But You Can’t Eat Passion

Or can you?

Catherine Groux, “Law School Students Use Passion and Flexibility in Struggling Job Market,” U.S. News University Directory.

The U.S. Bureau of Labor Statistics states that [the reason the NALP says the employment rate for 2012 law school graduates hit its lowest point since 1994] is largely due to the fact that accounting firms and paralegals now handle many of the tasks once reserved for lawyers.

No, that is not what the BLS said. Its reference to paralegals and accounting firms was a future projection:

[G]rowth in demand for lawyers will be constrained as businesses increasingly use large accounting firms and paralegals to do some of the same tasks that lawyers do.

The BLS said that some amount of the current law graduate underemployment is due to there being too many law schools:

Competition should continue to be strong because more students are graduating from law school each year than there are jobs available.

The important words being “should continue” because it’s been going on before. The other reason the 2012 grads couldn’t find jobs is that the currency isn’t circulating, i.e. the economy is in a depression.

Yes, rich people are loaning the government money at a loss.

But that’s just par for the course. The substance of the article is much more entertaining:

According to a new survey by Kaplan Test Prep, half of pre-law students say they plan to use their JD in a non-traditional legal field, largely because of the current job market for lawyers. Approximately 43% of these individuals said they hope to use their legal degree to work in the business sector.

Oh God, half of pre-law students are sold on the juris doctor’s versatility?

Although the legal industry is struggling, many students say they want to earn a JD because they are passionate about law. About 71% of pre-law students said the main reason they are applying to law school is to “go into a career [they] are passionate about,” while only 5% said their primary motivator was the potential for a high salary.

Passion won’t make those bondholders sell their inflation-protected Treasuries and invest in real goods and services.

According to the Kaplan survey, 43% of pre-law students said they would be likely to postpone or alter their law school plans if they did not receive enough financial aid.

Except we all know they will receive enough financial aid—as much as they can spend really.

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In other news…

Tom Brennan, “The Looming Threat for South Korean Law Grads? Unemployment,” The Asian Lawyer.

The large expansion in the number of law graduates stems from the introduction of U.S.–style postgraduate law schools in 2009. Before then, the law was only open to 1,000 students a year who passed a notoriously hard bar exam and then trained at the government’s Judicial Research and Training Institute. Unemployment was practically unheard of in this elite group. But the 25 new law schools pumped out about 1,900 graduates from their first classes last year.

I wrote a while ago on how Japan did the same thing: Adopt the defective U.S. legal education model right as it alienates just about everyone outside the law schools.

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And finally, you should watch this:

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Send a Comment to the ABA Task Force on the Future of Legal Education

A while back I wrote about how the ABA was convening a Task Force on the Future of Legal Education and how it has its work cut out for it. It’s asking for comments before its February 9 meeting in Texas, so if you feel like saying something, do so. I’m reprinting my comment here, with a couple of corrections to watch out for in the endnotes. I admit I didn’t plan on submitting a comment until I was asked to, but it helped me summarize my thoughts on what the problems are and how they should be solved. It also gave me an opportunity to dumpster-dive into the LSTB and find posts on topics that don’t come up often but lurk in the background. The LSTB crested 300 posts recently, so there’s a lot there.

I’ll add that some of the comments are quite good (UC-Hastings dean Frank Wu’s is getting some deserved attention), and I mentioned a few of the better ones. I’ve at least skimmed through all of them (not so much the one by the Canadian lawyers that spanned hundreds of pages), but of the ones uploaded after mine I recommend most the one by UC-Los Angeles law professor Richard L. Abel because it addresses the history of how lawyers are licensed in the U.S.

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Matt Leichter

[email]

lawschooltuitionbubble.wordpress.com

January 16, 2013

Task Force on the Future of Legal Education

c/o Art Garwin, Deputy Director

Center for Professional Responsibility

American Bar Association

futurelegaled@americanbar.org

To the Honorable Randall T. Shepard and Task Force members,

I write at the encouragement of Task Force member Thomas Lyons, and I thank you for considering outside opinions such as my own. The Task Force is to be commended for accelerating its timetable, for such eagerness reflects positively on the ABA’s willingness to take seriously the problems facing new lawyers and legal education.

Until now, legal education reform has primarily focused on what I consider “demand-side issues”: furnishing more accurate information about law school graduates’ employment outcomes to prospective applicants so they can hopefully make informed decisions about becoming lawyers. The ABA Section of Legal Education and Admission to the Bar responded quicker to the information deficit than I’d predicted, but the successes of demand-side reforms of legal education pale against those problems remaining on the supply-side of lawyer licensing: The barriers to obtaining a law license (which includes law school costs) are too high and arbitrary, and they harm both aspiring lawyers and the public the profession serves. I recommend the Task Force consider legal education as one of many practices that require reform.

The Task Force Should Encourage the ABA to Shift Its Position on Federal Student Loans and Bankruptcy Reform, Embrace Novel Education Financing Options

            That said, the education requirement for becoming a lawyer is obviously the most salient issue today, but recognizing that one of the Task Force’s subcommittees is dedicated to improving the delivery of legal education, I believe this is one of the last items that require revision. Overall, I find demands for “practice-ready” attorneys to be a distraction from more legitimate concerns. If employers want certain skills they should train their workers themselves and advocate simplifying the lawyer-licensing process accordingly. That’s how it works other industries, and asking educators to provide training for jobs that employers aren’t obliged to create costs students unfairly.

Rather, the dominating problem with law school is the over-generous Federal Direct Student Loan Program (DLP), which obligingly lends most students up to $20,500 in Stafford loans and the remaining total cost of attendance plus living expenses in Grad PLUS loans each year. I believe that access to unlimited student loans, well-intentioned as it may be, enables law schools to increase their tuition for as long as people are willing to attend them.[i] I suspect that without Grad PLUS loans and the restrictions on discharging private student loans in bankruptcy, both authorized in Congress’ 2005 bankruptcy reform,[ii] tuition at private law schools would have begun to level off or even decline by now because students would have been unable to finance it.

My views break with those long held by the ABA, which regularly supports increased lending to law students,[iii] and calls for ending the DLP are often met with hostile responses that the legal profession would only be accessible to the wealthy. I disagree. With the Bureau of Labor Statistics predicting a surplus of law school graduates into the indefinite future, I see no justification for the government to lend money to people to buy degrees for which jobs are unavailable.[iv] Nor am I convinced that legal education is a public good requiring government support. I further believe the often-made claim that legal education is versatile and opens job opportunities beyond law practice to be unsubstantiated and fallacious.[v] Cheaper lawyer training is possible, and the current system does not open doors to the poor but in fact creates poverty by saddling law students with large loan burdens.

Consequently, many of the people who will graduate law school in the future, to say nothing of those from the past, will have very large debts and no place in the legal profession commensurate with the effort they put into law school. Although the government’s Income-Based Repayment (IBR) plan will rescue these students from destitution, it will still require them to pay essentially an additional, regressive tax on their earnings for twenty years, which will be acutely felt if they are not working as professionals. IBR’s loan cancelation privilege (if it is not abolished in the near future)[vi] coupled with excessive loan burdens persuade me that the federal government will lose billions of dollars canceling money lent to law students. Law schools and the ABA ignore the approaching confrontation with legislators at their own peril.

The ABA’s most-recent response I know of to existing student loans is to advocate requiring private lenders to extend IBR-like protections to debtors.[vii] I think instead the ABA should shift its position towards reforming the bankruptcy code to restore full bankruptcy protections to all student loans and ending the DLP. It can also encourage state governments to require their public universities to offer, instead of debt financing, an equity option called “human capital contracts,” which obligate graduates to pay a certain portion of their incomes for a fixed time period back to their universities. Unlike IBR, this type of policy forces universities to internalize the costs of their own programs, and if their programs become insolvent, universities should terminate them.[viii] Embracing these policies would signal to the public that the ABA understands the causes of factors enabling law school tuition increases and excessive student debt, and it would begin to heal the generational rift forming between new law school graduates and the profession from which they are increasingly alienated.

As for the law schools themselves, the student loan system animates many of their frequently discussed inefficiencies, such as competition over U.S. News rankings, overcompensation of employees, needless new buildings, funding positions for graduates to improve their employment statistics, over-focusing on GPA and LSAT scores at the expense of other factors,[ix] and using fees from some students to attract well-credentialed students with scholarships. If possible, rather than regulating bad behavior, the ABA should address the incentives that encourage bad behavior.[x]

Even other reforms such as easing accreditation requirements or reducing the required number of credits for law school[xi] might not affect how law schools operate so long as their students are fully financed by the government. For example, many private law schools that do not rank very highly on U.S. News are nevertheless very expensive. Also, the lure of federal loan dollars is so powerful that many law schools in states that license graduates of non-ABA institutions forgo the option of delivering cheaper legal education in favor of national accreditation and the DLP loans that accompany it. For these reasons I believe the Task Force should take student loan reform as the most urgent priority for law licensing and legal education reform.

The Task Force Should Encourage Bar Authorities to Reduce Remaining Entry Barriers to the Profession

Student loans, however, are not the only problem the profession’s entry system faces. In recent years critics have used the discontent directed at law schools as an opportunity to advocate for deregulating the legal profession entirely. Many of their arguments are poorly researched, particularly those demanding reform by claiming without evidence that doing so would cure an attorney shortage in the United States.[xii] They are correct that the profession’s entry barriers are arbitrary, and the longer the profession defends them and the DLP, the more likely outside forces will unilaterally rescind its autonomy. Outside of the risk of incompetent practice, this might not be a bad thing, even if done for the wrong reasons, but rather than resisting calls for change, the Task Force should acknowledge the weaknesses in most states’ lawyer-licensing rules and encourage efforts to change them.

For instance, bar exams in their current form are not defensible entry barriers. They almost always occur long after bar petitioners have sunk enormous costs into legal education,[xiii] they are too hard for some people who might otherwise make fine lawyers (“false negatives”), they test many obsolete legal doctrines, and they also omit entire substantive practice areas to which many attorneys dedicate their entire careers. Although I agree that some showing of legal knowledge (especially of ethics and constitutional law) is justifiable, demanding too much is not. Streamlining bar exams along practice lines would greatly reduce the incidence of false negatives among bar petitioners and conserve resources for all test-takers.

Simplifying the bar would also reduce the possibility of law schools knowingly accepting applicants who probably lack the aptitude to pass the exam because of the correlation between LSAT scores and bar passage.[xiv] Perhaps between five and ten percent of ABA law school graduates who take a bar exam never pass. Some test-takers might take more than one exam, passing one and not another, but the ABA should do everything in its power to prevent law schools from enrolling students who will waste precious time and money for a license they probably will not obtain, even if it means tightening bar passage requirements for accredited law schools. It’s unfair to deny people a place in the profession because the exam wasn’t calibrated to the knowledge they need as practicing attorneys. It’s also unfair to the clients they could have served.

It’s also probable that the law licensing system allows too many “false positives,” people who by virtue of their LSAT scores and GPAs appear to make good lawyers but don’t.[xv] I’m not knowledgeable of data on firm associate retention rates or similar topics, but front-loading the legal education requirement makes it too easy for people who do not know if law practice suits them to enter the profession. It also widens the information asymmetry between law school applicants and law schools, which the latter has greatly used to their advantage by admitting applicants who serve law schools’ reputational goals before their students’.

The mandatory legal education requirement doesn’t serve potential lawyers well either. For instance, the aforementioned correlation between LSAT scores and bar passage rates disserves those on the opposite end of the bar exam aptitude spectrum as well, which raises the question: Why require someone who will likely pass the bar exam by self-study anyway to attend law school? If the principal benefit law school provides these individuals is signaling their competence for good job opportunities, then I believe the Task Force should consider eliminating the formal legal education requirement altogether.

Conclusion

Declining applications and hostility towards law schools and law practice are teaching the public that demand for legal education (or, rather, law licenses) is not connected to demand for legal services. If the near-term solution to many of legal education’s problems is curbing the government’s lending to law students, the longer-term solution is to align the profession’s licensing system to the public’s need for legal services. I believe adopting my suggestions will accomplish both goals.

Thank you for considering my thoughts.

Regards,

Matt Leichter

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[i] For information on the theoretical basis of my beliefs, I recommend, Andrew Gillen’s “Introducing Bennett Hypothesis 2.0,” from the Center for College Affordability and Productivity. http://centerforcollegeaffordability.org/uploads/Introducing_Bennett_Hypothesis_2-1.pdf (PDF). I have yet to see a convincing author discredit Gillen’s analysis.

[ii] [Update: This is incorrect. Grad PLUS loans were authorized separately from bankruptcy reform by Congress in February 2006.]

[iii] See e.g. ABA president Carolyn Lamm, “Law School Debt Has a Manageable Solution,” 2009. http://www.americanbar.org/groups/law_students/initiatives_awards/advocacy/debt_solutions.html

[iv] Bureau of Labor Statistics, “Lawyers,” Occupational Outlook Handbook. http://www.bls.gov/ooh/legal/lawyers.htm

[v] Matt Leichter, “The Juris Doctor Is ‘Versatile’ Thanks Mainly to Numerous Logical Fallacies,” The Am Law Daily, August 14, 2012. http://www.americanlawyer.com/PubArticleALD.jsp?id=1202567415810&The_Juris_Doctor_is_Versatile_Thanks_Mainly_to_Numerous_Logical_Fallacies

[vi] One bill that may make its way through Congress proposes to end the loan forgiveness portion of IBR for future students, which will condemn many law school graduates to a lifetime of debt. http://www.bloomberg.com/news/2012-12-04/student-loan-collection-targeted-for-overhaul-in-congress.html

[vii] ABA Resolution 111A, Young Lawyers Division, http://www.abajournal.com/files/111a.pdf (PDF).

[viii] Similar ideas have been proposed by a student organization advocating reform of the University of California systems, called “FixUC,” which I wrote about here: http://lawschooltuitionbubble.wordpress.com/2012/01/23/fixuc-stumbles-onto-human-capital-contracts/.

[ix] One comment to the Task Force that illustrates law schools valuing incoming student credentials over applicants’ strengths is by non-traditional law student Elizabeth Paskiewicz, who has significant experience in the legal profession as a non-lawyer and performed very well in her paralegal education, but most ABA law schools overlooked her because of their mechanistic decision-making processes that exclude applicants with low undergraduate GPAs.

[x] For example, even without the student loan system, law schools still have an incentive to compete over their magazine rankings, which is fine, but they may still falsify student data they send to the ABA. If so, then auditing them is a good idea.

[Update: This sentence didn't come out right. Something more like "If possible, rather than regulating bad behavior, the ABA should address the factors that aggravate bad behavior." My point is that we might not be able to live in a world where law schools don't engage in needless competition (over their U.S. News rankings, for example). Regulations like auditing make more sense if addressing the loan program is insufficient.]

[xi] Although there have been growing calls (most recently in New York) to reduce the education requirement from three years to two, I discourage the Task Force from endorsing such proposals simply because the third year is expensive and not useful. This ignores the root cause of tuition increases, and one private law school in five has raised its tuition by 50 percent or more since 1999, meaning two years in 2011 buys a full degree then. Rather, I recommend the Task Force address the DLP but flip the question of usefulness around: How much formal legal education is necessary and why?

[xii] The primary example that springs to mind is Clifford Winston’s, Robert W. Crandall’s, and Vikram Maheshri’s book, The First Thing We Do, Let’s Deregulate All The Lawyers, 2011. A blurb from their Wall Street Journal article on the subject can be found on TaxProfBlog: http://taxprof.typepad.com/taxprof_blog/2011/08/its-time-.html. I’ve written more on the topic: http://lawschooltuitionbubble.wordpress.com/2011/08/23/wsj-op-ed-brings-shock-doctrine-to-law-practice/, http://lawschooltuitionbubble.wordpress.com/2011/09/02/the-economist-has-never-heard-of-the-bureau-of-labor-statistics/.

[xiii] One influence for this section are the sentiments expressed in the comment to the Task Force by Nicholas L. Georgakopoulos.

[xiv] Here are two examples documenting the connection: http://www.unc.edu/edp/pdf/NLBPS.pdf (PDF); http://academic.udayton.edu/thewhitestlawschools/2005twls/chapter2/Legaled04.htm (more recent, but hearsay).

[xv] I believe the “26 factors of lawyer effectiveness [plus one]” cited in Nancy B. Rapoport’s comment to the Task Force are the definitive factors for “true positive” lawyers.

Who Are American University’s 79.6 Percent?

I’m sure readers are aware of the Washington Post Magazine‘s “The Case Against Law School,” which carefully goes through all the BLS data that readers of the LSTB found out about at least a year and a half ago. (Just stroking your vanity, reader) Among other points, the Post Magazine calls out American University for expanding its facilities even though only 35 percent of 2011 graduates had found full-time long-term lawyer jobs.

It’s one thing when this information is publicly available on the ABA’s Web site, but when mainstream sources start converting them into fractions and publicizing them, then the unenviable task of defending the system falls to the deans, such as American University’s Claudio Grossman.

The Post focused on a single employment statistic that is grossly misleading and relied on a number taken from only one of 16 primary employment categories collected by the American Bar Association … In the case of American University Washington College of Law, a far more appropriate statistic than the one The Post cited is 79.6 percent, which reflects the true employment data and career choices of our 2011 graduates. These graduates are employed in positions requiring bar passage, in positions in which a law degree provides a distinct employment advantage or in other professional positions where developed legal skills are highly valued, or they are pursuing advanced degrees.

Superficially, I think the Post is justified in using law schools’ “Employed Bar Passage Required Full-Time/Long-Term” as their success rate. For 2011, the average law school’s was 54.1 percent (average deviation, 11.6 percent), which places American University unusually far down in the scale.

But what are these 79.6 percent doing? (Actually it’s 79.7 percent.)

Most of the remaining employment status categories aren’t as glamorous as Dean Grossman makes them sound. For one, “pursuing advanced degrees” is not an employment category at all. It means that 3Ls had no jobs lined up in the fall of their third year so they triple-downed on more degrees as a backup plan if nothing good emerged by graduation. Their alternative outcome, unemployment, has been blessedly shifted off the law school’s books. So take 5.6 percent away and make it 74.1.

And how many of those 74.1 percent were employed part-time, which isn’t much of a success for three years of legal education costing $130,000 in tuition alone? I count 53 out of 467 graduates. Take 11.3 percent: 62.8. Employed full-time short-term isn’t a very impressive outcome either. That’s another 10.5 percent, what’s left rounds to 52.2 percent.

Two graduates out of 27 are working full-time long-term at American University itself, but we’ll leave them in the total. Who knows? Maybe they were hired as law professors. Another 34 of the remaining 244 graduates are in clerkships, which are counted as full-time long-term even though they are jobs with indefinite employment periods, but I’ll be generous and leave them in too.

One could do this kind of calculation for all the law schools, but in the end I think relying on full-time long-term lawyer employment isn’t “grossly misleading” at all. Taking all the law schools together, this employment status correlates negatively to every other one for which the ABA collects data, especially unemployment, which is tautological yet not trivial. Apparently, the more a law school’s graduates are employed full-time long-term as lawyers, the less likely they are to be doing anything else.

(Note: The “Other Employment Statuses” include all part-time and short-term jobs as well)

More crucially, it doesn’t even correlate to categories like “JD Advantage” or “Professional Position,” which is important for superficial versatile JD arguments, which Dean Grossman provides with full force.

A legal education is important preparation for a wide array of career choices, including employment in highly competitive jobs and fellowships in legislative and political offices, in federal agencies, in the many public-interest, trade-association, corporate offices and international organizations in and around Washington.

If this is true for American University graduates, the dean will have to do more to demonstrate why his school’s graduates are the exception. If the J.D. were versatile at graduation, then we’d expect more positive correlations with bar passage required jobs. I can see why some of the 52.2 percent of a D.C. law school’s graduates might find themselves in Washington-ish jobs rather than law firms, but without a clearer breakdown on what the 35-79 percent of graduates are actually doing, the Post Magazine is well within bounds relying on that one employment status.

Original Article: ‘The Juris Doctor is ‘Versatile’ Thanks Mainly to Numerous Logical Fallacies’ on the Am Law Daily

“The Juris Doctor is ‘Versatile’ Thanks Mainly to Numerous Logical Fallacies,”

…can be found on the Am Law Daily.

In other news, there won’t be many new posts (to the extent I have time to churn them out) as I’m committing myself to updating the law school tuition data page. It can’t be done at once, so I’m doing it piecemeal. I’m going in reverse order and am up to Virginia.

For you, though, I’m showcasing one of those songs that’s been in my head for years but couldn’t place it. I heard it my local watering hole and the bartender told me what it was.

Aging Attorneys Not a Real Problem

Inside the Law School Scam beat up on Cooley’s dean, Don LeDuc for warning about a sudden shortage of lawyers in Michigan brought on by retiring lawyers.

Fortunately, the Washtenaw County Legal News quotes a bunch of people who disagree. He-said-she-said isn’t as good as BLS numbers, but some of the quotes are very much on the mark and sound persuasive, making it more of a he-said-but-they-said-he’s-very-very-wrong-and-the-paper-agrees-if-you-read-between-the-lines.

“I understand that law schools like Cooley want to create the image that there is job availability in the legal market because their graduates are struggling to get jobs and law school graduates struggling to find employment is bad for business. However, I would not tell potential students that the aging legal population will translate into jobs. I have seen that theory proven false. When I started as a lawyer 10 years ago, after graduating from Cooley, I made the foolish assumption that these lawyers I saw in their fifties, sixties and seventies, would be retiring. Ten years later, they are in their sixties, seventies and eighties, and I work with them every day.”

The Washtenaw County Legal News could’ve thought things through a little bit and shown that the quoted attorney above is correct.

(1)  Michigan can easily import attorneys from other states. There are many law school graduates from nearby states that would practice there if the opportunity arose.

(2)  Michigan’s population has hovered around 9-10 million since 1972 (40 years!), which is around the time Cooley opened. More law graduates for the same population is a solid indicator that there won’t be a shortage.

(3)  No one seems to be asking why a profession like law would start aging and what it means. It tells me that (a) experience matters for legal services, and (b) there hasn’t been new demand for lawyers in the state for a while. There’s just as much reason to suspect that many retiring attorneys won’t need to be replaced at all.

The Verdict Is in on the Lottery, Why not Law School?

Jenn Ladd, “Law School Letdown,” the Baltimore Sun.

The article isn’t bad, but the tagline is:

“With a hefty price tag and a shrinking number of jobs, is law school worth all the effort? The verdict is still out.”

The Sun, though, is in sort of a bind. Often local newspapers will only consider their state’s law schools’ plights. Sure, Maryland has only two law schools, both public, but adjacent D.C. has six, nearby Virginia has several, and Pennsylvania does as well. Sure the local schools probably have a leg up in posting grads in government positions, e.g. prosecutors and public defenders, but in the private sector, the two schools’ grads have to compete with the swarms that Georgetown releases into the wild each year.

Still, the two schools’ charge a lot less, but the article finds that the students magically graduate with six figures of debt, much more than triple the tuition. In fact their grads are around the national average, which might be due to Grad PLUS loans generous extension to full living expenses.

This prompts the question: Is the verdict still out?

Nope, it’s in. The only people I endorse going to law school are those who’ve worked in the field already, have minimal opportunity costs (e.g. they’re working part-time anyway), and are offered a full tuition waiver. That’s it. No one else should go. That doesn’t mean there won’t be some people who come out ahead without a scholarship, or that somewhere in the seats of today’s law schools are future legendary jurists, but it does mean that ex ante, those legendary jurists are better off not taking the risks.

The reality is that law schools have no idea what the medium-term value of a law degree is. When they do, there’s nothing stopping them from providing self-serving information. Take LawProf’s recent post on NYLS, which despite winning a dismissal of the lawsuit filed against it still gallingly implied that its graduates did better four years after graduation. The bottleneck argument and the versatile J.D. are alive and well, but note that nothing in the new 509 Standard precludes a law school from doing this. They can publish damning evidence of where their graduates are nine months out and then cover it up with a biased sample of what slightly older grads are doing. Hopefully fewer people will believe them anyway, but it’s another hurdle for informing applicants. As for very long-term data, we can suspect that a third of 1970s grads from non-elite law schools had left the profession. It’s probably significantly higher today.

Since the odds are so bad, why not view law school as the lottery and treat it as such? Perhaps it wouldn’t be as interesting to read about.

NYSBA Journal Article Relies on Several Logical Fallacies to ‘Connect the Dots’ on Legal Education’s Outlook

Gary Munneke, “Race to the Finish Line: Legal Education, Jobs and the Stuff dreams are made of,” New York State Bar Association Journal

Citing his 40-years’ observation of the legal job market, Pace Law School professor Gary Munneke writes, “So when I say the writers and bloggers in the legal press have missed the mark in their criticism of legal education, it is not without recognizing that there is some merit in what they have to say.” (11) Professor Munneke is a frequent contributor to the NYSBA Journal. I’ve liked some of his past articles, particularly one about the end of general practitioners last year. He’s only touched on legal education briefly, until this month’s Journal. It’s not good, and because the article isn’t on line yet (check here later), I’ll quote it extensively. He writes:

“It is true that the recession of 2008-2009 seriously undermined the job market for both new and experienced lawyers. It is also true that legal education is expensive, and many students pay for it through loans that have to be repaid after graduation. And it is well documented that some law schools misstated employment and other statistics in the tight, competitive job market of recent years. But connecting the dots in this case does not lead to a conclusion that our system of legal education is bankrupt or that law school is not an excellent career choice for many students. This article will attempt to re-connect the dots in a way that more accurately reflects contemporary legal education and the job market for lawyers.” (11)

At least Munneke leaves us with no questions as to where he stands on the issues. Instead of giving us hard evidence, though, (who exactly is saying that the system is “bankrupt,” aside from scambloggers? And what does this mean?) he essentially opens by telling us that “everyone” has known about legal education’s problems: high tuition and few high-paying jobs, yet this is a non-sequitur. Our focus is the law degree’s value, not whether criticisms are novel. Moreover, it’s not just “some law schools” that misstate their employment data. Anyone who even skims Law School Transparency’s Winter 2012 Transparency Index Report can see the embarrassing results, law school by law school. Worse, in 2011 it also came to light that at least two schools, Villanova and Illinois, had been defrauding the ABA for years with inaccurate incoming student data. Munneke whitewashes these problems.

Munneke’s article then confuses readers. Beneath a header titled, “The Good News,” he writes:

“Signs abound that the market for legal services is picking up, in concert with the general economy … It is not likely, however, that we will return to those halcyon days before 2008.” (12)

This, much less the subsequent paragraphs predicting the rise of staff attorneys, pro se litigants, and online non-lawyers, does not sound like “good news” for the median 2L in most law schools.

“With respect to graduates who go to work for small firms, government agencies, not-for-profits and other organizations, anecdotal evidence suggests that they do pay their bills and repay their loans. Chicken Littles who cry that it cannot be done are simply wrong. Thousands of law school graduates have been following this path for years. It may not be as easy to get by when you are making $60,000 compared to $160,000, but somehow you do it, and you survive.” (13)

Is this satire?

The problem is that like most law students, Munneke believes the $60,000 jobs are there for graduates if they want them, unless they decide to make the noble sacrifice and choose to work for $30,000 helping the destitute. On the one hand, Munneke thinks the economy will create enough law-ish jobs for everyone to pay down their debt, but on the other he says that things won’t be as good as they used to be. This is the “good news.” I can only explain this dissonance by assuming Munneke is committing the lawyer/J.D. equivocation fallacy. Sure, people in small firms, government agencies, and nonprofits have law degrees, but that’s not what happens to everyone who completes law school. For example, how many Pace grads over the last decade have defaulted on their loans?

If you knew where this was headed, you’re right. Munneke’s next point: the unsinkable, versatile juris doctor.

“[T]hose who claim that there are not enough legal jobs to go around fail to understand that the job market for lawyers is incredibly elastic, because a law degree is incredibly malleable and flexible.” (13)

Munneke leans on the findings of a 40-year-old ABA task force study that researched the “oversupply of lawyers” and determined that if law graduates couldn’t find work in law firms, they went to work in non-legal jobs. This is another straw man argument. Reformers are not committing the Luddite fallacy, arguing that law grads who can’t find work as lawyers never work a day in their lives again. But have heart, for Munneke anticipates this:

“[A] legal education provides training that will give you an advantage in the job market – both in getting the job and performing the job. What the [ABA] Task Force discovered in the 1970s remains true today.” (14)

He then provides an endnote to a book he coauthored, Nonlegal Careers for Lawyers.

Now, I’m not criticizing Munneke for citing his book in the endnote or even writing one on the topic. I’m sure plenty of lawyers would like to go into non-legal careers, and it gives them good advice. Rather, I’m going to point out two things. One, I have yet to see anyone quantify the “advantage in the job market” that a law degree provides. Even reputable organizations researching the topic make the shocking methodological error of equivocating holding a juris doctor and working as a lawyer, such as the Pew Center’s “Is College Worth It,” and Georgetown’s “The College Payoff.” Any skills taught in law school can be learned in a solid undergraduate program—and should be. Two, many lawyers seeking alternative careers are pretty intelligent to begin with. I seriously doubt law school (much less college) found them as lazy dolts and forged them into precision workers. This is a post hoc fallacy: you went to law school, then you became a good worker, therefore law school made you a good worker. At this point, I’ll add a line from the BLS’ Occupational Outlook Handbook that I typically underemphasize:

“As in the past, some graduates may have to accept positions outside of their field of interest or for which they feel overqualified.”

Notice that “overqualification” here is based on a “feeling,” not on an empirical observation that the graduate’s qualifications exceed the employer’s demands. This is the heart of the rebuttal to the versatile juris doctor: it’s unfalsifiable. Law school ends up working out for everyone regardless of the outcomes, be they monetary or intangible, particularly higher workplace autonomy. Yet, it’s one thing if people who can’t find lawyer jobs earn some premium for their law degree elsewhere, but it’s another if the degree provides no benefit or a detriment. The BLS is open to this possibility; Munneke is not. Ultimately, he provides no reason for us to believe that making diligent workers requires $120,000 in tuition debt, plus living costs and forgone income.

Which leads me to my favored elephant: Munneke doesn’t discuss the federal student loan program’s impact on how legal education is financed. Sure, he says law schools should be more “cost-effective,” but throughout his article, he implies that tuition increases are accidental. No discussion on the Direct Loan Program, bankruptcy nondischargeability, or any serious inquiry as to why law school needs to be expensive. It just is. He’s perfectly content to let taxpayers loan unlimited sums to law students like it’s Monopoly money, no matter what their future incomes are or how many loans on IBR will have to be canceled 25 years after graduation. Again, this is a straw man, or well, an invisible straw man argument. For example, in 2011 Brian Tamanaha wrote on the intersection between federal education policy and legal education, I’ve also researched it as well, but Munneke declines to directly engage these claims.

“There is no evidence that people will stop coming to law school, nor is there evidence that they should.” (14)

On the contrary, we’re seeing a decline in applications and LSAT takers, and there’s good reason to believe that marginal law schools will see shortfalls in desired applicants.

(I’m assuming February 2012 LSATs are the same as 2011, so this is conservative.)

And there’s plenty of evidence, which Munneke characterizes as “anecdotal” in the beginning of his article, that a law degree is not a good investment. For example, law students going on to IBR would suggest law degrees aren’t self-sustaining. Also, Herwig Schlunk recently redid his 2009 calculations and found that everyone loses money on law school. University of Louisville dean Jim Chen conducted similar calculations and their implications lead to the same conclusion. Batting these efforts away as “anecdotal” reflects either an unwillingness to research contrary evidence or a deliberate attempt at evading them.

Yes, it’s true that law schools didn’t cause the housing bust and overall wage stagnation in America, but Munneke’s attempt at “reconnecting the dots” on legal education employs so many logical fallacies that I think it’s worthwhile to list them for the sake of practice:

• Straw men
  • Who is claiming legal education is “bankrupt”? What do they mean by this? Is this a commonly held view?
  • Who is saying that graduates will be permanently unemployed? Is this a commonly held view?
• Argument from authority
  • Munneke’s experience over 40 years, while interesting, is not evidence of legal education’s value.
• Hasty generalization
  • Munneke’s experience of graduating during a recession in 1973 is not comparable to those graduating in 2009 due to differing economic factors and the nondischargeability of student loan debt.
• Non-sequitur
  • “‘Everyone’ has known about legal education has problems, therefore critics are saying nothing new.” That doesn’t mean they’re wrong.
• Post hoc ergo propter hoc
  • “Lawyers are good workers, therefore law school makes people good workers.”
• (Hidden) Argument from incredulity
  • “Knowledge and skills picked up in law school can’t possibly be learned elsewhere for cheaper.”
• Unfalsifiable claim
  • “The juris doctor is so versatile that everyone who obtains one still finds gainful employment, even outside the legal profession.”
• Composition fallacy:
  • “There’s no evidence that people will stop going to law school.” There were fewer applicants in 2009 than we would’ve expected, and now there’s a decline, so won’t some law schools be more adversely by the applicant shortfall than others?
• Invisible straw men (ignoring contrary evidence)
  • What about reformers who criticize the Direct Loan Program?
  • What about reformers who are looking at the root cause of tuition increases?
  • What those asking about the responsibility the profession has to ensuring tax dollars are well-spent on legal education?
  • What about those who point out that the number of people applying to law school is dropping?
  • What about those who calculate that law school requires an income-to-debt ratio of 2.0 or higher?

Then there are a few borderline cases.

• Equivocation
  • “Lawyers can be found in good jobs, therefore all law graduates have access to good jobs.”
• Misleading statement
  • “Some law schools are misstating their employment data.”
• Refusing to research contrary information
  • How many law grads have defaulted on their loans?
  • How many require family help to pay them?
  • How many are on Income-Based Repayment or Income Contingent Repayment?
  • What are their income-to-debt ratios?
  • How many law grads believe they are underutilized in their work?

I count nine (really eight) classes of clear logical fallacies in Munneke’s article, along with three classes that are judgment calls, and that’s only from excerpts gleaned from reading the article twice in one evening without taking detailed notes. I also didn’t need a legal education to see them (okay, my grad degree did, like, 25 percent of the work). Gary Munneke did not connect the dots on what’s really going on in legal education and disserved NYSBA Journal readers as a consequence.

Will the ABA Law Student Division Respond?

On Wednesday, February 1, 2012, the Internet amused me, for on the same day, two items popped up.

(1) Joint Statement of ABA Law Student Division Chair Tremaine “Teddy” Reese and Young Lawyers Division Chair Michael G. Bergmann Re: ABA and Young Lawyers, Law Students, ABA Now

“Law students and young lawyers face more stress and uncertainty today than ever.  Today, the cost of legal education and average student loan debt loads are unprecedented, while job prospects for graduates are uncertain.  The ABA and its Law Student and Young Lawyers Divisions understand these realities, and are creating and leading initiatives to assist you during the initial stages of your career.”

And,

(2) “Eight Law Firms Sue Twelve Law Schools,” Inside the Law School Scam, more detail at Law School Transparency.

David Anziska, “[I]t is time for the schools to take responsibility, provide compensation and commit to transparency. These lawsuits are only the beginning.”

So “Young Lawyers and Law Students”…

Door #1: The Young Lawyers Division’s initiatives?

Door #2: Suing your law school for fraud?

Both?

Seriously, when will law students (who aren’t affiliated with the ABA) start organizing the way the ones suing their law schools are?

[Bonus reading at Anthony Urti.]

Not Your Parents’ (or Grandparents’) Profession

In a post a few weeks ago, I teased the BEA for a clear typo on its Web site.

For my previous Am Law Daily post, which was based on that, I called the BEA to find out what was what. Turns out my guess of 1,277,000 persons engaged in industry was close (coincidentally), it was really 1,269,000. However, the BEA told me that the correct numbers were in the NIPA tables, and the person I was talking to said, “Oh, they go back to 1948.”

She was mistaken. They actually go back to 1929.

You can see it all in “Section 6 – Income and Employment by Industry.” Here’s the number of “persons engaged in industry” and “full-time equivalent” (FTE) employees in the legal sector. “Persons engaged” adds self-employed workers to FTE employees. (Why it’s not self-employed workers plus “full-time and part-time workers,” a separate BEA series, is beyond me.) The BEA changes its methodology periodically, explaining the breaks.

By dividing these two series by the population (pre-1952 is from averages of this Census Bureau page), we can actually learn quite a bit about the legal sector’s vitality through most of the last century, which is especially useful because the BEA’s data on the legal sector’s real value added only go back to 1977. Think about it: whenever the number of persons engaged and FTE employees per capita grows, that means the sector is absorbing workers from other industries and that demand for legal services is growing faster than the economy. (The opposite isn’t always true, for when it declines, either the whole economy is going down or just the legal sector is.)

This is an interesting example of where precision matters more than accuracy. It’s not so much the exact number of FTE employees or persons engaged per capita that’s important but their growth rates. For the gap years between the datasets, I took the averages of the end years. Here’s the five-year moving average to give the general pattern.

Any year above zero is one in which the legal sector’s “population” grew faster than the nation’s. These graphs should really land home my point about the legal sector. It did fantastically well from about 1960 to 1990 (and the 1970s, wow), and then … Yeah. Here’re the unsmoothed growth rates:

I put this up to show exactly how badly the legal sector has been doing recently. It generally went negative starting in 2004. That was eight years ago.

The other point to take from this is the gravity of the disappointing generational divide between those in leadership positions in the professions and those entering it. I haven’t yet opined on the new ABA President’s ill-advised comments on recent graduates; I may do so in greater detail later, but when William T. (Bill) Robinson III says that “[Law students] are, in my opinion, making very wise decisions about their future,” readers have to realize that as a 1971 grad, Robinson’s career began at the dawn of the profession’s golden age.

In the average year during the 1970s, FTE employees grew seven percent, the number of law school graduates per capita was lower, tuition was lower, and the 1970s was the frontend of the boom in legal education. Today’s law students would be thrilled to graduate under these circumstances. The fundamentals today couldn’t be more different, and the profession will pay dearly if it is led by individuals who refuse to acknowledge (and therefore represent) the growing constituency of lawyers who never had a realistic chance of joining it.

Earlier, I pointed out that the BEA defines “persons engaged in industry” as FTE employees plus self-employed workers, implying that we can isolate the number of self-employed workers in the legal sector by subtracting FTE employees from persons engaged. This can be useful because the vast majority of self-employed workers in the legal sector are lawyers, in contrast to the paralegals, clerks, secretaries, and janitors that can’t be separated from associate attorneys in the FTE employee data. At a per capita rate, it looks like this.

The number of self-employed workers alone better helps us measure long-term success in the profession. Assumedly, starting one’s own practice, or buying into an existing one represents an achievement in terms of professional competence. Not all associates stay with the profession, whether voluntarily or not, and while the number of self-employed workers per capita doubled between about 1950 and 1995, it took a rocky path to get there. Nearly a quarter of self-employed workers per capita in the legal sector have vanished in the last 15 or so years. Don’t expect them to come back.

Why is this important? A self-employed lawyer is by definition a “marginal attorney” in economics terms, i.e. the last person who can make a living as an attorney. That doesn’t need to be a “good” living, but the marginal attorney is someone who in theory can earn more lawyering than doing something else. (Emphasis on the “in theory.”) Unless and until I get the number of self-employed lawyers from the directly from the BLS, this (along with FTE employee growth) is as good a proxy for the long-term career outlooks of current law school graduates. The fact that the number of self-employed workers per capita in 2005–before the Great Recession–was about what it was in 1985 tells us we don’t need to train so many lawyers, i.e. it’s time to shut down law schools.

“Very wise decisions about their futures” indeed.

‘New BEA Data Showing Legal Sector Grew 2.3 Percent in 2010 No Reason to Celebrate’ up on Am Law Daily

New post on the Am Law Daily:

“New BEA Data Showing Legal Sector Grew 2.3 Percent in 2010 No Reason to Celebrate“

Somewhat improved over the original post, as always.