When Did the Law School Tipping Point Occur?

Answer: We’ll never really know (for reasons I’ll get into), but there are some good indicators that it was late 2009/early 2010. This isn’t widely acknowledged, but demonstrating it requires some careful calculating that’s worth showing.

The question is, when did people start not thinking about going to law school? (If that makes sense.)

Enrolling in law school is a multi-step process that I’ll reduce to two, taking the LSAT and applying. Looking at applicants is easy enough; looking at LSATs is not. Some people take the test more than once, and the LSAC is stingy about releasing data that break down LSATs by how many tests were first-time or repeat administrations. Worse, the previous release of the LSAC’s “Performance of Repeat Test Takers on the Law School Admission Test,” which publicizes this information, stopped at February 2010, tantalizing us with what was to come. Nor did it help that the February 2010 administration was a cliffhanger: There was an 11 percent drop in first-time takers over the previous year! Did the decline continue in June! Tune in next season, viewers!

Well, it’s been three years, so the LSAC has at last televised the resolution (pdf).

First-Time LSATs One-Year Moving Sum

It turns out that the number of first through third-plus LSATs do not add up to the total. I listed the discrepancy as “Canceled/Nonstandard.” I don’t know if that’s correct strictly speaking, but it tends to correlate with movements in first-time takers. I have no idea how many people take the LSAT under nonstandard conditions, but the data show a discrepancy, so there it is.

A few observations. One, by February 2013, there was a record low number of first-time LSATs going back to 1995 and certainly earlier. Two, the number of second-time LSATs has trended upward since 2006, which is attributable to the ABA’s decision to require law schools to report repeat takers’ highest LSAT scores and not their averages. This is one more reason to isolate first-time takers.

And what do they tell us? Although there was a substantial drop in February 2010 first-time test takers, the decline was modest the following June. Then it hit the fan in October.

Percent Change LSAT One-Year Moving Sums

You can also see that repeat takers resisted declines for a few more periods. All administration types only started falling together in June 2011. The real question is why did February 2010 fall more than June 2010? For that I have no answer. I’d need to know the typical demographics of the test takers in each cycle, so the February drop could be mostly an anomaly. The only thing I know is that first-time takers in that period tend to have lower scores, which indicates that they might be older, non-trad types—not because people’s LSAT abilities rapidly turn to mush as people age but because people who would naturally do well on the test either did so already or are employed in other fields. It’s a big ol’ case of selection bias.

All told, we can imagine the number of LSAT takers as a ball being pushed up a hill by multiple forces and resisted by others, e.g. unemployment versus the population of college-educated young people and informal voices telling them not to bother with law school. At some point the forces pushing the ball uphill were countered by other forces in late 2009/early 2010. Those were, I imagine, early scamblogs (Big Debt Small Law), Above the Law (Elie Mystal’s writings in particular), and Mark Greenbaum’s op-ed to the L.A. Times.

If you want a second opinion on the evidence, we can hypothesize that a “signature” of the tipping point would be an unusual number of people who took the LSAT once or twice but who decided not to retake it or apply after all. Mathematically, the LSAT year, June to February, corresponds best to the applicant cycle. We find that in 2007, 2008, and 2009, that on average there were 1.08 first-time LSAT takers per applicant in 2008, 2009, and 2010, respectively. In 2010, the ratio spiked to 1.17 and then fell a little in subsequent years. With 102,948 2009-2010 first-time LSAT takers, and assuming the 1.08 ratio, we get about 94,500 applicants for 2010. Instead, there were only 87,900, implying that about 6,500 people with a first-time LSAT score in hand in 2009-10 chose not to apply to law school. (It doesn’t matter that the ratio accounts for behaviors of repeat takers, it just needs to be measurable, correlative, and logically related.) Repeating the same process for all LSATs to find a ceiling that includes subsequent test takers who mayn’t’ve applied, we get 100,300 expected applicants, a shortfall of 12,400.

LSATs to Subsequent Applicants

So, sometime between receiving their scores for the June 2009 administration and the beginning of the fall 2010 application cycle, somewhere between 6,500 and 12,400 people dropped out between the LSAT cycle and the application cycle. Switching to a calendar year LSAT cycle (to align it better with the application cycle) raises the range to 8,800 and 14,400.

This, second analysis, suggests that the tipping point occurred in late 2009 but the impact on first-time LSATs wasn’t felt until 2010. It could mean more credit for the early scamblogs and Above the Law, and other sources than the Greenbaum op-ed.

Once the peak was reached, the countervailing forces overpowered the upward ones. Unemployment gave way to distrust in law school as a viable long-term career path. Certainly other sources contributed as well, e.g. The New York Times, but those articles were published a year after the Internet set things in motion. Now inertia is setting in and the trough is slowly being reached.

It’ll be another three years until the LSAC updates the number of first-time and repeat takers again. We may find out who contributed to the upswing in February LSATs in 2014.

Stay tuned…

Site Update: Lawyer Overproduction Page

You can find it here or in the “original research (updated)” menu above. It’s long overdue as I’ve received requests for its sources.

I also delisted the “law schools and law students per capita” page. It hadn’t been updated in around three years, and the lawyer overproduction page pretty much supersedes it. It’s a little sad because that was the first research project I started on this blog back in the summer of ’10. Maybe I’ll come up with a reason to put it back into the mix, but not now.

No Progressives, the ABA Does Not Control the Supply of Lawyers

You can trash the ABA and its Section of Legal Education and Admissions to the Bar, which accredits law schools nationally, for many reasons. You cannot, however, trash either for restricting the supply of lawyers in the United States because they are not licensing authorities. They certainly do not restrict the number of law schools. But if you’re Michael Lind writing for Salon, then you’re free to make all kinds of unsubstantiated claims to the contrary.

Lind’s title succinctly describes his argument, “College-Educated Professionals Could Doom Progressive Politics,” and he gives three reasons. One, professionals won’t support higher taxes on themselves. Two, they extract rents by restricting the supply of professionals, e.g. lawyers, doctors, and for some reason tenured university professors. Three, Lind’s personal experience tells him that these folks aren’t really interested in working class issues.

I normally like Michael Lind. He’s even mentioned Henry George approvingly in his Salon articles. This piece, though, is a disaster that substitutes prejudice for reason—and not just because he walks back from supporting land taxes to calling for higher income and, ugh, consumption taxes.

Support for Higher Taxes

Since Lind’s only evidence that professionals don’t support higher taxes on themselves is Democratic politicians fiscal proposals (tax hikes for households with incomes greater than $250,000, in other words the top two percent), there’s really nothing to discuss here. Household income isn’t the same as individual earnings, which I’ll get to below, and plenty of these households don’t include highly paid professionals. It’s not even clear to what extent these households’ incomes are due to investments and not professional earnings.

To editorialize, many professionals, even highly paid ones, aren’t wealthy in the sense that they have significant workplace autonomy and easy alternatives to their current jobs. Many of them even have hefty student loans that cut into their discretionary incomes, IBR or no. These people might understandably prefer taxes on households with higher incomes, whatever the source.

Supply Restrictions

Lind writes:

Try to find a progressive activist denouncing the monopoly rents of the American professoriate, the American Bar Association, or the American Medical Association [Yes, this sentence didn't end in a period.]

The dirty secret of the American professional elites is credential rents. By restricting the supply of practitioners — you generally can’t be a tenured professor, a practicing lawyer or a doctor without the right degree — the guilds that the professions control artificially drive up the price of college education, legal services and physician services.

As I understand it, the physician shortage in the U.S. is due in part to residencies being funded out of Medicare and Congress not increasing the dollar amounts. Maybe the AMA can ease the rules in other ways, maybe not, but I don’t think it’s pure black hat stuff. I could be wrong though. This blog isn’t defending all professionals.

The supply of lawyers, on the other hand, is not restricted by the ABA. The “generally” Lind uses is a bit broad here. For example, California allows foreign-trained lawyers to take its bar exam (same with New York) and those states have the highest-paid lawyers in the country nevertheless. California also has a slew of non-ABA-accredited law schools. You’ve seen these points here before, so I won’t repeat them, but if there were a lawyer shortage, that’s where you’d see cheap lawyers, not expensive ones.

As for tenured professors … Wow, this one was way out there. Tenured faculty don’t drive up college tuition prices. That’s caused by loose federal student lending, lost public university subsidies, and lack of job opportunities for high school grads. There are plenty of people who teach at the college level for very little, and it ain’t because they lack the credentials.

Lind then states that these professionals maintain their solidarity with the poor by demanding more subsidies to low-income consumers, which is a mixed point. It turns out that poor people can’t afford things like health care, which is why progressives want to give them nationalized insurance. Same goes with legal services. I’ll demur on subsidies for higher education, but it doesn’t occur to Lind that lawyers might have high incomes because rich people and corporations like paying them lots of money. Conspicuous consumption in services provided by superstars and all that. If you don’t like it, the problem is the rich clients, not the superstars.

Lawyers also make money because the economy is poorly managed and industries are badly regulated. For example, many lawyers will make money on recalls of defective hip replacements because the manufacturers didn’t test them and the regs didn’t require them to. Others will make money because large Silicon Valley tech firms allegedly fixed their workers’ wages. You can quibble with how much these lawyers are paid, but it’s not their fault if they make money in high-profile cases. Talk about subsidies.

This is my favorite part:

Doctors, lawyers and professors tend to think of themselves as altruistic servants of the public good. At the same time, many insist on being compensated well enough to belong to the top few percentiles in income, rather than being paid like teachers, nurses, police officers and firefighters. This contradiction generally does not bother professionals, but it should bother progressives.

Here are some median salary numbers courtesy of the BLS and their estimated earnings percentiles in 2012:

Teachers: For elementary and middle school, $56,180; for secondary school, $57,710 (~80th %). Postsecondary teachers tend to earn between $50,000 and $100,000 (~93rd %) (law teachers get more, but that occupation’s grown quite a bit over the last decade because of the bubble, so no artificial shortage there).

Nurses: $67,930 (~85th %)

Police Officers: $57,770 (~80th %)

Firefighters: $47,850 (~74th %)

Lawyers: $130,880 (~96th %)

Doctors: $190,060 (~98th %)

Earnings for detailed occupations vary, but the bottom 10 percent of lawyers on a wage and salary basis make $54,310, which from the above list is less than all but the median firefighter. Self-employed lawyers in smalllaw and law grads who could never find work in the profession probably do much worse. Maybe they suffer from enough false consciousness that they think they’re in the two percent by household income?

Lind’s Personal Experience of Professionals’ Uninterest in the Poor

I base my observation (admittedly a personal one) on a quarter-century of experience in journalism and the nonprofit sector. If you want to fill an auditorium at a think tank, magazine office or other venue, hold a panel on one or more of the non-economic issues I just mentioned [global warming or freedom from NSA surveillance] and the seats will fill up quickly with enthusiastic, affluent, mostly white upper-middle-class progressives. If you want to hold a panel on the minimum wage or workplace tyranny, expect to have a lot of empty seats. To avoid embarrassment, you might reserve a smaller room.

Isn’t the stereotype of university professors that they’re all tweed-jacket-wearing Marxists? The other problem here is that this isn’t evidence that professionals don’t agree with progressives about those issues, just that they don’t want to attend lectures on them. (Incidentally, I attended a lecture on the minimum wage at the Henry George School last year, and I’m a cheating credentialed professional. I’ll accept my progressive cred by e-mail, thankyouverymuch).

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I’m not being hard on Lind just because his article is a lazy swing at supposedly liberal professionals that he happens to dislike. The reason Lind and those who think like him rile me so much is this: I don’t expect people to go to law school based on spurious studies saying they’ll make an extra million dollars. Nor do I think anyone who does will be surprised when conservatives unhelpfully tell them they were absolutely liable for their employment outcomes, and if they don’t like it they should have conducted an After the JD study of their own and interpreted the data better than even the AJD’s own Ph.D.-wielding researchers have.

Rather, I think would-be lawyers expect progressives (whom they tend to identify with) to not use them as propaganda targets to score points with perceived working class constituencies. I’m reminded of when the New America Foundation, which Lind co-founded, did just this when it sensationalized the changes to the already-generous IBR by saying the graduates of a high-debt, poor-outcome law school were essentially welfare beneficiaries because they were so amazingly educated. The rich lawyers get all the goodies while Pell languishes!

Moreover, even if lawyer-licensing requirements are loosened, which I agree they should be, it won’t result in cheap prices for consumers. Letting in foreign lawyers, a policy futilely advocated by Dean Baker and already implemented in many lawyer-heavy states, will only create a lot of malemployed foreign lawyers. Don’t expect Michael Lind and the progressives to explain why prices haven’t dropped or help clean up the mess anymore than the “absolute-liability” conservatives or million-dollar-law-degree professors will the current one. Meanwhile, the effort progressives spend attacking their educated constituents pointlessly alienates them.

The message that Lind et al. send to law applicants and grads is that they can expect no ideological allies if things don’t work out for them. It even tells them that if they do succeed at law, it’s because they cheated. If there’s a reason not to go to law school, political isolation is it.

‘After the JD’ Offers Weak Evidence of JD’s Value

…Is up on The Am Law Daily.

And now ladies and gentlemen, the band called Death.

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This band’s interesting story is the subject of a documentary titled, A Band Called Death, that’s on Netflix.

LSAT Tea-Leaf Reading: February 2014

It’s the end of the LSAT year! Party! And we have 19,499 people taking the LSAT in February 2014, a record low going back to … February 2013. Yup, there was actually a 1.1 percent increase in LSATs year-over-year.

No. LSAT Takers, 4-Testing Period Moving Sum

The four-testing-period moving sum is thus slightly higher at 105,532. In December it had reached a record low of 105,319. It’s the first time since June 2010 that the moving sum saw an increase. Nevertheless, the 2013-14 testing year is a record low going back to 1998-99.

It’s possible that the bottom has been reached, but I’m not betting on it. The February LSAT has historically had the lowest ratio of first-time LSAT takers compared to the other testing periods, so the other testing periods can stand to lose more first-time takers.

Since we’re talking LSAC data, here’re the fall 2014 applicant and application estimates, which were updated yesterday.

No. Applicants Over App Cycle

No. Applications Over App Cycle

There was a slight bump in the final estimate last week, but it shows that there will be about 53,500 applicants this year. I’ve read some comments here and there saying that the law schools have already made offers to everyone who was on the fence last year. I don’t know if that’s true, but if it is, we’d expect the final applicant count to be noticeably lower than the current projections, which have steadily risen over the past several weeks. Then again, last year there was a shift in the number of applicants as a percentage of the previous year’s final preliminary applicant count, indicating latecomer applicants.

No. Applicants as a Percent of Preliminary Final Count by Week

What’s interesting is that the shift became apparent around week six (mid February) and then after week 10, which would have been last week. Then again, schools could just be shifting their application deadlines.

That’s all I’ve got.

Peace.

Record 14 Law Schools Didn’t Report 2013 Graduate Debt to U.S. News

Record, that is, going back to 2009. If you have data from earlier, lemme know.

Each year, accompanying the U.S. News rankings is the online magazine’s list of law schools by graduate debt. The law schools are required to report this information to the ABA, but the ABA inexplicably doesn’t release it to the public, even though it’s one of the most useful things people studying law schools would like to know about. Instead, the ABA takes an unweighted average of the numbers and posts it in this pdf. Thus, for some reason, we must rely on U.S. News, and of course, law schools can decline to transmit their graduates’ average debt numbers.

On average, about four law schools (excluding Widener University’s Harrisburg campus, the three Puerto Rico law schools, and Belmont because I don’t think it’s had any graduates yet) don’t report average graduate debt levels. The previous record was six in 2010. This year, as many as fourteen chose not to. Here’s the list and their last reported average graduate debt levels:

Arizona Summit (formerly Phoenix) – $162,627 [UPDATE: Per the comments below, Arizona Summit Law School's Web site posts its 2012-13 graduates' average amount borrowed as $184,825.]

Southwestern – $147,976

Atlanta’s John Marshall – $142,515

Cornell – $140,000

Touro – $137,781

Campbell – $130,428

Santa Clara – $129,621

Loyola (La.) – $124,335

Thomas M. Cooley – $122,395

Appalachian – $114,740

La Verne – $112,628

Texas Southern – $99,992

Florida A&M (two years in a row) – $96,934

Rutgers-Camden – $93,990

Most of the non-reporters are private law schools and five are free-standing privates. Four are in California. All of them tend to have higher debt levels than the norm, so any weighted-average law school debt figure will skew downward. This is important because the unweighted average law school debt level appears to have declined, but that’s attributable to non-reporting—not reduced average costs or less Grad PLUS borrowing. Last year these schools graduated 3,724 students, eight percent of the total.

Other law schools deserve dishonorable mention for misreporting:

  • Barry University didn’t report its average graduate debt level last year, but two years ago it was $137,680; this year it’s only $47,799, suggesting it reported its third-year students’ annual debt and not graduate debt like it was supposed to. There was a flap about this last year, so it’s surprising anyone would make this mistake again. (Why U.S. News doesn’t notice is another matter.)
  • Southern University Law Center’s graduate debt spiked from $21,911 last year to $80,542 this year, indicating it’d been misreporting in previous years. Credit for the correction, discredit for misreporting in previous years.

Honorable mentions:

  • University of District of Columbia reported its average graduate debt for the first time in three years.
  • University of Indiana-Indianapolis reported its average graduate debt for the first time in four years.
  • No law school that reported its average graduate debt omitted the percent of graduates who had student loan debt. This had occurred in previous years but not this year.

I don’t know why law schools neglect to report their average graduate debt levels. If I were paranoid, I’d say that it makes high-debt/poor-outcome schools look unappealing, and since there’s no punishment for not reporting, they don’t. I do think it’s bad for law schools to not report average debt levels, and the high number of non-reports this year doesn’t make law schools look particularly transparent in general.

[UPDATE: Forgot to mention that the numbers thrown around here are average amounts borrowed and not average indebtedness, which would include accrued interest.]

LSAC Data: More White (Male) Flight From Law Schools in 2013

The Law School Admissions Council (LSAC) tracks ethnic and gender data on people who apply to law school. Its data aren’t nearly as detailed as what appears in the Official Guide, which provides the same information by law school and has a “two or more races” category that prevents over-counting of applicants/admits/matriculants by ethnicity. That is, starting in 2012, the LSAC utilized “maximal reporting,” which ensures that the sum of applicants/admits/matriculants by ethnicity exceeds their actual totals.

I covered the demographics of who’s not applying to law school a few months ago in an Am Law Daily piece titled, “White Flight Hits Nation’s Law Schools,” but those data only applied to the 2012 academic year. The LSAC recently updated its ethnic and gender numbers for the entering class in 2013. For reasons stated above, I can’t compare them accurately to 2010, which I’ll do when the Official Guide comes out this summer, but I can give you a rough cut compared to last year.

In 2012, 67,900 people applied to law school; in 2013 only 59,400 did, an 8,500-applicant drop. There were 41,400 matriculants in 2012, 37,940 in 2013, a 3,460-matriculant drop.

Here’s the contribution to the decline in applicants by ethnicity.

Contributions to Applicant Decline by Ethnicity in 2013

And here’s the same thing for matriculants.

Contributions to Matriculant Decline by Ethnicity in 2013

In 2013, men comprised 54 percent of the applicant decline; for women it was 45 percent. For matriculants, the attribution to the decline is starker: 61 percent were men; 38 percent were women.

For fun, here’s the percent of applicants admitted by ethnicity going back to 2000. The LSAC changed some of its ethnic classifications in 2010, and it began using maximal ethnic reporting in 2012, which explains some of the gaps and dashes in the categories.

Percent Admitted Applicants by Ethnicity

Based on my comparison between 2012 and 2010, I predict the decline in white and male enrollments will not be distributed evenly among law schools in 2013. More prestigious schools will see little difference in their student bodies’ ethnic and gender compositions while the opposite will hold true for less reputable schools.

I admit I am somewhat surprised that even by 2013 white applicants and matriculants contribute so overwhelmingly to the decline, even in just one year. The proportions will stabilize at some point, but I think “law school white flight” a clear indicator that the positional value of a law degree is collapsing. It’s a sharp rebuke of how the profession has failed to identify and resist incentives that reward signals over substance.

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