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Peak Law School

[ 40 ] May 22, 2013 |

Bill Henderson and Kyle McEntee have a couple of interesting articles regarding the ongoing crash in law school applications and enrollments, and the implications it has for law school budgets.

Some numbers:

First year enrollment at ABA schools:

2010: 52,500

2011: 48,700

2012: 44,481

This fall the 2010 matrics will be replaced by a new entering class. We can roughly estimate its size, because typically 95% of applicants have applied by mid-May. Since last fall law schools have been frantically soliciting applicants, when it appeared the applicant pool might be as small as 52,000-53,000. It now appears it will be around 58,500. If 75% of applicants are accepted to at least one school (this would be a historic high), and 87% of these people — the typical percentage — matriculate, that will produce an entering class of about 38,000 1Ls.

A 28% decline in enrollment over three years sounds daunting enough, but the real situation is probably worse. What these numbers don’t reflect is the extent to which schools are slashing real (as opposed to nominal) tuition, in order to fill even this drastically reduced number of first-year seats.

For example, I just got an email from an applicant who is considering a “scholarship” offer that would save him 60% of the advertised tuition price for a fairly high-ranked law school. (These price cuts aren’t scholarships in the traditional sense of income from an endowed fund that offsets the actual cost of tuition, but rather straight-up price reductions from the advertised rate).

The applicant received this offer just a couple of weeks ago, even though he had been admitted two months earlier. More telling is the fact that the applicant’s LSAT and GPA are both below the median for last year’s matriculants at this school. (Traditionally, discounts of this size off nominal tuition have been employed to lure applicants with significantly higher than average LSAT/GPA numbers). Many schools now seem engaged in the academic equivalent of a Priceline fare war, as they scramble to fill seats with steep discounts at the end of the application cycle, even as they slash admissions standards.

When law school faculties reconvene in three months or so, the $64,000 question they’ll need to pose to their administrative superiors is, exactly how much did we have to cut prices to get this 1L class in the door?

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Comments (40)

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  1. Eli Rabett says:

    Youse guys ready for a pay cut?

    The increase in tuition was more than matched by an increase in faculty salaries.

  2. silversterling says:

    Great to hear. Half of all law schools, at least, should close immediately. Hopefully this will hasten their demise. What a waste.

    • TribalistMeathead says:

      Wouldn’t really bother me if many of the Tier 3 schools shut their doors. Even ten years ago they were selling their students a life they’d never have.

  3. njorl says:

    I think it makes sense to expect record high acceptances. I doubt capacity has declined noticeably compared to applications. I also doubt the low-end schools will refrain from lowering their standards.

  4. Monday Night Frotteur says:

    Two questions Paul:

    1) Is there a possible “Bar Exam Crisis” coming? If schools are admitting (and presumably graduating) less intelligent students, while bar associations (lead by Michigan) are increasing the difficulty of Bar Exams, are we going to see a massive “Bar Exam Bloodbath” in 2-3 years?

    2) Why is Thomas M. Cooley still in business? Who is crazy (or uninformed) enough to pay tuition for that degree?

    • Paul Campos says:

      (1) Yes. Michigan passed only 55% last July, down from a normal pass rate of around 80%. That’s just one state of course, and who knows if this was a one-year blip, and/or if other state bars will follow a similar course, but if both the ABA and the fed loan programs continue to refuse to enforce any real barriers to entry, the state bars might, at least in a piecemeal fashion.

      (2) Cooley, like a bunch of other diploma mills, is in business because they’re free-riding on the “prestige” still associated with being a lawyer, or at least with having a law degree. And statistics mean nothing to special snowflakes.

      http://insidethelawschoolscam.blogspot.com/2012/05/special-snowflake-syndrome-and-spirit.html

      • Sebastian H says:

        “but if both the ABA and the fed loan programs continue to refuse to enforce any real barriers to entry, the state bars might, at least in a piecemeal fashion.”

        This would be almost a worst of all worlds outcome for current students–huge debt and they don’t even become lawyers.

        • Warren Terra says:

          I assume that if the loan program was curtailed the students might not enroll, rather than bearing an increased debt burden from unsubsidized loans. But maybe not; and I don’t know whether the loans are granted year-by-year or for the three year term.

        • Barry says:

          “This would be almost a worst of all worlds outcome for current students–huge debt and they don’t even become lawyers.”

          I would say that it’s not ‘almost’; it is, for that reason.

      • Monday Night Frotteur says:

        Thanks for your response, Paul.

        Agree with Sebastian H. Tournament-guilds are the worst possible outcome for everyone except the people at the top, running the tournament-guild.

        One thought though, as somebody married to a 5th year Biglaw associate; everyone hates their jobs right now. Even low level partners are getting fed up, in my anecdotal experience. Clients are treating lawyers of all stripes like dogshit…

        • Brandon says:

          My clients are treating me fine, but of course I don’t charge them BigLaw prices, I know all my clients personally and I actually care about helping them succeed.

          • Rand says:

            Unfortunately in the current economy you can have a good client who generally treats you well but ends up not being able to pay your bill. This is part of the reason for this whole discussion. If your client’s can’t pay, associates do not get hired.

      • Barry says:

        As was mentioned on ItLSS a while back, apparently the ABA is going to require three-year rolling average bar passage rate of 50%. Assuming that they start counting this summer, this class would be the third class to fall under that rule. As Paul (I believe) pointed out, many schools are under that now; cutting standards to ‘able to make an X in proper spot on financial aid forms’ will not help.

        A friend suggested that what these schools should do it concentrate more on recruiting a vast number of warm bodies for L1, and then flunking most of them out. That would get a year’s worth of financial aid, and avoid the ‘marching morons’ problem with bar exams.

      • ichininosan says:

        Michigan’s efforts to fail more bar takers misses the bigger point. In 2012, law school based in Michigan graduated 2,285 students (source: http://www.lstscorereports.com/?r=mi). Only 525 graduates took the Michigan bar exam in 2012 (source: http://www.ncbex.org/assets/media_files/Bar-Examiner/articles/2013/8201132012statistics.pdf). Most of the rest presumably took the bar elsewhere and had an easier time of it. The problem for most students who graduate from law schools located in Michigan is not the bar exam (which most past, somewhere) but their inability to find employment as a lawyer after passing the bar exam.

        • BL1Y says:

          That may help explain the low passage rate. Presumably people who are taking the bar in other states are more likely to have secured employment, and if you have a job you’re more likely to be from a better school, have better grades, and have the ability to pay for a better prep course.

  5. Anonymous says:

    Are prospective law students applying to medical school instead (fingers crossed)?

  6. pigmund says:

    As a person who currently works at a law school, I saw the course schedule for the coming academic year, and in comparison to the previous five years, the declining size of the 1L class was quite noticeable.

  7. n1ck says:

    Good.

    I went to a Tier 1 school and the best I’ve done is document review.

    I’d be happy watching every law school dean get fired and every law school get sued for fraud, but that’s just me.

  8. Warren Terra says:

    What is the time scale for law school acceptances? It sounds like your correspondent delayed their decision and the school, aware its incoming class was likely to be entirely too small, started making offers to them and presumably to others like them. But I’m just surprised, because back when I went to grad school there was a nationally coordinated date by which you had to decide among your options (April 15, as it happens), after which I think the offers of admission were no longer binding. Is there a similar system for law school admission?

    • Paul Campos says:

      No. Most schools have formal application deadlines sometime in the spring, but lately many have been accepting applications after the formal deadline. Admits have deposit deadlines that they have to meet to hold their place in a class, but they’re usually small enough that lots of people double or even triple deposit. And people get pulled off waitlists all summer.

      • edwoof says:

        The real pain law schools are experiencing is the decline in applications. Applicants are down 13.4% but applications are down 18.9%. Prospective law students have correctly decided that there are a few tier1 schools which offer value for money and if they don’t get into one of those schools, there’s no point in going to law school.

  9. Logistics says:

    With 60% discounts, is it time to go to law school?

    • Bijan Parsia says:

      40% of a big pile of money to get a degree that probably won’t lead to a job?

      I’d still avoid it.

      Buying into a bursting bubble in the early days of the crashing is generally unwise.

      • Barry says:

        As has been pointed out on ItLSS and other blogs, there is also a vast backlog of people who got sorta-lawyer jobs (temp work, doc review), and law firms who hire for real lawyer jobs fire 80-90% of their associates. This leads to a very large number of degreed, bar-passed and (varied) experienced lawyers being put on the street each and every year.

        One commenter claimed that living in NYC had acquainted him/her with a lot of HLS grads who didn’t make the partner cut, and who were scrounging for any legal work.

  10. MacK says:

    Has anyone read Dan Filler’s latest Panglossian lunacy over at the faculty lounge?

  11. Jeff Matthews says:

    There isn’t anything like good, old market forces to drive supply and demand. We can thank Sallie Mae for socially-engineering this “crisis.” But in the end, the market always prevails.

    Wasn’t it said back in the Cold War days that Big Brother would learn this the hard way?

  12. Rand says:

    For those of you in law school, the chance of making it to BigLaw have gone down. However, this may mean that you actually get to have a life. The signs of things turning around are happening. It is happening regionally right now, but over the next couple of years many firms that have been running lean will start hiring. The most important thing is to show that you have drive and ambition. There are too many associates now days who want BigLaw salaries and to leave the office by 5 everyday. If you do not have a job, make one. Get out the door and hit every small firm you can and offer to be their part time clerk – research etc. on call. 1) it will get noticed by firms – here is someone who has ambition; and 2) one of those firms might just be your first gig out of law school.

  13. Gregory Dursteler says:

    The interesting thing will be to see how far the decline goes. At what enrollment level will appplications stop declining?

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