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May 13, 2015

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JM

I am just blown away by the fact that 8% of the applicants in this year's class will come from beyond May 8.

Derek Tokaz

So let's assume that the current trend (of slowing declines) is going to continue. This year there will be about 2.5% fewer applicants. Next year let's say 1.8% fewer, 1.2% after that, then 0.6% down, and four years out it stabilizes.

Those lost numbers aren't going to be evenly distributed among schools. How many schools can afford to lose, over the next 2-4 years, another 10-15% of their classes?

anon

Derek

To go one step further, assuming the top 100 enroll about 20, 000 students, what will the LSAT profile of the lower 100 schools be? The lowest 25 schools?

anon

And, to advance the question one further step: What will S have to say about the employment/earnings prospects of graduates of law schools that enroll a majority of persons whose scores were in the lowest quintile on the LSAT?

MILLION DOLLAR PREMIUM TO EVERY ONE OF THEM, FOLKS!

ENROLL NOW, BEST TIME IN HISTORY!!!

The headline elsewhere will be: LAW SCHOOLS ENROLLMENT UP AND NEARLY FULLY RECOVERED FROM POST 2008 LOWS

Observer

"I am just blown away by the fact that 8% of the applicants in this year's class will come from beyond May 8."

Law school marketing departments are on the job!

It would be amusing to see the volume of solicitations any moderately qualified student gets who has expressed any interest in law school.

JM

"Those lost numbers aren't going to be evenly distributed among schools. How many schools can afford to lose, over the next 2-4 years, another 10-15% of their classes?"

Very true statement. Ironically, the schools hit the hardest may be those in the US News 15-50 given that applicants in 160-170 range are still declining at a rate of about 7% annually. If these schools want to keep their LSAT profiles, they will have to reduce class size big time, and probably shell out big scholarship dollars too.

confused by your post

Well, it looks like there will be a few less seats to fill with new 1L's this Fall judging from the Youtube video I just watched. A cell phone video of last week's "meeting" between owners/adminstrators and Charleson SOL's faculty.

https://www.youtube.com/watch?v=zlJxfOJFvao&feature=youtu.be

Gotta love the msg to the faculty at the meeting. If the faculty don't want to lose their jobs they must personally appeal to Infilaw and tell it that faculty won't make any trouble. Beg Infilaw to reconsider buying Charleston and paying the owners millions. It's Infilaw or death.

Derek Tokaz

The man who signs the pay checks should be the one to sign the pink slips. - Ned

When you play the game of law schools, you fill seats or you're fired. - Cersei

Did you 'ear that? The school's too fat to fit in its budget. Go, run and find the admissions standards stretcher! - Robert

Any school that must say 'I am a law school' is no true law school. - Tywin

Fewer. There are fewer seats to fill. - Stannis

[Spoilers Ahead]

For the employment stats! - Olly

The Red Lady

Winter is coming.

Barry

Posted by: Derek Tokaz: "Those lost numbers aren't going to be evenly distributed among schools. How many schools can afford to lose, over the next 2-4 years, another 10-15% of their classes?"

And a substantial percentage of their tuition?

If they have to discount another 20% to get 'only' a 15% decline, that's a gross revenue adjustment of: 0.8*0.85 = 68% of where they are now. Paul Campos has made some back of the envelope calculations to guesstimate that a third or more of law schools are now in the red.

Knock off another 32%, and the number in the red might outnumber the ones in the black.

Kyle McEntee

Barry, you way underestimate the number in the red. One law school dean said to me just the other day that he thinks all but a small handful are running a deficit. This is consistent with what other deans have said to me. It is also consistent with Kent Syverud said publicly a year or two ago.

twbb

In terms of survivability it's not just a matter of numbers; law schools attached to selective universities are not going to let admissions standards get too lax and risk their brand name.

Al Brophy

@twbb, you raise an important question: how much can law schools attached to selective universities drop their admissions standards. I think central administrations aren't very sensitive to the kinds of fine distinctions that people here in the faculty lounge (and elsewhere in the law school world) draw about student (and faculty) quality. I'd be interested in your -- and other people's -- thoughts on this.

[M][@][c][K]

twbb, Al, Barry, Kyle:

It seems that to work out what is going to happen you need to put yourself in the shoes of a University or College President and his/her board. In doing so it is worth considering that as a group they tend to be ruthless – and that in many instances law schools have been established less as “prestige” addendums to the university and more as simple “cash cows.”

So start with the “prestige” rationale for having a law school – that to some degree depends on the law school being “prestigious.” If the law school has falling admission criteria, controversial employment outcomes, and is less prestigious than the institution as a whole, or a number of its other graduate schools, then the prestige rationale is in trouble. There are quite a few law schools whose rankings and prestige are “upside-down” vis-à-vis their host institutions.

Then consider the “cash cow” status of the law school. It is a pretty open secret that parent institutions have been milking the law school tuition pretty hard for a couple of decades. Two stories that revealed that reality were savage budget cuts at Catholic University due to the decline in tuition revenue from the law school since 2010 and the resignation of Philip Closius University of Baltimore School of Law over the efforts of the University to continue or even increase its extraction 45% of the law school’s tuition revenue.

We are now in a situation where very few law schools are running the sort of surpluses that allowed for the rake-off than their host institutions expected (and remember the ABA allowed at least 20% (and creative accounting it would seem allowed for more to be grabbed.)) Instead, law schools are operating in the red at many colleges and universities. So the question is how long will these host institutions tolerate a loss-making law school?

Returning the our hypothetical University or College President and his/her board, that question really comes down to “will this situation change?” Will there be an upturn in revenue due to rising tuition, falling discounting or falling costs. However, there is a constant tension between these factors – cutting costs runs the risk of a reduced reputation, as does cutting discounting for students with high LSAT/GPAs, which in turn leads back to discounting, etc. It is a vicious circle. They have to be thinking “the law schools has been arguing that the 'end is in sight' for enrollment and tuition declines for several years now – but are they materializing and when will things turn up?” Credibility must be running out.

I have long predicted that closing law schools will be a “wave” that will be triggered by the first few law schools hosted by serious colleges or universities unambiguously closing their doors. That by the way not be Charleston School of Law or any of the Inflaw schools, who can be characterized as dramatically dysfunctional and sui generis. It will be more mainstream institution. But I think the day is close.

Al Brophy

Thanks for this, [M ... K]. I suspect that many (perhaps most) law schools add prestige even if they are upside down as to ranking vis a vi the home institution. Maybe I'm wrong about this, but I don't think prospective students (other than law students) and alumni and administrators in the central administration are as sensitive to rankings as those of us who work in schools (or graduated from them) may be. To carry this out some more, I have a vague sense that the medical and dental schools at UNC are really well-regarded, and the history and English departments, too. But I know very little about three of those four.

Sure, rankings are trotted out periodically, but I have very serious question how much central administrations know (or care) about the quality of law schools. And I've been saying to people in conversations about law school closings for a long time -- this isn't an issue of continue spending at the current (and presumably unsustainable level) or close. There are a lot of steps that schools can (and I suspect will) take before closing, such as cutting faculty size and salaries. We've already seen dramatic declines in replacement of faculty; buyouts at some schools and outright layoffs at others. There's room for more of this before schools need to close. I think central administrations will be reluctant to close schools entirely because of the prestige of having a law school; because of entrenched interests from alumni to the community; because a law school can be a marketing tool for undergraduates; because success as an administrator is often seen as expanding a school, certainly not in contracting. There may be some schools closing; I'd expect that there will be. But I'll be surprised if it's going to be a lot and I suspect few if any will be those above what US News used to call the fourth tier (or what are now called the unranked schools). At any rate, time will tell.

twbb

I don't think any law schools are in imminent danger of closing, though I don't think it's outside the realm of possibility for a number of law schools attached to relatively prestigious undergraduate universities. Supposedly, one of the factors behind the closure of dental schools in the 1980's-through-00's was that the drop in applicants meant dental schools were getting much less selective, and the universities had a problem with that. And these tended to be at schools with fairly elite undergrad programs like Georgetown and Northwestern.

In the modern era it seems even more likely; one of the impacts of corporatization of the modern university is a greater focus on things like "strategic missions" and "branding," and it seems that every college around has spent the past decade trying to fight its way up the prestige totem pole. That doesn't necessarily mean that central administration is focused on the minutiae of USNWR ranking oscillations year-to-year, but I do think they will notice when their law schools are admitting students with median LSATs 6 or 7 points lower than they were a few years ago, or if the USNWR reports show a significant rankings drop over several years. That reduction in selectivity basically creates a fundamentally different student body, and I think that will start to become noticeable.

Now obviously there's a reputational hit these schools would take from having to close a school that has to be taken into account, and the potential financial hit of dealing with the inevitable lawsuits from aggrieved law faculty, but in the end those universities are going to do what they think benefits the university as a whole. And I don't think faculty senates are going to be too sympathetic considering the typical pay and work disparity between law professors and other disciplines. When law schools were subsidizing the university as a whole that was one thing, but now that this has vanished a lot of places I think the political capital of the law school administration and faculty has dwindled significantly, and law schools tend to have shockingly large faculties; as a law student I remember looking at the faculty directory and seeing a large number of full-time professors I had neither taken nor even heard of.

Kyle McEntee

"And I don't think faculty senates are going to be too sympathetic considering the typical pay and work disparity between law professors and other disciplines. When law schools were subsidizing the university as a whole that was one thing, but now that this has vanished a lot of places I think the political capital of the law school administration and faculty has dwindled significantly"

This is key. The politics will be what does schools in, I believe.

[M][@][c][K]

Al,

I take it though that you agree that Charleston would not be seen as a bellwether - that, rightly or not, if it closes as seems likely, it will be distinguished in various ways by many commentators.

anon

twbb and Kyle have it right.

It would be error, perhaps, to assume that the arguments propounded by law faculty members, here in the FL and in other like settings, have had no negative effects on the perception of legal academia, and thus, law schools in general.

Every prickly, undertrained/underqualified and biased exercise in dilettantism used to support the status quo in legal academia, and every bit of praise heaped upon such efforts by some with a vested interest in the outcome, reinforces the conclusion that some things are very, very wrong with the law school ethos.

Once this perception sets in (and it has already) the vain, self interested arguments put forth to stave off the inevitable sound increasingly feeble.

We have the same applicant base that existed long before fifty or so more enterprises rose up to feed at the federally supported trough. Law schools rapaciously jacked up tuition, even at the schools most assuredly at the bottom of the barrel, with reckless abandon.

What justification exists now for those bottom feeders to continue? As admission standards sink, the "opportunity school" rationale disappears.

Let the culling begin, and let it begin where it should: from the bottom up.

Al Brophy

I think you're exactly right, [M ... K]. The situation at Charleston isn't a good predictor of what's going to happen (or is happening) at most other schools.

(I guess I'd add that I'm a little surprised that Charleston isn't doing what I've said other schools have done and are going to do -- which is to cut more expenses before closing.)

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