Thursday, April 7, 2011

Want to help law students? Close down law schools.

As I've written before, the powers that be are increasingly waking up to the fact that legal education is a mess. But the solutions being proposed leave something to be desired.

At this point, I think it's safe to say that the consensus solution is the "market information" approach. Its supporters want to increase the accuracy of employment information available to prospective law students, enabling them to make smarter choices about where and when to attend school.

The most obvious manifestation of this trend is Law School Transparency, an organization devoted entirely to seeking more detailed employment information from law schools, and which has gotten a lot of press lately. The ABA is revising its accreditation standards to include a greater emphasis on accurate job statistics. The US News rankings are getting into the game, too, revising their employment reporting standards.

Don't get me wrong: better statistics surely can't hurt. But I'm extremely skeptical that they'll do much to help, either. That's because this approach is based on a flawed premise: that the oversupply of paying law students is the result of deception by law schools.

Look, I've been pretty harsh on law schools in the past. I don't plan on stopping anytime soon, because the supposedly-respected heads of these institutions know full well how badly their students are going to fare in the real world. But we shouldn't let anger at law schools obscure the real problem.

The breakdown in legal education is a broad-based market failure that goes much deeper than deceptive practices by the schools themselves. It's not that the sellers of legal education have themselves churned up too much demand for legal education relative to the number of available jobs. Instead, too much demand existed in the market prior to the current crisis. Schools eventually discovered this, and have taken advantage of it like any rational economic actor might, both by jacking up tuition dramatically (because there's always someone willing to pay it) and opening dozens of new schools (because there's always someone willing to attend).

I know a lot of people who read this blog are law students -- how many of you carefully delved into economic statistics prior to law school? How many of you examined legal employment outcomes while deciding whether to attend law school at all (and remember, that's a different question than which law school to attend)? Maybe some, but I'd wager not many. I certainly didn't. I based my decision on fuzzy notions of self-fulfillment ("Lawyering is intellectually engaging work"), hopeful thoughts about degree portability ("A JD opens a lot of doors for me"), and, of course, optimism about salaries ("All lawyers do pretty well for themselves, right?").

The evidence isn't just anecdotal, either -- poll after poll shows that incoming law students are absurdly overoptimistic about their job prospects and generally far less concerned with finding careers than with accumulating prestige.

More realistic information about law careers might dampen the seemingly inexhaustible American enthusiasm for legal education. But this approach seems unlikely to solve the problem completely, because the demand for law schools is driven by external factors; namely, the widespread cultural perception of lawyers as rich and influential. At this point, it's a perception with little resemblance to reality, but it might take a long, long time for ingrained attitudes to shift.

On the other hand, maybe the market information approach would be successful. But what then? At the very least, some law students would decide to not attend law school. Fewer students means financial pressure on law schools. One would have to assume that even a five- or ten-percent drop in matriculating students would significantly strain a school's budget. And after that?

Some schools, rather than accept a reduced existence, would probably scrape even further along the bottom of the barrel for applicants. (For its part, the ABA is threatening to make this easier by making the LSAT optional.) If anything, it's these least-qualified students that are most vulnerable to rosy promises of legal careers, and subsquently most likely to suffer under enormous debt loads. While improved employment reporting may individually benefit some students, the basic social problem would remain unaltered: too many useless degrees bought with nondischargeable debt. So long as we're talking about the general social good, one broke law student is pretty much the same as the next.

Alternatively, some schools, unable to make ends meet, might simply shut their doors. In certain ways this is the superior outcome: fewer JDs! Less job competition! Less debt! But it's also a chaotic outcome. It seems that, so long as we're shuttering law schools, it's better to shutter the lousy ones first, right? And market-based school closings would probably occur irrespective of school quality.

After all, if there's an overall drop in the number of law students, it's likely to occur across the board, rather than be confined to a few institutions. Schools that close as a result aren't going to be the schools with the worst academic programs, but the schools with the worst particularized financial circumstances. That might mean schools that cater to low-income students. Or it might mean schools with a very small endowment. Or it might just mean schools with an anomalously small incoming class the previous year. I don't see any way to predict in advance which schools would be hit the hardest, or ensure that they're "bad" schools. Moreover, while a widespread decline in admissions would leave many schools standing, virtually every school would suffer in the meantime, causing a lot of unnecessary pain. Meanwhile, before the market finished rebalancing itself, thousands of students would continue taking out millions in loans to pay for legal educations at institutions of dubious longevity. If you think a JD is worthless today, imagine having a JD from a school that financially imploded.

So, in summation, the market information approach probably won't drive students away from law school. And if it does, law schools will probably just fill those seats with worse students. And if they don't, the resultant market shift will cause pain and uncertainty for wide swaths of the legal field.

With all that in mind, it seems clear that the optimal solution is also the simplest: simply shut down law schools. Pick a handful of institutions and show them the door in an orderly fashion, probably spaced out over a number of years. After they're gone, don't accredit new law schools until the legal industry actually needs more lawyers.

Yes, this approach leaves a number of open questions: who gets shut down, and how, and by whom? All thorny issues, but none of them insurmountable. (I might post about these problems later.)

Yes, this approach raises worries about "picking winners." But this isn't really about picking the right schools -- there are hundreds to choose from -- but solving the problem without creating a free-for-all and all its attendant risks.

Of course, the odds of anyone pursuing such a dramatic and simple solution are slim to none. Instead of solving anything, the ABA would rather wash its hands of the matter. "Well, told law students it was a trap," it says. "Who can blame us if they walked into it anyway?"


  1. Oh ye of little faith. Information takes time to filter through a market. Especially one where people can’t react very flexibly. That doesn’t mean it won’t filter through eventually. And just because you didn’t consciously consider the price doesn’t mean it had no effect. There are plenty of markets that work fine without people being aware of considering prices.

    Besides, there's another equilibrium solution besides artificially closing law schools. (Also note that denying ABA cert doesn’t close the school. Even the non-ABA schools can sucker kids in.) The vast majority of law schools could charge less -- a lot less. Plenty of people in other fields trade 3 or more years of their life for status, prestige and accomplishment, and we don't think it's a grave social problem. The issue is that law students are taking on debt that is vastly disproportionate to the value of the degree.

    Well, there is no reason the bottom 200 schools need to charge such exorbitant rates for their diploma mills. Sure, the academy likes having all sort of expensive interdisciplinary scholars and exotic classes (and I like taking those classes) but for a huge number of students, it is gonna suffice to have 100 students in a lecture hall taking basic bar courses from a former practitioner using the Socratic method. Sure, no journal for most of these students, but moot court is still do-able. The math on those expenses looks a lot different than the current math at most ABA schools.

    (As someone who holds out the flicker of a hope of getting a cushy academic job some day, this doesn’t appeal to me, but it’s still a good solution to the social problem. Mmm. Best hope people who think like me don’t happen to be stakeholders with a say in the outcome . . . .)

    Of course the other problem with this is that this won’t reduce the price of the top ranked schools, where graduation still is a ticket to a high-paying big firm job. Even if you don’t want to work a biglaw job, the fact that that salary is out there is going to mean that the market will bear high tuition prices by the top schools. (So, yeah, this doesn’t necessarily make you better off. Your tuition prices wouldn’t have been lower.)

    And this solution also mightily offends the meritocratic sensibilities of the profession. I should be able to ask what school you went to, what journal you were on, and what your class rank was and be able to pinpoint your precise position in a ranking of all lawyers who ever lived ever! God forbid that the brilliant students who could be going to a top 19 school instead choose to go to a vastly cheaper school because they know that for what they want to do with those degrees, it won’t be worth the tuition cost. That would mean that I couldn’t judge the objective worth of a human being by what school he went to. I might only be able to judge what his cost-benefit analysis looked like.

    And God forbid that cheaper J.D. prices actually allows that “portable degree” fantasy of yours to become a viable reality! Can you imagine, people getting J.D.s and then going into other fields, where _real_ lawyers might run into them and be _challenged_ on their dominance and supremacy!

  2. I don't disagree that the system you're envisioning, where law school tiers are reflected by price tiers, might be good in a lot ways.

    But I don't see how we get from here to there. And I'm not sure there's any market for it. Like, people think law degrees are tickets to wealth and professional success, which is why they're willing to sacrifice so much to get one. With that in mind, why would anyone want a cheapo portable law degree from Chapman University or whatever? Along those lines, although financial considerations make a difference around the margins (I came to Minnesota because it was cheaper than the one other school that let me in, which was slightly higher ranked), nobody is going to pass up the opportunity to go to a Harvard or Penn or Michigan to go to a St. Thomas.

    Oh, and I don't think law schools themselves have any interest in providing that kind of service. Maybe I'm wrong, but it seems pretty clear that the modern explosion of legal education is the direct effect of the willingness of students to pay exorbitant sums for their JDs. It's not hard to see why these schools exist: as long as they're drawing applicants, they offer cushy, high-paying jobs for their faculty and administration, their law school trappings confer prestige and respect, and when the schools are affiliated with universities, they're a useful cash flow that subsidizes expensive science programs and what-have-you. But none of that is true if, instead, you're selling JD Lites for bargain basement prices.

    I guess I simply don't believe that there's anyone out there who wants to start a low-ranking, low-priced, just-the-facts style school. If you think these schools are desirable, I only see one reliable means of creating them: a set of direct interventions into the structure and pricing of legal education that would be far more onerous to free-market principles than merely shutting down some low-performing schools.

    And yeah, I realize that stripping a school of accreditation doesn't necessarily dissolve that school entirely. (I almost added a section to my post about the Charlotte School of Law, my personal favorite unaccredited blight on the legal profession.) But I don't see how the ABA closes down a school directly, and while I'm not totally opposed to the government getting involved and shuttering a lot of the nation's less respectable institutions (outside of the law school context, even), that's obviously a much larger issue. In any case, stripping accreditation would undoubtedly do massive damage to these schools' ability to continue as they have. To the extent that we want market information to do some of the job for us, the least we can do is push the schools down into the weeds where they belong.

  3. I agree that there is no impetus to go the cheap road right now, when students are still following the herd into monumental debt to get a J.D. — rather there is the opposite incentive you catalogue, toward more numerous, more expensive schools — but your hypothetical envisions (and I think reality will demand) that the gravy train stops eventually. My point is that instead of shuttering randomly, schools can probably reduce costs, at the expense of changing the type of education they deliver. (And it'll hit the lower ranked schools harder.)

    Of course, don't look for price reductions to show up on the sticker price, at least not at first. Schools will give out more merit-based money instead, effectively making the poor saps who are gonna be jobless after graduating in the bottom half of the class at some no-name school subsidize their higher-achieving bargain-shoppers classmates.

    Oh, it's it all just a clusterfuck of inequity!