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The end of Dickinson?

[ 77 ] November 26, 2013 |

Over the past few weeks, a number of people employed by and connected to Penn State’s law school have helped draw the following portrait of what’s going on there:

PSU’s law school is the brainchild of Graham Spanier, who early in his tenure at the university’s president decided that the university ought to have a law school, because prestige etc. At that time, Tom Ridge was Pennsylvania’s governor. Ridge is an alumnus of the Dickinson School of Law, a small private law school in Carlisle, which is the seventh-oldest law school in the country, having operated since the early 19th century. (It’s never been affiliated with Dickinson College, the well-regarded liberal arts college in the same town).

Spanier decided that the best way to advance this scheme was to convince Ridge to allow PSU to acquire Dickinson. Over the next few years complex political negotiations — in which Ed Rendell apparently played some role as well — eventually produced the following deal: The law school would become part of PSU, and a second campus for the school would open in State College, site of PSU’s flagship campus. PSU agreed to keep the Carlisle campus open until at least 2025, or 2020 if the university declared a financial exigency. The university committed to spending an enormous sum — about $130 million — on creating the new campus and updating the old one. Consequently, PSU built a $60 million law school building in State Park, which opened in 2009, and spent an additional $50 million on a new building and the upgrading of the existing physical plant at the Carlisle campus. The new Carlisle facilities were completed in 2010.

Spanier’s “vision” called for a law school with a typical first year enrollment of around 240 students, with two thirds of these in State College and the rest in Carlisle. This exercise in classic imperial administrative overstretch began to fall apart almost immediately. Predictably, the faculties of the law school’s two campuses didn’t get along. The State College faculty wanted to chase after rankings, which meant playing the academic prestige game, which in turn meant trying to hire faculty who would publish lots of law review articles. The righteous remnant in Carlisle, also quite predictably, started thinking of itself as focused on professional training — “experiential learning” in the current jargon — rather than on “theory.” (“Theory” is the buzzword for anything smacking of academic pretentions in this thing of ours).

The spat got bad enough that, even though the State College campus had been open for just a few years, the two faculties voted to file for academic divorce, and accepted an arrangement whereby the law school would be spun off into two separately accredited law schools. The ABA is currently finishing up on giving its blessing to the split, which should be completed by next fall or shortly thereafter.

If you think this sounds like a terrible idea, you haven’t heard the half of it. While the faculty was fighting over the wedding china and custody of the kids, enrollment and revenue were both collapsing. The two campus model was premised on having around 700 JD students enrolled at any particular time, while jacking up tuition drastically (it went from $25,500 in 2004 to $42,000 this year). The school enrolled first year classes of between 205 and 230 students in the late aughts, but over the last three years enrollments have plunged. This fall PSU 132 students matriculated at the two campuses, with just 34 of those matriculants beginning their legal educations in Carlisle’s new $50 million digs. (The decline in applications has been even steeper, from 5,326 in 2010 to 1,885 in 2013. H/T JDU.)

Not surprisingly, this whole operation is currently bleeding red ink at what I’m told PSU’s central administrators consider an unacceptable rate. Student-faculty ratio has plunged from 17.3 to 1 in 2004 to 8.8 to 1 in 2013 (for comparison purposes, average law school student-faculty ratios across the nation were 25 to 1 in 1990, 18 to 1 in 2000, and 14.3 to 1 in 2012). The school is spending millions of dollars a year more than it’s bringing in — perhaps $10 million more this fiscal year — and apparently things are going to get worse before they get better, because PSU announced this week that it’s cutting tuition in half for Pennsylvania residents. This announcement provides a dire hint regarding what the school’s current application volume looks like.

Note that this $20,000 annual “scholarship” doesn’t feature any stipulations, and is granted automatically to any state resident the school admits, so it’s really nothing but a straight up 50% price cut. Note too that current PSU 1Ls and 2Ls aren’t eligible for these “scholarships,” which means that next year many if not most of the school’s 2Ls and 3Ls (only 18% of last year’s student body got tuition discounts of half or more) will be paying twice as much in tuition as the entering 1Ls.

PSU’s law school has a total endowment of only $46 million, which is currently being split up between the soon-to-be separate schools. Assuming something like an equal split, each campus will be getting about a million dollars a year in endowment income going forward.

From a financial perspective this can’t and won’t work. Why then, given this ongoing collapse in law school operating revenue is, the university choosing to greatly increase operating costs, by forgoing all the economies of scale generated by being a single law school with two campuses? Now PSU will have to finance two separate law school administrations, two admissions processes, two career services operations, two development offices, etc. etc. Why would PSU’s central administration agree to this obviously untenable arrangement?

One possible answer is gross administrative negligence, which, given the current state of higher education in general, is a theory that has Occam’s Razor to recommend it. I suspect the real answer is rather more Machiavellian. On this account, the faculty divorce is providing central with an opportunity to downsize PSU’s law school operations relatively — at least from central’s perspective — painlessly. Once it has been spun off, the Carlisle version of the school will simply be allowed to die (recall that the campus can be closed in a little more than six years from now if the university declares a financial exigency), thereby permitting PSU to offload around a third of its tenured faculty all at once. The physical plant will be sold off to Dickinson College for pennies on the dollar, the university’s budget will unburden itself of about a dozen expensive faculty lines, and the Dickinson College of Law, will, after nearly two centuries, cease to exist.

It may well be that the Carlisle faculty — who are for the most part quite senior — even recognize this, and would prefer to run out the clock in this fashion, rather than remain tied to their State College brethren. We shall see.

When after all it was you and me

[ 199 ] November 22, 2013 |

oswald

I had just turned four, didn’t speak any English at the time, and my parents didn’t own a TV (although my father went out and rented one from the corner drug store that afternoon). So I don’t have any memory of the event, although I’m told I was on a swing-set on the outskirts of Washington DC when my father came running up and said in Spanish to my grandmother “they’ve killed Kennedy.”

And I suppose “they” did, if one takes a appropriately sociological perspective on the event.

Some thoughts:

(1) For today’s college freshmen, 9/11 is pretty much what the JFK assassination was to me: a historical event that occurred after we were born, but could have just as well happened 50 years before. This is one reason why the concept of the baby boom “generation” is not very useful: for people born toward the end of it, “the Sixties” — which as many people have said began that day — mostly happened for us later, when we saw the decade replayed on TV and in movies and (endlessly) on the radio.

(2) It’s also an endlessly repeated truism that the public’s eventual rejection of the official story told by the Warren Commission reflected a fundamental shift in the America people’s willingness to trust the federal government in particular and authorities in general. I wonder how much actual evidence there is for this claim?

(3) I’ve never waded into the controversy over the assassination itself, so I have no opinion regarding it, but having just watched a couple of documentaries on the subject, I’m reminded of a story about Sir Walter Raleigh. Sir Walter, it’s said, proposed during his imprisonment in the Tower of London to write a history of the world. One day after he began this project, a fight broke out between two workmen in the courtyard below, which resulted in the death of one of them. Sir Walter tried to find out what the fight was about, and found he was unable to do so. Thereupon he abandoned his history.

(4) I will say that the Jim Garrison story ought to shake the faith of those who believe that it’s not possible for literal lunatics to ascend to important public positions inside the iron cage of bureaucracy.

(5) Oswald bought his rifle via mail order for $12.65 ($96.55 in current dollars).

Brand new Cadillac

[ 75 ] November 20, 2013 |

Matt Bodie reacts to a couple of recent LGM posts pointing out that most law schools are currently losing money because they’re spending more than they’re bringing in, which means they’re going to have to spend less:

Not to rehash these issues for the ump-teenth time, but I wish reformers like Campos would at least acknowledge some of the benefits of the current (but likely passing) model for legal education, such as smaller classes, more clinical opportunities, and more extra-educational services. Sure, that’s expensive, but is trying to provide a better product rent-seeking? Not to say that there aren’t examples of rent-seeking, such as higher salaries and cushy benefits. But smaller student-teacher ratios mean you are hiring more teachers, not more expensive ones, and tenure existed in the 1980s, too.

Campos doesn’t come out and say this, but apparently he wants to return to the days when law schools had largely big-lecture Socratic classes, a couple of clinics, and students teaching legal research and writing. If so, I wish he’d say it. I think there’s a good argument for the old method: a “VW Bug” version of legal education may make more sense for more people than a Cadillac one. (The nice cars do have Corinthian leather!) But once he came out with something concrete, people would have grounds for criticizing his approach.

This assumes that the form and substance of legal education in America today is significantly different than it was in, say, 1990, when the average student to faculty ratio was 25 to 1, as compared to the current 14 to 1 figure. But is it? I’m not aware of any studies of this question, and Bodie doesn’t refer to any. I do know that a glance at the course schedules of the two law schools I know best — the one at which I teach and the one from which I graduated — reveals that, in these two cases, there is very little apparent difference in how law school education is structured from its form 25 years ago.

For example, at the University of Michigan, all the traditional first-year classes continue to be taught, and continue to be taught in very large sections, as they were when I was a student there in the mid/late 1980s. First-year students still take Contracts, Property, Torts, Criminal Law, Civil Procedure, and Constitutional Law — exactly the same courses I took as a first-year in 1986. Indeed three of these courses are being taught by the very same professors I had nearly 30 years ago. (The one significant alternation to the first-year curriculum is the addition of a Legislation and Regulation class, as law schools are now beginning to acknowledge that knowing something about the contemporary administrative state may be of more practical relevance than memorizing The Rule In Shelley’s Case.)

For the class of 2014, all of these classes were taught in sections of 60 to 120 students, with the most common class size being 90. In other words, at my alma mater, the entire first year curriculum looks almost identical in all respects to what it was in the 1980s.

The situation at the school at which I teach is the same. Although our first year class is one half the size of Michigan’s, and our student-faculty ratio is quite a bit lower (9.7 to 1 as compared to 12.8 to 1), we don’t have more than three sections of any first year class (the required classes are identical to Michigan’s, which again are nearly identical to what they were at the two schools 100 years ago; law schools are not exactly hives of pedagogical innovation and experimentation), which means that first-year classes will have either 60 or 90 students in them (one class has only two sections, while the rest have three).

As for upper level courses, the situation seems similar. The classic courses which students are expected to take — Evidence, Tax, Corporations, Bankruptcy, Family Law, etc. — are being offered in one or two sections per year, which means these classes will be very large as well (at Michigan, which is twice as large as CU, a lot of these classes will have 150 students in them, as they did back when I took them).

Not everything in legal education is exactly the same as it was 25 years ago. The radical drop in student-faculty ratio probably means that there are more upper-level niche courses, reflecting faculty interests, featuring small enrollments (although since reductions in teaching loads have eaten up the functional effect of much of the decline in student-faculty ratio, even this isn’t necessarily true). Career services offices and the like are far more elaborate than they were (whether this actually helps get graduates jobs is another question altogether). And at both CU and Michigan there are many more clinical offerings than a generation ago. Yet the data I’ve seen on this subject indicate that the large majority of law students are still graduating without taking a single clinic. Clinics are extremely expensive, and they also tend to involve a lot more work for most students than intermittently coming to class for 14 weeks before “learning” the material from a canned outline for the purposes of single issue-spotting in-class exam. If you think this is a hyperbolic description of the pedagogical experiences of upper level law students, I recommend browsing through a few of the posts in this thread. Typical exchange (there are dozens in a similar vein):

Legitimate 3L question:

Really easy class, two hours long, 3 credits, all it is is a little discussion panel on law firm management and client interaction, run by the career services office with tons of guest lecturers, everyone gets an A, and the final grade is based on just doing a 15 minute presentation.

What’s the catch?

It’s on Friday, 12:30-2:30.

WHAT SAY YOU, TLS?

No. Fridays are sacred. The only way you take this is if you don’t have class on Mondays so you still get a long weekend.

Motherfuck Friday classes. But I’d take one if I knew it was a guaranteed A. Just plan the schedule around that. Frankly, a Friday class is fine if you can schedule your other classes on only Wednesdays and Thursdays (plus another Friday class).

4-day weekends every week is T[he]C[redited]R[esponse] for 3LOL, IMHO. I’ll have Th, F, Sa, Su off plus no class until Monday at 6. So 4.5 day weekend.

At this point I can’t resist quoting from the following oration, given this fall to the incoming class at the University of Chicago by a new member of the law faculty:

What differentiates good lawyers – graduates from this law school – is the ability to advise clients about what those laws and documents actually mean in the real world, how they affect human interaction, and most importantly, how those effects can be changed.

To prepare you for this – and we do prepare you for this – we will teach you to explore how rules, policy, and human behavior interact. It is precisely for this reason that law school is (more than any other area of study) so interdisciplinary. You cannot understand the rights that a lender will exercise against a bankrupt corporation without understanding finance, economics, psychology, political theory, and philosophy, to name a few.

A few? Mastering a large swath of the humanities and social sciences while learning some law and taking a lot of four-day weekends sounds like something of a challenge.

I feel my snark getting the best of me, but here we have a prime example of the real anti-intellectualism that plagues law schools, as opposed to the kind supposedly emitted by the awful scam blogs and the unsympathetic media the young Prof. Casey decries in his remarks. Does Casey actually believe that a genuine “understanding [of] finance, economics, psychology, political theory, and philosophy, to name a few,” is what his law school provides to its, as Milton Friedman would put it, “customers,” and that achieving this astonishing (and, needless to say, wholly imaginary) feat of erudition is necessary before one can become a good bankruptcy lawyer? And how exactly is this pedagogical miracle being performed, in the context of something that, from the published course schedule, looks very much like the same program that his school, and indeed almost all law schools, have been offering since the memory of man runneth not to the contrary?

In short, it appears that what law schools have done is continue to sell the same VW Bugs they were selling 25 years ago. They’ve just started charging Cadillac prices, while making increasingly extravagant claims that they’re selling magical vehicles that can take you to the Moon and back in time, not just down the Indiana turnpike. Also, the cars often don’t have engines in them any more.

Precisely what to do about this is in some ways a complex question, as the answers will vary a lot depending on the institution. But in other ways it’s not complex at all. I’ll address that issue in detail in another post.

More on law schools losing money

[ 60 ] November 14, 2013 |

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.

Borges y Yo

[ 48 ] November 12, 2013 |

um msu

The other one, the one called Borges, is the one things happen to. I walk through the streets of Ann Arbor and stop for a moment, perhaps mechanically now, to look at the arch of an entrance hall and the grillwork on the gate; I know of Borges from the internet and see his name on a list of assistant coaches or in a wikipedia entry. I like the west coast offense, jet sweeps, power running games, Krispy Kreme donuts, and Youtube highlights of Anthony Carter; he shares these preferences, but in a vain way that turns them into the attributes of an actor.

It would be an exaggeration to say that ours is a hostile relationship; I live, let myself go on living, so that Borges may contrive his offense, and this offense justifies me. It is no effort for me to confess that he has achieved some valid game plans, but those plans cannot save me, perhaps because what is good belongs to no one, not even to him, but rather to the television rights and the tradition. Besides, I am destined to perish, definitively, and only some instant of myself can survive in him. Little by little, I am giving over everything to him, though I am quite aware of his perverse custom of falsifying and magnifying things.

Schembechler knew that all things long to persist in their being; the tailback eternally wants to be a tailback and the wolverine a wolverine. I shall remain in Borges, not in myself (if it is true that I am someone), but I recognize myself less in his strategies than in many others or in the laborious ranting of a fan. Years ago I tried to free myself from him and went from the mythologies of the message boards to the games with down and distance, but those games belong to Borges now and I shall have to imagine other things. Thus my life is a flight and I lose everything and everything belongs to oblivion, or to him.

I do not know which of us has written this post.

80% to 85% of ABA law schools are currently losing money

[ 115 ] November 12, 2013 |

Over the past few months I’ve studied the current operating budgets of a representative sample of the nation’s 202 ABA-accredited law schools (there are several dozen non-ABA law schools in America, mostly in California, whose operations I know nothing about).

I acquired these budgets via various routes, including asking schools for them, open records requests, tax filings, and private communications with individuals. Law school budgets are somewhat arcane documents, both because each school has its own accounting , and because most schools are located within universities. The latter fact creates various complexities in regard to measuring what are known in the business as “indirect expenses” — that is, university-wide operating expenses that must be distributed among the institution’s various schools and colleges.

Nevertheless, it’s possible to get a tolerably accurate picture of a law school’s true financial situation via budget documents, since most schools get almost all their operating revenue from two sources: tuition and gift income (the latter comes in the form of endowment income and annual giving). Indeed at most law schools tuition revenue accounts for the vast majority of operating resources — only a few schools get even 20% of their revenue from gifts. The exception to this generalization is provided by the increasingly small number of public law schools that still get some sort of significant subsidy from tax dollars. I address this complication below.

As for expenses, these tend to be both homogenous and fixed, consisting largely of personnel compensation, in a context in which serious downsizing of labor costs can’t be undertaken without declaring a fiscal emergency — a move which has serious reputational costs — and physical plant operation. Costs that can as a matter of institutional politics be treated as variable — for example, library subscriptions, adjunct faculty, and low-status staff — are by comparison relatively small.

Furthermore, law schools tend, even in the best of times, to budget on the assumption that they will spend almost all the revenue they expect to generate. This is a natural consequence of the obsession with law school rankings. It’s important to realize that this obsession provides the key ideological justification for law school budgetary practices. Law schools “must” spend more money in real terms every year because other law schools are spending more money every year. This is the all-purpose justification for hiking nominal tuition in real terms every year: we have to raise tuition because we have to spend more money, because otherwise we’ll fall behind in the competition for a crucial positional good.

Thus tuition goes up because costs go up, although, as Brian Tamanaha argues in Failing Law Schools, it would be more accurate to characterize this pattern from the other direction: law schools spend more every year because they raise tuition every year, and they raise tuition every year because they can, courtesy of the federal government’s impecunious educational loan policies. (Law schools can charge literally whatever they want to whoever they choose to admit, and, subject to trivial exceptions, the federal government will loan that entire amount, including living expenses, to the admitted students).

This system is a sure-fire recipe for creating fiscally reckless institutions, that charge prices for their outputs that bear no relation to the actual economic value of those outputs, which is of course exactly what has happened.

However, this sort of system also invariably contains the seeds of its own destruction: the pyramid collapses, the bubble pops, the extraordinary delusions that fuel the madness of crowds dissipates. And, in American legal education, this is what appears to be happening now.

Over the past couple of year, the disjunction between the cost of law school and the marginal economic benefit provided by a law degree has become sufficiently self-evident that the market for places at ABA law schools has begun to collapse. Schools have slashed both enrollment qualifications and real tuition (via semi-invisible discounts), yet first-year enrollment is down nearly 25% since 2010, and real tuition revenue is down by nearly that much (because over the past three years increases in nominal tuition have, it appears, only slightly outstripped increases in off-sticker discounting).

My survey of law school budgets suggests that, on average, law school revenues will be down this fiscal year by about 15% in real terms from where they were three years ago. Costs, meanwhile, have not decreased by the same amount — if anything, they are slightly higher (as of now the rankings struggle continues unabated). Very few law schools were running 15% operating surpluses three years ago, which means that the large majority of law schools — I estimate between 80% and 85% — are incurring significant operating deficits in the present fiscal year.

Note that this estimate is conservative, in that it treats state tax subsidization at public schools as operating revenue rather than an operating subsidy. It is also conservative in that it assumes that no universities maintain long-term budgetary policies that require their law schools to provide subsidies to the rest of the campus, in the form of significant revenue over expenses (aka, the infamous “cash cow” model of legal education).

The likely consequences of this situation will be the subject of another post.

Law professor advocates requiring law school to be four years instead of three because there’s a lot more law these days

[ 61 ] November 6, 2013 |

Is joke yes?

Not!

[T]here is today much more law to learn than there was in the past. There are today whole new fields of law which did not exist a generation ago, e.g., health care law. Moreover, within pre-existing areas of the law, the amount of law has expanded enormously over the last two decades.

Consider, for example, the area in which I write and teach, taxation. No one doubts that the current tax law is more complicated and extensive than the taw law in effect when I went to law school. Important subspecialties, e.g., pensions, partnership tax, and international tax, have grown in complexity and importance.

Many critics belittle the substantive business of legal education by dismissing my tax courses as theoretical or doctrinal. But my courses are where my students learn the law and there is much more law to learn than there was a generation ago.

I don’t even . . .

Compare and contrast: More books are being published than ever before. We should therefore require every elementary school to spend more time teaching people to read.

On top of everything else, this guy is a tax law professor! If there’s a single area of law where it should be obvious that teaching people the minutiae of the current legal rules makes about as much sense as forcing people to memorize current phone numbers, it would be tax, where the substantive rules are constantly changing at a dizzying pace.

But wait, there’s more:

The most serious argument against a fourth year of law school is the additional cost it would entail. Legal education is already too expensive. Adding a fourth year would impart even greater urgency to task of controlling the expense of law school, just as there is currently great urgency to the task of controlling the costs of undergraduate education.

As a practical matter, this adds up to arguing that law school is too expensive, so let’s reform it by making it more expensive.

Two features of this sort of thing leave my mind especially boggled:

(1) The complete absence of even a gesture toward the need to engage in some sort of actual cost-benefit analysis. The argument for adding a fourth year of law school must be based on the premise that the marginal value of a fourth year of law school for law graduates would be greater than the marginal cost (For obvious reasons neither Prof. Zelinsky nor anyone else is going to be willing to defend this proposal on the grounds that it would be good for law schools). But the author clearly feels no need to make such a gesture. The law school reform movement is often criticized for being anti-intellectual, but it would be difficult to imagine a more pseudo-intellectual atmosphere than one which generates arguments of this type.

(2) The apparent pointlessness of this sort of proposal. Individual law schools are of course already free to add a fourth or fifth or tenth year of law school if they wish, but they don’t, because almost nobody is going to pay for a four-year JD degree if they don’t have to (this is just another way of saying that, without enforced cartel pricing, the market for four-year JD degrees remains completely non-existent, because almost nobody believes that a fourth year of law school is going to be worth the price).

So the four-year law school can’t come into existence without a rule requiring it issued by process that would include the ABA promulgating such a rule, and state bar associations assenting to the new ABA rule (This is how the three-year law school requirement was created in the 1920s. Prior to then there were many two year law schools, although as the ABA noted at the time, these schools tended to cater to the Irish Italians Jews working people the kinds of students that lowered the overall quality of the profession.)

The odds of such a rule being promulgated can be safely calculated as less than zero. So what is the point of this sort of thing? I suppose the answer has something to do with psychology of professional identity maintenance, or something. . . Commenter Bloix makes the perceptive observation that the real function of this kind of argument is as a sort of Overton Window strategy. Whether such strategic considerations are considered consciously by their authors is another interesting question.

The law school crisis: An update

[ 24 ] November 5, 2013 |

Updated below

Almost exactly two years ago, in the fall of 2011, Brian Tamanaha took part in a forum at the National Law Journal regarding whether law schools were in crisis. Tamanaha noted sardonically, and correctly, that “law schools are doing just fine, thank you.”

We should be clear: law schools are NOT in crisis. Although a number of law schools shrank their entering class in 2011, enrollment at most law schools remains near all time highs, and tuition is sky high, especially at private schools. Law schools have more resources than other university departments. Law professors are paid far more than other professors and earn more than most lawyers.

The real crisis, he pointed out, was being endured by law school graduates, who faced mountains of debt and grim job prospects.

Since then, in part because of Tamanaha’s work, the situation has changed drastically. When Tamanaha took part in the NJL forum, the most recent enrollment data (for the entering class of 2010) revealed that ABA law schools had enrolled their largest first-year class ever, featuring 52,500 matriculants. These schools had enrolled a record total of 153,700 JD students over the previous three years. Law schools were both larger and much more expensive than ever: average private law school tuition had increased, in constant, inflation-adjusted terms from $15,000 in the mid-1980s to $40,000 — an astonishing 167% increase in real terms. And resident tuition at public law schools had increased by a vastly greater percentage.

What’s happened since then is what Matt Leichter has called “the law school tuition bubble” has burst. Applications have plummeted from 88,000 in 2010 to around 59,400 in 2013. And the trend shows no sign of reversing: LSAT administrations were down by 11% in October year over year, marking the 16th consecutive administration in which the number of test takers had fallen relative to the previous year. Halfway through the current administration cycle, it appears that a total of around 103,000 tests will be administered, based on historical patterns. This in turn is likely to yield around 54,000 to 55,000 total applicants in this application cycle.

In other words, around 10% fewer people will apply to law school this academic year than were admitted to law school in 2009-10. Even with more and more schools adopting de facto open admissions policies, these numbers mean that the trend in first year matriculant totals will, by next fall, look something like this:

2010: 52,500

2011: 48,700

2012: 44,500

2013: 40,500

2014: 38,000

It’s important to recognize that the effect of this sort of pattern is cumulative: each year, a larger graduating class is replaced by a smaller entering class, so that each year the effects of declining enrollment become more severe. For example, by next fall, law schools will have enrolled 123,000 people over the the previous three years — meaning that, assuming attrition levels have remained constant, there will be 20% fewer JD students enrolled in ABA law schools than there were four years previously. And even if enrollment were to plateau in 2015, schools will be looking at declining total enrollments for at least two more years beyond that.

What about tuition? While nominal tuition has continued to increase, it is far from clear that real per capita tuition — the amount actually collected per law student after taking into account the increasingly aggressive price cutting schools engage in, in the form of faux “scholarships,” will be higher next fall than it was in 2010. Indeed, some schools are now taking the unprecedented step of actually slashing nominal tuition: Just this week Ohio Northern announced that it is cutting nominal tuition by 25% next year, while last month Iowa (whose entering class is half as large as it was two years ago) announced it was drastically cutting out of state tuition for non-resident students.

All this has radical consequences for law school operating budgets. Most law school budgets are heavily tuition-dependent, as only a few schools have large private endowments, and very few faculties generate much in the way of grant money to help fund research. In addition, since almost all law schools are, as a matter of tax status, non-profits, and furthermore are engaged in a negative-sum positional game in which they fight for relative status with each other via idiotic “rankings,” schools have tended to plow almost all their ever-increasing revenue back into ever-increasing operating costs — with the exception of whatever revenues are extracted by central university administration to subsidize other university programs (As we shall see, the extent to which law schools actually subsidize other university operations varies enormously, and indeed at present it appears that, at a large number of schools, any subsidy is now going the other way). Even more problematically, these increasing operating costs have, for reasons that will become clear, a tendency to become fixed rather than variable. Any slowdown in revenue growth, let alone an actual decline in revenue, is thus going to produce serious budgetary strain.

In any case, it’s clear that a very large number of law schools are no longer doing just fine. How many? That will be the subject of a subsequent post.

Update: Further discussion.

From each according to his abilities

[ 105 ] November 4, 2013 |

Tales from the New Gilded Age:

Last week, childlike Business Insider boss Henry Blodget publicly bemoaned the fact that a fancy New York restaurant employs bathroom attendants. Now, Henry’s dream has come true: the bathroom attendants are all getting fired. Great . . .

Thus, Henry Blodget, a millionaire, has successfully convinced Keith McNally, a millionaire, to fire several low-wage employees, in order to avoid any potential inconvenience to Balthazar-dining millionaires in the future.

I have mixed feelings about this. On the one hand several people who probably don’t have the option of becoming the publishers of crappy internet publications or hedge fund managers are now unemployed. On the other, the jobs they lost consist of quasi-feudal make-work that wouldn’t exist in any tolerably egalitarian society, whose primary function is to make the Masters of the Universe feel more potent than the ED pills they wash down with bottle service champagne.

Bad publicity leads to tragic consequences for law school dean

[ 28 ] October 31, 2013 |

obrien

Last week somebody at New England Law decided to leak the fact that John O’Brien was strong-arming the faculty into accepting a host of buyouts, via various forms of bureaucratic terrorism.

On Tuesday, the Boston Business Journal reported that next year (not now) O’Brien will take a 25% pay cut, which will reportedly reduce his salary to $650,000. (NEL’s Board of Trustees saw fit to pay O’Brien $867,000 in FY2011 and $865,000 in FY2012. His salary for FY2013 and FY2014 is not public information).

As a point of comparison, the University of Michigan paid the dean of the law school $186,000 in 1980 (in 2012 dollars), $325,000 in 2005, and $470,000 in 2012.

Lou Reed

[ 109 ] October 27, 2013 |

lou reed

Lou Reed died today.

He had a liver transplant in May.

Brian Eno remarked that, while only 30,000 people bought a copy of the Velvet Underground’s first album, all of them started a band.

Decided schematic advantage

[ 40 ] October 26, 2013 |

weis

Baylor put up 505 yards of total offense against Kansas tonight.

In the first half.

. . . I just looked up Weis’s contract, and he’s guaranteed $2.5 million per year for five seasons, 2012 through 2016. In other words there’s no buyout provision! (KU is still paying Turner Gill six million in guaranteed money after firing him after just two seasons.) Given Weis’s previous track record, this has got to be the worst college football contract ever.

Also, in keeping with the fundamental principle of contemporary American life that rich people should not be forced to spend their own money to buy things, we have this:

Weis also receives the use of two vehicles, a term life insurance policy in the amount of $2 million, travel expenses for his wife and two children to attend road football games, nearly all revenue from summer camps and clinics, 50 tickets to home football games and six tickets to men’s and women’s basketball games, the use of a suite at Memorial Stadium, and a membership at Lawrence Country Club that includes all business-related expenses.

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