The 2011-2012 LSAT Year Begins

I didn’t realize the June 2011 LSAT administration occurred a week ago. I await the numbers, but we can expect them to be depressed as they were last year due to widespread knowledge of the legal education system’s failures. Before the LSAC’s chart is updated though, it’s time to put the numbers in context, particularly because the LSAC doesn’t account for population growth. Take a look.

(Note that the LSAT year is that of the February test date’s. The Civilian Employment-Population Ratio (CE-PR) is the reading at the beginning of the calendar year.)

There are several interesting facts about this graph:

• The peak LSAT year was 1991, followed by 1992, 1990, 1989, and then 2009. 2011 was similar to 2009, 2004-05, 1994, and 1988.
• Oddly, the CE-PR and the number of LSAT takers tracked each other somewhat until 1992. The Pearson correlation coefficient is only -0.344.
• As we’d expect, for the most part, LSAT takers grow along with unemployment. From 1992 to 2008, the Pearson correlation coefficient is a whopping -0.959.
• Starting in 2009 the correlation breaks down. In 2009, the increase in LSAT takers doesn’t correspond as tightly to the CE-PR as before, even though tons of jobs were lost in 2008, and in 2011, as we know, the trend reverses with LSAT takers declining along with the employment rate. From 2009 to 2011, the correlation is -0.473.

Despite 2009-2010 being a peak LSAT year, the data may actually be hiding a “scamblogger effect” beginning at that time. This both is and is not surprising. On the one hand, we wouldn’t expect people to consider law school if they didn’t think there’d be any jobs; on the other hand, given the stagnant CE-PR and the fact that many prospective students can wholly finance legal education (and some living expenses) with loans eligible for income-based repayment, we can wonder if some 0Ls are pragmatically stalling for time as the economy improves (it’s not).

Bear in mind that with a CE-PR this low, the short-term opportunity cost of going to law school is almost negligible, contrary to the badly mutilated ROI calculation David Van Zandt came up with that the ABA as well as others frequently tout in its “Value Proposition of Attending Law School” document (omitted opportunity cost = $60,000 per year (HA!)). Herwig Schlunk’s vastly more accurate calculation uses salary numbers from Payscale.com that are around $30,000 per year, but I think as of 2011, the real opportunity cost of attending law school for today’s college graduates is lower than that because income gained by slaving away at the “McJobs” of 2011 is less than the living costs included in a Grad PLUS loan. I discourage anyone from going to law school just because IBR exists, but I wouldn’t be surprised if it starts happening.

Anyway, the 2012 LSAT year is on. Happy Summer.

Speed Link—Future of Legal Education Symposium Portrayed as Waste of Time

Katherine Mangan, “As They Ponder Reforms, Law Deans Find Schools ‘Remarkably Resistant to Change’” in The Chronicle of Higher Education

A while back J-Dog of Restoring Dignity to the Law informed readers of a symposium on the future of legal education (his response is here), and the Chronicle discusses its results.

“Putting one professor in front of a large group of students is very efficient.” Clinical classes and simulations, which require low student-to-faculty ratios, cost more, [UC Irvine Dean Irwin Chemerinsky] said…Asked by an audience member how the school could afford to do that, he answered, “It starts with having to charge ridiculous levels of tuition.” Annual tuition and fees at Irvine total just over $40,000 for California residents and $50,000 for out-of-state students.

The problem I have with hands-on training is that it’s a lot easier to have a boss teach someone this type of stuff on the job. In other words, no amount of clinical training will create jobs. The word I bet wasn’t uttered here? Apprenticeship (or “articling” in Canada and outside North America). But that would mean shutting down law schools, which the deans probably didn’t want to consider.

Mr. Matasar took issue with the latter charge [that law schools churn out too many ill-prepared lawyers and mislead students about their job prospects with inflated placement statistics]. “There’s a common myth that law schools are engaged in the business of lying to people to get them to come to law school,” he said. If it were “some giant conspiracy” by law deans, “that would suggest we’re all a bunch of immoral, unethical, and terrible people, and we’re not.”

Law students know what they’re getting into when they sign promissory notes for their student loans, and they have no doubt read the many blistering critiques questioning the value of a law degree, he said.

Yes and no. True, law schools aren’t moustache-twirling grifters selling bridges. But they’re not guileless suburban preschools either. They freely acknowledge that they’re overcharging students relative to what the market can return for them, and they frequently admit that tuition hikes are for prestige, i.e. they’re valueless. If law schools know that they’re not providing value, then they’re accepting federal debt money in bad faith (private lenders had to warp the lending laws to their advantage, and that’s moot now with the advent of Grad PLUS loans). Title IV of the Higher Education Act is meant to help students gain a higher standard of living via education—not allow higher educators to charge whatever they feel like. Also,we shouldn’t need scambloggers to trash law schools’ for their excesses and distorted employment advertising, and I’m sure some would retire if disclosures were more accurate. Then again, there’d be fewer law schools as a consequence. So long as law schools treat the federal student loan system as an entitlement, they deserve every savaged toilet Third Tier Reality hurls at them.

Legal education does cost too much, Mr. Matasar said, mainly because it is “grossly inefficient.” Schools could cut costs by stratifying—offering, as a friend characterized it to him, a “Motel 6″ education with few bells and whistles, in which practicing lawyers teach many of the courses, as well as a “Ritz-Carlton” version taught by full-time, tenure-track professors. Neighboring schools could share library, faculty, and other resources, he said, adding, “Does every law school need an expert in the law of Timbuktu?”

This doesn’t quite contradict Dean Chemerinsky’s point about efficiency, and Dean Matasar is largely right. The problem though isn’t just that legal education isn’t “unbundled,” it’s also too large and the educators don’t take on the financial risk of their students’ failures. If they’re interested in cutting costs, schools could also not paying instructors so much.

[S]everal speakers…argued that accreditation rules set by the American Bar Association discourage innovation.

Yup. I wonder if anyone pointed out that Dean Matasar has disagreed with Dean Jay Conison (also present and of the ABA’s Standards Committee) that the changes in the ABA’s accreditation standards won’t lower costs. That would’ve been an interesting exchange.

Many students entering law school today won’t earn enough to make their investment pay off, [former Northwestern Dean David Van Zandt] said, adding that under the current system, going to law school makes economic sense only if a graduate earns a starting salary of at least $66,000 a year.

It’s more than $66,000 per year as Herwig Schlunk calculates. Also, again, if the deans know their model is failing students today, they shouldn’t be taking the money, and on a moral level they shouldn’t accept private loans either. They should take on their students’ financial risks and should be arguing for student debt reform for existing debtors. If they were truly virtuous they’d think of ways to rehabilitate the Lost Generation to the law. The Chronicle article didn’t discuss this, and I suspect that’s because such a discussion never occurred.

Sticky Links—YLD Transparency Resolution Drops the Ball on Tuition Transparency

(1) ABA Young Lawyers Divison (YLD), “Resolution 1YL,” via J-Dog, “ABA Young Lawyers Division Adopts Transparency Resolution,” in Restoring Dignity to the Law

The ABA Young Lawyers Division proclaims:

BE IT RESOLVED…that the American Bar Association urges all ABA-Approved Law Schools to similarly publicize the actual cost of law school education, on a per-credit basis, and the average cost of living expenditures while attending law school…

The [Truth in Law School Education] resolution urges all ABA-Approved Law Schools to include the actual cost of law school education, on a per-credit basis, and the average cost of living expenditures while attending law school, which will assist law students during the decisionmaking process of applying to law school. The ABA has also addressed this issue in a document entitled The Value Proposition of Attending Law School, which can be found at: [http://www.americanbar.org/content/dam/aba/migrated/lsd/legaled/value.authcheckdam.pdf]. [My emphasis]

First of all, the ABA’s “Value Proposition” document is not a reliable source. Former Northwestern dean David Van Zandt low-balled the break-even starting salary a law degree requires: private law school tuition is higher than $30,000 on average, student loans accrue interest, and there’s a glut of attorneys on the market which means the 5% discount rate is likely too low as well. Though in his defense, no one makes $60,000 annually before law school so that lowers the break-even point from the other factors I’ve specified.

Last week, I predicted the ABA wouldn’t be foolish enough to require law schools to publish their tuition on a per-credit basis because law schools charge all kinds of fees as well. If passed, law schools will start behaving as airlines—keeping tuition down and shifting costs to arbitrary fees for which they aren’t held accountable. Here’s an example from the University of Montana.

Yeah, you're gonna have to click on this one.

Obviously, in fairness, UMT isn’t exactly gouging its residents, but for the sake of argument do the math:

Tuition + all fees = $10,972. Tuition on a per-credit basis? $145, assuming thirty credits per year. Tuition ends up accounting for 39.6% of the total cost of attendance less books, transportation, and living expenses. Law schools are also entitled to change their tuition and fees at any time without notice.

As to what the ABA wants: First, law schools are already providing this information in standardized annualized form to the LSAC. It’s not the current school year’s tuition; it’s not next year’s tuition. It doesn’t predict tuition increases, which are certain at all but a handful of schools that are making token resistance (University of Maryland and Ave Maria). But at least it’s a fully inclusive number that law schools don’t dodge by fee-shifting.

Second, what’s so great about per-credit tuition? It requires applicants to multiply the numbers to get a meaningful idea of what they’ll be paying over three years (or more). The varying fees between law schools make tuition calculations incomparable, and it shields the perceivable impact of tuition increases from the actual impact on students’ bottom lines. For example, a 5% increase at UMT will make next year’s per-credit tuition only $152.25. That doesn’t seem like such a big deal right?

Third, prepare for the fee onslaught. Instead of increasing total costs, law schools will shift increases to their opaque fees. Take a look at University of Oklahoma:

You want transparency? Why not ask your law school what the “Academic Excellency Fee” means. Why does it cost $59.45? Is that more or less than at other schools? What’s it spent on specifically? Are there cheaper ways of obtaining um…academic excellence? Is all the money collected spent on it? If there’s a surplus, where does it go and what is it spent on? When will increases to this fee be announced? Is there a way students can opt out of fees they feel don’t impact them, like the $5.95 “Student Activity Fee”? My other favorite example is at Louisiana State University with its “Mandatory Fee” and “Operational Fee.”

I know I’m picking on public schools over this, and that’s because these are the best examples from my memory. But remember two things: all schools charge fees on top of tuition, and public law schools are increasing costs faster than private ones—they’ll soon be identical as state governments cast them out like Hagar and Ishmael.

Prospective law students—whom the YLD apparently believes are too stupid to be convinced that a legal education has a disastrously low ROI should they read its own resolution’s summary of publicly available NALP data—are already getting better tuition transparency from the LSAC than what the YLD proposed to the ABA.

Hopefully the LSAC and the law schools will continue to publish tuition information as they currently do. I really don’t want to be the consumer advocate here.

Also, why is the ABA’s Annual House of Delegates meeting in Toronto?

(2) Brian Leiter, “Law Schools with Largest 10-Year Tuition Hikes,” in Leiter Reports: A Philosophy Blog

I’m vain. I like seeing the Law School Tuition Bubble popping up all over Google searches for “law school tuition increases,” though it’s not at the top yet. Further down the list Brian Leiter gives us a blast from the past in 2005.

The January 2005 National Jurist [tragically unavailable online] has striking data on which law schools have raised tuition the most in the last ten years; unsurprisingly, state schools dominate the list (yet most still remain far cheaper than their peer privates).  Strikingly, the University of California law schools are four of the top ten!  Here are the ten law schools that have raised tuition the most between 1993 and 2003; next to each school’s name is the percentage increase and the 03-04 (resident) tuition.

1.  University of North Carolina, Chapel Hill (589.7% increase, $10,429)

2.  University of Hawaii (376.2% increase, $10,942)

3.  University of California, Davis (294.5%, $17,195)

4.  University of California, Los Angeles (277.8%, $17,012)

5.  University of Arizona (272.9%, $10,604)

6.  University of California, Berkeley (269.1%, $16,294)

7.  University of California, Hastings (257.7%, $15,615)

8.  University of Washington, Seattle (242.6%, $13,630)

9.  Arizona State University (235.6%, $9,545)

10. University of Idaho (214.7%, $6,696)

Today: These law schools charge:

University of North Carolina – $17,068.00

University of Hawaii – $15,960.00

UC Davis – $41,605.00

UCLA – $40,616.00

University of Arizona – $23,527.00

UC Berkeley – $44,244.50

UC Hastings – $36,000.00

University of Washington – $24,339.00

Arizona State University – $21,598.00

University of Idaho – $12,940.00

Moral: Stay clear of the California “public” law schools.

Here’s my favorite quote:

Michigan—which is already de facto private (in terms of state support and percentage of state residents)—had the lowest increase during the 10-year period, of 123.5%.  But that still left it with an eye-popping tuition of $27,884, higher than many private law schools…

So Michigan’s $27,884 was “eye-popping” in January 2005, eh? What does that make its $44,600.00 today?

Link Slowly and See—Dean Slings Stones at the ABA

I have three this week:

(1) Michael L. Coyne, “Law, Beyond the Reach of Many,” in the Worcester Telegram

Reading through this piece, I thought, “Wow, this guy’s really done his homework and really likes Massachusetts School of Law.”  Then I realized that Coyne is actually one of MSL’s deans.  MSL, if you recall, is the non-ABA-accredited, renegade law school that resists the ABA’s archaic requirements.  Coyne could’ve been more persuasive if he’d commented on the juris doctor oversupply problem, which animates the tuition bubble, but it’s always a pleasure to see legal educators speaking reality to ludicrousity.  I can’t speak to MSL’s amazingness as a law school, nor do I believe Americans have a God-given right to higher education, and Coyne’s primary goal is to cast himself as an advocate for minority advancement rather than student debt reform, but when ABA law schools’ tuition doubles in nine years while inflation increases by 25%, that must signal a crisis.

An appropriately highlighted quote:

Nowhere is the need for reform of higher education more obvious than in legal education.

(2) David Halperin and Katherine Mangu-Ward, “Communitas: For-Profit Colleges,” in Blogging Heads

This diavlog doesn’t directly address legal education, though Halperin pointed out that law schools tend to offer scholarships based on merit rather than need because doing so inflates their US News rankings.  My favorite part was when Mangu-Ward brought up the argument of an asset bubble in higher education, which she’s more or less convinced describes the situation.  More subtly, she pointed out that accreditation standards tend to favor educators privileges rather than student outcomes.  If you’ve got an hour, it’s worth a listen, and I hope to listen to it again this weekend.

(3) Kimber Russell, “Tardy for the Party Redux: The Mainstream Media and the Blawgosphere Strike Again,” in Shilling Me Softly

I usually don’t parrot other reformers, but acclaim to Russell for being one of the few people to point out that the “Value Proposition of Attending Law School” document released by the ABA is more than a year old.  I have no idea why the legal world suddenly thought it was new—even Coyne, above, knew it was a year old.

Importantly, though, is what’s buried in footnote 12:

[Former Northwestern] Dean Van Zandt’s estimate [that a starting salary of $65,315 is necessary for a law degree to be a break-even investment] is based on the assumption that students would make $60,000 per year without going to law school, that law school tuition is $30,000 per year, that the student works for thirty years as a lawyer, and that the discount rate is 5%. His estimate does not take into account the opportunity cost of three years of foregone income, nor does he consider the cost of debt service on law school loans.

As I wrote last September:

Van Zandt’s $65,315 number makes even less sense.  Anyone making $60,000 year is not going to forgo $180,000 in salary + $90,000+ in tuition just to make $65,315 per year.  A $270,000 law degree over three years for a $5,315 raise?

Given that the necessary break-even starting salary is far higher than the degree’s cost, the legal education system is in a crisis.  The ABA should not be burying these facts in a footnote.

Dear ABA Committee Chair, No, It’s Not That Complicated. Signed, The Legal Profession

"Even if the ABA’s hands are tied behind its back, its statements on tuition (and silence on lawyer labor supply and bankruptcy reform) suggest it suffers from Stockholm Syndrome."

Heather Diersen follows up her JDs Rising piece, “Dear Law School, It’s All Your Fault.  Signed, Recent Grad,” with, “Dear Recent Grads, It’s More Complicated Than That.  Signed, The ABA,” in which she parses an interview she conducted with ABA Accreditation Committee chair, Jay Conison, also dean of Valparaiso University School of Law.  Dean Conison made it clear he did not speak on the ABA’s behalf.  Frank the Underemployed Professional (Frank), operator of Fluster Cucked, draws first blood by attacking Conison’s credibility: US News & World Report ranks Valparaiso in its fourth tier, implying a severe conflict of interest for the dean.

Diersen organizes Conison’s responses according to three ABA committees (Accreditation, Standards Review, and Questionnaire).  I’ll summarize the arguments and accompany them with my numbered responses:

• Accreditation: Echoing former ABA President Carolyn Lamm, the ABA’s hands are tied.  If a university wants to open a law school, it is free to do so.  If it wants Title IV funding, it is free to meet the Department of Education’s requirements.  If it wishes to obtain ABA accreditation (as opposed to state, regional, or none), it must merely meet the ABA’s standards.  It’s not the ABA’s job to prevent attorney oversupply.

1).  Great!  The ABA’s hands may be tied, but its mouth isn’t gagged.[i] The ABA, representing the legal profession, is free to inform prospective law students and the general public that given the job market and the excessive tuition at nearly every private and many public law schools, legal education is not a worthwhile investment.

2).  So it’s mouth isn’t gagged; what is it saying then?  As of now the ABA has only acknowledged the tuition/debt issue with a bottlenecky chunk on its website wishfully titled, “ABA Economic Recovery Resources.”

A).  Inside, we find its document, “The Value Proposition of Attending Law School,” which uses David Van Zandt’s low-balled ROI starting salary: $65,315.

B).  It also contains Resolution 301, a futile (but thanks for trying) request to Congress asking it to convert private student loans to public loans, increased access to loan consolidation and income-based repayment plans, and amusingly, TARP funds.

C).  An article by former ABA President Carolyn Lamm,[ii] “Law School Education Debt Has a Manageable Solution,” with the following two quotes:

The ABA has for many years — regardless of economic climate — advocated for federal laws that would ease the repayment burden on law students who found public service jobs.  It’s time to explore creating additional methods to relieve repayment burdens for new graduates or new lawyers who have either been unable to find employment, have had their jobs deferred or have lost their jobs.

Now is the time for modest changes in current federal student loan programs to increase the amount that law students may borrow, and to bring existing private loans into the federal student loan system. [My emphasis]

In other words, President Lamm: (i) didn’t care if private sector lawyers were underpaid for their degrees or were drowning in debt, (ii) approved of financing the tuition bubble with taxpayer dollars, and (iii) advocated “modestly” increasing the tuition bubble with more federally guaranteed loans.  At no time did she criticize law schools for hiring superfluous faculty, raising salaries, and then raising tuition.  Bankruptcy reform was not up for discussion.

D).  And a Statement by Lamm, “ABA President Carolyn B. Lamm on GAO Law School Cost and Access Report,” addressing debt and diversity.

The ABA is committed to ensuring that the cost of attending law school does not become an increasingly insurmountable barrier for many individuals…The ABA urges Congress and the Administration to lift the cap on federal loans to finance law and other professional schools so that all students with talent and desire can attend law school—not only those of economic means. [My emphasis]

If the ABA is so concerned with diversity, accessibility, and debt, it should tell law schools to slash tuition, not ask for more free money from Uncle Sam to feed the tuition bubble.

But the GAO rightly recognizes that American Bar Association Standards for Approval of Law Schools play only a limited role in increasing cost and are not barriers to diversity.

Much more significant in terms of cost, according to GAO, have been the move toward a more hands on, resource intensive approach to legal education, and the competition among law schools for higher slots in published rankings that purport to distinguish between the 200 ABA approved law schools across the nation.

Lamm recognized that rankings dog-piling causes tuition increases, but she not only failed to connect that to ABA accreditation standards (next section, bear with me), but she also didn’t think the situation required warning potential applicants or the general public that law schools valued their reputations over their graduates’ debt loads.  Her solution was more Title IV debt-financing because in her mind law schools are entitled to incrementally raise their tuition indefinitely with no regard to graduate outcomes.

In conclusion, even if the ABA’s hands are tied behind its back, its statements on tuition (and silence on lawyer labor supply and bankruptcy reform) suggest it suffers from Stockholm Syndrome.

• Standards Review: This Committee reviews the ABA’s accreditation requirements.  Conison touts the proposed changes to Standards 302 and 303 (current standards here, redline to current standards here) to Diersen as the solution to the unskilled lawyer oversupply problem.

1).  Standard 302 replaces “Curriculum” with, “Learning Outcomes,” but the substance of the proposed rule merely tells law schools that they may change their curricula to meet their own standards.  Nothing in section 302 requires law schools to mark their degrees to the market.

2).  Section 303 serves as the new “Curriculum” section, and aside from retaining the ethics and writing requirements, it would require law schools to provide, as Diersen succinctly summarizes:

(i) a simulation course, (ii) a live client clinic, or (iii) a field placement. The theory behind this is that the students will be better equipped to practice law or seek non-legal careers upon graduation.

Again, the problem isn’t just that law schools are graduating students without marketable skills (so much for the GAO’s more expensive “hands on, resource intensive approach” to legal education); rather, they’re graduating students who have few job opportunities remunerated to make their ever more costly juris doctors worthwhile.  The proposed rule changes do not prevent rankings dog-piling, nor do they encourage smaller market schools to teach to their markets.  Even so, Standard 302 is so permissive that it’s hard for the ABA to deny accreditation to any law school.[iii]

3).  Okay.  Above, I quoted Carolyn Lamm stating, “But the GAO rightly recognizes that American Bar Association Standards for Approval of Law Schools play only a limited role in increasing cost and are not barriers to diversity.”  FALSE.  Former President Lamm, Dean Conison, GAO, and Ms. Diersen, please allow me to introduce you to Chapter 4 of the ABA’s Accreditation Standards: Faculty, which incidentally, is not under review.  Standard 402(a) states:

The number of full-time faculty necessary depends on:…(3) the opportunities for the faculty adequately to fulfill teaching obligations, conduct scholarly research, and participate effectively in the governance of the law school and in service to the legal profession and the public.

Because we know the tuition bubble functions by expanding faculty and their salaries for prestige, obvious ways to reduce the bubble include: (i) reducing the faculty by allowing higher faculty/student ratios (>30:1), (ii) relaxing the emphases on scholarship and full-time instructors, or (iii) shortening the duration of legal education since so many employers find three years wasteful.  Thus, the GAO is wrong: ABA Standards play a direct role in high education costs and consequently are barriers to diversity.

4).  Similarly, another way to save costs, reduce the Standards Chapter 6 “Library and Information Resources” requirement.  My favorite part of this section is the Interpretation 606-5:

A law library core collection shall [!] include the following:

(1) all reported federal court decisions and reported decisions of the highest appellate court of each state;

(2) all federal codes and session laws, and at least one current annotated code for each state;

Most of these materials are easily Googleable, and law students (and faculty) don’t need access to every single appellate decision across the country.  No need for tuition dollars to maintain these collections.  Remember how Minnesota’s four law schools are trying to amalgamate their libraries to cut costs?  See?  One more way ABA accreditation standards make law school more expensive.

To be clear: I don't argue that MSL's business model is perfect. I do appreciate the contributions of Minnesotan Kevin Sorbo though.

5).  Still don’t believe me?  “ABA’s Bane” Massachusetts School of Law eschews cadres of full-time faculty, keeps salaries down, charges its full-time students $14,989.80 per year, and argues the ABA’s accreditation standards cause exorbitant law school tuition and inaccessibility.  Given its frequent law suits against the ABA, it’s no surprise Dean Conison doesn’t mention MSL’s business model.[iv]

• Questionnaire: The ABA requires every law school to report whether it’s fulfilling the accreditation requirements.  Diersen writes:

When I asked Dean Conison about the allegations of misleading and fraudulent reporting of employment statistics, he believes the Questionnaire Committee is significantly concerned.  During the next year, the committee is considering recommending changes in the law school reporting requirements, particularly in the type of information given with employment statistics…This seems to be what lawyers, students, and the public want most: don’t tell us you have a very high employment rating when a substantial number are not employed in legal-related work but are searching for such work.

Diersen is right that reformers should hope the ABA will significantly improve the questionnaire.  There are three problems with it currently.

1).  First, it only asks law schools to provide employment information that they already provide NALP, even though we know NALP has no authority over law schools.

2).  Second, the ABA doesn’t collect salary information from the law schools.  That again tells us the ABA is unconcerned with the juris doctor’s market value.

3).  Finally, and most importantly, this is all self-reported, meaning law schools can game the questionnaire just like they game US News’s rankings.  Worse, they can outright defraud the ABA, so long as their responses sound plausible.  The Questionnaire will have limited reliability until law schools are subjected to independent audits.

Diersen closes with a fear that Frank also laments in his depressing piece, “Why Prospective Law Students Will Never Get the Message”: that the legal profession is broken, and the tuition bubble will not burst.  The tides of law students can never be turned away, and law graduates will end up in other fields for want of access to the profession; their law schools will then claim the juris doctor’s flexibility got them there.  Diersen writes:

The ABA’s attempts to improve our law schools’ transparency and curriculum may not decrease the number of lawyers fighting to practice. What we can hope, is that those choosing to run in this rat race will do so with more knowledge…I wonder if there are really many people that go to law school without intending to have a legal-related career. It seems more likely that people go into non-legal careers due to economics and opportunities.

When faced with the truth, that the ABA denies its accreditation authority confers to it any real power, and that it mutinies against telling the public the legal profession suffers from structural oversupply, then until Everitt Henry’s lawpocalypse we’re left with the democratic tools Nando of Third Tier Reality advocates:

This is why my goal is modest, i.e. inform people and hopefully we can prevent at least some people from committing financial suicide.

---

[i] I swear this was Elie Mystal’s metaphor, but I can’t seem to prove it.  I know I didn’t come up with it.

[ii] I’ve yet to hear any comment on the issue by the ABA’s new President, Stephen Zack.

[iii] As an aside, the current Standard 303(c) states:

A law school shall not continue the enrollment of a student whose inability to do satisfactory work is sufficiently manifest so that the student’s continuation in school would inculcate false hopes, constitute economic exploitation, or detrimentally affect the education of other students.

The proposed Chapter 3 includes no such requirement, freeing law schools to exploit their students?  Oops.

[iv] Incidentally, MSL has opened its own “feeder college,” American College of History and Legal Studies, in Salem, NH.  Its undergraduates can apply to MSL as 2Ls, saving them a year of law school—something that no law school has tried because, “Most strong law schools that are well established would be disinclined to try to create such a system because they recognize that their applicant pools are already very strong.”  The article fairly notes that the college is still unaccredited, and that MSL’s bar passage rate is 69% for first-time takers, which is below the state average.

Link’s Next–Legal Education’s Return on Investment Questioned

Four links, but I’ll keep ‘em quick.

(1) DR, “Is Law School Worth the Price of Admission?” Dough Roller

DR writes:

Now, from a pure numbers perspective, a $150,000 price tag is probably money well spent if you get a job at a major firm, stay there for eight-plus years, and make partner. But that’s a big if. First, just to get one of those jobs requires that you attend a top-25 law school and finish in the top 25% of your class. (And if you want to work at an elite firm, you’d better attend a top-10 law school, write for the school’s law journal, finish in the top 10%, and clerk for a federal judge.) Anything below the top 25 or the top 25% in your class and, with few exceptions, you can forget about the big salaries at a big firm.

DR also writes on the juris doctor’s versatility, from which I inferred that the more expensive the degree, the less versatile it really is.  I hasten to point out that DR claims to be a “young” baby boomer, meaning he finished law school when it was far cheaper, and the legal profession existed in an overall better economic climate.  One of the highest hurdles reporting on the tuition bubble must overcome is the natural tendency of older practitioners to compare new lawyers’ experiences with their own without accounting for temporal differences.  This is not a criticism of DR, but undoubtedly a 1970s-80s J.D. correlates to a far more successful career than a 2011 one will.

(2) Managing Partner, “Get the Benefit of a Legal Education without the Loans,” in The Legal Dollar

Instead of law school, Managing Partner recommends college students switch majors to more lucrative careers, and for those who’ve graduated and still want to work with the law?  Become a police officer.

(3) Derek Roberti, “No ROI for Law School or College?” in Should I Go to Law School?

If there is no (or unlikely) ROI…for law school, the answer to the question – Should I go to law school? – is no longer an empirical one. If the purely financial answer is most often “no,” law school applicants are left with their own personalities, their passions and their capacities to consider. Which, for me, is where the law school decision gets interesting.

I have two problems with Roberti’s post.

1. His idealism misses the tuition bubble.  Law schools should be charging law students tuition rates that reflect the market value of a J.D.’s labor.  Idealism has its place, but telling university administrators that their law students are so passionate that they’ll pay any price for their degree creates a moral hazard.  The university will likely feel unconstrained when setting its tuition.  Moreover, even in a good economy, lawyers who are crippled with debt have greater difficulties maintaining their personal lives, especially raising a family.  I fail to see how turning lawyers into monks helps them or our society.
2. Roberti also assumes that someone who goes to law school to make money will be a poorer attorney than one who goes based on ideals.  This assumption has no basis in fact.  Some people who go to law school for non-idealistic reasons become great lawyers while others who go out of passion can turn out to be poor ones.  The reverse can also be true.  Given that the state of the economy at any given graduation year influences whether someone will be a good attorney more than idealism does, a low or nonexistent ROI in law is a crisis for the legal profession and not an opportunity to purge the profession of its less idealistic elements.

(4) Katherine Brooks, “Considering Law School? Do the Math,” in Psychology Today

Brooks’ checklist is fairly good, but it adopts the ABA’s break-even starting salary figures (via David Van Zandt).  This figure, $65,315 per year plus increases, ignores opportunity costs, compound interest on student debts, and it calculates law school tuition at $30,000/year when it is in fact much higher in many circumstances and rising.

Links Sell Out—Debt, Law School Culture, the Lost Generation, & Break-even investments

Four from over the weekend:

(1)  Samuel J. Scott, “Debt Bubble: Will the Market Crash Because of College Costs?” in Considerations.

A somewhat conservative explanation for the accelerating higher education costs compared to those in housing and healthcare.  Those of you who are falling behind in your Dean Baker readings should note that the Federal Reserve negligently allowed the housing bubble to form, and that if research in pharmaceuticals were nationalized, taxpayers would save billions in healthcare costs.  Who knows, maybe we should make higher education free in some form of human capital contracts?  One quibble I have with those showing the graphic of how higher education has exploded over inflation and even over housing prices: look at the absolute size and not the relative increases.  In these cases, the housing bubble was $8 trillion while the student debt bubble is only $850 billion, about one tenth the size.

(2)  Chuck Newton, “Law School Culture and Law School Professors Are a Big Part of the Problem,” in Chuck Newton Rides the Third Wave

Newton refers to Ashby Jones’, “Are Law School Faculties Part of the Problem with Legal Education?” in the Wall Street Journal’s Law Blog, in which the author cites a soon-to-be published article in the South Carolina Law Review by Georgetown professor Brent Evan Newton (no relation to Chuck).  B. Newton’s article recommends spinning off one third of all law school faculty into research track positions and two thirds into practical teaching positions.  He hopes this will provide law students with educations better suited to the workplace.

Chuck Newton doesn’t buy it.

I think the bigger problem facing potential law students today is the unprecedented greed and disrespect shown by law schools and their faculties in setting tuition and costs…[W]ith their eyes set on money, rankings and prestige, instead of the well-being of what they are really there to accomplish, [they] cannot seem to do anything about it.  Almost like a drug addict, they know there needs to be change, but they just cannot seem to wean themselves from the addiction.

He then asks the multi-million dollar question:

My argument would be who should be responsible for paying the research staff? Those seeking a basic, primary legal education? Should the nerds be forced to pay for the geeks? Most good research universities raise their money through other sources than tuition. I can well imagine that entering law students would be forced to pay for the less relevant to them. Law schools as institutions cannot seem to show any self restraint when it comes to pricing. The theory must be no matter what they decide that the government and the private sector will loan enough money to the students to pay for it. The problem with this argument, however, is that real people get hurt and, instead of producing those deep thinking lawyers, they are deeply enslaving their graduates with debt that will last lifetime.

C. Newton’s solution is novel: encourage state licensing authorities to reject ABA-accredited juris doctors and opt for those educated in practically-oriented state-accredited law schools instead.  Sadly, I doubt state licensing authorities, likely trained at ABA schools, would willingly cast their law school peers into the cold.  I’d be impressed if they did, but the paramount model, the ABA-scorned Massachusetts School of Law, charges a mere $14,490 per year.  MSL does this by using employing judges and practicing lawyers as its instructors instead of paying 5-6-figure salaries to full-time scholars.  MSL’s graduates’ placements probably aren’t very exciting (certainly not since the housing bubble burst), but the one-half to one-third cost reductions cannot be ignored, especially when compared to regional law schools.

But wait.  Does anyone really expect private ABA law schools to cut tuition by more than half, turn over faculty and staff and slash salaries?  Universities would likely prefer inflicting the bubonic plague on their law schools—the casualties would be fewer.

(3)  Managing Partner, “The Lost Generation?” in The Legal Dollar

Managing Partner informs us that recent graduates and current law students comprise a lost generation that will never be hired or reconsidered.  Since most hiring occurs in law students’ 2L years, 3Ls should know the show’s over.  A quote for recent grads:

[O]nce a law student graduates, their legal education (which is really not that great in the first place from most law schools) starts to decay.  If they perform some non-legal work for a year, then many firms might consider them out of the market.  Certainly if they have no legal experience for 2 years, then they are pretty much out of the game.  That is, graduates without serious experience are really competing at a disadvantage with new grads. [My emphasis]

Bear in mind also that new grads with ever higher student debt will have every incentive to compete harder for work.  Managing Partner also devastates the bottleneck argument: demand for legal services is not going to increase in the future, and the accelerating growth in law graduates overwhelms any increase in demand.

(4)  Stephanie Francis Ward, “The Job Seekers,” in the ABA Journal

¿The ABA interviewed three grads and found how awful the market is for legal services?  The point being?… Who is the article’s audience?  The best it tells us is that law is a “risky” investment, with a few quotes by Bill Henderson.

The only nugget I saw was an ABA document, “The Value Proposition of Attending Law School,” which tells the public that law isn’t what it’s cracked up to be and carries a lot of debt.  It mentions former Northwestern Dean, David Van Zandt’s $65,315 minimum starting salary for law to be a break-even financial investment.  Footnote 12 states:

Dean Van Zandt’s estimate is based on the assumption that students would make $60,000 per year without going to law school, that law school tuition is $30,000 per year, that the student works for thirty years as a lawyer, and that the discount rate is 5%. His estimate does not take into account the opportunity cost of three years of foregone income, nor does he consider the cost of debt service on law school loans.

Few make $60,000 per year before law school.  Frequently, tuition is above $30,000 per year.  The current economy (see Managing Partner above) renders a 5% discount rate too low.  Many law students carry over $100,000 in debt, with interest that banks count but Van Zandt does not.  I hate to say this because I appreciate his effort, but Van Zandt’s break-even number is unrealistically low.  The ABA should’ve cited Herwig Schlunk’s numbers.  But his only work when the discount rate was 12% or less, and Managing Partner’s comments (though anecdotal) suggest the appropriate discount rate is remarkably higher.  The ABA couldn’t use those numbers without admitting to the extreme systemic problems legal education institutions are experiencing, though we should commend it for its candor in footnote 12.

[Update]: It only took two weeks, but I realized Van Zandt’s $65,315 number makes even less sense.  Anyone making $60,000 year is not going to forgo $180,000 in salary + $90,000 in tuition just to make $65,315 per year.  A $270,000 law degree over three years for a $5,315 raise?

Links Generation—Law School Deans Are Not Experts on the Legal Labor Market, and Taxpayers Fund Army Officers’ Legal Education

When you run out of Beatles albums, you move to the Who.

Two links have caught my eye.

(1) LeeAnn Maton, “Law School No ‘Magic Bullet’ Against Recession, but Financial Aid Can Help,” in Wallet Pop

[I]s investing in a law degree still worth the expense?  Actually, yes, according to three legal education experts who spoke to Money College about law school financial aid.  [emphasis explained below]

Really??  Please, please, please prove me wrong about the tuition bubble!  Who are these three experts?  Behold:

Magical Mystery Links—ABA-Accredited Schools in China, Reasons for Law Practice Reform, & More on Tenure

(1)  Edward A. Adams, “Harvard Prof Sees Legal Profession in Turmoil”.

Mr. Adams proves I’m clairvoyant.  I published this a few days ago, “[A law school is] really something a community can only build when it is surging with growth.  Like China or India surging.  Not U.S.A. deflating.”  Here, Harvard Professor David B. Wilkins says:

Governments are investing in law and legal innovation as an export item. China and India have both created transnational law schools in which students are trained in English about U.S. and international law. The school in China even plans to seek ABA accreditation so its graduates can take the bar in any U.S. state…” [my emphasis].

Really??  I doubt this ABA-accredited school would be emigrating attorneys to the U.S.A. to open solo practices.  Moreover, its students won’t be borrowing from U.S. banks or the federal government for tuition money.  Something tells me few Americans will move to China for law school, so legal education is unlikely to come across the ocean in the same containers as finished goods.  BRIC (Brazil, Russia, India, China) countries are investing in law because their economies are growing rapidly and becoming more sophisticated.  When American law schools require courses in these countries’ legal systems, then I’ll be impressed.  As an example, I had to go overseas to take a course in Chinese law.

Links for Sale–Tenure, Bimodality, & Big Star

Re-emerging from the depths, here’re some links.

(1) Scott Jaschik, “Law School Professors Tenure in Danger?”

Dean David Van Zandt of Northwestern has been spearheading policy changes in ABA accreditation requirements that leave tenure systems up to law schools’ discretions, and so far it’s meeting with success in the ABA’s draft proposals.  The article quotes various instructors as horrified at the prospect of getting fired for publishing work that is too radical for the university community and the public to tolerate.