ABA Task Force (final) Report: The Good, The Baffling

So I’ve read through the ABA Task Force on the Future of Legal Education’s (final) Report and Recommendations (PDF). Some of its points are good, others baffling. Here’s a list of topics that jumped out at me and my thoughts on them; page numbers are in parentheses, but they’re not necessarily exhaustive.

1). The new report no longer describes the training of lawyers as a “public good” and now says it provides “public value.” (6-7)

The good: Wha~?

The baffling: I gave the task force grief last year for misusing the term “public good” when describing the fundamental, irresolvable, competing tension over the alleged good things the legal education system does for society versus what it supposedly does for law students. Reading through the report, I tried to give the task force the benefit of the doubt and determine how “public value” differed from “public good,” but it was pointless for two reasons. One, an “uncorrected” “private good” appears on page 25. Oops. Two, “private good” and “private value” must be synonymous—what other definition could there be?—so by analogy don’t “public good” and “public value” mean the same thing too? The new “value” terminology is undefined (unlike other terms, e.g. on page 5), so I don’t know why the task force bothered switching the words around or keeping the concept at all.

Indeed, for all its careful efforts to craft this private/public distinction, the task force pretty clearly comes down against formal legal education as providing public value. It supports limited licensing of lawyers (3, 14, 24-25), fewer undergraduate requirements (33), fewer law school requirements (28), the uniform bar exam (33), more law school “heterogeneity” (23-24), and substantial accreditation reform allegedly aimed at reducing the cost of legal education (2-3, 12, 24, 31). The task force even implies law schools aren’t providing students with core lawyering competencies (26) and that law schools aren’t benefitting society by absorbing federal loan dollars (22). By contrast, law schools provide public value in the form of … faculty scholarship? (7) Post-baccalaureate law programs aren’t needed for that.

2). “The financing of law-related training should be re-engineered.” (22)

The good: The task force prioritizes reforming the federal student loan program, stating, “The current system of law school education harms both students and society.” I’ll take the task force at its word that it’s unable to give the final word on how the Direct Loan Program should be modified and that another task force should be formed to address it. (30) I doubt that a subsequent task force would defend the Grad PLUS Loan Program as adding educational value.

The baffling: Does anyone benefit from how law-training is financed? If so, who? The loan program is not a negative sum system; the loan dollars go to law professors, universities, and lucky students who receive merit scholarships. Arguably it gives legal employers a steady supply of docile workers who have few alternatives to pay off their loans, but that’s indirect and not universal. The task force is surprisingly uninterested in why a social program doesn’t help society, to say nothing of its intended beneficiaries, i.e. poor people and minorities. The task force apparently misunderstands the implications of its own conclusions.

But the Bennett Hypothesis isn’t just an elegant, analytic explanation for why legal education becomes more expensive when you loan people unlimited money to buy it. It emerges from a social theory of positional goods, which are goods whose benefits to their owners by definition come at equal cost to everyone else who lacks them—and frequently a net social loss through rent-seeking by their sellers. That law schools absorb loan aid strongly indicates a moral problem with what legal education is, not just a miscalibration in the system that requires a kind of technocratic report by another task force.

If the task force doesn’t want to “moralize blame,” (9) then it shouldn’t be adopting frameworks that do so. In for a penny, in for a tuition bubble.

3). Demand for law graduates’ work in part determines their wages.

The good: Unlike some of its peers, this task force has actually heard of the law of demand. For example, on page 13 it writes, “The economy of law and related services and the associated employment market have changed sharply in recent years … These changes have had a substantial and adverse impact on employment opportunities for new and recent law school graduates.” It also says that there’s a “low prospective return on investment” for opening a rural practice. Nowhere did it say anything as absurd as, “Law graduates pass their student loans onto clients.” I call this progress.

The baffling: Nevertheless the task force still operates under a frustrating sort of “supply-side-ism” that just can’t be shaken. For instance, the no-rural-lawyers bogey has everything to do with demand for lawyers and absolutely nothing to do with legal education. The task force proposes looser licensing standards because fully trained lawyers aren’t “cost-effective” (2, 13). There’s no reason to believe this. Demand for legal services (and the (over)supply of lawyers) is what sets lawyers’ wages; therefore, it will also set limited-practitioners’ wages. More training does not make lawyers inherently more expensive than less-trained practitioners. At best perhaps people already living in poor or rural communities would be interested in obtaining limited licenses while principally working other jobs. That’s fine, but it’s not evidence that ABA-educated lawyers are “overtrained” and are thus too expensive for rural and poor folks to afford.

Additionally, since we’re on the topic, it’s been nearly seven years since The Wall Street Journal first pointed out that demand for legal services has been flat for many years, yet even in 2014 we have bar authorities saying, “The Great Recession did it.” No it didn’t. It exposed the truth of what had been going on for a long while, and the WSJ’s findings have only been repeatedly corroborated by analysis of BLS and state government data of law graduate and attorney overproduction. After being deregulated in the 1970s, and aided by an expansion of the legal education system, demand for private legal services grew until around 1990. It only slightly recovered during the stock bubble, and it’s been declining for ten years. This information is publicly available (pending BEA data revisions) and largely beyond dispute. Why bar authorities won’t acknowledge it is to me the biggest baffler on this list.

4). Where’s the signaling?

The good: The role that signaling plays in legal education appears in bits throughout the report.

The baffling: …And only in bits. The task force says law schools compete for highly credentialed students (2, 22, 23), but it doesn’t say why. The U.S. News rankings transmit misleading information to law school applicants (10), but the task force doesn’t tell us why the magazine is so popular if its representations are so misleading—or why law schools continue to supply it with information if that’s the case. Likewise, the shift towards the “consumer outlook” (9-10) on the part of applicants apparently occurred out of the blue and has nothing to do with how law schools broker jobs for their graduates based on their pedigree. Law schools’ costs grow because they’re under “pressure to deliver services and engage in functions other than core instructional services,” (11) but we aren’t told where that pressure comes from. There’s absolutely no mention of legal employers relying on any rankings, much less whether they evaluate job applicants based substantially on the law school they attend. If signaling plays any role in legal education, it calls into question whether law school builds any human capital at all, which would suggest that law schools don’t really provide any “public value.” That’s okay, though, because the task force’s recommendations pretty much say that too as noted above.

Signaling pathologies infect the legal profession like a body horror. They cannot be excised either, unfortunately, so long as wealth concentration ensures that some lawyers make very large amounts of money while others never meaningfully enter practice. Legal employers, which the task force says have abandoned their traditional role of training law school graduates (16), have always benefited from a surplus of eager, pre-graded law students willing to fill their openings, so they have no incentive to reform the system.

That said, the task force’s various recommendation of easing licensing requirements would mitigate some of the risk prospective lawyers would take on. However, the odiousness of signaling means that the problem won’t be the marginal law school after the crash but the most elite ones that survive it.

Speaking of which…

5). Easing licensing requirements

The good: Just about all of it. I don’t think it’ll create any jobs or reduce any debts, but it’s definitely a policy I’ve advocated, so the task force deserves credit.

The baffling: I get the sense that these reforms are pushing on a string. Jobs really are the independent variable here, but I’m just nitpicking.

6). The task force seems to think decentralization of lawyer education and licensing is good (1, but contra 24)

The good: Sure…

The baffling: …But I think decentralization has just enabled various institutions to blame one another for unemployed law grads and reduce the perception that the profession is able to reform itself. Decentralization might be an institutional reality, but I don’t see it as a plus.

7). Faculty “culture” causes resistance to change in law schools (4, 15-16, 27)

The good: Wha~?

The baffling: How do we measure “culture”? How is faculty “culture” not dominated by unaccountability for federal loan dollars? This, along with the “public value” stuff, makes me think that the task force is just throwing a deflated life raft to the law schools.

8). The final report is a manual for people of good faith. (4)

The good: Um. Okay, my other comments notwithstanding.

The baffling: How do we know when someone’s not acting in good faith? What do we do then? There’s plenty of stuff coming out of law schools that I don’t think is good faith, and I’m not even talking about the employment statistics. I won’t repeat the examples I put down when the task force’s first report came out, but it ain’t risk-averse, conservative faculty culture that caused them. It’s the free money.

9). Stuff unmentioned

The good: None. These things should’ve been mentioned.

The baffling: Here’s my list:

  • As noted above, the task force report implies legal employers have apparently played no role in maintaining the current legal education and law licensing system, nor have they benefited from it.
  • If the task force wants limited licensing and other looser licensing requirements, then why doesn’t it discuss apprenticeship or articling?
  • Nothing on restoring bankruptcy protections to student loans, especially in light of poor job prospects and graduates testifying they didn’t receive any training in core lawyering competencies?
  • What about public law schools that have gone off their states’ subsidies? What’s the point of such schools if they aren’t providing affordable legal education to their states’ residents? Do some states have too many public law schools?
  • Should bar exams be reformed too? The uniform bar exam is fine, but do the lawyers of the future need to know about the difference between sublateral and subjacent support when they’ll be practicing immigration law?

In all, the ABA Task Force on the Future of Legal Education’s (final) Report and Recommendations avoids some of the sloppy mistakes its peers have made, but there are still plenty of inconsistencies and notable omissions to spin some heads.

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8 Responses

  1. Matt
    The ABA and state bars haven’t a clue. The right hand doesn’t pay attention to what the left hand is doing. I get the looser licensing argument for law students who are going to eventually be licensed lawyers — but along with it, what about the contemporaneous move to expand the market of non-lawyers practicing law? There is already a glut of lawyers, many underemployed and unemployed.

    Sure, by fiat and justified under ‘expanded access to justice,’ the state courts are disingenuously calling what legal document preparers and limited license legal technicians do — not the practice of law. And not that these document preparers are any less expensive than many solos or newly-minted lawyers.

    But UPL is precisely what they are doing but for the exemptions being carved out of whole cloth. See http://www.wsba.org/Legal-Community/Committees-Boards-and-Other-Groups/Limited-License-Legal-Technician-Board
    and http://www.azcourts.gov/cld/LegalDocumentPreparers.aspx

    -Mo

    • Mo,

      If limited-licensing technicians or whatever charge less than a lawyer would for the equivalent service and provide it ethically, then it’s the right thing to do regardless of the lawyer glut.

      If LLLTs or LDPs don’t cost less as you say, cross the line ethically, or end up adding little more value than a lawyer would, e.g. serving people who should be talking to lawyers instead, then it has problems. I hope Ariz. and Wash. plan on actually monitoring the costs and ensuring they add up. I’d really hate it if the LLLT system only works because they don’t have to buy malpractice insurance or something.

      A little off-topic: I note that the Wash. plan requires 3,000 hours of substantive law related work experience, which actual lawyers apparently aren’t required to obtain. How weird is that?

  2. Matt
    I think you have undercut your blog’s raison d’etre with this. So why bother then with three years of law school; a six-figure largely nondischargeable debt; overpriced bar review; an onerous bar exam; high annual licensing fees; mandatory continuing legal education; expensive lawyers malpractice insurance; and a highly-regulated vocation — if a non-lawyer without that profound investment of time, training, trouble and treasure can provide the “equivalent service and provide it ethically” and “charge less than a lawyer”? It’s the commoditization of law and a race to the bottom. So we might as well concede the field, pack up our arms, and go home on our shields.

    As an aside just this morning, I saw an advertisement by a legal document preparation firm offering a discounted price for a revocable living trust package — but only for “the first 25 callers.” The regular price for a single person living trust package is $1099. That’s hardly giving anything away but then you are probably right. Even at just over a grand, that is still likely less than what a lot of lawyers might charge. But then again, if all they’re doing is helping a consumer fill out forms without supposedly dispensing legal advice, that’s a lot of dinero for document help. If all the consumer really wants is helping filling out a form, they might as well go online with an outfit like Nolo and do it for one-tenth of that or at a business like LegalZoom for one-quarter of that.Qualitatively it is not any different than what an ethical non-legal-advice-dispensing legal document preparer would do.

    – Mo

    • Mo,

      The raison d’être of this blog is not employing every ABA-trained law school graduate with the help of needless regulations that raise costs to clients, no matter how many years they studied or how much debt they have. To the extent that I advocate for them, I can’t think of any principled way to employ all the underemployed law grads as lawyers that doesn’t involve creating fictional demand for their work, e.g. mandating every municipality hire a lawyer for every thousand residents. I believe everyone is entitled to a job if they want one—and I wish everyone could work in jobs they were trained for or would excel at—but that’s not realistic for law grads. Please recognize that I say this against both my professional and personal self-interest.

      That said, I’m not a neoliberal equilibrium idolater who suspects that every solo practitioner is overcharging for work that could be done by a pseudo-lawyer instead, and I sympathize with your perspective that this is a case of meddling, clueless state bar bigwigs versus solos who know what they’re doing. I want empirical proof and the state bars aren’t providing it. You’re example, I think, proves that point. If pseudo-lawyers are charging near-lawyer prices just to fill out forms, then it sure sounds like UPL and the system should be scrapped. If they charge almost nothing, then they aren’t really necessary and the state bars have once again just wasted everyone’s time.

  3. ML,

    I appreciate the effort you put into your posts, but I wonder if the time/energy could perhaps sometimes be better directed.

    (See ideas below).

    The ABA/Law Schools will talk, and talk, and talk…forever.

    And do absolutely nothing.

    Except cash the checks.

    They’ve been following this playbook for *decades*.

    You are making the fundamental error of assuming good faith among consummately, conscientiously bad actors.

    If any of the actors in a position to freely change things had any desire to, the law school scam would have started to end long ago.

    And not only occur at blog-point.

    I think that your efforts will see more results if you sharpen your spear and start suggesting potential new avenues of law school litigation/more creative causes of action.

    Efforts in these areas have more or less failed to date, but I wonder if perhaps there isn’t a *lot* more than can be done:

    1) Look for legal/policy levers in the ethics codes, public law school financing process (legislative/taxation), etc.

    2) Co-ordinate/ally with other players similarly screwed over by the schools’ perfidy – student loan guarantors, student loan purchasers, taxpayers’ representatives, etc.

    3) Crowd-source creative causes of action and their subsequent elaboration.

    To get the ball rolling, here are some of the *potential* avenues of attack (there are hundreds of thousands of extremely pissed off lawyers – *use them*)

    a) Common law fraud (attempted)

    b) Federal wire/mail fraud (attempted?)

    c) Honest services fraud (still viable?)

    d) Qui tam actions for fraud against federal/state governments (guaranteed student loans)

    e) Negligent misrepresentation (attempted…but not against the ABA and USN&WR)

    f) Breach of fiduciary duty (remember all that financial info you had to disclose to your price discriminating law school?)

    g) Statutory violation of tax laws concerning “nonprofit” status of schools and endowments

    h) Writ of mandamus executed against public law schools to perform complete and accurate disclosure of *all* relevant placement information in their possession.

    i) Quo warranto writ executed against public law schools for unlawful execution of powers (public purpose of misleading applicants?)

    j) Violation of various Professional Responsibility obligations

    k) Federal and State Deceptive Trade Practices (attempted at state level)

    l) Securities law violations (false/incomplete representations when packaging student loans into securities for public sale).

    The point is not if all of these are viable – the point is to plant the seeds that crowd sourcing can build upon.

    Don’t plead with the corrupt to change.

    They haven’t and they won’t.

    They *will* respond to a spear in their financial guts.

    • cas127,

      If you’re so serious about taking on the law schools, feel free to emerge from anonymity, risk your time and reputation with futile, litigious attacks, and not gain anything personally to show for it.

      Good luck!

  4. Matt
    Let’s face it, there is a glut of lawyers and the problem as you have repeatedly pointed out, isn’t going away anytime soon. And I completely agree with you and have never argued for some kind of full-employment solution whether it is of the “New Deal” make-work variety or of any other type of governmental intervention that somehow assures a chicken in every lawyer’s pot.

    My gripe is that it is classic supply side nonsense of the worse kind when it is cloaked in the smug pronouncements by legal elites that by ‘benignly’ expanding access to justice to consumers via non-lawyer provided legal services, consumers are ultimately going to benefit via lower prices. So who is tracking that? Has it happened? Where is the empirical proof beyond anecdotal feel-good stories? Or is it as I suspect, a case of what John Kenneth Galbraith once dryly noted “If you feed the horse enough oats some will pass through to the road for the sparrows.”

    In truth, lowering the barriers so as to produce even more legal services in a time of unprecedented glut of real not pseudo lawyers is no assurance of consumer benefit. Instead, it potentially heightens risks to consumers while lining the pockets of those who lacking any sweat equity, haven’t made the profound investments of time, toil, talent and treasure.

    – Mo

    • Point taken. If state bars think they can raise prices because of inflation, as though their basket of goods is like the average American household’s, then I’ll bet they won’t even think to study pseudo-law firms.

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