jobs. Or he may mean that law graduates who start at $165K will make significantly more than that as their careers develop. This of course is very often not true, and is increasingly becoming less so.

But the biggest elision here involves the 85 schools between the "top 15" and the one hundred in the third and fourth tiers.  (Note how Davidoff casually concedes that the economics of law school make no sense at at least half of all law schools.)  What about all the "well ranked" law schools -- the solid majority of the first tier and all of the second -- that are hardly more successful in placing graduates in big law than their third and fourth tier country cousins?  If the economics of law school at such places resemble those of low-ranked schools far more than they do those of schools like Duke --and they do -- isn't that a bit of a problem? (And as a a commenter points out Davidoff's account also implies strongly that all is more or less well for graduates of the T-14 these days which of course isn't true either).  Given that Davidoff happens to teach at one of those 85 schools, not addressing this precise point seems like something other than an oversight.

Interview with Megan McArdle

I did an interview with Newsweek's Megan McArdle regarding Don't Go to Law School (Unless).

(Some of you may remember us from such interviews as Stop Trying to Hate Yourself Thin).

BTW, anybody with an .edu email address can read DGTLSU for free by signing up for Amazon Prime at no charge, which among other things allows you to borrow one Amazon Select book per month.  So if you don't want to skip that large latte one morning but still want to read the book, sign on up.

Regarding the need for ongoing educational efforts, here's an email from a recent graduate of one of New York's better law schools:

I wanted to inform you about another example of a lawyer at the top of the profession who is either totally clueless or actively lying about the state of the job market for recent grads.  In the September/October 2012 edition of the New York State Bar Association's State Bar News, there is an article entitled "Moving ahead on legal education reform: NYSBA looks to raise the bar for the profession's next generation."  In it, the past President of the NYSBA, Stephen B. Younger (who is a partner at Patterson Belknap Webb & Tyler), is described as saying that "he does not believe the problem is that there are too many attorneys on the market, but that they are seeking positions in a limited number of areas.  For example, [Younger] said, as a result of law school costs rising faster than salaries, young lawyers are eschewing jobs in lower-paying, high-need areas and seeking high-paying jobs to pay off their law school loans."  This isn't a direct quote, so it's possible something could have been lost when Younger was paraphrased by the writer, but as written, the article certainly gives the impression that Younger is, at best, so clueless about the state of the market for entry-level attorneys that he thinks people are actually turning down paying jobs because they don't pay enough to allow them to service their loans, and at worst, knowingly peddling the lie that there are lower-paying attorney jobs available to keep the scam going.  

 (I wasn't able to find the referenced article on line so I can't link to it).   It never ceases to amaze me how people in this business simply make up whatever story suits their purpose of the moment. It's even more amazing that somebody like Younger probably believes what he's saying, even though he can't possibly have any evidence for the existence of a non-existent trend.

Speaking of evidence, a lawyer informs me that right here in the little town of Boulder this ad (salary: $32,000 [!] for a full-time litigation associate, experience preferred) generated more than 40 applications in less than a week, several from graduates of top law schools.

The scandal

 Updated below

If you want a glimpse into the short-term future of American legal education, take a look at what New England Law did this year with its entering class.  NEL has, even by the standards of low-ranked law schools, atrocious placement statistics: only a little more than a third of the 2011 class got legal jobs (full-time long-term bar admission required; and this figure is bolstered by 15 people who listed themselves as starting solo practices), one in five graduates was completely unemployed, only four graduates out of 308 got jobs with law firms of more than 50 attorneys, and the median reported salary for the class was around $50,000, even though less than 25% of the class had a reported salary (Given these stats, it's likely the true median salary for 2011 graduates of NEL was under $30,000.) 

NEL has raised its tuition faster than almost any other private law school in the country, nearly doubling it since 2004, from $22,475 to $42,490 (these figures don't include health insurance, which will run students close to another $2,000 if they purchase it from the school, and which they're required to have under state law).  The 2011 class had a mean reported law school debt of $120,480, but keep in mind this figure doesn't include accrued interest, private non-government guaranteed loans, and other educational debt. Taking these factors into account, the average 2011 graduate almost certainly had at least $150,000 in educational debt, and quite possibly as much as $175,000.

The large majority of NEL grads aren't getting legal jobs, and almost everyone who does get a legal job isn't getting one that justifies the cost of attending the school.  So what did this institution decide to do this year, given these extraordinarily dire statistics?  If you guessed "raise tuition more than twice as fast as inflation and increase the size of the incoming class by 17%" you win a prize.  NEL increased its incoming class from 385 to 452 students. It achieved this, while applications to law school in general were plummeting, by dropping the median LSAT score of full-time matriculants from the 53rd percentile to the 41st percentile, and that of part-time students from the 41st percentile to the 33rd (fully a quarter of the part-time admits had LSAT scores below the 26th percentile of test takers).

But we haven't even gotten to the punch line yet, which is that the dean of this monument to catastrophic market failure  is John O'Brien, who was none other than the chair of the ABA Section of Legal Education and Admissions to the Bar during the 2011-12 academic year -- that is, the section of the ABA that is supposed to be regulating the conduct of accredited law schools.  (O'Brien was paid $867,000 by NEL in 2010-2011).

What we have here, in other words, is the academic equivalent of what in the world of finance is known as a pump and dump operation.  With an eye for the main chance that would make the likes of Whitey Bulger proud, O'Brien, who has been dean of NEL for 24 years, seems to have decided that he might as well get while the getting is good. With unlimited federal loan money there for the taking, NEL continues to jack up tuition as fast as it can, while tossing any semblance of admissions standards out the window, and not even pretending to care whether graduates are taking on life-wrecking amounts of debt in return for degrees that will rarely produce returns that justify their cost, and which indeed in many cases are going to be worse than worthless.

And while it's true that if something can't go on forever, it will stop, there's still at the moment nothing to stop people like O'Brien from running educational boiler rooms. Yes the whole thing is starting to crash, but in the meantime there's still money to be made, and lots of it.  (My guess is that, as fiscal reality slowly sets in, a lot more law schools will stop trying to hold their LSAT medians, and instead admit whoever they have to admit to keep classes from shrinking even further.)

As Michael Kinsley once observed, the scandal isn't what's illegal -- the scandal is what's legal.

Update:  Nice catch by commenter MacK on the "special board" appointed to make sure that O'Brien's astronomical compensation is warranted (I guess it's a positive that somebody felt it necessary to produce some bureaucratic justification for paying O'Brien what is probably three times the average dean's salary at an unranked school).

The only actual achievement cited by the review board is that, like a lot of bottom feeding schools, NEL has been turned into an apparently effective three-year bar review course.

NEL makes a very big deal of the fact that it spends lots of student tuition on paying SCOTUS justices to give little talks and such. There is to put it mildly zero evidence that this has produced any "elevated prestige" for the school.

As for "financial stability," until about 15 minutes ago running a crap law school was a license to print money, and it would have taken an extraordinarily incompetent dean to fail to achieve "financial stability."

The best part of this is citing heading the ABA Section of Legal Education as evidence that this guy is "strengthening the field" (the field, remember, being the practice of law) overall.  Just imagine how bad employment stats for lawyers would have become if John O'Brien hadn't been strengthening the field by running the Section of Legal Education.

NALP nonsense

Last week, NALP released a report on starting salaries for first-year associates. NALP is the largest collector of employment information about recent JDs, so people take note of NALP's reports.

The big news in this report is sobering: The number of large firms paying starting salaries of $160,000 has contracted. $160,000 was the median starting salary from 2008-2011 for associates at the largest firms (those with more than 700 lawyers). In contrast, the median for 2012 associates at those firms is just $145,000. The median starting salary in BigLaw has fallen back to 2007 levels.

Progress of a sort

 Updated below

Bill Henderson notes on the Legal  Whiteboard that NALP listed 2,856 class of 2011 grads getting jobs with firms of more than 500 lawyers, which is a 40% drop since 2007, when 4,745 grads got such jobs.  (h/t Taxprof).  Expanding on this a bit:

(1)  The real drop is actually larger, since Columbia law grads weren't part of the 2007 numbers, which would add a couple of hundred grads to those years figures. In addition some of the 2011 jobs (but probably almost none of the 2007 positions) include back office staff attorney jobs as opposed to partner-track associate positions.

(2) If we expand the analysis to graduates who got jobs with firms of more than 100 lawyers, the percentage decline is even bigger.  8248 grads, or 19.8% of grads whose employment status was reported to NALP, got such jobs in 2007.  The figure for 2011 is 4757, or 11.1% of the class.

(3) Real median salaries for starting big law associates who are still getting the "going rate" of $160K are down 10% over the past five years. This doesn't count bonuses, which would make the drop larger.  And again this doesn't include the drastic drop at the bottom of the salary curve for big law lawyers, since some unknown but non-trivial percentage of the class of 2011 got jobs with big firms that paid $50K to $75K rather than six figures.  Meanwhile the median salary for all associates at megafirms has dropped to $145K.

(4) Private law school tuition increased by 73% from 2000 to 2010 and public resident tuition increased by 150%.

So law schools altered their cost structures in a way that would only have made sense if an increasing percentage of their graduates were getting big law jobs, over a period of time when, at the national level, the number of graduates getting such jobs actually declined by nearly 50%.  To put it another way, a cost structure that didn't make any sense at many law schools in 2000 became one that didn't make any sense at almost all law schools by 2012.

On a cheerier note, it appears that economic reality is slowly trickling into the consciousness of prospective law students.  Here are some enrollment numbers for the class of 2015, curated by TLS posters:

Wake Forest 127 (-58)
Vanderbilt 173 (-20)
U. Minnesota 220 (-25)
UC Davis 191 (-1)
Hamline 134 (-66)
St. Thomas 150 (no change)
William Mitchell 250 (-59)
Arizona St. 250 (+79)  Updated: Actual figure is 152, -19)
U. Arizona 125 (-33)
U. Texas 300 (-75)
UC Hastings 320 (-80)
Penn State 170 (-50)
WUSTL 203 (-39)
UGA 189 (-36)
George Mason 147 (-39)
George Washington 400 (-74)
Valapraiso 163 (-55)
Notre Dame 178 (-5)
William & Mary 196 (-21)
NYU 453 (+3)
Seattle University 292 (-30)
Case Western 160 (-35)
Cooley law school reportedly down several hundred
UVA 358 (+1)
U. Kansas 141 (0)
Indiana 202(-38)
U. Alabama 155 (-10)
USC 188  (-11)
Nebraska 136 (+8)
University of Houston 216 (-48)
Loyola Chicago 283 (+9)
BU 211 (-31)
CU 153 (-11)
Yale 203 (-2)
SUNY Buffalo 205 (+30)
Wayne state 148 (-33)
Michigan St. 298 (-9)
U. Michigan 345 (-14)
Rutgers-Newark 226 (+2)
Columbia: 368 (-29)
Charleston 176 (-48)
UCONN  151  (-30)
Albany 202 (-33)
Oregon  147 (-36)
Gonzaga  132 (-44) 

So the word is getting out, and progress is happening.

Update:   Some more numbers from TLS:

Florida State:  187 (-13)
Barry    296 (+29)
Stetson 300 (-44)
Oklahoma City 177 (-24)
Santa Clara 243  (-44)
St. John's 265 (-28)
Hofstra 325  (-51)
Hawaii  86  (-30)
Seton Hall 206 (-60; 23% smaller class and median LSAT fell)
New England Law 452  (+67)

When the levee breaks

Last year there was a bit of kerfuffle over the AALS's decision not to approval even one "Hot Topics" panel -- apparently more than one proposal was put forward -- on the crisis in legal education at the organization's annual meeting.  This year's meeting is in New Orleans, recently the site of the biggest natural disaster in modern American history.

The potential symbolism of the location seems to have been lost on the prosaic minds of the people who organize these kinds of things, who have put together a program that if anything pays even less attention to the fact that the house is on fire, and prefers to focus on whether the living room decor truly captures the spirit of Mid-Century Modern.

I've perused this 192-page document so you don't have to, and here's a complete list of everything in it that even alludes to the perilous state of legal education (perilous from the perspective of the people who pay the bills, of course. As Brian Tamanaha pointed out awhile ago, most law schools are still to external appearances doing "just fine" -- although not nearly as fine as they were doing a couple of years ago, before all the unpleasantness began):

Improving Student Well-Being Inside and Outside the Classroom

Moderator and Speaker: Robert P. Schuwerk, University of Houston Law Center
Speakers: Ken Brummel-Smith, M.D., Charlotte Edwards Maguire
Professor and Chair, Department of Geriatrics, The Florida State U U University College of Medicine, Tallahassee, FL
Susan S. Daicoff, Florida Coastal School of Law
Lawrence S. Krieger, Florida State University College of Law
Todd D. Peterson, The George Washington University Law School
Corie L. Rosen, Arizona State University Sandra Day O’Connor College of Law
Robin S. Wellford-Slocum, Chapman University School of Law

One or more presenters to be selected from Call for Papers.

This is a watershed moment for legal education. Law applicants, students and graduates confront a troubled legal market. Law schools, themselves targets of criticism, operate in atmospheres of hostility and distrust. Faculties, faced with declining law school applications and the budgetary constraints they impose, reassess the structure and value of their programs. This confluence of factors, albeit posing a challenge, also presents opportunity. If we were to reimagine legal education, what might we do to alleviate students’ well-documented distress, while at the same time better prepare them to navigate a changing legal marketplace?

Deaning in the “New Normal”

Moderator: David N. Yellen, Loyola University, Chicago, School of Law
Speakers: John Y. Gotanda, Villanova University School of Law
Wendy C. Perdue, The University of Richmond School of Law
Jennifer L. Rosato, Northern Illinois University College of Law
Frank H. Wu, University of California, Hastings College of the Law

Serving as a dean today is quite a different experience than it has been for most of the past two decades. To cite a few of today’s challenges:
1. Applications have declined considerably for two years
2. The job market remains weak, with some experts suggesting that this reflects not just
lingering effects of the recession, but rather a systematic restructuring of the profession
3. Law schools have received an unprecedented amount of negative publicity, on issues
including expense, the relevance of legal scholarship, and the quality of the training
we provide our students
4. A number of law schools have been sued, with more suits apparently planned
5. The U.S. News & World Report rankings continue to have a number of pernicious effects
In these circumstances, and with great changes in legal education potentially on the horizon, what does it mean to serve  What are reasonable goals and expectations for someone considering a deanship?
Business Meeting at Program Conclusion.

AALS Presidential Program
2:00 - 3:45 PM
[6315] Presidential Program
Law Schools and Their Critics
Law schools face intense criticism. The panel will examine the critiques and discuss what they mean for the legal academy.

Reignite and Renew: How to Rebuild Your Brand in a Down
Economy and Bad Press

Moderator: Michelle Allison, Thomas Jefferson School of Law
Speaker: Angela Dalfen, Golden Gate University School of Law

Standing out from other law schools has always been a primary marketing focus of most law schools. With a little over two hundred ABA-approved law schools from which prospective students may choose, distinguishing your school as “unique” is not always easy. Doing so can be more challenging when your school is faced with the reality of a struggling economy, less than optimal employment opportunities for your graduates and a barrage of bad publicity. This panel of law school professionals will discuss the impact these and other factors have had on the prospective student pool, their current student body morale and will discuss ways their school has retooled and revamped their image.

That's it.  The conference features dozens of programs, and hundreds of speakers, but apparently no formal discussion of: the state of the job market for law graduates, the student debt crisis, the financial structure of legal education, the fight for transparency within the ABA, the ongoing collapse of applications to law school, or anything else that, as Sam Johnson observed, would tend to concentrate an attendee's mind  (There is, to be fair, this stray sentence in the introduction to the day-long Presidential Program, which is dedicated to discussing "globalization:"  "These choices [to focus on "globalization"] have rightly raised questions about the relevance to our students and to the practice of law of such undertakings as well as issues of resource allocation when law schools should worry about the rising cost of legal education and student debt." This is the only mention of student debt in the entire conference program).

Of course it's possible these things will be discussed in the ominously blank "Presidential Program" dedicated to the topic of law schools and their critics (I will be curious to find out if any critics will actually be participating in this discussion).  And one would think they will inevitably come up in other sessions.  But as it stands, this glossy program and the multi-million dollar conference it advertises are both monuments to the remarkable level of denial that still marks much of legal academia, especially in its most official bureaucratic self-representations.

I take it there will be another call for "hot topic" panels in the next few weeks, and although organizing that kind of thing (or anything else) isn't my strong suit I think I'm going to put together a proposal.  It could be called -- just thinking out loud here -- Category Five.

Don't Go To Law School (Unless)

Several people have suggested that I write an e-book that prospective law students, their families, and current law students could consult in the process of deciding whether law school was a good idea.  DON'T GO TO LAW SCHOOL (UNLESS) was published today at Amazon (a print edition will be available soon as well).

As the acknowledgements recognize, the commenters at this site (who have collectively left more than 30,000 comments in the 13 months of its existence) contributed significantly to the book's genesis and composition.

Here's a National Law Journal article regarding it.

Over the past year I've spoken to many people who wanted advice regarding law school, and I'll continue to do so.  I hope they and others like them find this book useful.

Do you have any questions for us?

 "Yes -- how do you plan to keep your doors open, all things considered?"

This weekend Arizona State's law school hosted a conference for aspiring law professors, which featured Prawfsblawg's Paul Horwitz, along with 15 other law faculty, mostly from ASU and Arizona.  One topic which I've been told came up quite a bit in the discussions is how to handle the potential awkwardness of questions regarding the crisis in legal education.

Should a candidate doing screening interviews at the annual DC hiring conference raise the issue in that context, or even allude to it?  This is a tough issue, pragmatically speaking, given that there's a pretty compelling argument that half the schools at the conference ought to be closing their doors rather than hiring yet more faculty.

Take a look at this spreadsheet, which gives a very fragmentary glimpse into what various hiring committees are looking to do this year.  Chapman -- a massively overpriced law school with horrible placement statistics located in the middle of the most saturated legal market in the country -- is looking to hire three more professors.  Suffolk is looking for a few good men (or women).  Hofstra wants to fill two or three junior slots. And so forth.

It would be interesting to know what advice aspiring legal academics were given on this obviously touchy subject, especially since, law faculties being what they are, it's likely that many hiring committees include some people who remain in partial to complete denial on the subject (It's arguable that some level of denial regarding the future of legal education would almost be a prerequisite for being on most law school hiring committees at this point).

Anyway perhaps someone who was there can help shed light on this topic.

On a related note:

I'm an attorney practicing trusts and estates law in Oakland.

I need someone who can be available from time to time when I meet with clients to execute instruments. Your job will be to act as a "witness." Days and times are flexible, generally.

No pay. You won't have any duties other than to show up and bear witness to what's happening, so. . . yeah, no pay.

I offer more than nothing, though. Although now I'm a solo doing trusts and estates, I used to be at a firm doing complex civil litigation for big scary financial service industry clients. I can probably answer any questions you might have about practicing law in the real world. I can help you with your writing, and give you edits and suggestions on stuff you've written.

Also, if all goes well, you can use me as a professional reference, and I'll speak glowingly about you to prospective employers.

Email if you're interested. Thanks.

Polar bears

I talked to a 2009 graduate yesterday, a very talented lawyer from a top-50 law school. He has been working the document review circuit, which he described this way:  "I feel like a polar bear faced with global warming. Each job is an ice floe melting below my feet. I swim from one chunk of ice to the next, but the chunks are melting faster and the swims are getting longer. There are no bridges from here to dry land."

When he mentions his job to former professors, this lawyer told me, they often congratulate him on "getting good experience." These professors are clueless about how document review works, how temp agencies operate, and how difficult it is for lawyers to move from document review to other positions. For those who don't understand, here are the cold facts of life for a legal polar bear:

• Document reviewers develop expertise using computer programs to review documents. That expertise translates into nothing except using the same programs to review still more documents.
• Law firms hire outsourcing companies to staff their document review projects. A standard arrangement is for the law firm to bill clients $100/hour for this work and to pocket half; the firm pays the outsourcing company $50/hour; and the company pays the document review attorney no more than $25/hour.
• This financial arrangement is somewhat like the way in which firms leverage the work of associates--except for the very important fact that the document review lawyer has no way of moving up in the hierarchy. Under the conventional firm structure, the partners collect one-third of the associate's billings as compensation for training the associate and giving her access to client business. In document review, the firm collects one-half of the junior lawyer's billings, but with no interest in giving the reviewer advanced training, access to clients, or promotion opportunities.
• Even when reviewers impress the law firms they are servicing, they have little chance to move into full-time staff positions. The reviewer's contract with the outsourcing company contains a clause prohibiting the reviewer from working for any of the company's law firm clients for a full year after the temp job ends--unless the law firm pays the outsourcing company a stiff fee. Even a very talented document reviewer will not impress a law firm enough to justify that premium price, especially when the firm can continue profiting so handsomely from temporary workers. 
• The ice floes are melting faster because the computer software is getting slicker. Fewer attorneys are needed to supervise the latest programs. As fewer bears fit on each ice floe, more are left swimming in the sea.  
• Temp work does not, as some professors romantically assume, offer workers a "more relaxed lifestyle." The polar bears work 8-10 hours a day on relaxed projects; 10-12 hours a day on more stressful ones. Law firm associates may struggle to get time off for a friend's wedding, family illness, or other commitment, but it's even harder for the polar bears. The temp agency has no investment in its bears' professional development or well-being. If this bear won't produce on schedule, there are plenty of other bears swimming in that cold sea.

Legal educators may denounce the law firms and temp agencies for their unprofessional behavior: As members of a profession, shouldn't more senior lawyers be willing to mentor junior lawyers? Shouldn't they create jobs that offer training, professional development, and a chance for advancement--rather than simply the greatest profit for the outsourcing company and firms' partners?

If we're serious about the idea of a profession, rather than a business cartel, then of course they should.   But the same criticism applies to law schools. We, too, are part of the legal profession. We shouldn't be admitting the most students we can entice, for the highest tuition we can gouge, only to release our graduates into a workplace that we know offers many of them just polar bear jobs--or no jobs at all. The economy will support only so many legal jobs with the possibility for advancement.

The real polar bears are not faring well. Neither are the legal polar bears, even the ones from top-50 habitats.

Sunday papers

Updated below

In one of those remarkably smooth mental transitions that people whose salaries depend on not understanding something are adept at performing, the law school scam has been transformed almost overnight from something that didn't even exist, into something that was so obvious that those who fell for it should be blamed for their willful blindness (the key phrase here is "personal responsibility.").

This being legal academia, such claims tend to be made without the benefit of supporting evidence of any kind.   Therefore I did a Nexis search of the ALLNEWS database, to try to get a little data regarding the question of how much discussion there's been in the mainstream media of law school graduates facing employment difficulties.  I used a query designed to call up stories exploring the issue of whether law school was worth its cost, with the following results:

Stories in the English language mainstream media pulled up by this search making any mention of the possibility that law school might cost too much, given employment prospects for graduates:

2001: 0
2002: 0
2003: 0
2004: 0
2005: 0
2006: 1 
2007: 0
2008: 1
2009: 2
2010: 3
2011: 12
2012: 14  (so far)

At no time in the last decade have any less than three out of ten law graduates failed to get a legal job within nine months after graduation, meaning, of course, that at perhaps half of all law schools the ratio between graduates who got legal jobs and those who didn't was more in the neighborhood of one to one, even in the "best" of times:

Here are the percentages of graduates of ABA-accredited law schools who, according to the annual NALP survey, were employed in full-time positions requiring a law degree nine months after graduation in each year since 2001:

2001: 68.3 percent

2002: 67.0 percent

2003: 65.5 percent

2004: 65.1 percent

2005: 66.7 percent

2006: 68.3 percent

2007: 70.7 percent

2008: 67.2 percent

2009: 62.5 percent

2010: 59.9 percent

2011: 57.9 percent

Note that these percentages include temporary positions, including temporary positions created by law schools for their otherwise unemployed graduates.  They also exclude from the denominator the roughly six percent of each national class whose status was unknown.  In other words, even using an extremely generous definition of what constitutes obtaining a legal job, fully one-third of ABA law school graduates were not obtaining such jobs prior to the recent recession.

Of course it's true that law school tuition has increased fairly drastically over this decade, so a bad situation has become much worse.  But it also couldn't be more obvious that, to the extent prospective law students are somewhat better informed of the risks they're undertaking than they would have been even two (let alone five) years ago, this is a product of information regarding employment and salary prospects being made public, in the wake of media/political pressure that has required "the ABA" (again, in this context "the ABA" means the deans of low-ranked law schools who control the Section of Legal Education) and individual law schools to reveal data that simply wasn't available to the public until the last year or so.

Anyway it's striking how quickly the narrative inside legal academia has moved from "it's outrageous to call law school a scam" to "it's not our fault you believed our lies, because in retrospect they were so obvious."

Update:  This comment sums up the entire division of responsibility issue very well:

Enough with the binary thinking about which side is responsible. It should be obvious to anybody that both the law schools and the law students share responsibility. I don't know any law school graduate, including myself, who doesn't agree that we should have known better, should have done more research, should not have been so confident, should not have developed special snowflake syndrome, etc. These were hard lessons learned, but they were learned.

Now there are two types of taking responsibility in this world. There's saying that you take responsibility, and then there's actually paying the price for something. Right now, even though the blame should be shared between the law students and the law schools, the law students are the only ones paying the price. The students ARE taking responsibility, in the literal sense (as will the taxpayers eventually). The schools are not.

That's why the focus on this blog and in these comments is so heavily focused on the law school's culpability and what can/should be done about it. Not because they are the only ones to blame, but because they the ones who have yet to take any responsibility for their role in this. The students sure as hell have, and pay the price for their mistake every month.

 

---

Hope and Change, Cook County Circuit Court Edition

Yesterday Cook County Circuit Court Judge Neil Cohen granted DePaul's motion to dismiss a class action suit brought by several DePaul graduates, who enrolled at the law school between 2003 and 2008, incurred massive student loan debt (one now has an outstanding balance of more than $300,000), and were either unable to get any legal jobs at all, or are doing very low-paid legal work that doesn't allow them to pay their loans in a timely manner.

The essence of Judge Cohen's ruling can be boiled down to this:

How many people are getting real legal jobs?

Real legal job = Full-time non-temp position requiring bar admission.

As a baseline, we can start with DJM's calculation that, according to the stats schools reported to the ABA and NALP, 59.8% of the class of 2011 whose employment status was known got full-time jobs requiring bar admission.  But it's clear the real number is far lower than that.

Factors that lower it:

(1) Six percent of the class had an unknown employment status.  It would be optimistic to assume that a third of those people got real legal jobs.

(2)  The default assumptions used by career service offices when they have incomplete data regarding employment status (which is often) is that the missing data is positive.  In other words, when there's ambiguity about whether a graduate is working full-time, or is in a long-term or bar required position, that graduate's job will be coded as full-time long-term bar-required.  This significantly overstates the number of graduates who have real legal jobs.  These assumptions are especially dangerous when applied to jobs with firms of 2-10 attorneys, which accounted for more than two out of every five law firm jobs class of 2011 graduates reported getting. Some unknown percentage of these jobs are law clerk positions, eat what you kill arrangements, or two or three new graduates sharing office space.  These distinctions are especially likely not to be made on NALP forms.

(3)  Evidence of employment is treated cumulatively.  Evidence of unemployment is not.  What this means is that a graduate who reports a positive employment status at any point between the spring of the graduate's 3L year and nine months after graduation is treated as employed, period. Graduates who report not being employed will have their status re-checked to see if it has changed.

(4) What counts as non-temporary (long-term) employment by ABA and NALP definitions doesn't actually track with a real-world definition of a non-temp job.  A job is considered long-term under these definitions if it has a duration of at least one year.  This means judicial clerkships are treated as real legal jobs, even though most of these positions are state district court clerkships, which in palmier days were often reasonable launching pads for legal careers, especially in regard to government jobs, but which under present conditions have morphed for most graduates into one-year way stations on the road to legal unemployment.

Note too that a certain number of "big law" positions in the NALP stats aren't really big law jobs at all.  A law professor writes:

At [mid first tier school], we have quite a number of 2009-2011 grads working with Baker & Hostetler.  Those are one-year contract positions, with the possibility of renewal, paying $75,000 per year for document work--but with benefits and a real office.  No one knows yet where--if anywhere--those jobs will lead.  Yet those are better than average in terms of salary!  (And they go into both our BigLaw counts and our salary averages.)

And then there are the folks going to the back offices of WilmerHale (Dayton Ohio) and Orrick (Wheeling W Va).  They're permanent, indefinite term jobs with starting salaries of $55-60,000 and benefits.  But where do those jobs possibly lead?  One can't be a discovery lawyer forever--and even discovery is getting more automated.

How many of the 4,767 jobs (10.7% of all law graduates) that law schools reported graduates of the class of 2011 got with firms of more than 100 attorneys were in this category? Nobody knows. (It says a lot that most current law graduates would consider these "premium" document review positions -- which at least feature one-year contracts, benefits, and offices -- to be "good" jobs).

Also, several hundred "full-time long-term jobs requiring bar admission" were one-year law school funded "jobs" designed to pump up NALP stats at places like Columbia and Virginia.

(5) 2.5% of the class of 2011 reported starting solo practices.  This counts as a real legal job if you're shilling for Cooley et. al. Otherwise not so much.

(6) Intentional misreporting on the part of law schools.  Confirming whether a school has been lying about the entering credentials of its students is easy, assuming someone bothers to check at some point.  Yet a couple of schools have been caught doing just that. Confirming that a school has been intentionally misreporting the employment status of its graduates would be difficult to do, even if the data reported by schools to the ABA and NALP were subjected to some kind of auditing, which they aren't.

All this adds up to the conclusion that, while we don't know what percentage of graduates are getting real legal jobs, it's far less than three out of five.  My back of the envelope estimate would be 35% to 40%.