The Law School Tuition Bubble: Tuition Increases Law School-by-Law School from 2005 to 2011, Part 1

As a member of a learned profession, a lawyer should cultivate knowledge of the law beyond its use for clients, employ that knowledge in reform of the law and work to strengthen legal education. – Wisconsin Rules of Professional Conduct “Preamble: A Lawyer’s Responsibilities,” ¶6, (WI SCR Chapter 20)

Introduction

Last May, I started the Law School Tuition Bubble for two personal reasons. One was to maintain my writing skills while I was unemployed (and ironically I found work around the time I started writing). The other reason was to contribute to the legal profession. At the very least, I could fulfill the Wisconsin Bar’s directive: reform the law and improve legal education. This blog fulfills that requirement.

My goal was to keep the candle alive on the supply side of the issue. Other reformers focus more on the demand side, gathering better graduate employment statistics and then transmitting them to prospective law students. Coverage on legal education’s ills has crested into the public’s knowledge over the last several months, but the tuition increases that animate the problem and their connection to the nondischargeability of student debt in bankruptcy, whether protected by income-based repayment, frequently appear as an afterthought.

I often run across quotes like these:

Tuition costs at law schools accredited by the American Bar Association have doubled in the last nine years. Total inflation during that same period was less than 25 percent. –Dean Michael Coyne, Massachusetts School of Law (non-ABA)

It’s always given as a statistic, even by the ABA. More sophisticated writers will distinguish between the causes of tuition increases in public versus private law schools. But it’s always a statistic. Somewhere someone has the spreadsheet with all the law schools’ tuition increases on it. I looked myself and it’s impossible to find it on the Internet.

So I built it myself.

Literature Review

As always, every discussion of the tuition bubble requires distinguishing a bubble from what I call a bottleneck. Law school staff (and sadly even progressive economists whom I agree with over just about everything else) look at the problem in terms of the economy. Every industry is doing badly, they will say. It’s just “cyclical” unemployment. Assumedly, as the economy improves, lost generation attorneys will be reabsorbed. In the meantime, unemployment remains high, the country is saddled with detritus of an $8 trillion housing bubble, and the federal government refuses to intervene on debtors’ behalves. Worse, structural problems plague the legal sector, too many attorneys chasing too few jobs, even if the economy reached a new normal.

You need not take my word for why I believe the bottleneck argument is false. Students, you are now enrolled in the Law School Tuition Bubble’s eponymous graduate-level seminar. Here is your syllabus culled from the Internet. I think that’s fairly comprehensive. If readers would like to add anything, let me know, and Professor LSTB will assign it.

• “Competition for job openings should be keen because of the large number of students graduating from law school each year,” and, “Job Outlook: About as fast as the average employment growth is projected [for lawyers], but job competition is expected to be keen.” Bureau of Labor Statistics, “Lawyers,” and, “Judges,” Occupational Outlook Handbook, 2010-2011 Edition.
• The ratio of attorneys per capita has risen from 1:695 in 1951 to 1:264 in 2000. Jason Dolin, “Opportunity Lost,” California Western Law Review, Vol. 44, 219-255 (2007).
• The legal field has not grown along with the rest of the economy. Amir Efrati, “Hard Case: Job Market Wanes for U.S. Lawyers,” The Wall Street Journal, September 24, 2007. [I believe this article is slightly crisper than David Segal’s recent and noteworthy New York Times piece.]
• Over the last twenty years, the distribution of graduate starting salaries gas shifted from a common mode of $30,000 per year to a bimodal distribution with a minority of graduates (about 25%) earning more than $160,000 and 34% of graduates earning between $40,000 and $65,000. NALP only reported 19,513 salaries in this stark 2009 graph. No one knows what the remaining 25,000 law graduates are earning, if anything.
• ABA records indicate that around 1.4 million juris doctors have been conferred in the period between 1968 and 2008. By contrast, the BLS reports 759,200 people employed as lawyers and 51,200 people employed as judges (total 810,400). No one knows how many people entered the field via non-ABA accredited law schools, especially in California, nor does anyone know if the remainder of those with ABA law degrees are gainfully employed or even if their law degrees helped them get their current jobs. No one knows how the employment situation is since 2008.
• The ABA also collected data from state bar authorities reporting 1,180,386 attorneys licensed and active within their jurisdictions as of 2009. No one has explained the gap between the ABA’s numbers and the BLS’s.
• The ABA’s MacCrate Report, published in July 1992, finds that law schools mostly do not adequately prepare law students for practice. Things have not changed since then.
• Using comparable back-of-the-envelope calculations, Fluster Cucked independently arrived at similar conclusions.
• Shilling Me Softly diligently reports the growth in Legal Process Outsourcing.
• Practioners: Jerry Kowalski informs readers that law jobs are down to 1991 levels. The Legal Dollar provides similar analysis.
• Growing numbers of law professors, likely too many to track, publically agree on these issues to varying degrees: Professor Bainbridge, Richard Sander, Steve Harper, Maimon Schwarzschild, Bill Henderson, Herwig Schlunk, Christine Hurt (whose article helped inspire this blog), and my favorite on the subject Brian Tamanaha +1.
• Dean Richard Matasar of New York Law School has long predicted the end of easy federal money to law schools. Richard Matasar, “The Rise and Fall of American Legal Education,” New York Law School Law Review, Vol. 49, No. 2, 465-504 (2004-2005); “Does the Current Economic Model of Legal Education Work for Law Schools, Law Firms (or Anyone Else)?” New York State Bar Association Journal, October 2010, 20-26.
• On the good news side, the Law School Admissions Council (LSAC) reports fewer LSAT takers in 2010 than in the previous year. Assuming legal education is highly countercyclical, this may indicate that the reform movement is successfully discouraging people from going to law school when it has a low return on investment.

Your three-page critical reviews are due next week.

So what?

What’s the benefit of knowing law schools’ tuition increases severally if we know them jointly? Shouldn’t hypotheses accompany research? Yes. The data I have collected tell us nothing we don’t already know. Although, all we can find easily is the post-aggregated statistics. Partly, this is an exercise in ensuring this blog lives up to its name. Those of you who want a tuition bubble, here is your tuition bubble.

More importantly, I think the statistics disconnect people from the reality of the crisis. Older practitioners can compare what law schools are charging today to what they paid. Younger graduates can see how much tuition has increased since they’ve left (even my recent successors’ fates sadden me). Students can envy what their recent predecessors paid, and hopefully prospective law students can grasp the bigger picture, especially since they don’t really know what they’ll be paying until they’re asked to pay it.

Data Collection Methodology:

I’ll explain how I gathered the tuition data autobiographically to explain the scope of the project.

I started collecting the data from U.S. News’s website, which gave the 2009-2010 school year’s tuition (with a few exceptions). Then came the hard part: finding the pre-2010 tuition data. At first, I went to law schools’ websites and went through the Wayback Machine, but this proved frustrating and took too much time. Then I made a breakthrough. The LSAC maintains data reported by law schools to the ABA going back to the 2004-2005 school year. I downloaded all 970 pdf files, 80.2 megabytes in all, and will provide them to those who don’t want to go through the LSAC themselves. Finally, to gather data for the 2010-2011 school year, I visited every law school’s website, seeking its tuition data.

Most of what I learned from the data-collection experience occurred while sifting through the websites. I can’t imagine too many other people having done this, save Nando from Third Tier Reality. It usually took only two clicks to find a law school’s current tuition, unless it was available via a pulldown menu. However, applicants trying to assess next year’s tuition are out of luck (except University of Hawaii, which estimates its 2011-2012 tuition). Law schools’ sites are well-designed. Eerily like a for-profit university, finding out how to apply for or obtain financial aid is far easier than finding the law school’s actual cost. That prospective law students can’t finance their own way through law school is usually taken as a given, not as a problem. How current students are given notice of tuition increases, I know not.

Notes on the Data:

The critical rule in empirical research is accuracy and precision. Accuracy refers to the degree to which the observations accord with the actual measurements, and precision refers to the reproducibility of the observations. These data are precise to the extent that one can look over the three sources and compare them, and I’m pretty damn good at data entry so I doubt there’re any mistakes. As to accuracy, because the data come from three distinct sources, they may vary. I’ll go into them.

• The LSAC data come directly from the ABA, and for the first five years, they should be consistent unless stated otherwise. For instance, sometimes, I conclude that a law school’s semester tuition is reported instead of its annual tuition.
• U.S. News data are reported by the law schools to the magazine. I doubt they differ from what the ABA reported in the LSAC data. When the LSAC publishes its law school reports for 2011, I’ll reenter those into the 2009-2010 school year.
• Law School websites are far different from the other two data sets. Often readers may find that tuition dropped in the 2010-2011 school year over the 2009-2010 school year. This is not evidence the bubble is deflating! Rather, I took the bald tuition statistic the law school published and excluded fees whenever possible. Law schools are very inconsistent in how they measure fees. Some include them in tuition, others separate them, and still others itemize them. Law schools are very much like airlines, which pay a tax based on fares, so they add numerous, sometimes vague, fees (e.g. a “9/11 Security Fee”) to retain income. By separating tuition from fees, law schools appear cheaper than they actually are. As a result, when the 2012 edition of U.S. News is published this year, I will update these data as well.

I’ve organized the data by state in alphabetical order, noting whether the school is public or private. Along with the tuition, I also calculated the percent increase over the consumer price index according to the Bureau of Labor Statistics. This is not the place to discuss whether you think headline inflation is more relevant, or if you think CPI doesn’t mean anything anymore because the government switched to hedonic measurements in the last several years. More inflation is actually a good thing for those with massive non-dischargeable debts.

For private schools, a little treat for you. Using the regression coefficient for each law school’s tuition increases, I projected what the law schools’ tuitions will be five and ten years from now. Unsurprisingly, it’ll get absurdly expensive in the future. Note: I’m assuming tuition is increasing linearly rather than exponentially. If it’s growing exponentially, which may in fact be the case, then the problem is nightmarishly worse. I may recalculate the predictions using exponential regression after the next LSAC/U.S. News publishing cycle gives me an opportunity to update the data, which should be before the summer. So remember, what you see is a conservative estimate.

In Part 2, I share the data.