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More on law schools losing money

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In a previous post I estimated that the large majority of ABA law schools are running substantial deficits this fiscal year. This post is about the consequences of that situation.

As a preliminary matter, I’m going to briefly address commenter Dan’s argument that it doesn’t make economic sense to close a law school as long as its operating deficit disappears if its parent university only attributes marginal as opposed to pro rata indirect university operating costs to the school’s budget. This is a distraction. Indirect costs are real operating costs, and a school arguing that it should only be responsible for the marginal indirect costs it generates is really an argument that the school should be allowed to free ride on other schools within the university, since the university’s schools have to collectively pay for all those costs one way or another.

Basically, the bottom line question, for the 90% of law schools that have parent universities, is whether it’s acceptable to central for the law school to be subsidized by the rest of the university’s programs. (For the 10% of law schools that are free standing, the bottom line is much simpler, since they don’t have the option of not at least covering their operating costs in the long term).

The answer to this question is likely to vary a lot between institutions. Law schools have several potential arguments as to why they should be subsidized by the excess revenues over costs generated by Psych 101 etc.

(1) This is all very temporary, and one day soon demand for legal education will increase to levels that will eliminate the deficit.

(2) It’s prestigious for the university to have a law school. In its more common form this is modified to “a highly-ranked law school.” In this model, the law school is like a football team that loses money. Sure, it spends more than it appears to bring in, but that’s because you’re not taking into account the less easily quantifiable benefits of having a football team/law school in regard to undergrad applications, alumni donations, university rankings, and so forth.

(3) Legal education is a public good that should be subsidized by somebody, aka can you really put a price on the Rule of Law?

(4) Lots of politically influential people in this state are graduates of this law school. These people care a lot more about the law school than the journalism school.

Central administrations will, it’s safe to say, vary quite a bit in regard to how receptive they are to these sorts of arguments. Some law schools may actually be able to continue to operate in deficit mode more or less indefinitely, assuming argument (1) doesn’t pan out. But a lot won’t. (And again, this isn’t an option for the free-standing schools). What will happen/is beginning to happen to schools that won’t be indulged in this way?

My guess is that very few if any ABA law schools currently operating will actually get shut down. The reasons are two:

(a) Completely shutting down its law school would be embarrassing to the parent university, and it will avoid doing so if there are other realistic options.

(b) It’s not at all difficult to operate an ABA law school that doesn’t lose money, even in a world in which half as many people, or even fewer, apply to law school as was the case in the salad days (Crucial caveat: (b) only continues to be true in a strong form as long as something like the current federal educational loan system remains in place).

These reasons are obviously related, since (b) means that realistic options do exist for both parent universities and free standing schools.

Here’s a simple illustration, via one data point, of how easy it would be, in the semi-long term, for almost all law schools to get their budgets in line.

Student to faculty ratio at ABA law schools, by year (figures exclude schools with less than 300 total law students):

1980: 29 to 1

1990: 25 to 1

2000: 18 to 1

2012: 14 to 1

I don’t have comparable number for student to administrator ratios, but I would bet dollars to donuts, using 1950s prices for this now-ruined figure of speech, that the decline in that ratio has been even more extreme.

In short, quite literally the only reason law schools are spending so much money is because they can. Economic necessity has absolutely nothing to do with it, which is another way of saying that what we have here is a spectacularly successful exercise in rent-seeking.

I have detailed historical budget information for one law school that reveals the school is spending exactly twice as much money, in constant inflation adjusted dollars, as it was in the mid-1990s, despite maintaining the same size student body. This spending spree, by the way, has not resulted in better employment outcomes for graduates, or even a higher average ranking in the pestilential US News hierarchy. What it has resulted in is:

(a) Vastly more administrators, and an explosion in compensation for the top of the administrative hierarchy.

(b) Far less teaching responsibility, both in credit hours taught and average class size, for the tenure track faculty. (25% of the teaching is done by adjunct faculty who in some cases are paid literally nothing, or rather are paid in “prestige.”)

(c) Genuine Corinthian leather facilities.

The school is running a big deficit, which wouldn’t exist, holding everything else constant, if it had increased annual real spending by 60% rather than 100% over the past couple of decades.

The solution to this completely self-inflicted financial crisis, is to stop spending so much money. Maybe we could even give some of the resulting savings back to our students, in the form of lower tuition, instead of sticking them with six figure non-dischargeable debts and increasingly poor job prospects.

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  • jackrabbitslim

    I misread that as “genuine Corinthian leather faculties” and I laughed to myself. Still works the other way though.

    • Schadenboner

      I like your formulation better.

      I have detailed historical budget information for one law school that reveals the school is spending exactly twice as much money, in constant inflation adjusted dollars, as it was in the mid-1990s, despite maintaining the same size student body.

      I hold in my hand a list of 205 Law Schools…

  • rvman

    Indirect costs are real operating costs, and a school arguing that it should only be responsible for the marginal indirect costs it generates is really an argument that the school should be allowed to free ride on other schools within the university, since the university’s schools have to collectively pay for all those costs one way or another.

    This is basic Econ 101 stuff. Let’s say the law school costs $10 MM directly (“marginal cost”), and $2MM in “Indirect” costs are attributed to it. If the law school brings in $11MM in revenue on a continuing basis, then the school faces a decision – close or not? If they leave it open, the rest of the university has to pony up $1MM. If they close it, the rest of the university has to pony up $2MM to cover those indirect costs – they don’t go away – any cost which goes away is a marginal cost for the purpose of this decision. Anything which can be redeployed is marginal for this decision.

    You are right that they may be able to cut expenses to make it profitable, but it is not necessary to do so in order for it to be a better decision to leave it open than close it.

    • Paul Campos

      Again, this confuses two issues:

      (1) Would closing the school save money?

      (2) Will central administrators allow the school to pay less than its pro rata share of indirect expenses relative to other schools in the university?

      These are different questions. Allowing a school to pay only the marginal cost it creates in regard to indirect expenses is in effect a subsidy to that school from the other parts of the university that aren’t given this benefit.

      • Fat Guy

        Are you assuming a law school is currently paying it’s “fair share” or exact pro rata share of the indirect expenses? Practically speaking, isn’t it likely the amount of indirect charges will be renegotiated with the central university in connection with discussions to reduce expenses at the law school?

  • Fat Guy

    So the bottom line is that law schools will tell the parent institution that “We can and will adjust our operating model to account for lower enrollment by cutting costs so as to return to being a contributor to the central university, we just need a little time do it.”

    I am curious if there’s ways the central university can penalize/incentive a law school to actively cut costs short of threatening closing it. For example, cutting the Dean’s pay or reducing the amount of X service provided to the law school.

    • Paul Campos

      Generally, law schools have to do what central administrations tell them to do. It’s not a question of incentives: if central says you have to spend $500K less next fiscal year, then you have to spend $500K less.

      • Schadenboner

        Do law schools have revenue collection mechanisms distinct from the University Bursar’s office?

        My assumption is that they do not (there’s no clear reason why they would) but I didn’t go to a university that had any professional schools.

        This is a moot point because a Law School obviously isn’t going to make that sort of decision contrary to the parent U’s dictate, it’s just an idle question.

        • Paul Campos

          My understanding is that the normal situation is for all tuition monies to be collected by the central university. Endowments are usually also managed by a central university foundation, that takes a cut of endowment income for its operating expenses.

  • kindasorta

    These arguments for keeping a law school open despite being unable to crack its budgetary nut for the coming fiscal year are stronger in the context of a public four-year university with several graduate and professional schools (e.g., the University of Colorado at Boulder) than they would be at a small or medium-sized private university with only a handful of post-undergraduate programs (e.g., Pepperdine). The larger the population of students and programs, the better opportunities for cross-subsidization as law schools work out their response to this “temporary downturn.”

    Of course, that’s not very comforting to the 100+ private law schools accredited by the ABA. It’s even troubling to those public law schools situated in university systems that will tolerate neither a failure to meet expected revenues nor a slippage in the rankings to admit a student mixture (e.g., more suckers willing to pay sticker, with credentials to match) that could make up the shortfall in expected revenues.

    • MacK

      With the public Universities there is also another potent threat which lacks the same negative aspect to prestige – merger. So to take for example Rutgers – why not just merge the Newark and Camden schools? Ankansas – merge the two schools, Kentucky – merge all three, California merge 5 into 2, Florida – merge 4 into 2, Illinois merge 2 of the 3, and so on. Indeed in Philadelphia, I think this probably will be the face saving way in which a bunch of private law schools “close,” i.e., by not closing, but merging.

      All of the parent institutions can describe the merger as a way to raise the quality of the law school, by concentrating the best teachers in one school, etc. I can see the spin now….

      • PSP

        The two Rutgers law schools are in talks to merge. It may happen if there is sufficient financial pressure. I wouldn’t bet big money on it though.

        • Unemployed Northeastern

          And Chris Christie tried to roll one of the Rutgers campuses into private Rowan University 12-18 months ago.

      • ichininosan

        How realistic is the merger option? My understanding is that the two Rutgers schools are, in fact, merging. But is it feasible in many states? In Pennsylvania, I’m not so sure its an option. To take your Philadelphia example, there are three schools in addition to Penn — Villanova, Temple, and Drexel. Only one of these schools is quasi-public (Temple); the other two are private. Even in states with multiple public schools, such as Florida, is there a body with the power to order a merger?

        • MacK

          There are a lot of large cities with multiple law schools – cross-town mergers offer an easy out. Similarly, several states have multiple law schools and could easily see the advantages in mergers (within the UC system for example.) Presentationally, a merger is easier to do than closing a law school – and in a number of instances, Pennsylvania for example, and Rutgers, the schools have been technically different campuses of the same institution. It also presents a solution of what you do with the currently enrolled students – just transfer them at the end of the academic year to the surviving institution.

  • PaulB

    The question that will decide how many law schools will need to close is whether or not the faculty is willing to take the kind of salary cuts and workload increases needed to balance the budget. This is far more than “we have to take a 10% cut and somebody’s going to have to take over Professor Foghorn’s class not that he’s retired” adjustment. Prof. Campos, do you think the internal mechanics of faculty decision making will allow for such an unpleasant adjustment or will a university president be forced to take the nuclear option and just close a school down in the face of faculty unwillingness to take such difficult steps?

    • Paul Campos

      I think your question misapprehends how much power faculties have in regard to conditions of employment. Faculties don’t get to decide whether salaries get cut, teaching loads get increased, or even whether faculty members get to keep their jobs. Central can do whatever it wants within the constraints created by tenure rights, which at most schools are actually fairly minimal in the context of financial exigency.

  • MacK

    There is an additional issue about overhead, and that is repurposing. That is to say that a lot of programs that create net revenue are size constrained because of facilities – if you take an urban University, adding lecture theatres, classrooms, halls, etc. is expensive and may be very difficult if the campus is effectively fully built out. However, if one closes or shrinks the law school, suddenly a lot of first class teaching space becomes available, classrooms, lecture theatres, computer centres, library study spaces, which can be repurposed to revenue generating courses. When a law school is downtown, in many respect the opportunities to repurpose the space may be even more lucrative – part time executive MBAs, assorted professional courses, etc.

    Overhead is not as much of a zero-sum game as it seems – it can be recovered if the source of the overhead (buildings, capacity) is repurposed. And the rest of the University faculty would get a chance to sink their asses into real Corinthian leather …

    • BoredJD

      Not only repurposing, but liquidating. The many law schools located in the downtowns of urban areas are sitting on extremely valuable real estate.

      • MacK

        True

  • justme

    Let’s just be clear here: Even if law schools reduce their costs so that they don’t run deficits, they still are charging an arm and a leg for a product that in all likelihood only “delivers” for roughly half of its consumers.

    • Lee Rudolph

      And in that they are different only (somewhat) in degree from “higher education” in general, I fear.

  • Bloix

    Historically (at least anecdotally), law schools were cash cows for universities: large classes, paying students, no labs or other specialized facilities, and relatively cheap libraries.

    The Socratic method seems to have been invented as a way to coerce large audiences to pay close attention to a single speaker.

    There’s no obvious reason that law schools couldn’t be returned to profitability, other than the resistance of the faculty to large teaching loads.

    • NonyNony

      There’s no obvious reason that law schools couldn’t be returned to profitability, other than the resistance of the faculty to large teaching loads.

      Well, there’s the “demand” side of the supply/demand equation, isn’t there? If you have X number of students who want a law degree at the tuition you charge and you need *X+Y)*tuition dollars to make the whole enterprise break even, then just increasing the number of students that each faculty member teaches in a class really isn’t going to do that much.

      I suppose if you think you could fire enough faculty to make that “X+Y” figure “X” instead then it could work, but how many faculty do you need to fire, and will there still be X students who want to get a law degree at your now gutted Law School when they hear that they’re going to receive their degree in an auditorium taught by one of the six tenured faculty members that gets retained? Given what Paul’s been posting here for the past few years, it seems like the demand side of this equation is where the problem lies and that it isn’t going to get any better until the job market for lawyers corrects.

      • Bloix

        “you could fire enough faculty to make that “X+Y” figure “X” instead then it could work”

        Precisely.

        “going to receive their degree in an auditorium taught by one of the six tenured faculty members”

        Not sure what this means – that classes will be very large? No, you tell the faculty that they have to teach more classes instead of spending their time on “research” (writing articles for student-run journals that no practitioner ever reads) and consulting.

  • dumbme

    For us non-econ people, can someone explain marginal and per capita costs?

    • Fat Guy

      Marginal – extra costs specific to running the law school (heating, lights, etc.)

      Per capita – costs shared across the entire university (road maintenance, IT infrastructure, registrar)

    • Dan

      The University’s central library, admissions dept, registrar, etc. have to remain open and staffed regardless of whether the law school does. Ordinarily, universities divide that cost and allocate it all the departments or divisions equally per student. That’s the average cost and it appears on each division’s budget as an “overhead charge.”

      Campos says that if the law school doesn’t pay this full average cost, it is being subsidized by the rest of the university. But if this is a “subsidy” it is a funny one.

      First, most universities don’t really know what the average overhead is, fewer actually allocate it evenly to departments — and there is nothing necessarily “fair” about allocating it evenly. There is nothing fixed in the nature of the universe that determines which charges are central and which are departmental in the first place. If the university wants the sciences to subsidize the humanities, all equipment becomes departmental. If it wants the reverse, lab space suddenly appears on the central budget. Law schools typically pay for the IT, accounting, admissions, placement, fund raising at the law school out of their own budget; the psych department always uses the central administration for these functions. Change this rule and law school deficits become huge surpluses or vice versa. At some schools the law school dean’s salary is a central expense; at others a departmental one. All these charges are constantly renegotiated in any university.

      Second, average costs are not the right way to think about whether the law school is financially a net benefit or net cost to the rest of the university. For that you need to think about marginal costs — the costs of adding or subtracting the law school to an already existing institution.

      The extra costs that the Law School creates for the central university, or that would be saved if it closed, are the marginal costs. They are far lower than the average costs.

      Closing the law school will reduce the costs of those central functions only a tiny bit. After all, the U. President’s salary will stay the same. And the central library, admissions, registrar, accounting, publicity, research support/sabbatical, benefits, fund raising, scheduling, IT, placement or advising budgets will not drop if the law school closes — the people who do those jobs for the law school (unlike for the Psych department) sit at the law school and the costs are on the law school’s budget. Even for functions that law schools typically don’t cover, such as HR or infrastructure, eliminating the law school is unlikely to make a big enough difference to allow downsizing the central administration.

      Indeed, at most schools, the marginal costs that the law school creates for the central university are likely to be little more than the costs of the building maintenance (and often not even all of that) — all other costs that the law school creates are already on the law school’s budget before the Overhead Charge.

      If the Law School is producing net revenues (i.e., revenues beyond expenses that are on the Law School’s budget) that are above the marginal costs its creates but below the average costs of running the university, Campos calls this a “real deficit” and says the Psych department is “subsidizing” the law school. However, shrinking or closing the law school will make the university and Psych department finances even worse. That is not the usual meaning of the word “subsidy” or “deficit.”

      • MacK

        There are a lot of problems with your analysis. First, it ignores the likelihood that law school facilities and their attached overhead could be repurposed by the parent institution. Second, it ignores the issue that some of the overhead is variable with headcount – to take an example computer facilities, software licenses, admissions, record keeping etc. To the extent that the central university provides these services they do scale with the adding of additional students – so a university could cut headcount and other expenses without the law school.

        In short you are trying too hard to say that a law school’s closing would be revenue neutral because the costs would exist anyway – not necessarily. Moreover, the overhead could be incurred on more “profitable” activity.

        So no, shrinking or closing the law school could improve the overall financial position.

        • Snarki, child of Loki

          You’re all thinking of “overhead” as a variable cost in the budget, but while there is some truth to that, I don’t think that Universities can operate that way.

          The reason is that they’ll have federally-funded research, so they have to follow federal budget rules and negotiate an overhead rate with a “cognizant federal agency” every 3-5-10? years.

          If they decide to give Joe’s School of Law & Plumbing a break on the rate, then why aren’t they giving the NIH/NSF/NASA/DOD/HSA the same break? Would the Feds split the recovery with the disgruntled person that dropped the dime on the nefarious plan to gyp the feds? (And if you use this idea, I demand 10% of your take, taker)

          • MacK

            Snarki,

            In research grants there is usually a cap on what can be charged for overhead – but the cunning administrator can get around some of this with charges for “shared services,” calling them direct expenditures by the research

          • Joseph Slater

            Hey, you just stole the name of the institution I was planning to found!

  • ichininosan

    “My guess is that very few if any ABA law schools currently operating will actually get shut down. The reasons are two:

    (a) Completely shutting down its law school would be embarrassing to the parent university, and it will avoid doing so if there are other realistic options.

    (b) It’s not at all difficult to operate an ABA law school that doesn’t lose money, even in a world in which half as many people, or even fewer, apply to law school as was the case in the salad days”

    I agree with this. The obvious “solution” from the perspective of lesser law schools (i.e. the 190 that are not national in scope) will be to restore student / faculty ratios above all else. This may solve their budgetary problems but it will not likely address the debt crises that students face and faculty and administrators pretend does not exist. Only the government can resolve that problem.

    • Unemployed Northeastern

      Law schools have closed in the past. In the early 1950’s, dear Northeastern closed its law school for close to two decades, reopening it in ’68 or ’69 as a hippie commune, which naturally means it is a public interest law school today (one that costs >$70k/year).

      Of course, back in the 1950’s, Northeastern was just a inconsequential, inexpensive commuter college. Now that Northeastern has soaked itself in NYU-style delusions of being a supposed Ivy League-caliber university, I reckon they’d hold onto the law school more closely.

  • ConcernTroll

    Nice analysis. I think most schools will manage with some combination of buyouts, increased teaching responsibilities, more adjuncts and some fairly mild compensation adjustments.

    I imagine that acquiring a tenure track position right now is probably harder than a University of Phoenix student being hired by Goldman Sachs.

    • My $0.02

      My understanding is that entry-level tenure track hiring has dropped by about two-thirds since 2010 or so (from about 150 new hires to about 50 anticipated new hires this year). Note: This is actually a bit better than what a lot of fields in the humanities have seen in the past decade.

      I’m not in legal academia, and I’m not interested in going into legal academia, but I’m fairly knowledgeable about the process. I know a lot of the pre-academic advisors at the feeder schools are basically telling potential candidates that they shouldn’t bother if they have more than one “wart” — e.g., no PhD or VAP, no COA clerkship, no LR, less than three publications, more than five years experience, or a hard-to-place field like con law or admin.

    • Unemployed Northeastern

      Prawfsblawg maintains several comment threads dedicated to new law prof hiring – who’s hiring who, who went to what law school and had what clerkship, etc. The anxiety level on those boards make JD Underground read like a class reunion at Exeter.

  • Unsympathetic

    The solution is analyzing the span of control of the administrators, seeing that administrator productivity is significantly less than the equivalent position at even a vaguely profitable company, and RIF’ing the vast majority of university administrators.

    If annual budget is entirely variable based on incoming students.. and student count decreases to finally match the true annual replacement rate of the law profession.. then law schools must downsize, period.

    Or, just increase tuition because America!

  • USNWRiorbust

    Nearly all schools are driven by the USNWR rankings to the near-exclusion of any other consideration.

    Without the rankings, probably most law schools would cut the size of the entering class, eliminate “merit” scholarships, shrink the faculty through attrition, and revert to the larger sections and leaner administration of the not-too-distant past.

    But if one school does that and its competitors don’t, the rankings impact will be huge.

    So every school is going to make its decision based on its prediction of what other schools will do — a highly unstable situation.

  • Sooner

    I hesitate to believe any of these decisions will be impacted by rational thought. Kind of like assuming the NFL will make decisions based on the results of studies about concussions. Trying to get in the heads of “decision makers” such as those that allowed law school to become what it has, seems to be a fruitless exercise for anyone that’s logical and has human emotions such as empathy.

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  • Orin Kerr

    My sense is that a good number of law schools are running deficits in large part because they have substantially increased “merit” scholarships — that is, they have begun to give out large numbers of tuition discounts to try to improve their U.S. News numbers. I would guess that this is a short term trend, as schools are very worried right now about how their numbers will drop relative to competitor schools as applications are still falling. When the application numbers stabilize — wherever or whenever that is — I would expect at least some schools to improve their budget situations by largely phasing out those discounts, or at least returning their numbers to what they were before the application numbers went down.

    • maxx

      If a business has to offer a discount to attract customers, that’s a clue that they’re charging too much for their product.

      Law schools are now selling a product that’s way too expensive; i.e. not worth what they’re charging. For that reason, they need to cut not just costs (salaries, number of employees etc.) but also prices (tuition).

      Law schools started by holding the line on the sticker price, but discounting it on an ad hoc basis – they will soon have to reduce the sticker price (or it will become a meaningless number that everyone negotiates down). They will also of course have to reduce costs as well.

      The law schools which adjust to the fact that what they’re selling is not as valuable as they think it is and reduce prices and costs accordingly will survive, the others, sooner or later, will have to close.

      The day of reckoning has been postponed by a lending bubble which, because the loans are non-dischargable, has led to tens of thousands of young people becoming debt slaves (women and minorities hit hardest). But at some point the lending stream will dry up or young people will refuse to incur non-dischargable debt or (ha ha) law schools will refuse to accept tuition payments funded by non-dischargable loans.

      In any event, the current model of extremely expensive tuition funded by non-dischargable debt is not sustainable. Fiddling with costs, offering some discounts, tinkering with the course load (“practice-ready”) is not going to change the underlying reality – law school costs far more than it’s worth for the vast majority of its students.

      • MacK

        If a business has to offer a discount to attract customers, that’s a clue that they’re charging too much for their product.

        Actually, differential pricing is what all businesses want to do, that is to say, a good or service is almost always worth more to one customer than the other – and businesses seek to extract that excess value. Airline tickets, with saturday night stay requirements, advance purchase requirements, etc. are a classic example.

        It is only where discounting becomes general that the good or service is clearly overpriced.

        • maxx

          “It is only where discounting becomes general that the good or service is clearly overpriced.”

          I don’t think law schools offered discounts until quite recently.

          And the discounting has become widespread among law schools and frequent, at least at some law schools.

          And imo discounting is just one of the more concrete signs that law school just isn’t worth it for the great majority of students at current prices, particularly when it’s funded with non-dischargable debt.

    • Paul Campos

      One annoying thing about the ABA Guide is that it lists only percentages of students getting discounts and the median discount, instead of the average, so one can only make a rough estimate of what the discount rate was for any school in a particular year.

      But we have some pretty startling evidence of what’s happening when a school neither cuts real tuition nor admission standards. Iowa refused to do either and they enrolled a class this fall of 95 — less than half the size of their recent historical average.

      The chasing after USN rankings is becoming increasingly nonsensical, as prospective students come to understand that rankings have nothing to do with employment prospects, outside of extremely broad bands (in other words it makes literally no difference whether a school is ranked 40th or 70th as far as employers are concerned).

  • MidwestDude

    “My guess is that very few if any ABA law schools currently operating will actually get shut down.”

    I would guess the opposite. I think in a decade or less we will see a slew of less prestigious law schools attached to small, private universities shuttered. I think that just here in the Midwest places like Creighton, Washburn, Drake, Hamline, Valpo, one or two of the Chicago schools (e.g. Kent, Loyola or DePaul), etc. would be the type of schools that will not survive the structural shift in legal education. Public schools attached to a larger university will likely survive thanks to legislators/regents who are alums and lower pricing that attracts relatively intelligent in-state students.

    As more and more of the truth about the dismal state of the legal job market spills onto the market courtesy of the internet, those less prestigious privates are going to remain in the red and the broader universities will not be able to stomach keeping them open, even with drastic cost cutting.

    • MacK

      My own assessment is that a few law schools will start closing at the beginning. The closing of a couple of Inflaw schools or Cooley would not have a huge impact, because no one has a high opinion of them. However, when the first serious university or two “pulls the plug” on its law school, say somewhere like Drexel or Santa Clara (both of whose law schools are drags on their reputation), closing the law school will be something respectable institutions do … and that will be when a wave of schools close.

      Take a look at Wikipedia’s list of US law schools – how many of them have the lawyers here even heard of? How many are at the tail end of most rankings, but attached to a more highly regarded University? How many are stand alone:

      List of US Law Schools

  • dominique wilkins

    BigLaw jobs, I know nothing about that works.

    But in terms of small law firm work, there is plenty of work. The problem is that the economy is bad and people don’t or can’t pay for it.

    Whenever I go to any status conference, for family law cases or small civil litigation cases, there are plenty of people who need attorneys and can’t pay for it. About 6-7 years ago, it wasn’t this bad.

    Law schools are basically treating this period as a bad period, but they are convinced that if they can ride out the storm and the economy eventually comes back, then people will have money to pay for legal work and a good portion of the employment problem will go away. Over the course of the last 30 years, legal education has led to most graduates obtaining solid earning power.

    Again, I don’t know how BigLaw will be affected when the economy turns around, but there will be plenty of need for the small “Mom and Pop” lawyers and more people will have money to pay for that work.

    • The New Attorney: Only the Rich Need Apply

      I think there has been a huge change in the need/desire for legal services that goes beyond price. I work in an alternative sector that you could say competes against lawyers for clients and I must say, there is a high demand for our services. (You could say it ended up being my revenge given that I was unable to get paid work in the legal field after incurring $100,000 of debt for my legal education and I am now successfully competing against lawyers for clients.) :)

      What I am seeing is a turn against lawyers. The average person not only can’t afford to hire ’em – they don’t want to. There are too many alternative resources to a lawyer that people trust more: people can go online to get the forms they need – people don’t understand the complexities of the law and think that will suffice. Or a lot of the times, they are turning to mediation to negotiate their disputes.

      People that think the tide will turn when (or if) the economy straightens up are missing the huge tide of change towards the belief in the value of legal services. It just isn’t there anymore, folks, and no one in the legal field is doing anything to address this because they don’t see it. They think it is all a matter of price and when the economy turns and people become more flush, they will return to spending money on legal services. In the jurisdiction where I work, 60% of all individuals are unrepresented in family court and guess what? They don’t want to be represented – they think they are doing just fine. And this is at a time when lawyer prices are at an all-time low with all the unemployed lawyers competing for work. The times have changed, folks. Woe to the individual who hasn’t noticed.

  • matt

    Thanks, dominique. Your perspective is a great antidote to the doom and gloom around here. As an attorney I’m sure you’ll understand my asking the basis for your claims. For example, if what you’re saying is true I would expect most lawyers had little trouble finding work before the recession (i.e. 6 to 7 years ago). Care to enlighten us on that?
    Also, what will all these people be willing to pay when the economy turns around. People are graduating with $200,000 of debt so they’ll need to charge at least $50 an hour and they’ll be inefficient due to lack of experience. How many of these prospective client have $1,000 or more lying around to pay an attorney?

    • dominique wilkins

      Law school isn’t worth 250K in student loan debt.
      It’s not worth more than 50-55K in student loan debt – about the same as buying two Camrys in 10 years. If someone has to finance 250K in student loans, they shouldn’t attend.

      The basis for my claims that people need work but can’t pay for it? I already answered that – go to any status conference/calender call and see how many people there are who can’t pay for lawyers. It wasn’t this bad before about 6-7 years ago.

      What can be done about the law school students graduating now to no jobs and no training? I don’t know. They are in a bad situation, and right now the ABA, law schools, and the state bars aren’t doing enough to figure out solutions. In three years, with no training and no job, they won’t be in a good position – in many ways they will be in a no man’s land that they will have a hard time getting out of.

      Those individuals are the biggest reason why we are having a drop off in individuals applying to law school. They are law schools’ worst enemies, and justifiably so.

    • Barry

      ” For example, if what you’re saying is true I would expect most lawyers had little trouble finding work before the recession (i.e. 6 to 7 years ago). Care to enlighten us on that?”

      One thing that I’ve noticed is that while some maintain that the legal profession is in a cyclic low, few (if) any even try to support that with hard evidence (jobs:grads ratios, salaries:tuition ratios).

  • Noobesq

    I graduated from a law school associated with a small private university in 2007. Recently, I paged through the school’s directory of “professionals”. Almost all of the tenured professors who had more than 15 years experience when I attended are absent from the website. The few remaining enjoy “emeritus” status. Most courses are now taught by adjuncts. Some of the associate professors remain, but their courseloads have doubled.

    My immediate conclusion was that the school trimmed the fat to prevent a tuition hike. Oh, how very wrong I was. The cost of attendance per year is $15k more than I paid in 04-07. The money trail is definitely not leading to the students.

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