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Welcome to the new Law School Cafe!
January 10th, 2016 / By Kyle McEntee
This weekend, we decided a slight refresh of our site was in order. The new design is mobile and tablet friendly. It should also load even faster. Stay tuned for lots of new content in 2016!
Note to Law Schools: Show Your Work on JD Advantage Jobs
April 23rd, 2015 / By Kyle McEntee
In a column in this week’s New York Law Journal, Jill Backer, assistant dean of career and professional development at Pace Law School, says it’s artificial to distinguish between jobs that require a law license and jobs where the JD confers an advantage. Backer contends that doing so through the ABA’s standardized employment reporting regime reinforces a perception that JD Advantage jobs are “less than” the Bar Passage Required jobs.
As it turns out, there’s strong evidence that many of these jobs are “less than.” But Backer does not address overwhelming evidence that JD Advantage jobs pay substantially less on average and leave graduates looking for new jobs shortly after starting them.
Additional information showing otherwise would be helpful, but law schools do not provide it. Instead schools hope we’ll trust their word that JD Advantage jobs are not only desirable, but worth pursuing through the JD-path instead of a shorter, less painfully expensive degree.
I will be the first to admit that there are many great JD Advantage jobs. For instance, my job as executive director of Law School Transparency would count as JD Advantage because my JD provides a “demonstrable advantage in . . . performing the job,” even if my job “does not itself require bar passage or an active law license or involve practicing law.” The same applies to the editors of Above the Law, the founders of Hire an Esquire, and federal agents.
The problem is that JD Advantage category is so broad that it loses meaning. Schools infuse meaning on the term through the occasional, sexy anecdote—just like the ones in my previous paragraph. Look no further than Baker’s column lede to see how these anecdotes are operationalized. Baker frames readers’ understanding of JD Advantage jobs by pointing out that the President of the United States holds a job for which the JD is an advantage.
But the definition does not even require the employer to care about the JD—the education merely needs to be helpful. A colorable argument can be made that a legal education helps with just about any job a law graduate would consider. How many jobs would you take that don’t require some measure of critical thinking or understanding of our legal system?
The category is so flimsy that paralegals and graduates in administrative positions at law firms count as JD Advantage. For example, at Baker’s own school, 14 class of 2013 graduates (or 13% of all graduates in firm jobs) were paralegals or administrators. Of the 14, five were “professional” jobs and nine were “JD Advantage.” Nobody pays $45,000 per year in law school tuition to become a paralegal. But nearly a quarter of Pace’s graduates in JD Advantage jobs were paralegals or administrators at law firms.
According to NALP, 41% of all class of 2013 graduates in JD Advantage jobs were still seeking another job nine months after graduation. Graduates in Bar Passage Required jobs were one-third as likely to indicate the same. According to data from law school graduates, JD Advantage jobs are not nearly as desirable as Baker would have readers (and prospective students) believe. Further, NALP reports that the average JD Advantage salary is 25% less than the average salary for graduates in bar-required jobs.
There are certainly people who attend law school with other aims, and they may find desirable work outside of the practice of law. (Note that there’s good reason to believe that non-legal employers are after people with legal experience, rather than a legal education.) Though I don’t speak for others, LST does not include non-legal jobs in the LST Employment Score for straightforward reasons. For people interested specifically in a non-legal career including these jobs in the LST Employment Score would not make the score more meaningful. Such a mixed score would be determined primarily by legal job placements. A mixed legal/non-legal score does not really tell prospective students about alternative job placement.
For people interested in only a legal career, the addition of non-legal jobs greatly depreciates the value of the score by including a number of jobs they are not interested in. The only group that would be well served by a mixed score is a group who would be okay with pretty much any job upon graduation. While there are third-year students and recent graduates scrambling for any job they can obtain, few people have such an attitude before entering law school.
If a school prides and sells itself on its ability to produce graduates primed for JD Advantage jobs, it ought to find another way to prove its graduates are different than the 41% of graduates in JD Advantage jobs looking for a different job just a few months after starting. I’d like to think schools in this category would want to do this. Regardless, the onus is on law schools to prove that their JD Advantage outcomes are desirable and worth pursuing a JD to obtain.
Northwestern University School of Law, for example, makes a persuasive attempt to do just that. On a page titled, “JD Advantage Employment,” Northwestern actively distinguishes itself from other schools through data and context. By request for this column, the school’s dean supplemented that information. Northwestern graduates from 2013 and 2014 are substantially less likely than the national average to be seeking another job with one in hand—an estimated 10% of JD Advantage and 3% Bar Passage Required job holders.
Law schools are in a position where they need to become more attractive to prospective students, especially the highest achieving ones. A school could legitimately position itself as a force for the new economy. Northwestern does this as well as anyone. If other schools want to show how they’re different, they need to do more than throw together a new program to sell to applicants and alumni or claim that their JD is the best path to these new economy jobs. It requires more than just bold claims and factless editorials. To schools like Pace hoping to carve out a new niche, show us your work in a meaningful way. The applicant market is listening.
How Deans Should Game the Above the Law Rankings
May 1st, 2014 / By Kyle McEntee
The popular legal news website Above the Law just announced its 2014 Top 50 Law School Rankings. ATL’s methodology focuses exclusively on outcomes: only jobs, total cost, and alumni satisfaction matter.
I generally disfavor rankings. Ranking systems appeal to a desire for clear answers even when clear answers don’t exist. Through a simple list format, rankings project the appearance of authority and value even when they provide neither.
Inherent issues aside, ATL’s rankings at least focus on elements that should and do matter to prospective students. As a result, the ATL rankings incentivize schools to act in ways that measurably help students. That’s a welcome change.
If you’re a law school dean that wants to increase its standing in the ATL rankings, here are the two most critical steps:
1. Lower Tuition
The ATL rankings factor in total educational cost, which combines living expenses, tuition, inflation, and the interest accumulated during law school. Unless a law school moves across the country, student living expenses are relatively inflexible. To compete on the education cost metric schools must either lower tuition or convince ATL to use net price instead of sticker price.
In using sticker price, ATL penalizes schools that use a high tuition, high discount model. That’s basically every school (but maybe changing). Schools that shift to a more transparent pricing model will benefit in next year’s rankings without taking in less tuition revenue.
2. Maintain or Reduce Class Size
Although class sizes are not directly measured by the ATL rankings, each employment metric either controls for graduating class size (SCOTUS clerkships; Article III judges) or relies on an employment percentage for which graduating class size is the denominator. Graduating class size is a function of incoming class size, net transfers, and students dropping out or taking longer to finish school than anticipated.
Smaller incoming classes demonstrate a modicum of social and professional responsibility in a visible manner. This buys trust from incoming students. But the urge to take more transfers to generate more revenue must be appealing these days as schools try to make up for lost 1L revenue. After all, transfers pay more, do not impact LSAT or GPA medians, have low marginal cost, and integrate rather silently. Large transfer classes also seem appealing if you believe that enrollment cuts have been too deep—an increasingly common, yet disturbing belief.
Due to ATL’s methodology, schools cannot hide from enrollment levels that adversely affect employment outcomes. Neither can schools make up for over-enrollment by funding jobs for graduates. As such, resisting the temptation to grow enrollment will benefit schools on rankings that unapologetically penalize schools for graduating too many students into a crowded entry-level market.
Schools game rankings. That’s just a basic fact about modern higher education. At least with ATL’s rankings, gaming the rankings produces measurable, positive results for students and the profession. It sure beats an incentive to burn money on blackacre to secure a higher ranking.
Transparency Review in Advance of New Law School Jobs Data
April 4th, 2014 / By Kyle McEntee
Since 1974, the National Association for Law Placement has surveyed ABA-approved law school graduates with the help of roughly 200 schools and a nod from the ABA. NALP’s annual survey asks graduates to describe their jobs, their employers, how and when they obtained the positions, and their starting salaries. (More details here and here.)
NALP checks the data for discrepancies and produces statistical reports of post-graduation employment outcomes for each law school. NALP must keep these “NALP reports” confidential, but individual schools may publish their reports.
NALP Reports
Before the law school transparency movement, law schools did not publish NALP reports online for prospective students and others to see. Instead, these detailed, immensely useful reports occupied dusty filing cabinets. I recall when my organization first requested these reports from law schools, several career services deans told me they did not know where they were.
Though publishing a NALP report carries zero cost, skeptics doubted we’d succeed: “However worthy the effort, I doubt that this group will have much success ….” We obtained just 34 NALP reports from the initial request, but that number grew to 54 reports just a few months later after a handful of LST initiatives.
For the class of 2011, 68 schools published a NALP report until our annual Transparency Index, which grew the number of participating schools to 85. Prospective students and interested readers were even more fortunate for the class of 2012. To date, 108 schools—that’s 55% of possible schools—made their NALP reports public.
If you’re interested in viewing the data we gathered from these NALP reports, please head over to the LST Score Reports. We indicate on school profiles whether a school has decided to withhold information from the public. You can also view a list of the schools publishing NALP reports for the classes of 2010, 2011, and 2012 in our NALP Report Database. Note that we now have access to 60 2010 reports, 94 2011 reports, and 108 2012 reports.
Actual Law School Transparency
Law schools deserve a lot of credit for increasingly living up to proclamations in favor of transparency. So too do prospective students, current students, and alumni for demanding information. We accomplished actual transparency without formal legal requests, though we also believe it’s time that the non-participating schools subject to open record laws be ushered into the era of transparency.
Law school opacity harms not only the reputation of the schools who do not participate, but of the legal education system at large. Law schools are tasked with training the legal professionals of the future. They hold students to honor codes, require them to attend a class on professional responsibility and ethics, and send them into a profession where they must uphold the values of that profession on a daily basis. However, when it comes to their own conduct, too many schools take a position that the minimal level of integrity required to maintain ABA accreditation is good enough. Our hope is that schools who value their academic and social leadership roles will go beyond the bare minimum—and do so without sticks and carrots from LST.
Class of 2013 Employment Data and NALP Reports
Next week, the ABA will publish much of the class of 2013 employment data it collected from law schools in accordance with recently-refined accreditation requirements. Many law schools are already publishing information above and beyond the ABA requirements, and we hope these schools continue this positive practice later this summer when they receive their class of 2013 reports from NALP.
If your school does not yet publish what it has at its fingertips, ask why and explain how inaction is unprincipled, prevents informed decision-making by applicants, and harms the school and profession’s reputation. Our profession needs affordable, transparent, and fair entry. It starts with something as simple as law schools doing the obvious.
Deliberations for a prospective law student
August 21st, 2013 / By Kyle McEntee
This piece was published in this month’s National Jurist PreLaw Magazine.
If you’re thinking about applying to law school, you likely have two main questions. Can I get in? and Should I go? Lately, the answers have shifted for many individuals. A higher percentage of applicants are getting into law school; fewer are deciding to attend.
Getting into law school remains an achievement. It signals intelligence and determination. But before deciding to attend, you need to examine your options and aspirations carefully. Don’t choose law school just because you just because you got in, you like to argue, you’ve always wanted to help people or you don’t know what else to do. Think more specifically about what you hope to achieve with a law degree.
You can find that clarity through more than your imagination. Law school is a professional school, so go see what the professionals do. Shadow a variety of lawyers, meet dozens more and do anything you can to peer into the career paths of those who came before you.
Once you’ve developed some ideas about the type of career you want, check out employment outcomes for specific schools. The American Bar Association has a website with recent employment information for every accredited law school. Nationwide, only 56 percent of 2012 law graduates found full-time, long-term jobs requiring bar admission within nine months of graduation. But employment rates and job patterns vary across schools, so look carefully.
Geography matters. In recent years, about two-thirds of employed law graduates obtained their first job in the state in which their school was located. Think not just about where you want to attend school, but where you want to build a career. My nonprofit organization, Law School Transparency, developed a tool that will help you find the schools that send graduates to the cities or states where you want to work, www.LSTScoreReports.com. Employment data from the ABA and other sources are available on LST school profiles too.
Understand your student loans. The federal government originates almost all law school loans these days. Research how these loans work, such as what amount you’ll have to pay and when you will have to begin repayment. Also look at the tax implications. Boston University and Georgetown law schools have developed user-friendly calculators to help you compute debt loads and repayment plans. Consider what life will be like with debt, from the impact it may have on your career choices to your family planning or psychological well-being.
Finally, ignore all U.S. News & World Report law school rankings. At best, these rankings proxy various traits — all of which are better measured through analyzing raw data on LST, the ABA, or in the ABA-LSAC Official Guide.
Helping You Deliberate
Even with all of the sources listed above, it’s hard to make good decisions about investing in law school. When you look at salary statistics or other information on a law school website, how can you be sure they’ve presented the data fairly?
Law School Transparency recently announced a law school certification program that builds on the resources provided by the ABA and individual schools. The program centers on assuring fair representations about financial education and job statistics. We’ll certify the inaugural group of law schools in the coming months. Certified law schools will partner with LST to help students make educated decisions about whether and where to begin their legal career.
As participants, these schools will use our certification mark to signal their compliance with best practices for publishing vital employment and financial information. “LST Certified” will also demonstrate the school’s commitment to enrolling an informed student body.
Two primary goals inspire our program. First, we want you to have access to the information you need to critically evaluate your life-changing decision. The ABA’s law school accreditation standards require some important information, but not all that you want to know. The new LST Best Practices fill the gaps.
Second, we want students like you to trust the law schools that deserve your trust. Prospective students typically struggle to distinguish between schools that claim a comprehensive picture of job outcomes and costs, and those schools that actually provide one. These days, all law schools put their best foot forward to convey their value and distinctive offerings. But fierce competition drives questionable marketing tactics.
Law school is a huge investment that requires you to balance complicated costs, potential job and educational outcomes, and intangible benefits. ABA data, law school websites, the LST website, and LST’s new certification can all help you make the best decision. None of these sources can tell you whether to attend law school — or which school to attend — but they will aid your decision-making.
New Study on Economic Value of Law Degree
July 17th, 2013 / By Kyle McEntee
I won’t spend much time summarizing the new paper by Michael Simkovic, an associate law professor at Seton Hall University School of Law, and Frank McIntyre, an assistant professor of finance and economics at Rutgers University Business School. Inside Higher Ed summarized the report just fine.
Instead, I want to comment on what I see as a misguided attempt to quell critics claiming that the law school investment is not a sound choice for many people. I hope Professor Simkovic and Professor McIntyre are correct that, on average and even down to the 25th percentile, the law school investment makes financial sense.
It just completely misses the point and grossly under-appreciates the human element.
Rather than viewing law degree holders in isolation, we can get better estimates of the causal effect of education by comparing the earnings of individuals with law degrees to the earnings of similar individuals with bachelor’s degrees while being mindful of the statistical effects of selection into law school.
Unfortunately, law degree holders are individuals who are sometimes (perhaps often) hurt by going to law school. Talking about groups necessarily smooths over the stories underneath the data—the ones that make you feel good and the ones that make you sick to your stomach. The reality is that there are many people that have been hurt and are hurt right now as a direct consequence of the costs associated with entering the legal profession (or trying to). These graduates very well may make more money in the long run. But this is hardly comforting to those considering law school and those who care about the people who do.
As I told Inside Higher Ed, law schools have made a habit out of capturing as much value out of their students as possible—and for a long time, used deceptive and immoral marketing tactics to do so. The dynamics are changing and should change because of the outrageously high price of obtaining a legal education. Even if an analysis shows an investment has a positive net present value in the long run, people are not like corporations. The short-term matters more for real people. Tens of thousands of law graduates leave school each year wondering how they’re going to manage to pay off their six-figure loans. That’s what motivates critics and frightens prospective law students.
Long-term value is not irrelevant, but using it to argue that education isn’t priced too high troubles me. If we think our society and our country are better for having an educated population, as these two authors do, then we had better stop pricing people out of education.
Berkman Center Webcast on “Creating a Law School e-Curriculum”
June 27th, 2013 / By Kyle McEntee
The Berkman Center for Internet and Society at Harvard Law has a live webcast on July 9th at 12:30 pm eastern called “Creating a Law School e-Curriculum.” The speaker will be Oliver R. Goodenough, a fellow at The Berkman Center and a Professor of Law at the Vermont Law School.
Here’s the description:
Legal practice and legal education both face disruptive change. Much of how and what we do as lawyers and how and what we have taught as legal educators is under scrutiny. Legal technology is an important factor in driving these challenges. Law schools reform their curriculums law and technology is an area that is ripe for expansion in our teaching. It also provides ample room for scholarly examination. Creating opportunities for learning how technology is shaping legal practice should be a priority for any school looking to provide a useful education for the lawyers of the present, let alone the future.
To watch the webcast, simply visit this page at 12:30 pm eastern on July 9th. If you’re in Boston, the same page provides a form for you to RSVP to the luncheon.
Proposed Employment Data Change
June 5th, 2013 / By Kyle McEntee
On Friday, the ABA Section of Legal Education considers a recommendation from the section’s data policy committee about when schools collect graduate employment data. Instead of collecting data nine months after graduation, schools would collect data ten months after graduation.
The change looks minor, but it’s misguided. Though the council should dismiss the recommendation outright for reasons outlined below, the council needs to at least decline to act on the recommendation this week.
The Committee’s Justification
The committee’s reasoning is straightforward: some graduates don’t obtain jobs by the nine-month mark because some state bars have a slow licensing process. As committee chair Len Strickman puts it in the committee’s recommendation memo, the data policy change would have “the benefit of a more level playing field.”
Several New York and California deans have lobbied for the policy change because those jurisdictions release July bar results so late. Last year, California provided results on November 16th, with swearing-in ceremonies in the following weeks. New York provided results earlier, on November 1st, but many struggled to be sworn in for months.
A variety of employers, such as small firms and the state government, tend to hire licensed graduates. Compared to schools in states with a quicker credentialing process, New York and California schools are disadvantaged on current employment metrics. Changing the measurement date to mid-March instead of mid-February would allegedly take some bite out the advantage.
To check for a quantifiable advantage, the data policy committee considered two sets of data. First, the committee sorted schools by the percentage of 2012 graduates working professional jobs (lawyers or otherwise) as of February 15, 2013. Second, the committee sorted schools by the percentage of 2012 graduates who were unemployed or had an unknown employment status. For both measures, the committee determined that New York and California schools were disproportionally represented on the bad end of the curve.
Poorly Supported Justification
Professor Strickman notes in his committee memo that many of the poorly-performing schools are “are broadly considered to be highly competitive schools nationally.” I’m not sure exactly what this means, but it sounds a lot like confirmation bias. Is he suggesting that the employment outcomes don’t match U.S. News rankings? The committee’s collective impression of how relatively well the schools should perform? Faculty reputation? It’s a mystery and without further support, not at all compelling.
Professor Strickman acknowledges that other factors may explain the relative placement. He does not name or address them. Here are some factors that may explain the so-called disadvantage:
(1) Graduate surplus (not just 2012, but for years);
(2) Attractiveness of certain states to graduates from out-of-state schools;
(3) Overall health of local legal markets;
(4) Graduate desirability;
(5) Ability of schools to fund post-graduation jobs.
Neither do we even know whether the rule revision would level the playing field. In other words, one extra month may not capture more professional job outcomes for graduates of New York and California schools than graduates of other schools. More time, after all, ought to produce better results for all schools with high under- and unemployment.
In sum, the committee should have declined to recommend the ten-month proposal until its proponents meet their burden of persuasion. The problem has not been well articulated, and the data do not support the conclusion.
The Accreditor’s Role
Worse than recommending an unsupported policy change, the committee ignores the group for whom law schools produce job statistics: prospective students. Prospective students, students, and a society that depends on lawyers are the Section of Legal Education’s constituents. Calling the uneven playing field a “disadvantage,” “penalty,” and “hardship” for law schools shows from where the committee obtained its perspective.
(1) Is there a normative problem with an uneven playing field?
It’s not apparent that there’s an issue to resolve. Grant the committee its premise that state credentialing timelines affect performance on employment metrics. Is it the ABA’s job to ensure that schools compete with each other on a level playing field?
In one sense, yes, of course. When a school lies or cheats or deceives it gains an undeserved advantage and ABA Standard 509 prohibits this behavior. But it does not prohibit that behavior because of how it affects school-on-school competition. Prohibitions are a consequence of the ABA’s role in protecting consumers and the public.
The ABA was ahead of the curve when it adopted Standard 509 in the 1990’s. The organization interpreted its accreditation role to include communicating non-educational value to these constituents through employment information.
Here, the ABA failed to adequately consider the prospective students who want to make informed decisions, and the public which subsidizes legal education.
Prospective students received only a passing mention in Professor Strickman’s memo. In describing why the committee rejected several schools’ request to move the measurement back to one year, Professor Strickman’s explains:
The Data Policy and Collection Committee decided to reject this request because that length of delay would undermine the currency of data available to prospective law students.
As it happens, the committee’s chosen proposal also has a currency problem. The committee also failed to convey whether or how, if at all, it considered the change’s impact on the value of the consumer information.
(2) Does the new policy impede a prospective student’s ability to make informed decisions?
One of the ABA’s recent accomplishments was accelerating the publication of employment data. Previously, the ABA published new employment data 16 months after schools measured employment outcomes. In 2013, the ABA took only six weeks.
But if the Section of Legal Education adopts the ten-month proposal, it pushes data publication to the end of April—after many deposit deadlines and on the eve of others. While applicants should not overrate the importance of year-to-year differences, they should have the opportunity to evaluate the changes.
The new policy also makes the information less useful.
At one time, schools reported graduate employment outcomes as of six months after graduation. In 1996, NALP began measuring outcomes at nine months instead. The ABA, which at that time only asked schools to report their NALP employment rate, followed.
The six-month measurement makes far more sense than the nine-month date. Six months after graduating, interest accumulated during school capitalizes and the first loan payment is due. Ideally that six-month period would be used to pay down the accumulated interest so that less interest is paid later. The credentialing process makes this a rarity. Adding another month to the measurement makes the figure even less valuable.
Reducing comparability also dilutes the value of recent employment information. Students should not consider one year of data in isolation, but should analyze changes and the reasons for those changes. It’s for this reason that the ABA requires schools to publish three years of employment data as of last August.
Conclusion: Dismiss or Wait
The council needs to add additional viewpoints to the data policy committee. Right now, the committee is dominated by law school faculty and administrators. All twelve members are current faculty, deans, or other administrators. The name change from the “Questionnaire Committee” to the “Data Policy and Collection Committee” envisions a policy role for the group.
Just like the council, standards committee, and accreditation committee need a diversity of viewpoints, so too does the data policy committee. Perhaps if this diversity existed on the committee to begin with the new measurement date would not have been recommended too soon or at all.
As the council considers whose interests it serves and whether the data policy recommendation is ripe for adoption, I hope its members also consider the drivers of the policy beyond a law school lobby promoting its own interests.
The policy presupposes a reality where there are enough graduates who cannot derive economic value from their law degrees nine months after graduating that the ABA needs to modify its collection policy in order to count them.
Let me repeat that. It takes so long to become a lawyer that almost a year can pass and it’s reasonable to think many people are not yet using a credential they invested over three years of time, money, and effort to receive. A career is (hopefully) decades long, but the brutal reality of credentialing is that its costs go beyond what any fair system would contemplate. A change to the data policy as a solution would be funny were the economics of legal education not so tragic.
What’s driving change in legal education and why you should care
May 30th, 2013 / By Kyle McEntee
This piece was originally published by the ABA Journal.
Change is coming to a law school near you. Economics will drive the change, but the exact configuration will depend on choices made by law schools, state supreme courts, the ABA, and Congress over the next few years.
Without intervention, market forces are likely to segment law schools. Are schools and the profession content with that outcome? The question warrants serious debate.
Law schools have entered crisis mode as word spreads about their costs and job outcomes. In recent years, tens of thousands of graduates have struggled to enter the legal marketplace and find professional jobs with salaries that permit them to service student loan debt. As a result of a steep drop in applications and enrollment, schools face a budgetary crisis—one certain to change the face of legal education. We can bend the future, but only if reform happens through the lens of fixing law school economics.
The drivers of this change are on course to stratify legal education for lawyers into two layers.
One group of law schools—perhaps a few dozen “elite” schools—will continue using the traditional model. Research faculties will teach high-achieving students from around the country and world. Graduates from these schools will continue to obtain the most competitive jobs after achieving traditional market signals like high GPA and law review membership.
These schools will be cheaper by today’s standards, yet expensive by any reasonable measure. Classes will follow a curriculum designed using core lawyering competencies and will involve more simulations and more writing.
Overall, elite schools won’t look much different than today’s law school—a professional and graduate school hybrid that tries to simultaneously serve both the legal profession and the pursuit of knowledge. Nevertheless, they will feel different because the educational product will be more skills-oriented.
The second group of law schools—perhaps a few hundred “local” schools, including new ones—will use a model centered on teaching faculty. These schools will have similar educational approaches to the elite schools, but look much different. The faculty will be hired for their experience as lawyers, judges, regulators and policy wonks. Scholarship may not be part of the job description, but will endure because the desire to analyze the world around you is human nature. The schools may teach undergraduates, paralegals, and other professionals in addition to lawyers. Ultimately, local leaders and lawyers will shape an education that is less graduate studies and more professional development.
Affordability will be a feature, but local schools will be defined by the ownership the local legal community takes in educating future members. The result will be a faculty that fluidly moves between practicing and teaching.
A transient faculty will provide opportunities, but also a set of challenges for these schools, particularly how to ensure a high-quality, consistent product that’s capable of teaching each student what they need to succeed. To overcome some challenges, schools will share faculty—sometimes across town, sometimes across time zones—and course materials because it’s more efficient than trying to hire for every need and having part-time teachers reinvent the wheel each term.
Although it’s the broken economics of law school accelerating reform discussions, demands for change concern just about every aspect of law school and come from diverse perspectives. Many stakeholders view the crisis as an opportunity to shape the future. Not everything needs to or will change, but widespread dissatisfaction has put everything on the table.
There are three main drivers of change, each tied to the future I’m predicting:
First, the cost of becoming a lawyer is too high. Tuition skyrocketed because law schools operated in a completely dysfunctional market. Law students (and therefore law schools) had unfettered access to student loans with little downward pressure on the borrowing. Attitudes about student debt were unsophisticated and schools enjoyed an information asymmetry about post-graduation employment outcomes. While the loan system still provides blank checks, applicants now have credible employment information and are becoming increasingly price-sensitive.
As the applicant market becomes more functional, at-risk schools will cut their budgets to meet demand. Surviving schools will be those that accept the need to reinvent rather than rely on minor changes. Budgets are largely personnel-driven, so most schools will need to figure out how to more leanly deliver education. This will all but necessitate involvement from the local bench and bar.
This brings us to the second driver: the bench and bar. Practicing lawyers and judges are fed up with the quality of education. The steady drumbeat for more practical skills training isn’t new—in fact it’s a century old. But the opportunity for reshaping law schools is new because of the information about and coverage of their broken economics. The trouble: Creating a law school experience that the profession wants requires a redefinition of the law school mission. It must become more professional school than graduate school.
The opportunity stems partly from the third driver: the legal profession’s structural transformation. The media began paying attention to law graduate struggles when it became apparent that even graduates of the country’s most elite schools struggled in “the new normal.” This accelerated the decline in the JD’s perceived value and invited a multitude of skeptical voices to shout their discontent.
Yet the structural change has been more gradual. Over many decades, practice has grown more complex and specialized. Technology, globalization and the unbundling of legal services have accelerated the change. The legal profession of the future looks different; so too will the education system that produces its members.
Upholding the broad and often elusive principles of the American legal system—such as equality, opportunity, and justice—requires a legal education system that’s not merely subservient to market forces. Successfully addressing the drivers of change without flattening essential principles depends on whether the solutions explored and adopted provide more than lip service to the broken economics of the modern law school.
If we lose sight of what’s causing the change, we may lose the opportunity to bend the course for the better.
The Federal Government’s Massive and Declining Investment in Legal Education
May 22nd, 2013 / By Kyle McEntee
Nowadays, law students borrow from the Department of Education Direct Loan Program for school. These loans are income-generating assets for the government. As such, I thought it would be interesting to see how large of an investment the federal government presently makes in law schools.
Based on my calculations, the total annual federal investment in law schools through student loans is currently $4.88 billion (2012-13 school year). Last year (2011-12), that number was $4.95 billion.
Calculating the annual investment required a sequence of estimates along with hard data. First, I used school-supplied data to calculate the government’s investment in 2012 graduates of ABA-approved schools. Second, I incorporated ABA-supplied enrollment data to estimate the government’s investment in all students enrolled during 2011-12. Finally, I used enrollment figures and tuition estimates to extend that projection to 2012-13, the academic year that just closed.
Students, of course, use their loans to cover living costs as well as law school tuition and fees. Law students, however, are forbidden from working during their first year, and find limited opportunities for paid work during the second and third years. Law schools can recruit students only as long as the students have a way to pay for both tuition and living expenses. It’s appropriate, therefore, to speak of educational loans to law students as an investment in law schools, not just students.
1. $4.43 Billion Federal Investment in 2012 Graduates of ABA-Approved Schools
Hard Data on 192 ABA-Approved Schools: $4.33 Billion. Students who graduated law school in 2012 borrowed at least $4.33 billion in federally-guaranteed and federal direct student loans to finance their legal education: that’s the amount of federal loan dollars processed and disbursed by 192 law schools to their 2012 graduates who borrowed for law school.
To calculate the amount loaned for each school (available in the table here), I took the number of graduates and multiplied it times the percentage of those graduates borrowing loans processed by the school. I rounded that number to the nearest whole graduate and multiplied it times the average amount borrowed for that school. The known federal government investment figures do not include students who never graduated and those enrolled in non-JD programs.
Here is a table that aggregates federal investment by school type:
| Type | Schools Accounted For | Avg. Debt/Student(% of all grads borrowing) | Total Federal Investment |
|---|---|---|---|
| Private (Non-Profit) | 110/113 (97.3%) | $125,963 (84.2%) | $3,064,183,905 |
| Public School | 77/81 (95.1%) | $89,078 (83.8%) | $1,110,978,434 |
| Private (For Profit) |
5/5 (100%) | $138,149 (91.7%) | $150,167,940 |
| All Types | 192/199 (96.5%) | $114,170 (84.3%) | $4,325,330,279 |
The following schools did not report sufficient borrowing data to U.S. News: Barry University (Private, 200 grads), Florida A&M University (Public, 160 grads), Indiana University – Indianapolis (Public, 295 grads), Inter American University (Private, 234 grads), Pontifical Catholic University of Puerto Rico (Private, 217 grads), University of Puerto Rico (Public, 202 grads), University of The District of Columbia (Public, 93 grads).
Estimated Investment in 2012 Graduates of Seven Other ABA-Approved Law Schools: $107 million. The seven ABA-approved schools (immediately above) had 1,401 graduates in 2012, but did not provide sufficient data about student borrowing. Three were non-profit private schools (with 651 grads); four were public schools (with 750 grads).
To estimate total federal investment in these graduates I used the average amount borrowed and average percentage borrowing by school type. The result is 548 graduates of the private schools borrowing an average of $125,963 and 629 graduates of the public schools borrowing an average of $89,078, or $125.2 million total. Because the three schools in Puerto Rico are on average much cheaper than their U.S. counterparts, I also discounted the amount borrowed 25% for the public Puerto Rican school and 30% for the private ones. This reduced the total for these seven schools to about $107 million.
Adding that total to the $4.33 billion discussed above yields a grand total of $4.43 billion that the Department of Education invested in students who earned JD’s at ABA-accredited law schools in 2012.
2. 2011-2012 Federal Investment in All Enrolled JD Students: $4.95 Billion
Estimating the federal government’s annual investment in all enrolled students, rather than just graduates, required some arithmetic gymnastics. Here are the calculations for 2011-12, the most recent year for which we have information about borrowing:
The 46,360 graduates in 2012 (with 84.3% borrowing) borrowed $4.43 billion, but that borrowing was over a period of three years during which tuition and cost of living rose steadily. In other words, the $4.43 billion estimate is for students who were first years in 2009-10, second years in 2010-11, and third years in 2011-12. (These numbers account for part-time and joint-degree students by assuming that, overall, their enrollment was steady from year to year.)
I next determined how much the 2012 graduates borrowed just for 2011-12. From the time those graduates entered law school, tuition rose on average about 7% each year. Under that assumption, 2012 graduates borrowed 31.2% of the amount borrowed for the first year, 33.4% for the second year, and 35.4% for the third year. So, 35.4% of the average amount borrowed for 2012 graduates came during 2011-12. Multiply 35.4% times total federal investment in 2012 graduates of ABA-approved schools ($4.433 billion) and the result is $1.569 billion for 2012 graduates during their last year—or an average of $40,146 for each of the students who borrowed.
Assuming that 1Ls and 2Ls followed the same borrowing patterns as the students who graduated, we could estimate the federal government’s annual investment in JD students simply by multiplying $1.569 billion (the amount loaned to 2012 graduates) by three. That yields a total of $4.71 billion. That initial estimate is low, however, because it doesn’t account for attrition. The graduating class is smaller than 1L and 2L classes.
To get a more accurate estimate of the federal investment in all JD students enrolled during 2011-12, I took the ABA-reported total JD enrollment for 2011-12 (146,288) and deducted the number of graduates (46,360). That left 99,928 students who attended JD programs in 2011-12 but did not graduate that year. If those students borrowed in the same percentages as graduating students did, then 84,239 (84.3%) of them took federal loans. Multiplying that amount times the average amount borrowed ($40,146) yields $3.382 billion. The total amount invested in all JD students enrolled during the 2011-12 school year, therefore, was about $4.95 billion.
Note the assumption that the average price paid did not vary by class year. Note, too, that my calculation does not include students at schools not approved by the ABA but nevertheless eligible for Title IV student loans. Nor, finally, did I include students eligible for federal funds who enrolled in LLM or other non-JD programs administered by law schools.
3. 2012-2013 Federal Investment in All Enrolled JD Students: $4.88 Billion
The estimate for 2012-13 faced several additional hurdles. The 2011-12 estimate must be adjusted for tuition rises (which increase the average amount borrowed), changes in total enrollment (which declined substantially), and the percentage of all students borrowing (which I assumed was steady at 84.3%).
In 2010, 2011, and 2012 law schools enrolled new classes of 52,488 students, 48,697 students, and 44,518 students. Based on prior graduation, enrollment data, and past attrition data, I estimated that 47,000 students graduated in 2013. We know that 44,518 were in their first year so, with total enrollment at 139,362 students, about 47,844 students were in their second year.
I next estimated how much these students borrowed in 2012-13. The 2012 graduate had borrowed an average of $40,146 for the last year of law school. If we assume that this amount rose due to tuition increases by an extremely modest 5% for the 94,844 upper-level students (with 84.3% borrowing), the federal investment was $3.37 billion for those students. However, the first-year students (in the aggregate, at least) did not feel the brunt of the tuition increases. Tuition discounts, financed through the upper-level students, were needed to sway prospective students. I assumed that students who began school in fall 2012 borrowed no more for their first year than the 2012 graduates borrowed for their last year. Using that assumption, I estimated that the federal investment in the 44,518 first-year students (with 84.3% borrowing) was $1.507 billion.
That brings total federal loans for JD students to an estimated $4.88 billion for 2012-13. That’s a substantial investment, but note that it’s $70 million less than the federal investment in 2011-12. JD tuition revenue declined significantly during the last academic year.
4. Bonus: 2013-14 Federal Investment Speculation
In 2011 and 2012, law schools enrolled new classes of 48,697 students and 44,481 students. For the coming fall, the most common projection is just 38,000. Based on prior graduation, enrollment data, and past attrition data, I estimate that 43,800 students will graduate in 2014. Using the projection of 38,000 first-year students, I estimate total enrollment at 125,300 students, which would be the lowest since 2000.
What will those students pay for law school, and how much will they borrow? Schools are competing to maintain first-year enrollments, so I predict that incoming students will borrow no more than the ones who just finished their first year (an average of $40,146). If 84.3% of the class continues to borrow from the federal government, then these incoming 1Ls will borrow a total of $1.29 billion. If we assume that the 87,300 upper-level students borrow 5% more than they did in the current year, and continue borrowing in the same proportions, those students will borrow about $3.18 billion. The estimated total federal investment in JD students during 2013-14 is $4.47 billion. That’s a lot of cash, but it’s $410 million less than the estimate for 2012-13.
Note that this estimate doesn’t include any changes in borrowing for living expenses–other than the reduction in the number of students. If inflation increases the cost of living, or if students have more difficulty finding paid part-time employment, total borrowing may be somewhat higher than this estimate. On the other hand, if students reduce living costs, borrowing may be even lower than my projection. The biggest story, here, however, is the reduction in number of enrolled students combined with modulation of tuition.
Putting all of the numbers together, I estimate that the federal government invested $4.95 billion in JD students enrolled in ABA-approved law schools during 2011-12; that it invested $4.88 billion in those students during 2012-13; and that it will invest $4.47 billion in 2013-14.
Conclusion
The calculations grow hazier as we move from hard data to estimates, but they are good ballpark figures for the amounts that law students borrowed from the federal government during the past two years, as well as for the amounts they are likely to borrow during the coming year. Two conclusions immediately stick out to me.
First, the federal investment in legal education is a lot. Compared to the $112 billion in federal investment in all of higher education in FY2012, law schools are disproportionately funded. As the conversation heats up about law school economics and student loans, and whether the federal government thinks such an investment is justified or fair, the estimates provide an idea about the magnitude of the federal government investment.
Second, law schools have a lot less money to spend and it is only going to get worse this coming year. My estimates for 2012-13 and 2013-14 suggest that fewer students are enrolling and that they are paying less tuition. The largest law school class ever enrolled just graduated and it will be replaced by the smallest class in 40 or so years. To enroll the upcoming class, schools will also likely offer larger discounts than ever before—a number that has been growing very quickly. My projections suggest that law students will borrow $480 million less during 2013-14 than in 2011-12 from the federal government. That’s a loss of almost a half billion dollars caused by lower enrollment and heavily discounted tuition. Information can do wonders, even in a dysfunctional market.
Schools may make up for some lost revenue through non-JD programs, which continue to expand unregulated and quickly. Others will have to cut costs. Most law schools will survive, but they have difficult decisions ahead.
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