It’s been almost exactly four years since the publication of David Segal’s original NY Times piece on the employment crisis overtaking recent law school graduates. Inside legal academia, Segal’s article was met largely with scorn, and in retrospect it’s easy to see why.
At the time, transparency regarding law graduate employment outcomes essentially didn’t exist, ABA law schools had just admitted their biggest first year class ever, tuition was at an all time high and still rising much faster than inflation (which demonstrated that law school was a fine investment because The Market), and any so-called employment “crisis” among law grads was obviously a temporary function of the recession, and was seriously exaggerated by bitter scamblog losers who went to bad law schools, and should have known better all along because Rational Maximizing of Individual Utility. Also, too, Caveat Emptor.
Today, well . . .
Elizabeth Olson and David Segal in today’s NYT:
The bottom of the law school market just keeps on dropping.
Enrollment numbers of first-year law students have sunk to levels not seen since 1973, when there were 53 fewer law schools in the United States, according to the figures just released by the American Bar Association. The 37,924 full- and part-time students who started classes in 2014 represent a 30 percent decline from just four years ago, when enrollment peaked at 52,488.
The recession was in full swing then, and many college graduates looked at law school, as they have many times in the past, as a sure ticket to a good job. Now, with the economy slowly rebounding, a growing number of college graduates are examining the costs of attending law school and the available jobs and deciding that it is not worth the money.
“People are coming to terms with the fact that this decline is the product of long-term structural changes that are just not going away,” said Paul F. Campos, a professor at the University of Colorado’s law school. “It’s kind of a watershed moment.”
Even after all this time, there’s a part of me that’s genuinely surprised that so many law schools are at present managing to lose so much money. I mean consider this “business” model: The government will loan anyone to whom you choose to sell your product the full price of that product, subject to essentially no actuarial controls. And here’s the kicker: you can charge whatever you want, no questions asked! You get the proceeds of the loans, the buyers and eventually the taxpayers take all the risk, and you can do whatever you want with the money.
Losing money in this situation should be pretty hard to do, but if history has taught us anything, it’s that there is no amount of money that can’t be blown on yachts with three helipads, bottle service, and university administration.
Anyway, even back in 2010 the warning signs should have been plentiful, as that largest first-year class ever, the size of which was necessary to pay for the helipads etc., was gathered in by cutting admission standards quite a bit from where they were a few years earlier. That process has since accelerated, with the result that, this fall, it appears that 80% of law school applicants were admitted to at least one ABA school to which they applied.
Although the total number of applicants who were admitted in 2014 isn’t yet available, the 80% figure can be deduced by observing that 54,527 applicants resulted in 37,924 matriculants. In 2013 86.8% of admitted applicants ended up matriculating somewhere: this latter percentage tends to be very stable. If we assume the same percentage of admitted applicants matriculated in 2014, that would mean the overall admission rate for ABA law school applicants will have looked like this over the past decade:
Here’s how this looks at the individual school level. I randomly looked up the percentage of admitted applicants at 13 schools: the holy trinity of Harvard, Yale, and Stanford, and then ten schools ranging from the sub-elite to the sub-basement. The first percentage represents applicants admitted in 2004. The second is the same figure for 2014:
American: 24.6% 49.7%
Boston College: 16.6% 43.9%
Brooklyn: 23% 53.2%
UC-Hastings: 19.5% 49.2%
UCLA: 13.6% 28.1%
Florida Coastal: 35.6% 77.7%
Fordham: 19.3% 35.5%
Hofstra: 26.3% 61.2%
Illinois: 23.1% 41.9%
John Marshall: 35.7% 72.9%
Harvard: 11.3% 15.4%
Stanford: 7.7% 9.1%
Yale: 6.5% 8.9%
So even the high rent district has felt a slight sting, though it’s nothing compared to what’s going on in the outer suburbs.
As to when and where this will all end, applications are down another ten percent so far this year.