The end of the law school scam and the limits of transparency

Three years ago this week I published a piece in the New Republic, outlining the various ways in which the graduate employment rates law schools advertised were deeply misleading. At that time, only a handful of mostly elite schools published meaningful employment data: by contrast, the standard practice was to report a nine-month employment rate that aggregated all employment, legal and non-legal, full-time and part-time, temporary and long-term, school-funded and real, into one impressive-sounding percentage. (Indeed until that very spring law schools were even allowed to get away with excluding graduates who they claimed were not seeking employment from their calculations).

On top of that, schools routinely published “average” salary numbers that didn’t reveal the percentage of graduates — often consisting of a tiny and completely unrepresentative sample — that these “average” numbers represented.

After pointing out how a closer look at the real numbers would alter radically the impression prospective law students would have on their potential six-figure investment, I argued what one would have thought was a non-controversial position:

All of this suggests the extent to which prospective law students need more and better information. Of course, such information will make law school look like a far worse investment than it does at present. Still, if we assume that the point of academic work is to reveal the truth, rather than to engage in the defense of a professional cartel from which law professors benefit more than almost anyone else, then this work needs to be done.

There was in fact tremendous resistance from the law school establishment to requests for more and better public information (This was information which all law schools collected every year already, but again with a tiny handful of exceptions didn’t publish. That the information was already collected made arguments that it would be costly to supply it to the public frivolous on their face. This didn’t stop lots of schools from making that argument, however). Today, the reason for that resistance is even more obvious than it was in April of 2011: the hypothesis that more transparency would produce a big decline in law school applicants has now been tested, with unambiguous results.

This fall, around 37,000 to 38,000 people will enroll at ABA law schools. Taking the higher end of the estimate, this represents close to a 30% decline in what law school enrollments looked like before the law school reform movement successfully pressured the ABA Section of Legal Education and the Profession — which has tended to be controlled by deans and faculty from low-ranked schools, who had the most to lose from increased transparency — into forcing schools to disgorge something resembling realistic employment numbers (the ABA still refuses to mandate any publication of salary data however).

The decline in applicants has been even sharper — nearly 40% — as law schools have slashed their admission standards to keep enrollments from cratering further.

Meanwhile schools have been cutting prices: it’s quite likely that average effective per capita tuition — sticker tuition minus discounts — is actually going to be lower in constant dollars for this fall’s entering class than it was for students who matriculated three years ago. The combination of far smaller entering classes and lower real tuition has forced many schools into serious cost-cutting mode, after decades of largely unrestrained extravagance.

Faculty-student ratios actually fell in half between 1978 and 2011 despite much larger enrollments, while administrative positions proliferated far faster than faculty lines. Faculty salaries nearly doubled on average in real terms, while administrative compensation skyrocketed in ways that made faculty raises look modest by comparison. Many schools replaced perfectly adequate facilities with increasingly palatial physical plants, in a sort of perverse amenities-based arms race for tuition dollars.

Of course all this had to be paid for, and it was, mainly by tuition tripling at private law schools and increasing five times over for resident students at public law schools. This has produced a situation in which the average educational debt of law students graduating this spring — that is, members of the last entering class before the law school reform movement began to have an impact on the structure of legal education in this country — is around $150,000, while the median salary, including salaries of zero, for this group will likely be well under $50,000.

Now that the party is mostly over, we can see that the push for transparency has accomplished a great deal. If — and of course it is very much an if — the market for legal jobs remains at its present level (the percentage of GDP dedicated to legal services in America has declined by a third over the past quarter century), then it’s possible that around three quarters of people enrolling law school this fall will get jobs as lawyers, rather than slightly more than the one half of all graduates who have gotten such jobs, liberally defined, over the past few years. (This article lays out and discusses the facts supporting the assertions in the previous three paragraphs).

This is being celebrated in some quarters as the epitome of a “great time to go to law school,” which, I suppose, is a reflection of among other things the effect of drastically lowered standards (Imagine if a quarter of all medical school graduates weren’t getting jobs as doctors, and this was treated as an advertisement for what a great time it was to go to medical school!).

But it does — or rather it would, let’s not get too far ahead of ourselves — represent a great improvement over the recent status quo. Huge problems, of course, would remain, even in a world in which “only” 25% of law graduates weren’t getting legal jobs, since among other things the vast majority of entry-level legal jobs don’t pay anywhere close to enough to service $150,000 of educational debt on the terms under which that debt is supposed to be repaid.

Still, it’s real progress. In a sense, one could say that we have reached the end of the law school scam — in the sense that young people who enroll in law school today have every opportunity to avoid being misled about the prospects that await them. Of course this is no excuse for continuing to engage in aggressive sales tactics that sound more like a condo time-share pitch than a disinterested scholarly evaluation of the evidence.

In other words, we’re moving toward a situation — we’re not there yet, mainly because of the cultural lag in recognizing what has been happening to the legal profession, i.e., the Legally Blonde Syndrome — in which law students will be no more prone to overestimate their career prospects than Ph.D. candidates are now prone to overestimate their odds of getting a tenure track job (I”m assuming here that the latter don’t tend to indulge in too much optimism and confirmation bias, although I have to admit that this assumption isn’t actually based on anything other than my own optimistic wish that this is the case. My co-bloggers and many commentators are in a position to confirm or correct this impression, and I hope they do so).

That is all to the good, but, in terms of genuine reform, it’s very much half or perhaps a third of a loaf. Genuine reform goes far beyond even optimal transparency (which is still far away in the law school world), because the crisis of the American law school is just a particularly sharp example of a far broader crisis: that created by an economy that simply doesn’t produce anything like enough appropriate (halfway decent-paying, skills based) jobs for our increasingly educated, and increasingly disaffected, younger generations.

The real scam, in other words, is the contemporary structure of our society. Making that transparent is a goal towards which the law school reform movement is playing its own small part.