Thursday, November 29, 2012

Response to Larry Mitchell's New York Times editorial

Updated below

My response to Larry Mitchell's New York Times editorial on the supposedly "sensationalist" claims of law school critics is here.

From comments:

Impressive that Mitchell hits every single scam point in a single op-ed, rather than going with the two to four that he considers to be the most persuasive. It is all there. He says:

1. overwrought bloggers exaggerate.
2. cyclical economy.
3. who knows what the world will be like in 40 years?
4. law school trains leaders!
5. opens doors to exciting and well-paid non-law careers.
6. everything else sucks too.
7. starting salaries are 61K!
8. average lawyer makes 130K!
9. legal sector is growing!
10. Long-term lifelong investment (aka good debt).
11. baby-boomer die-off.

I want to comment on the rarely discussed #4, because it helps explain why #5 is false. #4, incidentally, was beautifully expressed by Prof. Peter Bayer of UNLV Law, who said: "We are not producing plumbers and bookkeepers, we are producing the leaders of our Society whose primary ability is the strength of their intellects. Law teachers hone the mind in a variety of ways through a variety of methods."

JDs, excluding maybe graduates of the 30 or 40 least selective schools, really are brighter and more disciplined than the average BA. So why is a law degree actively despised by nonlaw white collar employers?

I believe it is because nonlaw employers recognize that a JD signifies a bundle of elite expectations, rather than a bundle of skills. A fresh JD degree doesn't communicate the message: "I have the training to represent clients in a couple of practice areas"-- which a nonlaw employer might respect, even if he or she cannot utilize those skills. Rather, a newly minted JD communicates: "I can't do anything practical for you or anyone, but I spent three years playing obscure mind-games, and now I think I am a leader and oh-so-smart." To the nonlegal world, a JD stands for asshole.
See also.

Update:  Mitchell's article has generated some excellent critical commentary.  In addition to the Simple Justice piece linked above,  Alison Monahan, Matt Leichter, Elie Mystal, and Keith Lee take Mitchell to task in various enlightening ways (I'm sure there are other good responses as well.)

A law professor writes:

It’s useful to consider Mitchell’s op ed in light of Case’s enrollment over the past two years.  Based on LST stats and the 2012 numbers on Case’s website, Case’s 1L enrollment has gone from 236 to 192 to 154; meanwhile the median LSAT of 160 is flat despite the 35% cut over two years.  And another 10+% decline in applicants coming this year…  No wonder the op ed reeks of desperation.
I have a vague feeling I ought to disclose that two years ago I supported Mitchell's candidacy to become CU's new dean, in part because he gave what by law school administrator standards was a very blunt presentation to the faculty regarding the increasingly problematic financial structure of legal education.  And I can appreciate he's in a bad spot right now, as Case Western is exactly the kind of school that's extremely vulnerable to the shock waves hitting legal academia.  It's:

(1) Very expensive
(2) Has poor employment outcomes
(3) Is not in a locale that's attractive to trust fund slackers looking to wile away three more years of their youth
(4) Is located within a university that has a better academic reputation than the law school

The last item is particularly important.  As higher ed in general comes under more and more budgetary pressure, I doubt central administrators will be eager to subsidize professional schools that don't enhance their universities' prestige, especially when those schools are graduating increasingly disgruntled alumni into a hyper-saturated market.


How low can we go?

I've written a critique of Larry Mitchell's op-ed in this morning's NYT, which I hope will appear elsewhere later today.

Mitchell isn't happy about the effect criticisms of legal education are having on the willingness of prospective law students to actually drop a couple of hundred thousand bucks to get a law degree.  The financial effect of those criticisms on law school bottom lines appears to be considerable:  First-year enrollment has dropped from around 52,000 to 44,500 (a 15% decline) over the past two years.  That's a loss of about $240,000,000 in revenue, or around an average of $1.2 million per ABA law school.

A law professor writes:

I have two comments (a question and a comment, really) about your November 14 post.  First, don’t you think there is a lot of room for law schools to cut spending?  I certainly think there is here at [   ].  In about 10 minutes, I could come up with a long list of things we could either stop spending money on altogether, or stop spending so much money on.  If my cuts were enacted, nobody would really notice except for some people who would lose their jobs, and a few others who would have slightly more work. 

Second, it seems to me that the number of law school applicants is perhaps not quite as important as your post suggests, because all but the worst handful of law schools can simply lower their admissions standards as much as necessary to enroll the same number of students as last year.  Sure, you take a big hit in the rankings, but given the choice between sliding in the rankings and losing tuition revenue, I’m afraid most law schools would choose the former.  Law school applications would have to really plummet—by 50%?  80%?—before even a relatively low-ranked school like mine is actually forced to have smaller first-year classes.  Put differently, if we really just want 420 students in our 1L class, ranking and quality be damned, all we really need is 420 applicants who will accept our offer of admission.  I submit that we are a looooooooooong way from not having that. 
 I agree completely with the point in the first graph: From what I know of law school budgets, most could be slashed by half or even two thirds with little or no loss of educational quality.

As to the second claim, this seems to me to be a rather complicated question.  The constraints on filling seats by dropping admission standards are:

(1)  The rankings.  This is a collective action problem, and therefore a relatively trivial barrier in the long run.  I agree with the writer that when push comes to shove schools would rather drop standards that cut class sizes, and we're already seeing a good deal of this (for example American let its median LSAT decline by three points -- a huge statistical drop -- in order to avoid a massive cut in the size of its entering class this fall).

(2)  Bar passage rates.  If enough of a school's graduates fail the bar it can threaten the school's ABA accreditation.  Many low-ranked schools have reacted to this threat by doing as much as possible to transform themselves into something like three-year bar review courses.  That strategy seems fairly successful, as the gap between bar passage rates is not nearly as large as the differences between admissions standards between high and low ranked schools would suggest they ought to be. Still there are limits to this strategy.  It's unlikely that people with 135 LSAT scores can achieve acceptable bar passage rates no matter how much effort schools put into that goal.

(3) Loss of cultural cachet.  This seems to me to be the biggest long-term problem with simply dropping all pretense to selectivity in admissions.  If law school comes to be regarded as something of an academic joke -- if 100 Cooleys bloom -- this could have some dire long-term effects on the willingness of prospective students to chase the "prestige" of a law degree -- and prestige is a big part of what law schools have left to sell.

Wednesday, November 28, 2012

The real cost

Every few weeks I get an email like this one:

Dear Professor Campos:

First I want to commend you on your excellent blog.  I have begun to read through your articles.  The positive thing that I'm getting from the blog is that I don't feel so lonely anymore thinking that I got scammed when I went to law school.  I started law school in 2002 and graduated in 2005.  Prior to going to law school I had heard rumblings about how being an attorney was not as profitable as the schools made it out to be.  I was also warned by other attorneys that it was very stressful.  Unfortunately that information did not sink in and I bought the hype that [average-ranked law school] offered.  So I spent three good years of my life working on a degree that I believe should have only taken two.  

Then reality really hit when I entered the job market.  It was not good.  You could find jobs but for $40,000 to $50,000.  At first I thought that it was me, that I had not done the right things, ie kiss up to the right people, done unpaid internships, etc.  So I decided to hang up my own shingle.  I opened my own office, and tried to make a go of it.  It has been an incredibly difficult five years.  For many of those years I would blame myself for not doing better; I began to believe that there was huge mistake that I was making or I had made that had alienated clients, or that I wasn't advertising properly, or any number of things that could be attributed to an office that produced income, but not that much.  I worked long hours by myself trying to satisfy clients that could not be satisfied.  I panicked at little mistakes, and thought the worst case scenarios for every misstep.  It was a miserable existence and it put me in a depressive state with bouts of anxiety that were difficult to control.   

So I went to therapy to get my head back on straight and that has helped a little.  I also found blogs (like yours) and additional information that has allowed me to put my career in perspective.  The conclusion that I came to was that after I beat myself over the business not going as well as I would like, the reality is that the current situation was stacked against me.  It is very difficult to succeed in today's environment, and I don't feel like my school has addressed that at all.  Which leads me to my point in to this rambling email.  Perhaps you have written about this, but I cannot stress this enough; there is a mental toll taken on attorneys.  Depression and anxiety have taken the wind out of my life.  I'm getting help, a lot of help.  I am aware of the dangers of allowing somethings to go untreated.  People need to know how destructive this profession can be to some people, it has been for me.  I suspect it is for most attorneys because we all share the same stories. . .   If you can, please write something on your blog about the dangers of depression, substance abuse, and suicide among attorneys.  When I called the local state legal assistance program, one of the first things they asked me if I was thinking about hurting myself (unfortunately that had crossed my mind).  It never occurred to me that it is so prevalent, it's quite scary actually.

Relevant posts:

This blog has focused primarily on the most straightforward economic aspects of the failure of the American system of legal education.  It's important not to lose sight of the fact that, as a consequence of that failure, lawyers and law graduates deal with much more than crushing debt burdens and career options that bear no rational relationship to those debt levels.

On a related note, both student loan debt levels and delinquency rates are skyrocketing.

Tuesday, November 27, 2012

Legal scholarship

Before I begin, please note that the contents of this post reflect only my own views, not those of my co-editors, my school, my colleagues (all of whom are fabulous teachers, scholars, mentors, administrators, and people), or our wonderful students and alums (who are smart, hard working, and will make or already are great lawyers) . . .
I think there is great value in legal scholarship. The public benefits by getting legal and government structures that make real people's lives better. Students benefit from the scholar's ability to turn chaos into order and communicate both the chaos and the order to someone who hasn't done the same work. The students have to start with order and see how it is constructed from chaos and how to explain that before they can learn to do the same thing, which really, is what lawyers do for their clients.

-- Prof. Marcia McCormick, commenting on the value of legal scholarship in the face of criticisms that question whether the law students who subsidize it are getting their money's worth --

So as I sit here on a Saturday night, I am having the great pleasure of putting the finishing touches on my last books as a law review editor.  I have procrastinated about this, at least somewhat, because I am pretty convinced that the law review is a pretty meaningless activity.  Sure, being the EIC was an interesting experience, I got to do some editing and other work that I would not have done -- and it's undeniable that the long-term career benefits of having the EIC next to my name are large.

BUT -- here is the stark reality.  We had 12 open slots last year for articles.  Through Expresso, I think we ended up having something like 1800 submissions.  1800!!!!!  Of those 1800, I would say 1500 were absolutely awful.  Terrible.  The student comments written by second-year students were better -- usually far better.  As I would work with the articles editor on picking pieces, I would become more and more depressed about the meaning of legal scholarship and what I was actually doing.

I further realized that the whole law review enterprise was another cog in the wheel for raising the costs of law school.  One aspect of your criticism of legal scholarship that has not been made yet is the undeniable connection between "scholarship" and USNWR rankings.  As you surely know, deans try to control every and any input that they can in the USNWR process.  They know that the academic survey counts.
 Never mind the fact that the academic surveys are largely stagnant -- I think many deans believe that if they hire professors who write stuff that gets published, it could possibly raise their academic reputation score and thus increase their USNWR ranking.  So, you hire senior faculty, who write lousy articles, and you pay them lots of money -- or you hire junior faculty with the promise of writing lousy articles and you promise them light teaching loads.  Either option contributes to increased costs for students -- but very few care about that because the students are largely insensitive to costs (at least up until now).

I should be fair and say that not EVERY submission was bad -- I would say about 300 were good.  But every night last summer and fall when I would read the very many bad articles, I kept thinking -- is having a faculty person write this REALLY the best use of resources?  Maybe instead of encouraging people to write all of these articles, we could encourage people to, well, teach, take on higher teaching loads, which means we would need fewer faculty overall, and thus decrease the cost of faculty, and perhaps pass on some of the savings to students in the form of lower tuition?
-- Email from the EIC of the flagship law review of a moderately well-ranked law school --

The observation that most legal scholarship is bad is neither original nor in itself necessarily too significant.  (Cf. Sturgeon's Law).  The problem -- again -- is cost.  Back when I was doing the basic research for David Segal's better New York Times critiques of legal education, I calculated that the total amount of legal scholarship being published annually had increased about sixfold since the early 1970s, that "scholarly output" had increased by about three and half times per capita, and that at present the average law student pays about $12,000 over the course of his or her legal education to subsidize the production of law review articles (a sum that has roughly tripled in constant dollars over the past 25 years).

When people ask how to go about bringing the cost of law school back toward having some rational relationship with the net present value of a law degree, one of the first questions that needs to be answered is: how much of the legal scholarship students pay for is worth what they pay for it?  I'm not suggesting this is an easy question to answer.  I'm suggesting the question needs to be asked.  At present, my sense is that, at most law schools, it is simply taken for granted that the production of ever-greater numbers of law review articles is a primary institutional goal, and this is reflected by the faculty hiring process in particular, and the allocation of scarce resources in general. 

Monday, November 26, 2012

A bit of evidence about the state of entry level large firm hiring

Caveat: This kind of post has very little relevance to people who attend or are thinking about attending the 80% to 85% of ABA law schools who don't ever send much more than 10% of their class to large firms, even in the best of times.  Legal academia as a whole pays far too much attention to large firm hiring statistics.

On the other hand, around 80% to 90% of law students are now spending sums of money to get law degrees that would make economic sense only if they were to get large firm jobs.  (Put the math in these two short paragraphs together and you have the law school mess in a nutshell).

Anyway, here are the outcomes of Fordham's OCI interview process for the last five years, not including 2012, for which statistics are not yet available (Fordham's OCI features large law firm employers almost exclusively):

Percentage of 2L full-time and 3L part-time students who accepted a job offer received via the OCI process:  (Keep in mind that students interview through OCI two years before graduating. So fall 2007 OCI was for the class of 2009, and so forth).

2007:  54%  (Class of 2009)

2008:  39%  (Class of 2010)

2009:  18%  (Class of 2011)

2010:  24%  (Class of 2012

2011:  27%  (Class of 2013)

Percentage of graduating class that got jobs with NLJ 250 firms:

2009:  29.4%

2010:  25%

2011:  19.5%

Percentage of class that reported getting jobs with firms of 100+ lawyers (a somewhat more inclusive category for big law than NLJ 250 firms):

2009:  Unknown

2010:  33%

2011:  25%

A couple of notes:  A whole lot of people in the class of 2009 got no-offered, which helps explain the big gap between the 2007 OCI results and the class of 2009 hiring numbers.  Going in the other direction, a non-trivial number of people in the class of 2011 -- about 7% of the class -- seem to have managed to scramble into a big law job despite striking out at OCI. So the astonishing collapse in OCI results between the classes of 2009 and 2011 is much more extreme than the end result for the two classes -- the class of 2009 did far worse in the hiring market than their OCI results suggested they would, while the class of 2011 did somewhat better.

The 2010 and 2011 OCI numbers suggest that somewhere around 30% to 35% of the Fordham classes of 2012 and 2013 will end up with market-paying jobs, although we need to be cautious about this for a couple of reasons.  First, this assumes that these classes will be as successful as the class of 2011 in scrambling for big law work post-OCI, while at the same time not getting no-offered in significant numbers (as the classes of 2009 and to a lesser extent 2010 were).  It also assumes that all or almost all jobs with firms of 100+ lawyers are market-paying.  As more firms adopt the Orrick model of hiring non-partner track entry-level staff attorneys at $60K per year this assumption will become increasingly inaccurate.

Of course Fordham is just one school, situated in a unique market (New York has a vastly disproportionate number of the big law jobs in the U.S.).  But these numbers do provide a glimpse, however partial, of what may be going on in big law hiring for the classes of 2012 and 2013, at the small minority of law schools where this is a significant question.

The document from which these numbers are drawn ends with the following observations:

One area [we] were unable to obtain data on is the effect of GPA on OCI outcomes. When asked if they could provide the number of students with below median GPAs who accepted Fall OCI offers, the CPC reported that they do not track such data. The widespread perception among students is that the process is largely grade driven. The CPC emphasized that this perception was incorrect, but was unable to release any data showing why that was so. The CPC went on to express how important it is for students, across all GPA ranges, to participate in their preference counseling programs.

As the numbers clearly show, while hiring has recovered since the Fall 2009 OCI season, it is still 50% below the pre-crash levels of 2007. When the Fall 2012 results are released next year, along with the post-graduation outcomes for the Class of 2012, it will become clearer whether the market is still recovering slowly, or if it has stabilized at something of a dismal new normal.

Sunday, November 25, 2012

Prestige factories

One thing I think I've underestimated is the extent to which the "prestige" associated with being a lawyer affects peoples' thinking about whether to go to law school.  This thread on TLS features an OP who, less than a year out of undergrad, is making $60K at a consulting job which features a lot of career stability, that will be paying him around $80K in his mid-20s, and around $100K by the time he's thirty, and which has ceiling of around $250K long-term, although it sounds as if he's more likely to top out at around $150K-$175K on this career path.  He's bored by the work (which in comparison to being a lawyer sounds neither particularly stressful nor time-consuming), and he doesn't like the fact that no one seems overly impressed when he tells them what he does for a living.

The OP is quite refreshingly straightforward about his reason to go to law school: to make a lot of money, and to have a more prestigious job than being a consultant.  His plan is to go to a lower T-14 and via a combination of "scholarship" money, family help, and savings, graduate with no more than $100K-$125K in debt.  He'll then pay this off by working in big law for a few years, then lateral into an in-house position. (He's got a 3.5 and a 170, which would probably require him to pay sticker or close at lower T-14 schools, and which would leave him with far more debt than this, but he plans to retake the LSAT, add a few points, and shake some money out of Michigan or Penn or UVA or whomever).

His thinking is that the in-house position will in all likelihood pay enough to justify the direct and opportunity costs of going to law school, and that there's a decent chance he could get a post big-law job that would pay a lot more than $250K per year, thus making his law degree a good to excellent investment.

From a purely financial perspective this is, to put it mildly, a terrible plan -- his realistic best-case scenario is that he ends up more or less breaking even in the long run after dropping $500K in direct and opportunity costs by going to law school, and of course he's running a huge downside risk.  So why is he even considering it? This is somebody trained in quantitative analysis after all, who is paid to advise business people, so it's not as if he's an innumerate snowflake who doesn't even know what "opportunity cost" means.

Who knows, but my guess is that what this guy is really chasing after is the cultural prestige associated with being a lawyer.  When push comes to shove he's willing, or thinks he's willing, to take what  from a probabilistic standpoint is a ridiculously risky gamble, in exchange for being able to tell people he's a lawyer.

And that, in the end, is what law schools from Yale to Cooley all sell, in one way or another.