What Matters Most (in legal ed these days)

For those of you who noticed I hadn’t posted here lately, thanks for noticing.  I’ve been listening and thinking, two virtues we all too often honor in the breach.  What I’ve mostly been listening to and thinking about is the swelling threnody bemoaning—or in some cases celebrating—the impending Demise of Legal Education As We Know It.

What all this shouting about Fraud, Failure, Exsanguination, Plague and Death has given me is an appetite for some perspective.  (My favorite Thanksgiving side dish, inexplicably not served in many American homes these days.  Go figure.) 

What kind of perspective?  Let’s start with some clear thinking about What Matters Most in legal education’s current circumstances.  What I mean by this is that we ought to start our discussion about What’s Broke and How To Fix It by isolating, among the many matters of legitimate concern at this time of profound and rapid change, which ones are the most fundamental—the ones that provide the necessary backdrop and context for the rest.

I’m going to start that effort here. I’m working on a longer piece that will explore these issues at greater length and with some effort at empirical support, but as the lamentations swell, I’ve become increasingly concerned that this question is getting drowned out, and at some considerable expense to clear thinking.  In my efforts to isolate What Matters Most, I imagine I will exasperate quite a few of you who are understandably preoccupied with issues that I don’t think Matter Most.  So let me be clear:  The issues that I don’t think Matter Most are still very important, and deserve concerted attention.  But those issues are not are the ones that necessarily define the context for plausible definitions of problems and solutions.  First things first.

There are roughly three categories of contumely being heaped on the legal academy these days.  Two of them have received disproportionate attention, and what’s striking is that they are pretty clearly not the ones that Matter Most.  Those two are arrays of related contentions (1) that law school fails to prepare students for practice; and (2) that law school costs too much.  Let me say again before readers start calling me names in the Comments that these concerns are, in one formulation or another, both quite important and quite well taken.  But they’re not What Matters Most. 

What Matters Most is that there are today significantly more seats in accredited American law schools than there are entry-level law jobs for the emerging graduates.  This is obviously neither an original nor a novel observation; lots of people in addition to me have written about it.  But its fundamental importance has received surprisingly little attention. 

To appreciate why it’s important, let’s refine the observation a little.  You can argue about how big the overproduction of law graduates is right now.  Numerous commentators have focused on ABA employment statistics counting the number of law graduates who have found full-time, long-term jobs requiring a law license within nine months of graduation to argue that something like half of all recent law graduates are “unemployed” or “underemployed.”  For reasons I have elaborated on previously in this space, I think this overcounts the number of law graduates unable to make good use of their law degrees in the job market.  But however you count it, the overproduction is currently very substantial.  I’m still working with the data, but I would estimate overproduction of law graduates today at about 1 in 3—that is, that roughly 1/3 of recent law graduates cannot get a job that makes good use of their law degrees. 

You can also argue about how long the overproduction will last—that is, how much of this overproduction is cyclical, caused by depressed demand for legal services resulting from our depressed economy; and how much is structural, resulting from changes in the provision, staffing and pricing of legal services driven by changes in technology and business practices.  The difference is critical, because cyclical forces should largely resolve themselves as the economy eventually improves, while structural forces should force long-term reduction in the demand for young lawyers regardless of the pace of economic recovery.  I was on record early with the view that the changes we are observing in recent years are much more structural than cyclical in origin, and what has happened since has only confirmed that the sudden reductions in law jobs that have emerged since the economy crashed have resulted predominantly from pent-up structural forces that had been building for years. 

If that’s right, What Matters Most is the current and foreseeable future overproduction of law graduates.  Period.  This matters more than law schools’ pervasive failures to prepare their students adequately for practice—failures that, by the way, have persisted for at least a generation and probably two during which demand for young lawyers grew rapidly and consistently.  Why?  Because the reason that substantial numbers of recent law graduates cannot get a law-related job is not for lack of practical training.  It is for lack of jobs.  Schools that improve their practical preparation may help their graduates seize a marginally greater share of the limited law jobs available, but they will not materially expand the job market.  While my friends in the Crisis Chorus would probably liken this to improving your chances at Musical Deck-Chairs on the Professional Titanic, I reject this metaphor, but only because I deny the analogy to the Titanic, not the very apt analogy to musical chairs.  Again, this is not to say that curricular reform is not very important and long overdue, but it is not What Matters Most.

Similarly, overproduction of law graduates matters more than the excessive cost of a law degree (and the indiscriminate availability of government lending to fuel its increase).  Why?  Because the reason that substantial numbers of recent law graduates can’t get a law-related job, or a law-related job that pays enough to service their student loan debt or economically justify the cost of their professional degree, is not mainly because they are overburdened with debt.  It is because they are undersupplied with jobs.  If there were any more law-related jobs available, even at very low pay, the unemployed and underemployed recent law graduates extant today would be swarming to fill them.  But they don’t exist.  And lowering the price of a law degree will not create more law jobs.  In most markets, if you lower price, demand rises.  So if you lower the price of a law degree, on the margin you will induce more people to apply to law school (lower cost; lower risk; why not see how I do?), and create an even greater oversupply of law graduates.  Is this wise?  Yet again, I am not suggesting that there is much good to say about the manner in which legal education is currently priced and funded.  Nor am I suggesting that every law school should remain as expensive as it is.  But I am suggesting that, if the markets want cheaper law degrees, ordinary price competition (with some interference from regulatory forces such as accreditation and licensure standards that may need attention) should help provide solutions.  Watch for it in the next 12-24 months.  But with all respect to Jimmy McMillan, I’m not prepared to join The Rent Is Too Damn High Party.

I’ll have more to say about this in coming months, but this post is already long enough.  The long and the short of it is that What Matters Most is that there are too many law-school seats and not enough law-grad jobs.  In most markets, what happens when there is an oversupply is that production and price fall until the market clears.  That’s already happening today.  Prospective law students have become aware of the undersupply of law jobs, and law-school applications are falling significantly.  Many law schools appreciably reduced the size of their entering classes this fall in response to the falling number of qualified applicants.  Price competition on tuition (right now predominantly through the tactical use of financial aid) is being reported.  Many schools will shrink, and some will fail.  Many will experiment with curricular, placement and financial innovations to meet the demands of the times and attract more and more-qualified applicants.  Critically, all of this will be driven by the applicant pool’s perceptions about what kinds of value a law degree will furnish by the time you’re done getting one.  And that’s why the oversupply of law-grad production and the undersupply of entry-level jobs are What Matters Most right now.  The really interesting questions are which schools are going to be most and most quickly affected by these forces and how. 

Stay tuned.

--Bernie 

Comments

[Anon508]

Anon_JD, Fair enough, but let me play Bernie Burk here: what's your basis to say that? I can't say that my theory has been empirically vetted, but I think there's evidence that there are plenty of opportunities that are missed by shooting for the wrong market.

One example: According to Legal Zoom, TWO MILLION customers have used their corporation docs, wills and DIY divorces. At several hundred dollars a pop, that's a lot of lawyers who are losing business by not marketing to the right crowd.

Enough to satisfy the whole market? I frankly don't know. Enough to get many people working, you bet.

[Tom]

"My proposal is relatively simple. Before we declare the job market saturated and legal ed dead, how about helping some grads recognize they can have wonderful livings helping people that could actually use their services and are vastly underrepresented?"

This is laughablly stupid. We currently produce about 45,000 new law grads a year for a market that can absorb (according to the BLS) about half that. For the benefit of entering this oversaturated market, students are saddled with around $125,000 in debt ($150,000 est. for next years class).

The legal education crisis is quite simple:

1. We produce way too many lawyers.
2. We charge way too much in tuition.

Reducing class sizes/number of schools and reducing tuition won't be easy, but it is inevitable. Applications are (again) down, we are fast approaching the point when there will not be enough students to fill all spots.

Although the problems are simple, the solutions are probably complex (and certainly painful). But there is something simple we in academia can do: speak openly and loudly against these high-priced, low-ranked schools that are the cause of the crisis.

[Anon_JD]

As I said, for simple matters, there are already tons of lawyers who charge not much more than LegalZoom prices. You seem to think that all these solos out there aren't already trying to get this business but they are. Its just that this business "market" is nowhere near as big as you think it is.

It real easy, for instance, to see tons of ads for $200 no contest divorce. Just look through yellow pages, etc.

The people using LegalZoom are doing it because LegalZoom fulfills their simple needs. They won't pay more for a real lawyer to do it for them (or simply can't afford to).

In any case, if the only work you can ever get as a law grad (after forking out hundred of dollars and 3 years in law school) is piecemeal work for a few hundred dollars every week or so, then the scam bloggers are right. You'd be better off working retail and hoping to move up in management than practicing as a LegalZoom-type lawyer.

[Tom]

Anon508: "I think there's evidence that there are plenty of opportunities that are missed by shooting for the wrong market.

One example: According to Legal Zoom, TWO MILLION customers have used their corporation docs, wills and DIY divorces. At several hundred dollars a pop, that's a lot of lawyers who are losing business by not marketing to the right crowd."

I finally get it, Anon508 is taking the role of Stephen Colbert in this debate. Suggesting that students spend three years, and take on $125,000 in debt, so they can compete with LegalZoom for all those lucrative, hunderd-dollars-a-pop corp. docs, wills, and divorces.

Anon508, I do like your sense of humor.

[Larry Rosenthal]

It may well be the case that law schools are producing more lawyers than the market can absorb (although relying on the graduate to law-firm jobs ration is perilous because not everyone goes to law school in order to practice law in a conventional setting). It is, however, rather a leap to conclude that this is what "matters most" in legal education. If we care about positioning our graduates well in an increasingly competitive market, then we should care a great deal about offering a program of legal education that maximizes the marketable skills that students have on graduation. Any analysis that gives short shrift to this objective, in my judgment, lets law schools off the hook far too easily.

Larry Rosenthal
Chapman University School of Law

[Dean]

Larry Rosenthal: "although relying on the graduate to law-firm jobs ration is perilous because not everyone goes to law school in order to practice law in a conventional setting"

Yeah, that's it. It's not that Chapman grads are having a hard time finding good legal jobs, its that a significant portion of them are choosing to go into lucrative positions at consulting firms, I-banks, lobbying firms on the hill, think-tanks, etc.

This has to be one of the most egregious examples of the way schools try to hide the truth about the employment situation for law grads. I think the following stats (showing the percentage of a schools grads that take JD Advantage/Professional/Non-Professional jobs) is instructive:

Yale - 6.8%
Stanford - 5.2%
Harvard - 4.4%
Chapman - 23.2%

So at the top schools in the country, where it can be reasonable expected that the grads actually have a choice of good options, only about 5-7% or so are choosing to go into non-legal jobs. But at Chapman, for some reason, almost a quarter of the grads are choosing non-legal employment. Chapman grads aren't taking these non-legal jobs because they want to, they are taking them because they have to.

[Dean]

Larry Rosenthal: "If we care about positioning our graduates well in an increasingly competitive market, then we should care a great deal about offering a program of legal education that maximizes the marketable skills that students have on graduation. Any analysis that gives short shrift to this objective, in my judgment, lets law schools off the hook far too easily."

Far be it from me to let a school like Chapman off the hook easily, so lets do a quick analysis of how well you are positioning your graduates in this increasingly competitive market.

Chapman
Cost/year: $41,460
Est. total Cost: $265,265
Est. monthly loan payment (10 yr plan): $3,163

Percent employed in full-time, JD required jobs: 40.1%
25%/Median/75% salary for above jobs: $50,000/$64,000/$75,000
Percentage of above jobs that are Solos: 2.3%

Percent employed in full-time, JD Advantage jobs: 10.7%
25%/Median/75% salary for above jobs: $33,280/$55,000/$70,000

Percent employed in other professional jobs: 3.4%
No salaries reported

Percent employed part-time, all categories: 18.7%
No salaries reported

Percent unemployed: 19.8%
No salaries to report

So a Chapman grad has about a 1 in 5 chance of no job whatsoever, a 1 in 5 chance of a part-time job, and a 50/50 chance of obtaining full-time work at a salary that will almost certainly require they go on IBR (i.e. their education put them in a financial hardship that requires government assistance).

Are these good outcomes?

[anonymous101]

Current 2L here.

Nobody is going to law school to earn 30k a year. An undergrad degree in another field would garner that salary. Also, the debt would make that prohibitive anyways.

But the long term solution is to cut government funding--the education bubble needs to burst. When the federal government stops loaning students money to pay extortionate prices, schools will stop charging them. When law school prices fall, people will be able to work for less when they graduate. Of course, law schools need to limit the seats and make the classes more practical and less... useless.

But again education spending is out of control and outpaces inflation and all other conceivable reasons for the increases apart from loans. Student loans should be limited to a percentage of the cost of school, and locked at a rate increase of a low percentage per year. That way when the school tries to charge 45k and the government only loans 20k, maybe they will make law profs take a pay cut and reduce prices, allowing grads to take lower-paying jobs; this will also make the legal system in America better for middle and lower class people who could not afford representation otherwise.

And I totally agree, class loads need to increase for profs. I went to a community college and the profs thre all had to teach 3 classes at least, and they were available in office hours to contact at any time. In law school, profs teach 1-2 classes, are barely available, and complain on top of it. Research institutions are over-rated. It is good to have profs who are current in the field, but publishing articles does little doe improve students quality of learning in my opinion.

[Anon]

I know the plural of anecdote is not data, HOWEVER: I'm an '08 grad of a top 5 school who graduated swimming in biglaw offers, as did all of my classmates. I also have lots of friends from high school who graduated from "Tier 3" and "Tier 4" schools.

Five years later, where are we?

Well, few of my law school friends are left in biglaw. Many are now working more "fulfilling" prestigious jobs that pay very moderate incomes well below 6 figures. Some of them are still practicing law, others have policy or business jobs. Some are working on PhDs. Some are making it big in finance and doing much better than the biglaw people, but I would say that on average the people left in biglaw earn 2-3x what any 3 random non-biglaw people are making at their "fulfilling" prestigious jobs.

What about my Tier 3 and Tier 4 friends? Well, they mostly took the sort of jobs us elites never would've touched; small firm gigs doing less lucrative legal work, non-prestigious government work, etc. In many cases, the job search out of law school took months. While my law school friends were almost uniformly miserable in biglaw, my Tier 3/Tier 4 friends had a pretty high rate of job satisfaction. This turns out to matter a lot: most of them are now making much more money because they were good at their jobs or used their experience to move up in their field or to more lucrative legal work. One even moved from a small firm to biglaw. Another got hired by a biglaw firm out of law school as a PARALEGAL -- the HORROR --- and was made an associate after proving herself to be that good! This is the same firm so many of my friends quit because it was "horrible" "boring" "unfulfilling" etc. One just got hired through a random linkedin solicitation to a midsized firm from a small shop and is now making 6 figures. He was unemployed for about 9 months after law school.

can you take anything from this? I don't know, but I am much more skeptical of this uniform focus on starting salary than I was five years ago graduating with a fancy biglaw gig and a smug feeling.

[Tom]

Professor Rosenthal, I think you would have to admit that those numbers look pretty ugly.

If you add up the unemployed, the part-time employed, the other professional (non-JD required/non-JD advantage) grads, and the JD advantage grads earning less than $34,000 (a reasonable salary expectation for someone with only an undergrad degree), it would appear that for around 45% of your schools grads, the degree is of absolutely no value. If you disagree that the degree was useless for these grads, I welcome you to explain why.

Conversely, it appears that only about 10-15% of your grads will be making over $70,000, and thus, actually be able to pay off their loans without government assistance.

And all of this for the low, low price of $125,000. Surely, in your days as a prosecutor, you sent people to prison for lesser crimes.

[Larry Rosenthal]

On the slim likelihood that facts matter in this debate, it is worth pointing out that the employment statistics for California schools are skewed by the fact that the California bar is so difficult and most employers will not hire graduates until they pass the bar (results come out in late November). Thus, the job hunt starts later here, and lasts longer than it did a few years ago. Many of our graduates ultimately have the kind of careers described by Anon at 12:27AM.

Tom and Dean: Your views are so curious. If law schools were concealing material facts, why it is so easy for you to find them?

[Bernie Burk]

Cheap shot, Prof. Rosenthal, and we all are entitled to expect more of you. Facts matter tremendously in this discussion. By no means do I agree with everything that the Commenters criticizing Chapman are saying, but they are explicitly relying on reasonably reliable quantitative data, and you're not. Complete and meaningful data are not yet fully available, and as more data become available it is certainly possible that a fair assessment of the scope and nature of the challenges facing legal education will evolve. But if the problem in California had to do with particular features of that state's job market, you would not have multiple other law schools in California with placement success statistics two or three times better than Chapman's. Your assertion that all (or most of) your graduates are really doing very nicely thank you is not supported by any empirical data you've offered or of which I'm aware. Given the data we do have, it does not seem plausible.

The point here is not that Chapman has some unique, or uniquely blameworthy, problem. It is that the entire legal academy has some very serious problems. Denying that these problems exist and that everything is just fine would not appear to be a very effective coping strategy, even for the short term. For the long term, I respectfully suggest that it is untenable.

Your continued participation in this forum is invited; but let me ask you to try and contain your irritation at those who disagree with you before responding again.

Bernie

[Larry Rosenthal]

Professor Burk: Our nine-month placement statistics for the class of 2011 are here: http://www.chapman.edu/law/careers/employment-statistics.aspx

They can profitably be compared to those of other California schools.

That said, as my earlier post indicates, my view is certainly not to "deny[] that these problems exist and that everything is just fine." My view is instead that law schools have an obligation to do as much as they can to position their students for success in an increasingly competitive market.

[FacePalm]

"...can profitably be compared to those of other California schools"

Professor Rosenthal - the data you link to suggest that less than 40% of Chapman University SOL grads (2011) have full time jobs requiring the degree they just earned.

I can not speak for Professor Burk, but I can (and did) read his post. It suggests that the single most important thing is too many law school grads for the jobs available.

If you gathered all 177 of your 2011 grads in a room and asked them whether they would agree with Burk's point, my guess (based on your data) is that at least about 100+ of them would shout a resounding "Yes!".

Or do you really think those other 100+ grads paid to go to Chapman to do something "other" than practice law? Really? I mean, more than a small percentage of them?

Whether (or not) Chapman's placement stats are as miserably situated as those of other California law schools (or in your lingo "can profitably be compared") is just completely irrelevant... ...what's that phrase? Oh yes - "It Is To Laugh".

And that's very sad. I'm sure the 60% of Chapman grads who can't get lawjobs are comforted by the fact that they're in the same boat as the hundreds and hundreds other 2011 grads of California law schools with whom their penury "profitably compares".

I have heard it said that misery loves company, so maybe in time they will learn to appreciate your kind words.

[Dean]

Larry Rosenthal: "Our nine-month placement statistics...
They can profitably be compared to those of other California schools."

So Chapman gets called out for having dismal job placement stats, and your defense is that your school is comparable to a lot of other schools. What? Isn't that the whole point? There are too many schools like Chapman where a significant portion of the students have no real job prospects.

And thanks for the link, but I hope you don't think those stats vindicate your school in any way:

Unemployed: 19%

Getting yet another degree: 4%

Unknown: 1%

Working in a job where the JD is neither a requirement nor an advantage: 6%

Working in a JD Advantage job that pays less than $34,000: 4.5%

It's telling that the school doesn't separate out part-time or short-term, but we know that number from above: 18.7%

Please explain how the above grads have benefited from their Chapman degree.

Further, the updated stats still only show about 18% of grads will make the $70,000 and up salaries that will actually allow them to pay off their debts.

These job placement stats suggest that Chapman is about twice as large as it should be, and the salary stats suggest that it is about twice as expensive.

[Dean]

My mistake, the updated stats do show the number of JD Required and JD Advantage jobs that are part-time and short-term; 39 in total, so we need to bump that up to 22% of all grads.

[FreeEduAid]

I am glad to see more people inside academia focusing on something important -- too many grads for the number of jobs -- instead of the window dressing that is curricular reform. However, I think it's pretty clear that tuition is What Matters Most.

If the average debt load is around $125,000 and the average salary is half that, then even if there are enough law jobs to go around, it still means a lot of bad results.

We need fewer law schools, for sure, but we also need the lower ranked schools to start pricing themselves in a way that actually relates to the salaries their grads can reasonably expect.

Regards,
Susan Miller
http://www.schoolanduniversity.com