Month: January 2015

On The American Lawyer: Applying to Top Law Schools Disserved Many in 2014

Applying to Top Law Schools Disserved Many in 2014.”

It really is one of the most unusual things I’ve seen in my few years writing on legal education. Like, where did these applicants get it into their heads that U.S. News‘ darlings were desperate? Hope they did well though.

Law School Gives Away Free Money to Non-Students (More 509 Errata)

Today’s raspberry goes to Duquesne which reports that 117 percent of its full-time students received a grant.

Free Money at Duquesne

My hunch is that there were only 231 full-time students who received less-than-half-tuition grants last year rather than 331. The typo then compounded within the table since so many of the information reports’ numbers are just calculations and not hand-entered data themselves.

Other notables are Texas A&M (formerly Wesleyan), which amped up its scholarships to the extent that only 6 percent of its students are paying full tuition, way down from 57 percent two years ago. New Hampshire’s final year as a private law school also saw a large reduction in full-time students paying full tuition: 21 percent to 8 percent.

Otherwise, the 2013-14 academic year saw another precipitous drop in the percentage of full-time law students paying full tuition.

Percent Full-Time Law Students Paying Full Tuition

Perhaps this year only one-third of the enrollment at a typical law school is paying full freight. Like, maybe I should consider moving the blog to a more descriptive title.

Moving on to the topic of private law school tuition, which is easier to research because most of the time it’s not possible to distinguish resident from nonresident students at public law schools, we can see the plummeting reliance on full-tuition students—as well as revenue from that source.

Mean No. Full-Time Private Law School Students by Grant Received

Aggregate Revenue From Full-Time Private Law School Students Paying Full-Tuition

(These charts exclude Brigham Young because like most public law schools, we can’t know how many students are paying discounted LDS tuition.)

In all, private legal education lost nearly $450 million in annual full tuition revenue since 2011. It now makes less than in 2002. We keep hearing about how resilient law schools are to closing, but when I see this stuff I think that this just can’t go on forever.

Finally, for those curious about the dispersions of students receiving the median grant and how much that’s worth, I’ve come up with a new way of displaying that information: full-tuition quintiles. It occurred to me that simply showing median discounted tuition isn’t useful because an expensive law school can give a large discount while a cheap law school can discount by very little to get to roughly the same price tag. By treating full tuition as the independent variable (and because law schools tend to stay within the same full-tuition quintiles), I can give you a much better idea of how much the median discount is worth. The following charts use the intra-quintile mean average to give a broad picture of what’s going on.

Percent Private Law School Students Receiving Median Grant by Full Tuition Quintile Mean

Full-Time Private Law School Tuition and Median Discounted Tuition by Tuition Quintile Mean

Interestingly, a lot of the action in recent years appears to be within the third and fourth quintiles, which charge the same median discounted tuition to the same percentage of students—but schools in the fourth quintile are able to charge higher full tuition. Perhaps this is where competition over students is fiercest. In general, though, median discounted tuition in all quintiles ranges between 59 and 65 percent of full tuition. Back in 2002, the range was 82 to 91 percent.

If you’re curious what quintile a law school belonged in last year, just look at the tuition data page and compare to this table:

QUINTILE MINIMUM TUITION MAXIMUM TUITION
1 $22,560 $36,662
2 $36,994 $40,486
3 $40,890 $44,465
4 $44,520 $48,190
5 $48,730 $57,838

I believe this will be my last analysis of the information reports because I’ve covered all the topics I usually write on. Happy MLK Jr. Day, Americans.

BLS: One in Four Lawyers to Switch Occupations by 2022

…And if you know what that means, great, because there’re plenty of caveats I have to lay out for everyone else.

Steven Harper inspires me to check up on how things are going with the BLS’s proposed rule-change for estimating occupational replacement rates; there was an update on January 2nd. Apparently, the Employment Projections program released a spreadsheet with experimental 2012-2022 replacement and separations data alongside the numbers from the current methodology. I don’t think it was there before, but the BLS says it was. If so I wish I’d noticed it earlier as it’s quite interesting.

For one, my hunch in my American Lawyer article was correct: Under the new methodology between 2012 and 2022, 339,800 out of 759,800 lawyers would be replaced, and the growth rate, which is what we should be caring about because it’s not zero sum, doesn’t get changed. I like getting the numbers right. (Okay, I was off by a thousand.)

For another, the BLS goes further than I expected by separating the total occupational replacement rate into “labor force exits” and “occupational transfers,” which mean as they sound. Labor force exits are certainly going to include most retirements but also people exiting for parental leave and other, less common personal reasons. The labor force exit rate for lawyers is 17.1 percent, which compares strikingly well with the current methodology’s 16 percent replacement rate.

As for occupational transfers, as this post’s title states, it’s 25.5 percent. That’s the concept I’ve been most concerned about all along. These are lawyers who are leaving the profession for different types of jobs. To be clear, some of these transfers are preferable and some not. It includes lawyers who become judges with lawyers who become retail sales clerks. The interesting comparison—and the best I can give you—is with other occupations that require doctoral or professional degrees, sorted by size and occupational transfer rate.

OCCUPATION SOC CODE CURRENT METHOD NEW METHOD
REPLACEMENT RATE, 2012-22 OCCUPATIONAL TRANSFER RATE, 2012-22 LABOR FORCE EXIT RATE, 2012-22 OCCUPATIONAL SEPARATION RATE, 2012-22
Animal scientists 19-1011 33.3% 54.3% 22.2% 76.4%
Biochemists and biophysicists 19-1021 28.5% 54.1% 18.0% 72.1%
Medical scientists, except epidemiologists 19-1042 21.1% 51.3% 14.5% 65.9%
Computer and information research scientists 15-1111 15.7% 44.9% 11.2% 56.1%
Clinical, counseling, and school psychologists 19-3031 27.2% 42.1% 24.1% 66.3%
Physicists 19-2012 24.5% 38.8% 19.1% 57.9%
Astronomers 19-2011 24.5% 38.8% 19.1% 57.9%
Judicial law clerks 23-1012 16.2% 35.4% 27.5% 62.9%
Postsecondary teachers, all other 25-1199 15.0% 34.1% 32.9% 67.0%
Health specialties teachers, postsecondary 25-1071 15.0% 34.1% 32.9% 67.0%
Business teachers, postsecondary 25-1011 15.0% 34.1% 32.9% 67.0%
English language and literature teachers, postsecondary 25-1123 15.0% 34.1% 32.9% 67.0%
Education teachers, postsecondary 25-1081 15.0% 34.1% 32.9% 67.0%
Biological science teachers, postsecondary 25-1042 15.0% 34.1% 32.9% 67.0%
Mathematical science teachers, postsecondary 25-1022 15.0% 34.1% 32.9% 67.0%
Psychology teachers, postsecondary 25-1066 15.0% 34.1% 32.9% 67.0%
Engineering teachers, postsecondary 25-1032 15.0% 34.1% 32.9% 67.0%
Computer science teachers, postsecondary 25-1021 15.0% 34.1% 32.9% 67.0%
Communications teachers, postsecondary 25-1122 15.0% 34.1% 32.9% 67.0%
Foreign language and literature teachers, postsecondary 25-1124 15.0% 34.1% 32.9% 67.0%
Philosophy and religion teachers, postsecondary 25-1126 15.0% 34.1% 32.9% 67.0%
History teachers, postsecondary 25-1125 15.0% 34.1% 32.9% 67.0%
Chemistry teachers, postsecondary 25-1052 15.0% 34.1% 32.9% 67.0%
Recreation and fitness studies teachers, postsecondary 25-1193 15.0% 34.1% 32.9% 67.0%
Political science teachers, postsecondary 25-1065 15.0% 34.1% 32.9% 67.0%
Sociology teachers, postsecondary 25-1067 15.0% 34.1% 32.9% 67.0%
Law teachers, postsecondary 25-1112 15.0% 34.1% 32.9% 67.0%
Physics teachers, postsecondary 25-1054 15.0% 34.1% 32.9% 67.0%
Economics teachers, postsecondary 25-1063 15.0% 34.1% 32.9% 67.0%
Criminal justice and law enforcement teachers, postsecondary 25-1111 15.0% 34.1% 32.9% 67.0%
Atmospheric, earth, marine, and space sciences teachers, postsecondary 25-1051 15.0% 34.1% 32.9% 67.0%
Agricultural sciences teachers, postsecondary 25-1041 15.0% 34.1% 32.9% 67.0%
Area, ethnic, and cultural studies teachers, postsecondary 25-1062 15.0% 34.1% 32.9% 67.0%
Social sciences teachers, postsecondary, all other 25-1069 15.0% 34.1% 32.9% 67.0%
Social work teachers, postsecondary 25-1113 15.0% 34.1% 32.9% 67.0%
Architecture teachers, postsecondary 25-1031 15.0% 34.1% 32.9% 67.0%
Anthropology and archeology teachers, postsecondary 25-1061 15.0% 34.1% 32.9% 67.0%
Environmental science teachers, postsecondary 25-1053 15.0% 34.1% 32.9% 67.0%
Geography teachers, postsecondary 25-1064 15.0% 34.1% 32.9% 67.0%
Library science teachers, postsecondary 25-1082 15.0% 34.1% 32.9% 67.0%
Forestry and conservation science teachers, postsecondary 25-1043 15.0% 34.1% 32.9% 67.0%
Lawyers 23-1011 16.0% 25.5% 17.1% 42.6%
Judges, magistrate judges, and magistrates 23-1023 16.0% 25.5% 17.1% 42.6%
Administrative law judges, adjudicators, and hearing officers 23-1021 16.0% 25.5% 17.1% 42.6%
Physical therapists 29-1123 24.6% 23.6% 15.2% 38.8%
Pharmacists 29-1051 23.9% 20.5% 16.8% 37.4%
Audiologists 29-1181 20.7% 20.0% 14.5% 34.5%
Veterinarians 29-1131 32.1% 16.6% 14.5% 31.1%
Physicians and surgeons, all other 29-1069 25.0% 14.4% 14.6% 29.0%
Family and general practitioners 29-1062 25.0% 14.4% 14.6% 29.0%
Internists, general 29-1063 25.0% 14.4% 14.6% 29.0%
Surgeons 29-1067 25.0% 14.4% 14.6% 29.0%
Anesthesiologists 29-1061 25.0% 14.4% 14.6% 29.0%
Pediatricians, general 29-1065 25.0% 14.4% 14.6% 29.0%
Psychiatrists 29-1066 25.0% 14.4% 14.6% 29.0%
Obstetricians and gynecologists 29-1064 25.0% 14.4% 14.6% 29.0%
Optometrists 29-1041 29.0% 14.0% 19.6% 33.6%
Chiropractors 29-1011 19.6% 13.6% 13.1% 26.8%
Dentists, general 29-1021 24.4% 12.7% 15.6% 28.3%
Orthodontists 29-1023 24.4% 12.7% 15.6% 28.3%
Oral and maxillofacial surgeons 29-1022 24.4% 12.7% 15.6% 28.3%
Dentists, all other specialists 29-1029 24.4% 12.7% 15.6% 28.3%
Prosthodontists 29-1024 24.4% 12.7% 15.6% 28.3%
Podiatrists 29-1081 20.7% 12.1% 11.1% 23.3%

I didn’t include it, but some of the occupations at the top with high turnover are quite tiny. There are only 2,700 animal scientists, for example, so my guess is there are still problems with the data. You’ll also note that many of the stats tend to clump together by occupation types, e.g. the 33 postsecondary instructor classes, which all have the same replacement rates, for both the new and old methodologies.

But the real money is in comparisons among the professional occupations, which are generally doctors, dentists, and lawyers. Lawyers’ occupational transfer rate is double doctors’ and dentists’. The medical occupations’ replacement rates under the current methodology are only a few percentage points lower than the total occupational separation rate under the new one, but the same can’t be said for attorneys’.

I’m not sure how reliable these experimental data are, but they do tend to show that there’s more turnover for lawyers than the other professions they’re most often compared to. (Ironically there’s even more turnover for postsecondary law instructors.) And I’m not even getting into job quality. I wouldn’t say this is especially strong evidence of a high turnover rate for lawyers, but it’s another piece that fits in that puzzle.

The BLS (still) says it’ll give us another update early this year, but I hope to write on other topics.

10 Ways to Falsify Law Graduate Employment Doomsayers

I begin 2015’s first substantive post by invoking the right of listicle clickbait.

A loose end from December is Loyola Law School, Los Angeles professor Theodore Seto’s response to my American Lawyer article on the Bureau of Labor Statistics’ proposed change to how it measures the replacement rate for lawyers. For Professor Seto, I have good news and better news.

The good news is that when he writes that he’s flattered that I’d respond to his article, he need not be. Of course I was going to write on the topic for The American Lawyer anyway, but his first article usefully illustrated the kind of thinking I cautioned against when I broke the story in early November.

The better news is that his closing line raises an interesting question worthy of further consideration. He writes:

But we should all remember (myself included) that the best legal counselors, when faced with new evidence, adjust their advice accordingly. They do not simply attack the evidence.

Let’s not discuss whether I was attacking new evidence. Readers can compare my article to Seto’s for themselves. Instead, if I interpret Seto fairly here (and he says I didn’t do that for his other article, so I tread lightly), he’s implying that I or perhaps others make unfalsifiable claims about the future of law graduate employment—that we unfairly dismiss any favorable news about graduates’ prospects because it contradicts our dogmatic positions that law school is a poor decision in probably most circumstances.

If so, he’s incorrect. My beliefs are falsifiable, and because the topic of falsifiability arose on this blog two more times in the last month, I’m inspired to write on it. So, here’s a list of events one could point to (and would probably need to) to predict that things will be better for grads in 2016.

(1)  The absolute number of graduates in the classes of 2014 and 2015 employed in full-time, long-term, bar-passage-required, non-school-funded jobs rises. No one disputes that employment percentages will improve on account of there being fewer graduates, but the best way to show that graduates are finding jobs is … showing that graduates are finding jobs. Similarly, I’d like to see evidence that grads are finding better jobs. That could be the NALP reporting that grads are shifting into lawyer jobs at law firms larger than the 2-10 bracket, though 2013 toed in the right direction.

No. Graduates Employed by Size of Firm (NALP)

You can slag biglaw all you want, but it tends to pay better. Likewise, wage growth in the 25th percentile for law grads is absolutely necessary if anyone wants to convince me that law school is better than going back to college for a more lucrative bachelor’s degree, but technically that’s a slightly different issue.

* Note: At this time I’m not too concerned that the ABA’s decision to give law schools a tenth month to report their graduate employment data will substantially impair any comparisons to previous years.

(more…)

LSAT Tea-Leaf Reading: December 2014 Edition

And the LSAC said, “Let there be growth!” and it was so. A whole 0.8 percent more people (222 souls) took the LSAT last month than in December 2013. The calendar year total is 100,829, which is about 4,500 fewer administrations than the previous year. The decline for 2013 was about half what it was the year before, so we might be bottoming out.

No. LSAT Takers, 4-Testing Period Moving Sum

It’s the second time since the LSAT plunge began in October 2010 that we’ve seen a year-over-year growth in test-takers. The last one was in February 2014, which was a larger, 1.1 percent increase. There will probably be more declines in the future, but at some point in the next few years it will stabilize. I doubt it’ll start growing though.

Meanwhile, week 1 has come and gone, and I can finally give you a trend path for applicants and applications for fall 2015.

No. Applicants Over App Cycle

No. Applications Over App Cycle

It looks like 5,000 fewer applicants is what we can expect for this year. I say again that these numbers still look too high, and I’m surprised that more people aren’t deterred from law school.

Voodoo Links

I’ve been asking myself recently what standards a topic needs to meet before I’ll post on it, and while there’s no point in giving a list of criteria, one thing I try to look for is information readers won’t find at other sites, particularly more heavily trafficked ones. Consider it my offer to readers. So, I thought to myself that maybe I should occasionally point out instances of good work that teaches me something I didn’t know. (It would certainly give me an opportunity to practice not being a meanie in my writing.) I can think of two examples from the last month+.

Law School Truth Center, “LSAT Scores Do Not and Cannot Predict Bar Exam Scores,” Outside the Law School Scam, November 20, 2014.

I have to thank the normally satirical LSTC for playing it straight and explaining item type theory and equating to me. It didn’t just illuminate how standardized testing works; it spared my readers disputable longitudinal comparisons between law school classes. I especially appreciate the post because until then I had no interest in last summer’s bar exam debacle.

Mitchell D. Weiss, “Don’t Believe the Hype: There’s Still a Student Loan Crisis,” Credit.com, January 5, 2015.

June 2014 blessed us with a policy paper by Beth Akers and Matthew Chingos of the Brookings Institution ridiculing our assertions that there’s a student loan “crisis” on the horizon. Weiss does us a favor by summarizing many of the Brookings Institution’s policy papers over the last year arguing that the student debt system is fine but it’s those irresponsible kids taking on too much debt that’s the problem. I’m wary of giving Brookings any more attention than it already gets: The last thing we need is more genuflecting to D.C. think tanks, but Weiss’ contribution is a solid analysis for anyone interested in Brookings’ position on higher education and student loan debt.

I hope to get to substantive stuff soon.

It’s 2015. Where’s My ‘Hyperinflationary Great Depression’?

[The following post first appeared on the LSTB on January 1, 2012. What it said then still applies today, mutatis mutandis. Thanks for reading the blog and have a prosperous 2015!]

Behold, the curse of a long memory. Last January [2011], Google Alerts sent me an e-mail informing me that the National Inflation Association (“Preparing Americans for Hyperinflation”) issued a press release predicting that the higher ed bubble was “set to burst beginning in mid-2011. This bursting bubble will have effects that are even more far-reaching than the bursting of the Real Estate bubble in 2006.” The NIA press release then digressed into legal education (I’m guessing they’d just read David Segal’s first NYT piece a few days earlier), how evil lawyers are, how they produce nothing for society, and how 60 percent of the Senate and 37 percent of the House are lawyers who rig the economy to make jobs for lawyers. It editorializes:

“While everybody went to school to become a lawyer [really?], nobody went to school to become a farmer because Americans didn’t see any money in farming. With prices of nearly all agricultural commodities soaring through the roof in 2010 and with NIA expecting this trend to continue throughout 2011, the few new farmers out there are going to become rich while lawyers are standing at street corners with cups begging for money.”

The NIA would’ve been more helpful if it explained how lawyers could be a drain on society yet remain vulnerable to market forces. Also, one would think unemployed lawyers would try to find non-lawyer jobs instead of begging, but I think it’s important to note that agricultural prices weren’t “soaring through the roof” in 2010. They were growing, yes, but although the NIA was right that they continued to do so in 2011, (a) it’s stalled recently, and (b) they’re no worse than they were in the 1980s and early 1990s.

Oh well. The NIA sternly concluded:

“We must work hard to educate America to the truth if our country is going to have the wherewithal to survive the upcoming bursting college bubble and Hyperinflationary Great Depression.”

Whoa.

I can’t say I’m quite as disappointed as the NIA undoubtedly is that we’re not seeing much inflation these days, and in mid-2011 I didn’t see many colleges cutting their tuition, laying off faculty, closing programs, or trying to retrench themselves. I also remain unconvinced that $1 trillion in student debt can be worse than $8 trillion in mortgage debt. True, student debt is not dischargeable (unlike mortgage deficiencies) absent a showing of an undue hardship, and it’s hampering the recovery and ruining lives, but it’s not worse in quantity than the housing bubble. As for the NIA’s paranoid ranting about lawyers, all economic evidence I’ve seen indicates that legal services have all but stagnated for much of the last two decades. Apparently, those 60 percent of lawyer-senators aren’t very good at creating work for themselves. I suppose the NIA should express appreciation.

Anyway, if anything, inflation would be a boon to underwater homeowners and student debtors because it erodes the real value of their debts, which grew significantly in the 2000s. Here’s household debt to GDP:

Importantly, I’m no macroeconomist but I’ve never heard of a “hyperinflationary depression.” The terms contradict each other. Depressions occur when people take on excessive debt and begin paying it down simultaneously instead of spending money on other things. This is deflationary because new credit isn’t being created, even by the government. By contrast, hyperinflation has only occurred in unusual circumstances, like when a government owes debts to foreigners in a different currency. Weimar Germany, for example, owed gold-dominated war reparations to the Allied powers, and to purchase the gold, it printed money, causing hyperinflation. Zimbabwe isn’t a good comparison either because it’s a small, HIV-ridden landlocked state with an undiversified, oligopolistic agrarian economy while the U.S. is a wealthy, continent-spanning super-state.

As for inflation fears generally, maybe it’s the fact that I have no memory of high inflation, but why isn’t there a “National Personal Income Association” (NPIA) that regularly celebrates increases in Americans’ per capita personal income?

“Per capita personal income has quadrupled since 1980! Prices didn’t even triple! Hooray! We’re rich! Fiat currency forever and ever! ‘You shall not crucify mankind upon a cross of gold!'”

I’m sure the NPIA wouldn’t’ve been too thrilled with 2008-09, but personal income is increasing again. The problem has just been that over the decades those gains haven’t been distributed equally. This isn’t a problem of inflation but one of wages and taxation.

Intuition tells me the NIA won’t spend early 2012 carefully discussing why the higher ed bubble didn’t burst in mid-2011 as it predicted, nor will it take the time to explain why Americans—many of whom are net debtors—should be concerned about inflation. Instead it will prophecy even more hyperinflation later. But here’s hoping the National Inflation Association won’t provide me entertainment come January 1, 2013. Such is the curse of a long memory.