Wednesday, October 31, 2012

Trick or treat

For Halloween, Professor Brian Leiter revived an exchange I had in late August with an anonymous poster at the TaxProf Blog. I guess this is the day that scary things rise from the dead.

And this anonymous poster, "Anon," was scary. He or she cited the Bureau of Labor Statistics' low unemployment rate for attorneys, which is misleading for these reasons. At the same time, he/she ignored BLS's projections about how many lawyers our economy can support. Anon misstated basic facts about NALP employment reports, such as whether the category of "full-time, permanent jobs requiring bar admission" includes judicial clerkships (it does, but he/she thought it did not).

Anon also pushed the IBR magic bullet, suggesting that "[w]orst case scenario, [law school graduates] have 10% less income than they would have had without law school for 10 to 25 years." Anon is a business professor with a strong redistributive bent: He/she wants the taxpayer to subsidize law schools and their graduates, regardless of the macroeconomic consequences.

Perhaps most troubling, this ghoulish Anon insisted that "there is no crisis," "it's highly unlikely that anyone's life was 'ruined' by debt," and that any crisis talk is based on employment rates "in one single year for one class--2011--in a time of recession." Leiter endorses the last point, concluding that Anon won our debate, despite some of his "dubious" claims, because of the "weirdness of drawing dramatic conclusions from a limited data set, in the middle of a recession, and of failing to draw meaningful comparisons between JD outcomes and other professional outcomes for those who forego a JD."

These are the zombie propositions that just won't die. You can stake them in the heart time and time again with the facts, but they keep rising from the dead. Let's try again:

  • The economic downturn began in December 2007; that was five years ago. At least for lawyers, there is no end in sight. If we are in the "middle" of a recession after five years, does that mean employment will improve in another two years? Three? Five? At what point does a sustained period of economic hardship become more than "a limited data set"? I think five years are more than enough.
  • Employment outcomes for law graduates have declined every year since 2007, whatever measure you choose. Total employment, nine months after graduation, fell from 91.9% in 2007 to 85.6%, with declines registered every single year. The percentage employed in jobs requiring bar admission (including short-term, part-time, and/or ones funded by law schools) fell from 76.9% to 65.4%--again, with drops every single year over the full period. And the percentage of graduates not working nine months after graduation rose inexorably from 5.8% in 2007 to 7.7% in 2008; then 8.7% in 2009; 9.4% in 2010; and 12.1% in 2011. Limited data set or five-year trend line?
  • I don't know anyone who thinks that the Class of 2012 fared better than the Class of 2011; we'll have those data to add to the set in February. Today's 3Ls, the Class of 2013, look stricken. The 2Ls, Class of 2014, are reeling from a particularly brutal season of OCI.
  • The Executive Director of NALP, James Leipold, sees more law school employment statistics than anyone. Based on those data, Leipold emphatically rejects the notion that changes in the legal job market stem from the recession. "[O]ne thing we know for sure," he recently counseled placement directors, "is that [the employment market for the classes of 2016 and 2017] will be different, and probably dramatically so, than it was for the Classes of 2006 and 2007." 
  • There are reasons why the JD job market has contracted and will continue that process: the reduction of BigLaw associate positions; creation of more contract and staff attorney jobs in private practice; outsourcing of all types of legal work; freezes in government hiring; and the ability of computers and nonlawyers to perform an increasing number of legal tasks at all levels of the practice hierarchy. These forces are dramatic, but they're real. They certainly don't stem from a single year.
  • Finally, let's examine the question whether JDs fare better than "those who forego a JD." Undoubtedly some of them do--including some who never practice law. But there are others who don't. The key questions for law schools are: What amount of financial hardship are we willing to tolerate among our graduates? And how much more of their potential income will we appropriate through tuition increases that continue to substantially outpace inflation and JD starting salaries? I see little discussion of those issues by Anon, Professor Leiter, or others who claim that law schools are the best of all possible gardens.  
  • Professor Leiter teaches in a very sheltered ivory tower, at a school that continues to produce strong employment outcomes for almost all of its graduates. That's terrific for the University of Chicago and its students. But graduates of other schools aren't doing nearly so well. Here's an updated version of the table I posted earlier this week; to the "every fifteenth" schools I selected for that table, I've added the school I teach at, as well as Drexel's Earle Mack School of Law (where Professor Leiter's co-blogger teaches). These are the percentages of the Class of 2011 who, nine months after graduation, worked in part-time jobs, held temporary positions, or were unemployed:
Not Working
25.6 %
7.0 %
32.6 %
17.3 %
5.7 %
23.0 %
Ohio State
19.5 %
5.2 %
24.7 %
22.7 %
6.8 %
29.5 %
23.7 %
4.4 %
28.1 %
13.8 %
16.8 %
30.6 %
21.3 %
6.2 %
27.5 %
21.4 %
19.1 %
40.5 %

Sure, this is one year of data. But, at best, it's in the "middle" of a very long recession. At what point do we say "enough"? When do we stop raising tuition, every single year, at rates that exceed inflation and starting salaries? When do we think about the toll on our graduates? When do we grapple realistically with the forces reshaping the legal profession?

Trick or treat is over. It's time to face facts.

Cautionary tales

Don't Go to Law School (Unless), which was published as an e-book last month, is now available as a physical book, for those who prefer that medium. 

October LSAT scores will be released in the next day or so, and in addition to reading DGTLSU, prospective law students should consider things such as this message:

Professor Campos,

My school does not officially rank, and to the extent they pigeonhole students it is by top 5%, 10%, 15%, top third, etc breakdowns.  Students talk, of course, and as best I can gather I finished second overall in my 1L class.  At the very least I was well above the top 5% threshold.  (We have a shade under 300 students in the first year program).  Roughly 10% of the class in 2011 and 2010 landed jobs at firms with 100 or more attorneys.  Another 2 or 3% of these classes landed Article III or State Supreme Court or Chancery Court clerkships, and it is reasonable to assume they had offers at those kind of firms or will be in position to get one at the end of their clerkship [Ed note: I wouldn't be so sure about that. This was true five years ago, but seems much less so today].  So looking at these numbers one should be pretty comfortable finishing in the top 5-10% of the class.  This year's reality says not so much.

BigLaw OCI just wrapped up at our school.  One or two offers might still be dangling out there, but for all intents and purposes people either know where they will be next summer or know they have to figure out a plan B on the fly.  My school is a T2 in a major population center (top 10 in population city).  I don't know what I was expecting in retrospect, but OCI wound up being a white knuckle affair.  I got callbacks with 15% of the firms I did "screener" interviews.  Thankfully I had a large enough sample where a 15% success rate meant not just a callback but an offer, too.  Still, I came way to close to striking out.

Other people in the top 5% did strike out.  These are folks on Law Review and/or moot court.  They are outstanding, personable, sensible men and women who have a lot to offer a firm.  But the firms don't have anything to offer them.  What was really disappointing were the number of screeners to callbacks to positions available ratio.  I don't think your readers (especially the ones thinking of going to school) understand this.  For instance one NLJ 250 firm came to my school to screen 20 candidates.  According to NALP they do OCI at 9 schools.  7 of them are in the geographic area of my school, so it is fair to assume all 7 schools were interviewing for the same office.  Total positions they were looking to fill for next summer:  3.  The anecdotal evidence suggests this firm was hardly an outlier but rather representative of the hiring ratios most firms were using.  In short, many of the firms who came to my school to interview 20+ people did so with one or two callbacks in mind to produce 2, 1 or 0 offers to my classmates.  When you are dealing with these kinds of yields, GPA distinctions such as 3.95 or 3.80 or 3.72 matter as much as what color tie you are wearing that day.  All 20 people who interviewed at the above referenced firm had tremendous measureables.  All that got you is the chance to be the amongst the one or two they called back.  Multiply that by 7 schools, and you are looking at 14 people for three jobs out of a group of roughly 140 who can all say they are 5-10%ers with law review and other tremendous markers.  When you think about it that way it is surprising that more people in the top 5% didn't strike out. 

I sat down with a classmate recently to go over a few items from class this current semester.  During our conversation we discussed briefly the year in OCI (we both have summer jobs lined up at V100 firms), and we both agreed that only a fool (ourselves included) would take a chance with law school. 

I mention this not to brag, as no doubt most people would love to do well enough to participate in OCI and get a job offer at the end of it.  I mention this to put a real story on what the whole process, from the first day of 1L to the end of OCI actually looks like.  Enroll at a school where the median LSAT is around the 80th percentile.  So already you are "smarter" than 4 out of 5 people going to schools across the country.  Work your ass off first semester.  Skip Thanksgiving with the family cause you are outlining.  Spend half your weekends with your study group, the other half reviewing your notes on your own.  Look around you and realize that forty other people in your section have done the same.  You need to finish better than all but two of these folks to make top 5%.  And what do you know, you do.  Congrats.  Now do it all over again in the second semester.  If you are fortunate enough to ace things again in the second semester then all you have done is earn a chance to be the person to score the one or two callbacks at xyz firm available for the 20 people just like yourself during OCI.  And if you do, now you have to ace the process again when the odds are still in many cases better than 50-50 against you.  That's what it takes for the vast majority of people (at the non T-14 schools) to land the kind of job that one had in mind at the start of the law school process.  Proceed at your own risk.

Tuesday, October 30, 2012

The debt spiral

One problematic feature of institutional decision making in particular is that the effects of a decision often don't begin to be felt fully until several years later.  Taking this lag effect into account is both difficult and essential.  Consider the relationship between law school tuition rates and law graduate debt.

The relationship between tuition and debt is is not complex: increases in tuition have basically a one to one relationship with increases in law school debt.  (This isn't surprising given that increases at the margin in the cost of law school are going to be almost completely debt-financed).   Here's how the lag effect works in regard to how much law school debt current 1L will carry, on average, when their first payments on that debt are due six months after graduation:

(1) The mean amount of law school loans taken out by 2011 graduates who took out loans was about $105,000.  (This NLJ story reports the average for private schools was $124,950 while that public schools it was $75,728. About 65% of law school graduates graduate from private schools. In addition the public school debt figure is probably understated because of things like Georgia State reporting an average graduate debt of $19,971, which is obviously a single-year figure.  Months ago I spoke to Bob Morse at U.S. News about correcting this number, which it continues to post on its website, along with equally ludicrous figures for Drexel, Southern, and Texas Southern.  It's curious that in these litigious times the administrations of these schools continue to do nothing about correcting the only public record regarding the average debt of their graduates).

(2) Law school tuition and law graduate debt have been climbing by an average of 6% per year.  If we estimate conservatively that the growth rate in these figures for the current 1L class will be 5%, this yields a mean amount of law school loans taken out for this class of $128,000.

(3) The current 1L class is the first that will graduate without the benefit of subsidized Stafford loans, on which the government paid the accrued interest on the first $8,500 per year (this benefit was  eliminated this past summer).  This change has now been incorporated into GULC's handy online debt calculator, which reveals that the $128,000 in law school loans which will be taken out by the average current 1L will result in a total debt of $151,588 when the first payment comes due.  This will require monthly payments of $1,791 on the standard ten-year repayment plan, and $1,110 per month on the extended 25-year plan (the latter will require the graduate to make $333,003 in payments over the course of the loans).

(4) These figures don't include other educational debt.  If the average 1L is carrying $20,000 in educational loans at the beginning of law school (payment is deferred on such loans while the student is in school, but interest accrues on them), then the average current 1L at the average ABA-accredited law school who graduates with educational debt is going to have around $175,000 in such debt when he or she receives his or her bar results.  (The median debt figure for the current 1L class will be somewhat higher. Indeed it's quite possible that half of current 1Ls will be carrying at least $200,000 in educational debt when their first loan payments come due).

How many law schools are generating short and long-term employment outcomes that make accruing $175,000 in educational debt a reasonable investment?  To put it another way, what percentage of current 1Ls are going to have to go into IBR -- assuming it still exists -- three years from now?  IBR is a form of "soft" default, or if you prefer a kind of quasi-bankruptcy for educational debt.  If it's the "solution" to this problem, then law schools themselves are bankrupt, in both a metaphorical and literal sense.

Monday, October 29, 2012

The working life

This week I'm planning to say a few things about the mismatch between the professional experiences of law faculty and the professional futures, if any, of their students.  Today I'd like to flag a very interesting and odd blog post by Michael Madison, who teaches at the University of Pittsburgh.

Madison's post concludes with this arresting analogy:

Luke Bierman quoted Hastings Dean Frank Wu, who has compared legal education to 1970s Detroit.  I’ve written of a different and to my mind, more apt comparison:  Legal education is the 20th century steel industry – massively successful up until the very end, and then, in a moment, it wasn’t.  Not successful, and not much of an industry.  American steel producers (including producers in Pittsburgh) have rebounded, and they still make lots of great steel – but the big integrated producers don’t make the huge quantities of the structural steel that made them rich and powerful, and in all that they produce today, they employ only a tiny fraction of the US workforce that they once did.  In Pittsburgh, where I live and which has become something of a poster-child for the chic revival of post-industrial America, the scars of the dislocation, disruption, and loss wrought by the crash of steel are still visible, and full of meaning and economic impact, 30 years on.
The collapse of American steel may or may not have been avoidable, at least at the very end.  But everyone at the top of the pyramid, on both management and labor sides, saw the end coming:  the over-capacity, the flawed economic model, the changing demand.  They saw it decades ahead of time.  Everyone diagnosed the problems as the responsibility of other players.  In macro and micro ways there were plenty of opportunities for management and labor collectively to take a balanced view of their futures and to avoid walking over the precipice together.  Yet walk over the precipice together is what, in the end, happened.  The parallel to legal education is imprecise.  At the very least, this is not law schools’ 1981, the year that Steel's struggles really started to hit home in earnest.

Is it?
What I know about the political economy of the U.S. steel industry is limited to what I learned from Tom  Geoghegan's great book Which Side Are You On?,  so I can't really comment on how apt Madison's analogy actually is, other than to note it serves as a reminder that changes in economic and social structures can happen very quickly, and that although people aren't very good at foreseeing such changes, they're still better at foreseeing them than they are at doing anything to prepare for them.

Be that as it may, Prof. Madison appears to be someone who sees that the legal services industry is undergoing radical changes, and that those changes are in the process of making the current economic structure of legal education unsustainable.  This makes the part of his post that precedes the conclusion quoted above all the more odd.  Madison argues at length that legal education needs to become more client-centered, and that the best or at least the most practical way to bring this about is for individual legal academics to employ innovative teaching techniques, and for those innovations to be supported by deans and alumni.

What's odd about this is that it seems completely disconnected from "the over-capacity, the flawed economic model, the changing demand" that wrecked the US steel industry thirty years ago and that is well on its way toward wrecking legal academia in particular and higher education in America in general.  It may well be true that it would be a good thing for law school teaching to be "client-centered," but leaving aside the immense practical difficulties that stand in the way of that happening (I'll have more to say on that shortly), is client-centered education going to create more jobs for lawyers? Is it going to make legal education cheaper? Is it going to affect the technological changes that every day are eliminating more and more traditional legal work, or transferring that work to non-lawyers?

I suspect that Prof. Madison, like so many other people in legal academia at the moment, wants to talk about curricular reform, because curricular reform is something over which law professors have a relatively high degree of individual control, and which can be undertaken at a relatively low cost, in both individual and institutional terms.  The arresting analogy with which his post ends reminds both the author and the reader that the kinds of changes that are happening in our industry, and that are just beginning to affect legal academics, aren't going to be easy or cheap.

Saturday, October 27, 2012

Five facts

I participated yesterday in a panel discussing Affordability and Access to Legal Education at the Washington University School of Law. This panel was part of a broader symposium on "The Law School in the New Legal Environment." Here are the five facts (together with slides) that I offered during my ten minutes:

Fact one: In real dollars, the median starting salary for law school graduates is lower today than it was twenty years ago. In 1991, the median was $40,000. In 2011, it was $60,000—but that’s the equivalent of $36,330 after adjusting for inflation. Median starting salary, in other words, has declined by 9.2%.

The decline is not simply an artifact of the recent recession. This graph shows median starting salary (in red) compared to the Consumer Price Index (in light blue) for the full 20 years. As you can see, the two track one another quite closely. We've all heard about rapid rises in BigLaw salaries, but those increases did not trickle down to most law graduates. For the average graduate, salaries have risen only with inflation.

The "median" salary, moreover, is closer to the seventy-fifth percentile. Only about half of law graduates report their salaries, and the unreported salaries skew heavily to the low end of the spectrum. The salaries we see on this graph, therefore, mark the high end of starting salaries earned by about three-quarters of law graduates.

Fact two: Large numbers of law graduates cannot find full-time, permanent jobs. Here are the employment results, measured nine months after graduation, for the class of 2011 at six law schools among the top 100 schools ranked by U.S. News. To avoid playing favorites, I chose every fifteenth school on that list. That method eliminated the top fourteen schools, for which outcomes are somewhat more favorable--although far from ideal. My method then generated a quick view of outcomes at the remaining top 100 law schools.

At each of these schools, one quarter to one third of 2011 graduates were unemployed, working part-time, or working in a temporary job. Those were outcomes measured a full nine months after graduation--and among the top half of all law schools.

Applicants to these schools still talk about landing high-paid jobs in BigLaw, but here's how many really achieve that feat.  I’ve defined BigLaw generously here, to include all firms with more than 250 attorneys, not just those with more than 500 attorneys.

At each of these schools, the chance of landing a BigLaw job was less than the chance of being un- or underemployed nine months after graduation. At three of the schools in this sample, as at many others, less than 5% of the graduates got BigLaw jobs. And once again, we’re still looking at schools that rank among the top 100 nationally.

Fact three: There are not enough lawyering jobs. The top line here (in red) represents the number of JD graduates from ABA-accredited law schools during the last five years. The bottom line (in yellow) shows the number of them who, by nine months after graduation, had obtained a full-time job requiring bar admission.

The jobs included in that yellow line aren't all ones that pay stable salaries or benefits. Some of them were temporary document review positions, others represent solo practitioners. This yellow line depicts all of the full-time jobs requiring a law license that our graduates were able to find.

As you can see, accredited law schools are graduating significantly more JDs than the legal market can absorb. It is true that some JDs use their degree in other fields, but surveys suggest that most of them would rather practice law (more on that in another post soon). There just aren’t enough lawyering jobs to occupy all of our graduates.

Note that this job gap pre-dates the recession. It is getting worse, but this is no temporary setback.

Fact four: While starting salaries have stagnated, and jobs have declined, law school tuition has steadily increased. This graph shows the median starting salaries and consumer prices that I showed you before. In this version, I've added the average cost of three years' tuition at both public (in-state) and private law schools. Schools today are claiming a much greater share of the financial return that their graduates earn.

It is true that schools award more scholarships today than they did twenty years ago, but that doesn’t change the picture. In this slide, I replace tuition with the average amounts that students borrowed to finance their law school educations. I only have those numbers for the last ten years, rather than twenty, but you can see that the lines are virtually identical to the tuition lines. Law school costs much more than it did twenty years ago, and students are borrowing heavily to fund that difference.

Fact Five: The market for legal services has changed dramatically—and it will continue to change. Technology, global competition, and unbundling have reshaped the job market much more than most professors recognize. The three most important trends for our graduates are:

  • The number of highly paid legal jobs has declined, and will continue to do so. The economy will always need highly skilled, highly compensated lawyers--but a high-tech, globally competitive, and unbundled profession won't support nearly as many of those lawyers as it did in the past.
  • Instead, more legal jobs are modestly paid "service" positions. Some service lawyers represent individual clients in family, criminal, or other matters. These jobs provide strong personal satisfaction to some of the lawyers who take them, but they don't repay lawyers for the high cost of today's legal education. Other service lawyers perform standardized work for corporate clients: They review discovery documents or generate routine contracts. This work resembles the tasks that law firm associates used to perform, but it has been "unbundled." These service lawyers are paid less; they often work on a contract or contingent basis; and they are not being trained for more sophisticated work.
  • The biggest revolution has happened quietly outside the confines of our profession. There has been a vast increase in the number of non-lawyers who do legal tasks. Most HR managers, compliance officers, and contract administrators are not lawyers; they are BA's with specialized training. Nonlawyers also represent clients before administrative agencies. All of these "law-related" workers consult occasionally with legal counsel, but they perform day-to-day tasks that lawyers might have once done.
Taken together, these trends explain why median starting salaries have stagnated while the number of lawyering jobs is falling. The trends are irreversible; we have to adapt to them, not ignore them.

The symposium audience, which included professors, deans, practitioners, judges, and clients, seemed to accept the truth of these facts--which other speakers also stressed. There was also general acknowledgement that, to quote (loosely) Wash U's Dean Kent Syverud, "we are sailing stormy seas in which many of us will get wet and some will drown." Kudos to Kent and Wash U for an excellent conference: This was yet another step on the road from denial to acceptance and action.

Friday, October 26, 2012

Notes from all over

Email sent by professor at well-ranked law school to colleagues, regarding an impending vote on a lateral hire (Reprinted with permission, with redactions):

Dear Colleagues:

Forgive me for writing a very long email about an unhappy topic, but I think the situation justifies it. I also apologize for what might appear to be an untimely message, but I have only recently become firmly convinced of my position which is—due to the precarious, unprecedented state of legal education in the U.S., we should refrain from hiring permanent faculty unless and until it becomes more clear that [     ] will not in the future need to substantially reduce its size or cut tuition.  It is certainly bizarre for a business to rush to buy a long-lived asset (such as a tenured or tenure-track faculty member) immediately after its customer base has precipitously contracted.  Applications to law school were down 15 percent last year and, making matters worse, the biggest declines were among the precise students we hope to matriculate (e.g., 18.5% declines among LSATs between 160 and 169).  Furthermore, I think it’s safe to say that the most recent [  ] grads (e.g., classes of 2010, 2011, and 2012) and the next graduating class have faced or will face the worst employment prospects of any graduating class in the modern history of the law school and also have paid or will pay by far the most money (even in inflation-adjusted dollars) of any graduating class for those results.  I personally don’t think it’s a sustainable model when your customers pay more and more for worse and worse results.

Many of our peer schools are reconsidering their class sizes in reaction to the apocalyptic events of the last few years by substantially decreasing their first year classes (whether this is permanent or not is unclear).  Those that have decreased their classes have avoided reducing the credentials of their in-coming classes by as much as they otherwise would have.  Consider, for example, similarly situated schools like Texas (enrollment down 19%; LSATs down 1); Minnesota (enrollment down 11%; LSATs up 1); Indiana-Bloomington (enrollment down 16%; LSATs down 2); Iowa (enrollment down 14%; LSATs up 1); Georgia (enrollment down 16%; LSATs down 1); William & Mary (enrollment down 10%; LSATs down 1); Wisconsin (enrollment down 11%; LSATs down 1); Ohio State (enrollment down 18%; LSATs even); George Mason (enrollment down 20%; LSATs down 1); and Wake Forest (enrollment down 32%; LSATs even).  In short, about half of the schools ranked between 14 and 46 in the USNews cut their class by roughly 10% or more last year, as shown by this chart:

 The important question for us is whether we will, in the future, feel it necessary to at least consider substantially dropping our class size and/or tuition price to account for both the drop in acceptable applicants and also the reduction of satisfactory employment outcomes for our graduates (satisfactory after taking into account the cost of the education).  If we do feel it necessary to drop class size or cut tuition, having fewer tenured and tenure-track faculty will make the process less painful.  We would all presumably have to do more (perhaps for less pay) to pick up the slack, but that is something that nearly everyone else in the legal community (practitioners and students) have been doing for the past several years.

On the important question of whether will need to consider significant structural changes, there are two variables:  (i) whether the law school crisis is a permanent structural change or whether it is merely cyclical or even an anomaly; and (ii) whether, for various reasons (e.g., lower cost relative to peers or any unique strength of our regional market), [   ] is particularly well-suited to survive the crisis without significant and painful restructuring.  On (i), my strong belief is that this is the new normal.  On (ii), I am skeptical that we are in a sufficiently unique position to withstand these very strong economic forces that have appeared to already influence many of our similarly situation competitors.  But I am not sure, nor can anyone confidently predict what the future holds. 

In the face of substantial uncertainty, there is a significant option value to waiting.  Waiting would mean patching the roof rather than replacing it.  Patching the roof in this case might mean hiring visitors or paying people to temporarily teach overloads.  Or having everyone teach more until it becomes more clear that the storm has passed us by; we have asked our students to pay more and to suffer bleaker employment prospects (i.e., to do more with less), so it does not strike me as unreasonable to likewise ask the faculty to do more with less.  (For what it’s worth, I will be the first volunteer to teach more.)  The benefit of the “patch the roof” approach is that, should we decide that we need to move to a smaller house, it will be easier and less painful to do so.

I recognize that there may be costs to patching the roof.  Students and faculty could suffer by having less permanent faculty (though this could be mitigated somewhat by hiring visitors), and we could miss out on attractive candidates that end up going elsewhere.  However, in my view, these costs are much smaller than the benefit of waiting.  There will always be attractive candidates willing to come to  [  ]; there is no reason to suspect that this year’s candidates are any stronger than next year’s or any other year’s.  In fact, at least on the entry level, my opinion from having been to the meat market every year for the past 5 years (except the very latest one) is that the supply of candidates actually gets stronger every year.

If we wait and things turn around (or [  ] manages to evade the crisis), then we can make our long-term investments in new faculty.  If we wait and the law school crisis continues and affects [  ], we will be in a far better position to consider restructuring to adapt to the situation.

In short, I am proposing that [  ]behave like any business would in light of these facts and what our competitors are doing.  I believe that this is the time to rent, not to buy.  I remember having the same thought about the housing market in 2006.  I never did go on record with my bearish view (nor, unfortunately, did I get Goldman Sachs to help me create derivatives to allow me to bet against the housing market), though I did sell my house that year.  I am going on record now, though I suspect that many or most or even all of you will disagree with me.

 Meanwhile at the other end of the law school hierarchy, the Job Creators who run the Phoenix School of Law (a for-profit venture that's owned by the same private equity firm that owns Charlotte and Florida Coastal) had to spend money on a market survey to figure out that the name they chose for their school would lead people to assume it was somehow associated with the University of Phoenix:

5. What initiated PhoenixLaw to look at changing the name of the school?
The feedback that was received from students, graduates, and those considering attending PhoenixLaw, was that the name of our school was often confused with University of Phoenix, which did not reflect positively on the professional nature of our program.
I'm tempted to hold a contest to help the good folks at Sterling Partners pick a new name for their increasingly wobbly venture (Among other things the "town hall" memo to students quoted above explains why they don't have access to two floors of the school's new building -- the entering class was smaller than anticipated so it hasn't been built out -- and reveals the school has decided to run its own bar review course, which will cost graduates $3000).

Of course re-naming a dubious product is a time-honored strategery in more respectable lines of work than using tax money to run bottom-feeding for-profit law schools.


Thursday, October 25, 2012

The state of the discourse

One thing that has been driven home to me with extreme prejudice over the life of this little project is that law schools are run primarily for the benefit of their faculties.  This  observation, which will of course strike almost all law students outside the 1L bubble -- let us not even speak of our graduates -- as blindingly obvious, will, from my experience, be treated as a horrible heresy by large portions of those very faculties, for reasons that are equally obvious.

Yet -- again in my inevitably limited experience -- whenever law school faculties discuss anything that involves their interests, it would be an understatement to say those interests trump all other possible considerations, and most particularly considerations of whether what we're proposing to do is actually in the interest of our students and graduates.

Last week the CU faculty met to vote on whether to reauthorize and greatly expand our LLM program, which was started three years ago on an explicitly experimental basis.  In a cursory memo, the administration laid out its justification for expanding the program from its current average of six students per year to a projected 26 per year by 2014.  The memo featured no data regarding whether our program or similar programs are likely to be worth it for people who enroll.  Instead it would be fair to say that its argument consisted of pointing out that, at least with appropriately aggressive promotion on the part of the school, there will be a "market" for enrolling 26 LLM students per year, who will collectively generate nearly a million dollars in annual revenue for the school.

When the motion was presented for discussion, I laid out a series of concerns regarding the potential this expanded program would have to exploit the desperation of current law students and recent graduates -- the groups which the memo revealed would be primary targets for our greatly enhanced marketing efforts -- given the dismal employment market for new law graduates in general.

Naturally I didn't think there was any real possibility of blocking the expansion, let alone the re-authorization, of the program, given the overwhelming short-term economic incentives at work.  What I did expect, in retrospect naively, is that there would be some discussion of the merits of the proposal. At a minimum, I expected something in the form of an argument from the supporters of the proposal, as to why we ought to aggressively market $36,000 LLMs to current law students, in effect representing to them that it would be, under present circumstances, a good idea for them to extend law school from three years to four, and to spend another $55,000 or so on their legal educations.

What happened was that, after I had voiced my concerns and extracted some predictably awkward revelations regarding exactly where the LLM tuition money was actually going, nobody said anything. There was literally no discussion of the proposal, and after about thirty seconds of even more awkward silence, the motion passed by a vote of approximately 30 to 1.

In retrospect, it's easy enough to see why no one was willing to speak in favor of (let alone to oppose) the proposal.  After all the most plausible, and indeed perhaps the only, justification for the decision would, I suppose, have to be an appeal to the crudest form of economic self interest, i.e., "if people are willing to give us a million dollars per year for quite possibly useless LLM degrees who are we to say no?"  In addition, if we actually engaged in some sort of discussion regarding the potential justification of the LLM program from the perspective of the interests of our students who knows where such a discussion might lead?

Given that law school faculties are full of gated communitarians, who are to put it mildly not interested in exploring whether their institutional behavior can be reconciled in any way with their putative political commitments, it shouldn't have surprised me that no discussion at all took place.

Tuesday, October 23, 2012

Former assistant career services director admits to falsifying employment data, claims she was ordered to do so

A former assistant career services director at Thomas Jefferson School of Law has admitted in a sworn statement to fabricating graduate employment data, and claims she was ordered to do so by her boss, the director of the of the office.  Law School Transparency broke the story this afternoon:

Grant alleges that her fraud was part of a deliberate scheme by the law school’s administration to inflate its employment statistics. She also claims that her direct supervisor, Laura Weseley, former Director of Career Services, instructed her on multiple occasions to improperly record graduate employment outcomes and justified the scheme because “everybody does it” thus “it is no big deal.” TJSL could face sanctions from the American Bar Association as severe as losing accreditation.
Grant was Assistant Director of Career Services at TJSL from September 2006 to September 2007, during which she was tasked with tracking and recording employment outcomes of recent graduates. Grant is a licensed California attorney and made her sworn declaration on August 2, 2012 in connection to the class action lawsuit filed by Anna Alaburda, et al. against TJSL in 2011. (Complaint; Original Story.)

Specifically, Grant admits that she “routinely recorded currently unemployed students as ‘employed’ if they had been employed at any time since graduation,” which is a violation of both ABA and NALP reporting guidelines. Graduates should only be recorded as employed if they are employed as of February 15. 
TJSL denies both Grant’s allegation that she was ordered to falsify data, and that the data Grant submitted were false.  In an email to LST, Rudy Hasl, the school’s dean, also questioned Grant’s motivations:

“The law school stands behind the accuracy of the data that we submitted to the American Bar Association.” Sources report that Grant was terminated in 2007, though when asked for clarification, Dean Hasl would not comment on internal personnel matters beyond suggesting that LST “do a due diligence analysis … including the reasons for her departure from the School of Law.”
I’ll have more on this story shortly.