Law School Over-Expansion

Government Finally Tells Private Law Schools to Slash Tuition, Faculty

…In Korea.

The country’s Ministry of Education wants people from poorer backgrounds to be able to practice law, so its solution is to demand law schools charge less and offer more need-based scholarships, according to The Korea Times.

Average private law school tuition is a scandalous $17,152 annually (it takes about five years, as I discussed last year). The plan calls for a 15 percent tuition cut at Korea’s fifteen private law schools, which would put it below $15,000. The article isn’t clear as to whether public law schools would be affected.

Just to show you that there’s nothing new under the sun, the law schools complained that they’re under financial strain already, with faculty taking up ~$24.0 million while tuition revenue is only $19.7 million. Using math against ABA data for the 2013-14 academic year, I get an average $10.6 million to private law schools (excl. Brigham Young, Pontifical Catholic, and Inter American) from full-time students paying full tuition. I doubt the total is more than $15 million.

The government’s response: “[T]hey can lower the tuition if they restructure their high-cost faculty system.”

Indeed, the faculty numbers the article gives are bizarre: The government’s standard is 312, but they have—and I think this is an average—537. That comes to 8,055 faculty for … 6,021 students at all 25 law schools, which implies a student/faculty ratio well below one. Again, for comparison, in the U.S., the average number of full-time faculty (current definition) at private law schools rose from 35.4 in 1999 to 43.2 in 2014 (peak 48.9 in 2012). We could also easily get by with fewer profs and fewer schools.

Maybe there’s something off in the reporting, and I’m not sure how the ministry can encourage the law schools to cut their tuition levels if they don’t want to. Nonetheless, it makes you wonder whether the law-school system fails wherever it’s tried.

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The Legal Recessions That Weren’t

I don’t read The New Yorker regularly, but I’m of the demographic that does, so it pained me to read the first two sentences of its article, “The Legal One Percent.”

After every recession since the Second World War, the legal profession swiftly and robustly recovered. Not this time.

This is not what the data say. The legal sector (which isn’t the same as the legal profession, but given that the article goes on to cite profits-per-partner data I think that’s what The New Yorker means) has done terribly after recessions since the late 1970s. Although the BEA still hasn’t updated its industry data for the period between 1977 and 1997 per its comprehensive revision, the older data show the overall stagnation.

Legal Sector Real Value Added

It took five years for the legal sector to recover to its 1979 high, and then eight years to get back to where it was in 1990. This is supported by data on household consumption expenditures on legal services, as well as the Labor Department’s measure of employees in legal services.

Household Consumption of Legal Services

Per capita spending on legal services probably peaked in 1990, and it’s probably fallen to its 1960s’ level.

The legal sector and the legal profession have been ailing for quite a while. It’s surprising that their stagnation is still misreported.

Too Bad TJSL’s Grads Can’t Get a 2/3ds Write-Off

Oh, I’m sorry, “restructuring.”

That’s all that really needs to be said about Thomas Jefferson School of Law’s “Restructuring Support Agreement” with 90 percent of its bondholders. I’ve refrained from editorializing on the most of troubled law schools, but an $87 million write-off for its Xanadu-esque building sounds high. I suppose it beats a chapter 7 corporate dissolution; there is still plenty of unsubsidized Stafford loan margin to be captured, after all.

TJSL’s students on the other hand at least get PAYE, which they’ll need because last year they left with an average disbursed debt of $180,665. In order to avoid loan cancellation, even without accrued interest, graduates would need to make $182,000 from their very first repayment. After that, it’s twenty years until the government forgives their balances and sends them a tax bill for it.

But I’m sure employers are committed to ensuring that TJSL grads receive more than triple median household income the day they walk through the door.

Japan’s Law Schools Should Take Lessons From Their American Counterparts

Oh Yomiuri Shimbun, why must you blight the Internet with such nonsense in your editorials on legal education?

[T]he number of lawyers employed by local governments and business corporations has not increased as much as anticipated. A large number of people are unable to find jobs after passing the bar exam.

Some law schools have been increasingly inclined to withdraw from their field of education in recent months. The move has accelerated since last autumn, when the education ministry said it would curtail grants-in-aid to law schools whose graduates perform poorly on the bar exam.

There was a time when law schools bloomed, with their number peaking at 74. But the number of law schools accepting applications for admission next spring is expected to decrease to 54. It is only natural for law schools to quit if their students do badly on the exam.

Clearly Japan’s law schools’ mistakes aren’t emulating the U.S. system but not emulating it enough. Employing the strategies used by U.S. law schools could really make a difference at these institutions because over here, we’ve internalized the following lessons. When graduates don’t pass the bar or don’t find jobs, do the following:

(1) Capture the accreditation system and calibrate it so that if graduates from all schools fail the exam at about the same rate, the schools keep their accreditation. You’re not over-enrolled if you’re just average.

(2) Blame the magazine rankings. (Don’t worry if they blame you back, you both make your money on the (prospective) applicants. It’s just part of the business.)

(3) Shake down your alumni to finance a new, gratuitous, state-of-the-art law school building. That’ll show ’em.

(4) Blame your graduates for being greedy, entitled, and unwilling to make the tough sacrifices, like opening practices in rural areas. Lots of people in Shikoku need lawyers.

(5) Alternatively, blame your graduates for moving too far from the school and trying to make money where the jobs are, like Osaka perhaps. After all, it’s not the school’s fault for enrolling too many students for the local market; rather it’s the students’ fault for wandering too far from where their degrees have any signaling value.

(6) Advertize your school’s discounted tuition thanks to senior students who are asked to pay full freight courtesy of unlimited government loans. (Japan has those, right?)

(7) Complain that the press and the blogs don’t use any facts—because they don’t.

(8) Use Pyrrhonian skepticism to dismiss government employment projections showing that there is no need for your graduates’ professional labor.

(9) Notwithstanding (8), point to the imminent wave of retiring lawyers whose positions will need to be filled.

(10) In case Abenomics fails, waive away any predicted productivity increases in legal services, low household incomes and formation rates, the apparent income elasticity of demand for legal services, and predictions that the economy is going to stagnate for many years to come. Do not waver: The backlog of graduates will clear!

(11) Claim that your graduates are easily finding jobs after the employment data are collected. Disregard the findings of longitudinal studies like After the JD in the U.S., which found that graduates who enter the profession in good years frequently leave law practice several years later due to massive attrition.

(12) Throw out marginal product theory, the law of diminishing marginal returns, and the sheepskin effect and argue that your school’s degrees are “versatile,” ensuring that graduates will get an earnings premium in any occupation besides law practice because all schooling increases earnings for all positions regardless of the skill required.

(13) Ask rhetorically, “What else will intelligent young people do?” Obviously law is the answer.

(14) Plead that your school is virtuous because it enrolls minority students who do poorly on exams. It doesn’t matter if they never enter the profession or can’t service their debts. (They have IBR in Japan, right?)

(15) Use the crash in applicants to encourage people to apply. After all, it’s not like everyone will seriously heed this advice and make it self-defeating.

(16) U.S. law schools haven’t tried this yet, but yous should: Insist that the profession’s licensing rules are so restrictive that they prop up prices for lawyers’ services, which is why so many of the highest earners in the country are lawyers. Therefore, anyone who graduates from your law school is a lucky ducky. If anything, the country should allow foreign-trained lawyers to practice as it will drive costs down.

(17) And if all else fails, compare the number of attorneys per capita in your country or region to others because that’s an obvious measure of lawyer shortages. Duh.

So Yomiuri Shimbun and all Japanese law schools, the problem wasn’t adopting the American model; it’s not adopting it all the way.

Florida Legal Sector Peaks Higher, Troughs Lower Than Country’s

The Tampa Bay Times tells us, “Florida’s Swollen Ranks of Lawyers Scrap for Piece of a Shrinking Legal Pie“—a fair assessment.

As to whether there are too many lawyers as the article says, well, obviously there are as many lawyers as the state can employ at any given time. Whether the state (and the country) produces too many law graduates and licenses more attorneys than can be absorbed is a different matter. I sympathize with attorneys trying to make a living, but I am enjoined from complaining if clients are charged less as a result.

Here’s the relevant line:

Almost half of the lawyers who responded to a Florida Bar survey last year cited “too many attorneys” as the most serious problem facing the legal profession today. That exceeded “difficult economic times” and “poor public perception,” which many blamed in part on relentless TV advertising, such as that by big personal injury firms.

Surveys are important sources of information, but just because lawyers believe something doesn’t make it true. It’s difficult to separate the extent to which the “difficult economic times” and the “too many attorneys” cause lawyer underemployment. In fact, Florida’s legal sector peaked higher and troughed harder than the rest of the southeast and the country.

Real Legal Services (Fla. edition)

(Source: BEA, author’s calcs.)

Although, the surveyed lawyers have a point: It’s also true, as the article points out, that the number of law schools in Florida needlessly doubled over the last 15 years or so. Unhelpfully, the article publishes law schools’ unemployment rates rather than my preference: percent employed in bar-passage-required jobs, full-time/long-term excluding law-school-funded jobs. Here’re Florida’s law schools’ 2013 results:

  • Florida State – 69.6%
  • University of Florida – 66.4%
  • Stetson – 62.0%
  • University of Miami – 60.7%
  • Nova Southeastern – 60.5%
  • Florida International – 59.6%
  • Thomas – 47.8%
  • Barry – 39.8%
  • Florida A&M – 38.5%
  • Ave Maria – 34.6%
  • Florida Coastal – 30.8%
  • Average Florida Law School – 51.8%
  • Southeast BEA Region Average Law School (Excl. Fla.) – 57.3%
  • Average U.S.A. Law School (Excl. P.R., Fla.) – 56.1%

In general, Florida’s law schools are doing worse than the regional and national averages. Perhaps you could call it the Florida Coastal effect. I’m sure someone with more time on their hands than I could write a paper on the impact for-profit law schools have on state employment outcomes and state legal industries.

What surprises me, though, are the attorney counts stated in the article: They’re much higher than the number of active and resident attorneys Florida bar authorities report to the ABA.

Since 2000, the number of licensed attorneys has swollen from 60,900 to 96,511. … Florida had 27,000 licensed attorneys in 1980. Within 20 years, the number had more than doubled.

According to the ABA, in 2000, there were 49,139 active and resident lawyers in Florida, and 68,464 in 2013. I don’t have numbers for 1980, but in 1989, Florida had only 33,251 active and resident lawyers. Anyway, I get 39 percent growth since 2000, not the 58 percent the article implies.

Despite these bleak facts, as always we can rely on the deans to tell us to hail the JD Advantage.

So what’s the advice for those considering law school or soon to graduate? Until demand better meets supply, [LeRoy] Pernell of Florida A&M’s law school predicts that many new lawyers will have to use their education in “nontraditional ways.” Among them: working for businesses instead of law firms.

Some could also wind up in jobs that don’t require a law degree. …

[Christopher] Pietruszkiewicz, Stetson’s dean, advises interning, then working in a public defender, state attorney or U.S. Attorney’s Office.

Hopefully the message for applicants is clear: There are better alternatives than law school in Florida.

Which Law Schools Are Shedding Full-Time Professors (2013 Edition)?

I asked this question not even six months ago, but since the Official Guide‘s data are out already, I figured no harm’d be done revisiting it.

Followers of the law school applicant crash are likely to be interested in knowing which law schools are responding by letting go of faculty. Talk of buyouts is in the air, and tenured faculty are among the highest paid, making their departures relief to law schools’ budgets. The Official Guide can help illuminate where that’s going on. For the most part.

Unfortunately, some schools are more diligent about submitting their data than others. Also, it’s not uncommon for wide fluctuations to occur on a year-by-year basis or for downright absurd outcomes to occur, e.g. in 2011 when South Dakota reported only having a full-time faculty of one, which sounds like a Hollywood pitch. Property Prof Versus the Undead 1Ls would make a delightful zombie movie—and the gratuitous Blackacre jokes might even deter the hordes of applicants powered by Legally Blonde—but alas, it was certainly a data entry error.

Having said that, overall, the aggregate of the data probably tell a reliable story: Peak full-time law professor occurred in 2011, and by 2013 even part-time profs started to disappear. The bubble is slowly deflating.

Number of Faculty and Administrators by Type(Click to enlarge)

In fact, most of the full-time law prof bubble occurred in the 21st century. They had a good run, I guess. For a time, “law teachers, postsecondary” was one of the fastest-growing occupations in the country.

But I know what you really came here for: Rankings! These are sorted by net two-year reduction by school with the fewest number of full-time faculty in 2011, the idea being that a small school that reduces its professors by the same number as a larger one sees a bigger impact.

Behold! Your vile, execrable, perverted obsession indulged:

**********

FULL-TIME FACULTY (FALL)
RANK SCHOOL ’11 ’12 ’13 ANNUAL CHANGE NET CHANGE
1. Chicago 67 70 46 -24 -21
1. Florida Coastal 69 60 48 -12 -21
3. McGeorge 49 43 33 -10 -16
4. St. Louis 55 49 40 -9 -15
5. St. John’s 52 39 38 -1 -14
5. Hofstra 56 54 42 -12 -14
5. New York Law School 70 57 56 -1 -14
8. Widener 51 51 38 -13 -13
8. Catholic 52 43 39 -4 -13
8. Fordham 85 81 72 -9 -13
11. Hamline 34 26 22 -4 -12
11. California-Hastings 67 57 55 -2 -12
13. La Verne 19 8 8 0 -11
13. Roger Williams 27 20 16 -4 -11
13. Touro 36 34 25 -9 -11
13. Pace 48 41 37 -4 -11
13. John Marshall (Chicago) 69 69 58 -11 -11
18. William Mitchell 39 35 29 -6 -10
18. Wisconsin 57 54 47 -7 -10
18. Stetson 58 48 48 0 -10
18. California-Berkeley 65 63 55 -8 -10
18. Brooklyn 66 63 56 -7 -10
23. Golden Gate 36 30 27 -3 -9
23. Albany 44 40 35 -5 -9
23. Seton Hall 49 41 40 -1 -9
23. Loyola Marymount (CA) 67 65 58 -7 -9
27. Detroit Mercy 31 27 23 -4 -8
27. San Francisco 38 33 30 -3 -8
27. Georgia State 50 43 42 -1 -8
27. Seattle 61 57 53 -4 -8
31. New Hampshire 21 14 14 0 -7
31. Dayton 24 23 17 -6 -7
31. Capital 32 31 25 -6 -7
31. Wayne State 34 30 27 -3 -7
31. Cleveland State 36 32 29 -3 -7
31. California Western 42 38 35 -3 -7
31. Indiana (Bloomington) 55 50 48 -2 -7
31. Boston University 55 54 48 -6 -7
31. Virginia 85 79 78 -1 -7
40. Faulkner 19 14 13 -1 -6
40. Regent 23 18 17 -1 -6
40. Florida A&M 25 20 19 -1 -6
40. Vermont 29 27 23 -4 -6
40. Arizona 38 33 32 -1 -6
40. Thomas Jefferson 39 39 33 -6 -6
40. Wake Forest 41 38 35 -3 -6
40. Penn State 53 51 47 -4 -6
40. DePaul 54 50 48 -2 -6
40. Washington University 67 66 61 -5 -6
40. Miami 82 79 76 -3 -6
51. Toledo 28 25 23 -2 -5
51. Whittier 29 24 24 0 -5
51. Quinnipiac 29 26 24 -2 -5
51. Texas A&M 31 29 26 -3 -5
51. St. Thomas (FL) 37 33 32 -1 -5
51. Chapman 44 40 39 -1 -5
51. SUNY Buffalo 45 39 40 1 -5
51. Nova Southeastern 52 49 47 -2 -5
59. Ave Maria 19 19 15 -4 -4
59. Western New England 27 23 23 0 -4
59. Baylor 27 25 23 -2 -4
59. Missouri (Kansas City) 31 27 27 0 -4
59. Northeastern 36 37 32 -5 -4
59. New England 37 35 33 -2 -4
59. Pittsburgh 40 39 36 -3 -4
59. Southwestern 56 57 52 -5 -4
59. Santa Clara 61 56 57 1 -4
59. Texas 83 75 79 4 -4
59. George Washington 87 87 83 -4 -4
59. New York University 141 137 137 0 -4
71. Wyoming 17 15 14 -1 -3
71. Samford 23 22 20 -2 -3
71. Campbell 23 21 20 -1 -3
71. Widener (Harrisburg) 23 22 20 -2 -3
71. Southern Illinois 24 24 21 -3 -3
71. University of St. Thomas (MN) 30 29 27 -2 -3
71. Oregon 30 27 27 0 -3
71. Nevada 32 23 29 6 -3
71. Texas Southern 33 30 30 0 -3
71. Southern University 39 35 36 1 -3
71. Connecticut 41 38 38 0 -3
71. Notre Dame 49 54 46 -8 -3
71. Cornell 53 55 50 -5 -3
71. Florida, University of 61 62 58 -4 -3
71. Emory 63 64 60 -4 -3
71. Suffolk 70 66 67 1 -3
71. Michigan 70 71 67 -4 -3
88. Liberty 19 17 17 0 -2
88. District of Columbia 20 20 18 -2 -2
88. Kentucky 24 21 22 1 -2
88. Gonzaga 26 22 24 2 -2
88. Northern Kentucky 27 29 25 -4 -2
88. Oklahoma City 27 25 25 0 -2
88. California-Irvine 28 27 26 -1 -2
88. North Carolina Central 31 28 29 1 -2
88. Charleston 31 31 29 -2 -2
88. Cincinnati 32 32 30 -2 -2
88. West Virginia 34 34 32 -2 -2
88. Loyola (LA) 40 39 38 -1 -2
88. Case Western Reserve 41 41 39 -2 -2
88. Vanderbilt 41 38 39 1 -2
88. Southern California 45 46 43 -3 -2
88. Colorado 48 46 46 0 -2
88. Georgia 50 47 48 1 -2
88. Lewis and Clark 52 51 50 -1 -2
106. Western State 17 11 16 5 -1
106. Arkansas (Little Rock) 19 19 18 -1 -1
106. Howard 21 20 20 0 -1
106. Mississippi College 26 26 25 -1 -1
106. Tulsa 26 25 25 0 -1
106. Arkansas (Fayetteville) 27 23 26 3 -1
106. Hawaii 29 28 28 0 -1
106. Washburn 30 32 29 -3 -1
106. George Mason 34 35 33 -2 -1
106. Washington and Lee 35 35 34 -1 -1
106. Utah 37 36 36 0 -1
106. Marquette 37 37 36 -1 -1
106. Tulane 43 45 42 -3 -1
106. Maryland 61 61 60 -1 -1
106. Illinois Institute of Technology 64 63 63 0 -1
121. North Dakota 12 9 12 3 0
121. Northern Illinois 17 15 17 2 0
121. Willamette 25 25 25 0 0
121. Louisiana State 29 26 29 3 0
121. St. Mary’s 31 31 31 0 0
121. Barry 32 32 32 0 0
121. Texas Tech 32 35 32 -3 0
121. Oklahoma 33 31 33 2 0
121. Alabama 38 39 38 -1 0
121. John Marshall (Atlanta) 40 49 40 -9 0
121. Florida State 41 43 41 -2 0
121. Illinois 43 43 43 0 0
121. California-Davis 46 46 46 0 0
121. Arizona State 49 51 49 -2 0
121. Michigan State 51 51 51 0 0
121. Temple 58 55 58 3 0
137. Montana 14 14 15 1 1
137. Appalachian 15 17 16 -1 1
137. Ohio Northern 19 19 20 1 1
137. Creighton 23 25 24 -1 1
137. Louisville 25 25 26 1 1
137. Brigham Young 25 24 26 2 1
137. Drake 26 25 27 2 1
137. Akron 26 30 27 -3 1
137. Valparaiso 27 31 28 -3 1
137. Syracuse 41 45 42 -3 1
137. Indiana (Indianapolis) 42 8 43 35 1
137. Houston 51 55 52 -3 1
137. Duke 55 59 56 -3 1
137. Pennsylvania 62 65 63 -2 1
137. Northwestern 76 84 77 -7 1
137. American 102 103 103 0 1
137. Georgetown 130 140 131 -9 1
154. Memphis 18 18 20 2 2
154. Drexel 24 25 26 1 2
154. Mercer 26 27 28 1 2
154. Nebraska 27 29 29 0 2
154. Arizona Summit 32 41 34 -7 2
154. South Texas 44 47 46 -1 2
154. Baltimore 50 52 52 0 2
154. Boston College 52 49 54 5 2
154. Minnesota 53 51 55 4 2
163. Maine 16 16 19 3 3
163. Idaho 19 20 22 2 3
163. Kansas 28 30 31 1 3
163. Florida International 29 29 32 3 3
163. Villanova 32 31 35 4 3
163. South Carolina 33 37 36 -1 3
163. Southern Methodist 38 36 41 5 3
163. Washington 51 48 54 6 3
163. Stanford 59 60 62 2 3
172. Tennessee 27 28 31 3 4
172. Missouri (Columbia) 28 26 32 6 4
172. City University 34 39 38 -1 4
172. Iowa 39 43 43 0 4
172. Cardozo 58 62 62 0 4
172. Harvard 116 125 120 -5 4
178. Duquesne 23 27 28 1 5
178. New Mexico 28 29 33 4 5
178. Richmond 32 31 37 6 5
178. Rutgers (Newark) 34 38 39 1 5
178. Pepperdine 35 40 40 0 5
178. North Carolina 44 49 49 0 5
178. San Diego 55 47 60 13 5
185. Elon 17 19 23 4 6
185. Ohio State 38 45 44 -1 6
187. Loyola (IL) 48 48 55 7 7
187. California-Los Angeles 72 76 79 3 7
189. Rutgers (Camden) 45 48 53 5 8
190. Yale 61 71 70 -1 9
191. William and Mary 39 38 49 11 10
192. South Dakota 1 15 14 -1 13
192. Mississippi 17 28 30 2 13
192. Denver 62 73 75 2 13
192. Thomas M. Cooley 102 96 115 19 13
196. Charlotte 39 62 64 2 25
196. Columbia 127 142 152 10 25
10TH PERCENTILE 21 19 19 0 -2
25TH PERCENTILE 27 26 26 0 -1
MEDIAN 38 37 35 -2 -3
75TH PERCENTILE 53 51 49 -2 -4
90TH PERCENTILE 67 66 63 -3 -4
MEAN 42.4 41.3 40.1 -1.2 -2.3
GROSS GAIN 221 276
GROSS DECLINE -421 -670
CUMULATIVE 8,352 8,158 7,958 -200 -394

Comments:

(1). I seriously doubt Chicago let go of a third of its faculty this year; its enrollments are about the same as ever, and there isn’t a corresponding surge in part-time profs or similar offsets. Either Chicago misreported this year or did so in previous years and is now correcting it.

(2). The rest of the large reductions happened at schools that you’d expect them to, except maybe Berkeley.

(3). Incidentally, it’s nice to see that Indiana-Indianapolis found the 35 profs it lost last year. Again, another misreporting.

(4). In November, I was incredulous of Columbia’s 15-prof binge, but it appears to be continuing. In the last two years Columbia has increased its full-time faculty by 20 percent. Maybe that’s where all the Chicago profs went?

That’s all for now. Peace.

On the Am Law Daily: ‘ABA Task Force Report: Part Good, Part Baffling’

You can find my latest Am Law Daily article here:

ABA Task Force Report: Part Good, Part Baffling

Per the discussion on my first cut at the topic, I added a little bit more on the possibility of limited-licensing programs reducing costs. There’re other changes to the original post.

http://www.americanlawyer.com/home/id=1202643728147/ABA+Task+Force+Report+Part+Good+Part+Baffling%3Fmcode=1202617075486&curindex=3