LSAC Data and Predicting Number of Applicants for Fall 2014, part 3

Following up on my recent post on LSAC data on LSAT administrations and applications for fall 2014, I wanted to call attention to these statements from the LSAC:  "As of 1/10/14, there are 152,230 fall 2014 applications submitted by 22,093 applicants. Applicants are down 13.4% and applications are down 15.1% from 2013.  Last year at this time, we had 38% of the preliminary final applicant count."  I'm a little confused by that last statement because that's the same percentage listed last week, so there may be an error there.  If this year's applicants follow last year's pattern (and the 38% part is right), we'll have approximately 58,139 total applicants for the class entering in fall 2014.  Dan has some historical data on the first year enrollment from 1964 to 2012 here.  I link to some more comprehensive data (going back to the 1940s) here.

Comments

[CBR]

I think they forgot to update the "38%" number--the graph below for applications says "Last year at this time, we had 47% of the preliminary final application count," and I would guess that the applicant number would be closer to 47% as well. If so, that would suggest that there will be less than 50,000 applicants this cycle.

[Alfred L. Brophy]

CBR, you must be right that the 38% hasn't been updated from last week. But I don't think that last year they'd had near 47% of the applicants this early. It looks more to me from that first graph that last year at this time LSAC had closer to 40% of the applicants.

[anon]

What is sort of interesting is looking at the total number of entering applicants divided by teh number of law schools.
If my excel spreadsheet is telling the truth, the increase/decrease in students per/school does not seem as dramatic, i.e., wouldn't one expect the total number to have increased as number of schools increased, and to level off when the increase in the number of schools slows down?
Is this possible, or am I missing something here?

[Alfred L. Brophy]

Interesting observation, anon -- I hadn't considered this. Let me make sure I know what you're saying. You're referring to this table: http://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/statistics/jd_enrollment_1yr_total_gender.authcheckdam.pdf

And you're observing that the students/school remains relatively stable over time? I guess that isn't shocking to me -- that as more people want to go to school new schools open rather than existing schools expanding. I'm not a huge believer in the ability of the market to respond in a precise way to increasing demand (or falling demand as we're seeing of late). But I guess I might have predicted that new schools would be opening more or less in response to increasing in numbers of people who want to go to law school. (One other thing that I think is somewhat confusing in that ABA table is that until around the mid 1960s there were a lot of non-ABA accredited schools that were turning out a lot of students who took their state bar. So what looks like an increase in law schools is an increase in ABA-accredited law schools, though maybe those aren't so much new schools.)

[Judgement Day is Coming]

I think you guys are reading way too much into this. We went from "As of 1/03/14, there are 131,097 Fall 2014 applications submitted by 19,529 applicants. Applicants are down 13.6% and applications are down 15.8% from 2013.
Last year at this time, we had 38% of the preliminary final applicant count."

To "As of 1/10/14, there are 152,230 fall 2014 applications submitted by 22,093 applicants. Applicants are down 13.4% and applications are down 15.1% from 2013.
Last year at this time, we had 38% of the preliminary final applicant count."

So in a week they went from applicants being down 13.6% to being down 13.4%. That seems to be fairly insignificant. As far as the preliminary applicant count staying at 38% in one week in probably went form something like 38.1% to 38.9%.

[anon]

Alfred: Yes, I used that table. I converted it to an excel spreadsheet and added a column immediately to the right of total first year enrollment. Then, I asked excel to divide total first year enrollment by the number of ABA law schools.
What I saw was variance that was fairly constrained, or, perhaps, not a volatile as what we might expect.
I would say that demand may not be the only factor in opening law schools. Profit seems to have been a big factor, and perhaps we are onto a means of reconceptualizing the problem here.
In other words, as loans in nearly unlimited amounts became more and more available, and law schools in response began to increase tuition to effect a huge transfer from the US taxpayers, using students as conduits, then a business model emerged and others joined in the bubbling wealth creation.
It is, after all, possible to create a market for tulips, as compared with simply capitalizing on a pre existing demand!
How else to explain opening law school after law school in teh same market (other than a ripe orchard of young people ready to buy into slick marketing)?
So, as more law schools gain ABA sanction, more law students in ABA schools are "created" simply as a matter of logic.
Just some thoughts, certainly unproven but open for discussion and development.

[Alfred L. Brophy]

Anon--got it. Interesting. I want to do the same thing and look at that some more.

Couple of quick thoughts on this -- if the average class size at individual law schools seems fairly stable over time I wonder if that suggests there's sort of a natural ideal size for law schools? Or maybe as students in one market grow, other schools enter the market. This happens when it's viable to sustain a new school, that is when there are enough students in a market to sustain another school with the mean class size. The market for legal education is often local, because lots of people aren't going to move beyond their city or state to obtain it. (I think this was even truer in before the 1990s.)

Judgment Day is Coming: I think you're reading way too much into this post.

[anon]

Alfred: I will read with interest your thoughts after performing the experiment. I didn't save the results, but I recall that the average class size hovered around 250.
Of course, as I said in an earlier post (to which Mack provided some useful further information) Harvard admits far more than 250 (and, of course, Yale fewer) ... (Mack pointed out that some schools in the "lower tiers" admit vast numbers, though I am wondering whether that has changed ... i.e., can we determine how many of the total new admits were admitted by teh T100? THis would be a very useful bit of data.)
As for "demand" this is a valid economic concept, but I wonder how it applies, for example, to hamburgers. Why have a Burger King, McDs, Wendy's, etc. all within sight of each other? Gas stations, same. I don't think the overall demand supports all these options (otherwise, prices would increase), but I don't have data to support this observation and I don't have the training in economics necessary to properly evaluate this issue from the pov of that "science."
Can someone explain the reason that new law schools open in seemingly saturated markets? Is this solely because of untapped demand, or, can it be simply be the result of a "monkey see, monkey do" attempt to ride the wave of student loan money?
Is it valid to attribute increases in the number of new admittees to the increase in the number of schools, and a slowing of the rate of increase to a slowing in the rate of increase of new schools?
On a related point, tuition increases contributed to the hostility of the recent grads who could (and can) not find employment, and that hostility has contributed to press attention which has caused many to question whether attending law school at this level of tuition makes sense.
The tuition increases occurred even though job prospects were declining.
Again, how do economic models explain this?

[TWBB]

Anon, businesses within sight of each other are generally there because of Hotelling's Law; they locate so that they serve the largest area of customers possible. Wikipedia has an explanation though the best way to explain it is through simple maps, maybe you can find something online if you're really curious.

Law school siting is generally driven by whim and happenstance. Some legislator or university president gets it in their head that they want a law school somewhere specific, and generally the evidence is marshalled to support that decision. Because unlike a McDonald's there is little market pressure (or there WAS little market pressure) due to government-subsidized loans, poor siting does not become a liability.

[anon]

TWBB: The portion of your comment that is most interesting to me in this context was this statement:
"Because unlike a McDonald's there is little market pressure (or there WAS little market pressure) due to government-subsidized loans, poor siting does not become a liability."
Thus, the notion that law schools proliferated at least in part to take advantage of students' access to amounts of loan money all out of proportion to employment outcomes does seem to find some support.
The notion of student "demand" remains somewhat unclear to me, however. Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?
Also, massive tuition increases occurred while job prospects were declining.
Again, how do economic models explain this?

[Former Law Review Editor]

Law faculty,

Apart from the obvious threat to your comfortable existence, isn't the decline in applicants a good thing for the profession, the bar, and for the remaining law schools? Isn't it better for society not to have scores of thousands of young people burdened by debt each year for an unlikely shot at a miserable existence actually practicing law? I'd welcome law review articles on the subject from the naval gazers.

[oracle at delphi]

Former law review editor, are you primarily concerned about limiting your competition so you can make more money from your clients?

[Anon]

FLRE: insulting people is not usually the best way to get them to agree with you. And your point is not obvious to me. Perhaps we can agree that the issue of the ideal size of law school enrollment is not clear, but merits more study.

[Former Law Review Editor]

Oracle,

I actually want fewer economic barriers to entry -- a combination of fewer, but better funded public universities with low tuition and a return to an apprenticeship model. The current system of debt funded, subsidized law school for everyone makes zero sense and serves no one but universities. The market is doing just fine limiting competition. In our "all pay" auction system, though, that means a lot of ruined lives.

Anon,

Perhaps we can agree that nondischargeable federal loans for the full cost of attendance has had unintended consequences on graduates and inflates the cost of attending schools?

[anon]

It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

[Orin Kerr]

Former Law Review Editor,

I think the most important question is not what is good for the bar or remaining law schools, but what is good for the country as a whole. I think it's probably good for the country that the number of applicants is declining, regardless of the employment picture for lawyers.

[Guy]

Anon @ 1:17am

In response to your question:

"Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?"

If you look back to 2003, law schools accepted only 56.6% of applicants. http://www.lsac.org/lsacresources/data/lsac-volume-summary

Given that just about every applicant had access to student loans, there was clearly a market for additional law school seats in 2003. Where there is a market opportunity to sell an extremely profitable product, like a law school education, history has shown that "legal educators" will spring up to take advantage.

In other words, the opening of new law schools did not create additional demand, it already existed. However, the supply of law school seats was somewhat restricted in 2003 by law schools choosing to accept only the more qualified applicants.

Fast forward to the present, many law schools are now admitting individuals that would not have been accepted to any law school in 2003, hence the almost 75% acceptance rate in 2012. The percentage of accepted applicants will undoubtedly continue to climb, as more and more law schools hold on for dear life.

[Guy]

Anon @ 1:17am

In response to your question:

"Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?"

If you look back to 2003, law schools accepted only 56.6% of applicants. http://www.lsac.org/lsacresources/data/lsac-volume-summary

Given that just about every applicant had access to student loans, there was clearly a market for additional law school seats in 2003. Where there is a market opportunity to sell an extremely profitable product, like a law school education, history has shown that "legal educators" will spring up to take advantage.

In other words, the opening of new law schools did not create additional demand, it already existed. However, the supply of law school seats was somewhat restricted in 2003 by law schools choosing to accept only the more qualified applicants.

Fast forward to the present, many law schools are now admitting individuals that would not have been accepted to any law school in 2003, hence the almost 75% acceptance rate in 2012. The percentage of accepted applicants will undoubtedly continue to climb, as more and more law schools hold on for dear life.

[MacK]

It is hard to know. I am reminded though of a study of real estate agent economics - or why it is that a strong property market does not make real-estate agents earnings rise - and why realtors in areas with high prices do not make significantly more than realtors in low price areas. The explanation, curiously enough, is that there are very low barriers to entry in the real estate business, which means that in strong markets the number of agents tends to rise, and the number of transactions per agent fall.

[anon]

Orin:
How can a country so underserved by attorneys be benefitted by fewer attorneys?
We often assume that BigLaw is the measure of success in the legal profession, just as we often assume that Wall Street is the measure of the success of the economy.
The reason law school “training” is becoming less and less relevant, in my view, is the failure of the recent administrations in the legal academy to recognize the overwhelming needs of the US population for legal services. Legal academics often slip into a simplistic dichotomy, comparing "public interest" to the "greedy pursuit of money" and thus ignore the increasing irrelevancy of the “training” provided in law school to the changing needs of the country for legal services: training increasingly provided by PhDs in history, or economics, or other disciplines who have little or no experience practicing law, and who have little respect for those who do.
Clinics are, in this context, a risible but sad response, as these sterile efforts are often so divorced from the main street needs of the "country" (with, of course, notable exceptions).
When legal education was more often taught either directly by practitioners (see, e.g., “reading the law” as Lincoln did it), or taught in law schools by those who were familiar with the mores of practice and who imparted respect for the profession in which they purported to prepare others to engage, legal education was more tuned to the needs of the “country.” Now, not so much.
Is it any wonder that the product of US law schools is gaining less acceptance in the market?
Is this good for the “country”?