A recent public statement signed by a number of law professors makes a variety of criticisms and suggestions regarding law school education, but there may be implications for higher education generally.
Here are the key assertions in the statement:
“Over the last three decades, the price of a legal education has increased approximately three times faster than the average household income. With the help of the federal student loan fund, some ninety percent of law students borrow to finance their legal education and the average debt now exceeds $100,000. More than one third of current students will graduate with debt above $120,000…The price of legal education has risen as the job market for lawyers has declined. Over one third of law graduates in 2011 did not obtain jobs as lawyers; the median starting salary of the class was $60,000…A graduate who earns the median salary cannot afford to make the monthly loan payments on the average debt. Thousands of law students are forced to enter Income Based Repayment (IBR), a federal debt relief program that allows reduced monthly payments, but with significant negative consequences for debtors and taxpayers…The price of legal education substantially affects access to the profession. The out-of-pocket cost of obtaining a law degree ranges from $150,000 to $200,000 or more for many law students…A recent report found only half as many entry level job openings as individuals passing the bar. Most knowledgeable observers believe that the situation is unlikely to improve even if the economy fully rebounds. More employers are relying on paralegals, technology and contract attorneys to do work previously performed by recent graduates, and cash-strapped public sector agencies are facing pressure to curtail legal expenditures…Law schools are themselves in an increasingly difficult financial position. After years of uninterrupted increases in enrollment and tuition, they now face a sharp decline in applicants. As it becomes harder for law schools to fill classes with quality students, all but the wealthiest institutions will face pressure to cut expenses. Yet at the same time, preoccupation with the annual ranking of schools by U.S. News and World Reports gives schools a perverse incentive to spend more in areas rewarded by the U.S. News formula. Two examples are expenditures per student and faculty-student ratios, which have risen dramatically in the decades since the rankings went into effect. Schools also have incentives to provide merit scholarships to attract students with high median GPA and LSAT scores, even though these applicants are unlikely to have the greatest financial need. Schools can do better in the rankings if they spend more in ways that could enhance the school’s reputation. The combination of rising costs, declining applicants, and perverse incentives puts the financial survival of some schools in question…Legal education cannot continue on the current trajectory. As a profession committed to serving the public good, we must find ways to alter the economics of legal education. Possible changes include reducing the undergraduate education required for admission to three years; awarding the basic professional degree after two years, while leaving the third year as an elective or an internship; providing some training through apprenticeship; reducing expensive accreditation requirements to allow greater diversity among law schools; building on the burgeoning promises of internet-distance education; changing the economic relationship between law schools and universities; altering the influence of current ranking formulas; and modifying the federal student loan program…”
If legal education were an entirely private activity, neither regulated nor subsidized by government, an economist would describe the situation as one in which a fall in demand required sellers to move down their maginal cost curve in order to charge a price that covered their marginal cost; that is, their demand curve would intersect their marginal cost curve at a lower point, implying a lower price (and also lower output). The demand for legal education is a derived demand from the demand for lawyers; if the demand for lawyers drops, so does the demand for legal education. If law schools fail to make a price adjustment, applications will plummet.
But they can lower price only if they reduce their costs. The problem is that by reducing costs, they reduce demand, because the perceived (though not real) value of a legal education is dependent on those costs as refracted through the lens of U.S. News & World Reports, which publishes a highly influential ranking of law schools. That magazine gives weight in its rankings to factors that actually bear no relation to the quality of a legal education, including the faculty-student ratio (important in some types of education but not in legal education) and the law school’s expenditures per student. In addition, accreditation of a law school depends on such additionally irrelevant factors as the size of a law school’s library even though all research relevant to the study of law by students can be conducted online.
The factors valued by U.S. News & World Reports are costly, but the federal loan program enabled the law schools to raise tuition, in part it seems because many law school applicants, inexperienced in financial matters and afflicted with the overconfidence of youth, underestimated the cost of a legal education. They are beginning to wise up and as a result the number of applicants to law school has plummeted—by about 50 percent in the last decade.
The obvious solution for the law schools is to reduce the size of their faculties and/or reduce faculty salaries. Although most law faculty are tenured, and so their salaries cannot be reduced, they can be laid off for economic reasons and, in lieu of being laid off, can agree to a salary cut. Law professors tend to be paid very generous salaries, especially relative to the amount of work demanded of them compared to the sweatshop hours of practicing lawyers and the intense competitiveness and resulting employment uncertainty in the law firm market nowadays. And law professors derive greater utility from their academic careers, quite apart from working conditios, than they would as practicing lawyers.
If law schools were permitted to cartelize, they might well embrace the downsizing that I have described as a solution to their economic dilemma. But they are not permitted to cartelize, and this creates hesitancy. The first law school to downsize will attract unwanted attention and, if none or only a few follow suit within a short time, its rankings in U.S. News and World Reports will nosedive. Law schools also have to worry about the possible adverse reactions of the accreditation authorities. Then too there is the hope that if enough law schools do take substantial measures to balance supply and demand, the law schools that do not will benefit, for example in being able to attract more of the affluent applicants to law school plus the applicants (often the same people as the affluent) who by virtue of native ability or a superior college education are likely to do well even in a very challenging legal marketplace.
What seems plain, however, is that the law school market is not in equilibrium; that it will move, quickly or slowly (probably the latter), to a new equilibrium; and that the new equilibrium is likely to involve smaller faculties and student bodies, a lower ratio of faculty to students, cheaper methods of instruction such as online, lower tuition, and perhaps looser (or no) accreditation standards, a reduction in the length of law school from the present three, to two, years, and the elimination of federal loans to law students.
The concerns flagged by the law professors’ statement that I quoted at the beginning of this piece are mirrored elsewhere in higher education in the United States. College and university tuitions have soared in general and many graduates are unable to find jobs in the fields that they thought their education was preparing them for. Students who do stay the full four years of college appear to obtain little economic advantage from college. U.S. News and World Reports‘ rankings are influential in other branches of higher education besides law, in particular its rankings of colleges, exerting pressure on colleges and universities to increase tuition, and increasing the dependence of students on federal loans. Reforms similar to those proposed for legal education may be necessary for other branches of higher education as well.
Dear Judge Posner,
I've been reading some of your selections from OWH, Jr. Interestingly, I came across this quote from OWH:
"I doubt if a shudder would go through the spheres if the whole ant heap were kerosened."
Then I transitioned to your Catastrophe and Risk.
What a perfect complement.
It's been a few years since I've really dug into the genre, but Mr. Dworkin's passing has me motivated to dust off the relevant volumes and have it them.
On a digression to an aside, I remember the first time I read one of your books. The book was the Economics of Justice. At the time, I was a Dworkin devotee. I couldn't wait to settle down and read "the enemy." The problem was the more I read the more I became convinced of your genius. Once I got to your history of jurisprudence in Problems of Jurisprudence you had leveled the playing field.
I still think Dworkin was a profound thinker, and will always have his place in jurisprudence. At the same time, I find myself agreeing with the insights offered by you and Justice Holmes. Maybe it just comes down to "is" and "ought."
I'm not sure.
But I do enjoy the 15 plus books of your's I've read.
Posted by: Aye Run | 03/04/2013 at 09:46 AM
How about cutting costs by shaving off a year or so of undergraduate education? It takes longer to become a lawyer in the United States than in many other countries. Take Sweden. Over there, high school encompasses one additional year but then you go right into studying for the law degree, which takes 9 semesters. In other words, if it were translated into the American system, it would take 5 1/2 years of college education in total, undergraduate plus graduate.
So why not promoting more "combined" degrees where a student with high enough SATs etc. could get admitted not just to undergraduate studies but also be guaranteed admittance into the law program whenever he/she had fulfilled certain minimum requirements of pre-law courses? After all, it seems that there are many general undergraduate requirements, such as foreign languages and arts, that are not really crucial for becoming a lawyer.
This could save a year or two of tuition as well as generate a year or two of earning income - all in all easily adding up to $100, 000 or more.
Posted by: Gertrud Fremling | 03/04/2013 at 02:39 PM
For someone who actually wants to be a lawyer, law school is not the goal - state licensure is the goal. It is not up to law schools to decide to offer a 2-year program. It is up to state governments to decide to accept it as sufficient prerequisite study for licensure.
Unless there are too few lawyers in a state, the state has no compelling interest in underwriting a law school. Is there anyone out there who feels their state doesn't have enough lawyers? If not, it's just another form of feel-good welfare.
Back in the 1980's, when L.A. Law was popular on TV, law school applications surged. Around the same time, megafirms started to form and plant flags in major cities. The world of the lawyer has continued to morph rapidly ever since. By 2000 a highly attractive career model had emerged (even though in practice most aspirants to the top-tier firm life were ultimately excluded) and applications were high with no end in sight. The events of late 2008 changed everything once again, and now everyone's grousing over the high cost and low return. I still assert that over the course of a 40-year career starting in 2017 or so, a law degree will easily pay for itself.
As for education generally, it continues to be a good deal in spite of the downturns. People who get degrees make more, a lot more. However, socially there is some finite limit to both the number of educated people the market can use and the number of people who can increase their value in the market through additional education. Analysts and Presidents tend to speak as if training is all that separates the rich from the poor. I observe that aptitude and attitude are significant factors as well. If we build more colleges and educate everyone, we will still have the same number of stupid people we have now; they will simply be stupid, educated people, of marginally increased value over the stupid, uneducated people of the present.
Posted by: Terry Bennett | 03/04/2013 at 06:01 PM
Perhaps a better question to ask is, "Why Law School at all"? Before the advent of Professional schools, Law education was centered in the functional Law office where the would be attorney, read, clerked, and the like until he was called to the Bar. As in any craft or trade, it was called an Apprenticeship program, that turned out quite a number of intelligent and capable attorneys. Perhaps even more so than today...
Posted by: Neilehat | 03/05/2013 at 07:41 AM
"The obvious solution for the law schools is to reduce the size of their faculties and/or reduce faculty salaries."
Or, a top 100 law school could reduce its entry standards. It would still enroll as many students, and be able to keep staff and salaries high.
If the faculty ran the schools and understood budgets, I think that is what would happen. The alternative is for them to teach fewer and bigger electives and/or accept lower salaries. The universities might like this too, since it would maintain total income and law school research output.
Deans would probably prefer not to reduce student quality, since that matters most for magazine rankings. They'd prefer lower enrollment and a smaller, worse-paid, faculty.
Thus, we should see some tension.
Posted by: Eric Rasmusen | 03/05/2013 at 12:18 PM
I could go for Neilehat's proposal. If a state wants to license lawyers at all, just beef up the bar exam from two days to 10 or so, as we've discussed under previous topics, and let anyone who passes it practice law in the state, even a 10-year-old. If a state no longer requires a law school education as a prerequisite for licensure, then the funding of a law school also ceases to be a necessity.
If you want to go even further and eliminate licensure altogether, then anybody can hang out a shingle and sell what they know about the law to people who know less. Somebody who's been through a foreclosure probably has learned more about foreclosure than somebody who hasn't, and that knowledge has value to others. As long as the seller does not overstate his credentials, there is no fraud; if there is, the practitioner could be sued for fraudulent inducement to contract just like any other contractor. If he improperly overpromises, even a non-lawyer can theoretically be sued for malpractice.
Under this second scenario, the losers are the courts, who will have to deal with a bunch of participants who don't know how to draft a complaint, etc. The simple remedy for that problem is to direct everyone to the court rules, reject cases that do not comply therewith, and start imposing serious fines for violations, to compensate the court for its loss of productivity and to deter neophyte behavior by poser lawyers. It's a little more messy, but increased freedom generally is. It would still ultimately function.
Posted by: Terry Bennett | 03/06/2013 at 04:51 PM
It is a given fact that in general most if not all schools today cost high. There are certainly extreme and effective measures that should be done to ensure that it won't rise higher. Several options though are present like scholarships, grants and online education. I guess interested learners should think carefully before fixing their mind on what option to choose.
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Posted by: David Simpson | 03/13/2013 at 09:08 PM