Reynolds Holding, “Law School Deans Could Use Some Econ 101,” in Slate, Reuters Breakingviews.
I’ve found Slate has become increasingly less readable over the last several months, so as punishment I’m going to beat up on it for republishing this piece.
“Tuition at the likes of Yale and Stanford keeps rising faster than inflation, despite a dwindling supply of aspiring lawyers.”
This is a composition fallacy. Yale and Stanford have titanic reputations, allowing them to place their graduates during recessions with far less difficulty than other schools. It might not be easy, but they’re not the Midwestern School of Law or the Roger Taney Law Center. Thus, far more people apply to them than they have seats available, allowing them to raise their prices. It’s the mid-tier schools that should worry. Also, Yale only increased its tuition by 0.3 percent over inflation last year. Not saying that’ll continue, but just saying.
“For all their sophisticated skills, legal educators still haven’t mastered the law of supply and demand.”
Oh they have. They make lots of money compared to what they’d make as lawyers and probably as judges too. This is mastery of Rentier Economics 101.
“After the dot-com bubble burst in 2000, for instance, the number of law school applicants soared some 40 percent, reaching a peak of almost 99,000 in 2004.”
These numbers are just plain wrong. In 2000, there were 74,550 applicants and in 2004 100,604 applicants. That’s a 35 percent increase. Not that this is a huge, argument-crushing error, but hey, getting basic numbers wrong is just poor form.
“But in the recent downturn, applications to many professional schools have been about as scarce as jobs.
While MBA and other graduate programs show signs of renewed popularity, law schools are still suffering.”
I don’t know what this means. There have been plenty of applicants to law schools, at least in 2009 and 2010, just not as many as in 2004. This is weird because usually people make the reverse argument—that everyone and their mother applied to law school during the recession because they were all greedy lemmings who thought it was a golden ticket to blah blah blah blah. Now apparently, no one applied. Also I’ve seen no evidence of a shortage of med school applicants.
“Part of the problem is the high price of legal education. Tuition has quintupled at private law schools since 1985, averaging nearly $40,000 last year, according to the American Bar Association.”
Yeah, if you don’t adjust for inflation. It’s only grown 2.38 times in real terms. It’s still excessive, but again accuracy is important.
“The institutions are victims of their own success. They began attracting hoards of students in the mid-1990s when firms were splashing out $160,000 annually to first year associates.”
The hoards came in the 70s, and the $160,000 salaries are within the last decade, not the mid-1990s, but oh, shame upon you law school deans! If only you understood the science of economics, but instead, you got greedy. Shame, shame, shame. My finger is wagging. Since your salaries aren’t likely to be clawed-back, I condemn you to your lower-upper class lifestyles. What was that? Are you destitute law graduates complaining about your debts? Well, just go to a networking event or something.
Sure, someone could write a play about a tenured professor at a fourth rate private law school who suddenly realizes his or her students wind up as debt peons. That’s tragedy, but it’s already being done by an actor who was an admissions hustler at a for-profit college (called, incidentally, For Profit). Those who are in denial or law schools as institutions? Wouldn’t be quite as entertaining.
“It isn’t rocket science, but law schools seem quicker to understand torts than simple economics.”
Or they figured out how to game the taxpayer-subsidized student loan market. Wittingly or not, if that puts them ahead of legislators and bar authorities, I don’t see why we should view them as tragic figures.
Next on Slate:
Can I stop reading Slate now? I feel I’ve put in enough hours.