Peak law school?
By 
One of the curiosities of current debates about tuition increases, both at American law schools and in higher education in general, is that there’s very little if any understanding of how much tuition rose in real terms in the 1950s and 1960s. In the case of law schools, average private law school tuition actually went up faster, in percentage terms, than it has over the past 30 years. Of course the increases in recent decades have been from a radically higher baseline:
I’ve only collected data on public law school resident tuition since the mid-1970s, but average tuition levels were still barely more than nominal at that time, and remained so well into the 1980s:
Notes:
(1) The very rapid rise of private law school tuition in the 1950s and 1960s took place in the context of steadily rising median incomes during these years. Since the 1970s median incomes have remained practically flat.
(2) Any criticism of the cost structure of higher education is sure to produce a bunch of nonsense about “Baumol’s cost disease” from defenders of the status quo. In fact per capita faculty compensation has fallen sharply since the 1970s. For idiosyncratic reasons this hasn’t been true for law schools in particular, but it would be perfectly possible to cut entry level law professor compensation in half with little or no loss of quality. As anyone who has any experience with the hiring market recently is well aware, huge numbers of superbly qualified job candidates, both in traditional legal academic and more pragmatic terms, are finding it impossible to get a job.
(3) The current cost structure of legal education features fantastic levels of successful rent-seeking. If we measure the pedagogic quality of law school by the extent to which it prepares people to become licensed attorneys, there is no evidence that, over the past 40 years, the quadrupling of tuition at private law schools, and seven-fold increase in resident tuition at public schools has produced any quality improvements whatsoever. This is illustrated by the fact that scores on the Multi-State Bar Exam — a scaled and equated test, meaning the scores from which account for changes in the ability of test takers — are actually lower now than they have been at almost any time in the past 40 years.
(4) Econ 101 says that, all things being equal, firms that radically raise prices without commensurate improvements in quality will be immediately undercut by competitors, who will seize market share via lower prices. Econ 201, 301 etc., points out that this model of economic behavior is way too simple. In areas such as higher education, information gaps, Veblen effects, and the like cause potential tuition payers to treat price as a straightforward proxy for quality. This helps explain why every single private law school in the country is now charging vastly more in constant dollars than Harvard and Yale were charging 30 years ago, even though it seems safe to assume that Harvard and Yale Law Schools were providing acceptable-quality legal educations at that time.
(5) All this aside, there is some evidence that Peak Law School is now in the historical rear view mirror. Sticker tuition increased by “only” 5% in constant dollars between 2010 and 2014, while at the same time the percentage of students paying full freight at private law schools plummeted from 48% to 36%. This suggests that, over the past five years, effective per capita tuition has actually declined. Since overall JD enrollment has declined by 23% over this time, law schools on average are pulling in around 25% less in tuition than they were in 2010. (On average is a deceptive term here, as elite law schools are pulling in more tuition than ever, while a school like Thomas Cooley, which has seen enrollment fall 65% over the past five years, is probably getting less than half as much out of its student loan conduits as it was in 2010). Once again, if something cannot go on forever, it will stop.