LSAC Data and Predicting Applicants for Fall 2015, Part 7

The LSAC is reporting that "As of 1/30/15, there are 186,545 fall 2015 applications submitted by 26,702 applicants. Applicants are down 8.6% and applications are down 10.5% from 2014. Last year at this time, we had 54% of the preliminary final applicant count." If this year's applicants follow last year's pattern, there will be approximately 49,448 applicants for the fall class. The last post in this series is here.

Comments

[JM]

8.6% applicant decline is pretty heavy given that we are now into February. If the final number is anything in this range, I think it will finally sound the alarm bells for many schools. Deep cuts may be on the horizon. I'd expect tenure track academic hiring to be all but nonexistent next year.

[anon`]

If the numbers from prior years hold up, there will be about 20K admitted in the top 100 law schools.

That would leave 18,500 or so for the remaining 100.

Presuming, in rough terms, that the top 100 will take the top LSAT scorers, can we approximate the LSAT profile of the remaining 18,500?

Moreover, can we say with certainty that many schools in the lower 100 will not limit the incoming class to 185? If so, how does the distribution look for the remaining schools?

Just wondering ...

[Al Brophy]

JM, last year at the end of January applicants were down 14.5%. Though at that point in 2013 we'd had 58% of the total applicants. Last year there was a surge in applicants late in the season. It'll be interesting to see if there is a surge again this year in applicants.

http://www.thefacultylounge.org/2014/02/lsac-data-and-predicting-number-of-applicants-for-fall-2014-part-6.html

My guess is the by mid to late March we'll have a very good read on the total number of applicants. And it won't surprise me if we are looking at 52,000 total applicants for the year.

As to your comments on hiring, I think the most significant story about faculty at non-elite schools for next year may not be the limited hiring. It may be pressure for senior faculty to retire and other efforts to shrink the educational staff.

[Anon123]

AB, but the comparison of being down 8.6% is with last year. So a late surge will be needed just to stay with the 8.6% decrease against last year.

[[M][a][c]{K]]

It may be a bit like suggesting that people consider the making of sausage, but as a data point this should not be considered in isolation. Now what I am going to lay out here is back of the napkin statistics, none of the numbers should be taken as absolute - they are guesstimates-

From Fall 2015 there is a 3-4 year track to an applicant becoming a lawyer. All along the way there is “shrinkage.” The question becomes, will the shrinkage rate rise or fall. I am inclined to think the shrinkage rate may be higher than historic norms.

So start with 49,448 applicants for the fall class – the first question is how many of these applicants will be admitted. In 2014 there were 55,700 applicants and 44,500 admitted – or 78% (despite law school critics and even law school supporters highlighting of near open enrollment at some law schools, most of the upper tiers are selective and many applicants know better than to go to the open enrollment schools.) If this percentage holds, law schools will “admit” 38,617 candidates. Of course it is possible that this number might rise as some schools lower their criteria?

Taking the 38,617 putatively admitted, not all will choose to enroll. Looking at 2014, 37,924 students actually enrolled out of 44,500 admitted, or about 85.2%. If you assume this number holds, that gives 32,910 enrollees in the Fall 2015 class. This may be a high assumption – since so many law schools are going to extraordinary measures to obtain applications, waiving applications fees, application deadlines, hunting potential applicants down – it may be that this class will contain many who are not very committed to going to law school, or who will only go with a substantial tuition discount. But let's take this number – 32,910 enrollees.

The next question is how many will complete law school. Looking back through the data, about 11% of law students have typically dropped out of law school at some point. In theory this would mean that of the 32,910 putative 2015 enrollees, 29,289 will graduate. Will the drop out rate increase? Well there is reason to believe that it might. A lot of 1Ls will have been offered tuition and financial aid packages contingent on grades – many of them may choose to leave if they fail to keep the aid. Others may have enrolled in low ranked schools with a view to transferring – if the transfer opportunity is not there (because of say grades) they my also leave. Yet others may quit as they find out the reality of the legal market and what law school is like, while the relatively open admissions of many law schools in the last few years also means that they are not taking the most committed students. So this 29,289 estimate may be high.

Finally you get to the really sticky question – how many of the 29,289 will pass a bar exam? This is a knotty problem to extract from the data. In 2013 overall bar passage rates were around 78% for 1st time takers and 38% for repeaters. Assuming the repeaters did not keep re-repeating that means about 86% of graduates pass a bar exam, which yields around 25,200 admitted lawyers. Of course, it is suggested that bar passage rates are plunging as a result of the near open admissions policies of some law schools – so we need to wait and see.

Each step on the way to a law graduate is interesting in of itself. However another item is also interesting. Enrollments in law schools peaked in 2010 at 52,488 – and in 2010 the schools would have had a student population, paying in most instances undiscounted tuition of circa 150,000 JD students. In fall 2015 that will be down to around 100,000 enrolled, many of whom will have received steep tuition discounts. This means that tuition revenue will be down by more than 1/3 – maybe as much as ½ How do law schools cope – what do the larger institutions that hosted the law school as a “cash cow” react when it starts looking subsidies instead – especially if there is no sign of a future upturn?

[JM]

Anon 123 is exactly correct. The 8.6% decline prediction assumes a surge like last year. There would have to be a GREATER surge for the decline to be less than 8.6%. On the contrary, if the last season applicant surge is less than last year, than the decline will be greater than 8.6%.

[[M][a][c]{K]]

Al Brophy:

for the reasons I describe, a late season surge in applicants may not increase dramatically the number of students enrolled. The reason is that the late applicants may be less likely to enrol if accepted. I discussed this earlier in this thread, but consider the effect of:

a. Waiving application fees. The advantage of application fees (apart from revenue) is that it weeds from the applicant pool those who are not very committed to going to law school, or not very committed to going to application-fee-charging school.

b. Waiving application deadlines - an applicant who does not try to meet relatively easy application deadlines is also not very committed.

c. "Shaking the trees," i.e., deans of admissions contacting anyone with a pulse to look for applications - again the not very committed are found.

d. Discounts and financial aid - quite a lot of applicants won't go if they don't get a substantial tuition discount, but the problem becomes, how much of a budget do the schools have for such discounts.

The result is that a later applicant surge may be coupled with a low yield of enrolees.

[[M][a][c][K]]

In my numbers the admitted for 2014 was slightly wrong, it was 43,500 - the enrolled yield is still about the same (this is back of the envelope,cocktail napkin.)

[Al Brophy]

Yes, I agree, JM and Anon123. We'd have to surge off what we had last year. For me the question is whether the pattern of last year is now the right baseline. It's possible that this year is more like the season for fall 2013, in which case we're going to see the decline increase. But my guess -- and we'll all know in about six weeks -- is that there will be an increase in applicants later in the season, which will result in a smaller decline off last year than we're seeing now.

Also, [M ... K] you may be you right. I'd really like to see some data on how many late applicants end up going to law school.

[MacK]

Al,

I see your point. Law school is not a classic "asset bubble" so analogies are perhaps inappropriate. However, when asset bubbles burst, the usual pattern is for prices to fall substantially below their medium and long run average before there is a recovery.

If one were to make the same argument for law schools, law schools graduations/bar passage would need to fall below market demand for a few years before enrolment would start to uptick again. There is considerable debate about how many new lawyers the profession can absorb per annum - but numbers seem to be around the 18,000 to 22,0000 level. If so, the class of 2018 at some 25,000 admitted to the bar is still over the number the profession will absorb, and not enough below the line to spark a recovery in applications.

That argument is of course based on the idea that legal education is like an asset bubble - which is probably not a good one. But it is probably fair to suggest that until law graduates from most law schools are in short supply, and medium term career paths for lawyers openly improve very significantly, law school applications will continue to decline.

[[M][a][c][K]]

Al,

I see your point. Law school is not a classic "asset bubble" so analogies are perhaps inappropriate. However, when asset bubbles burst, the usual pattern is for prices to fall substantially below their medium and long run average before there is a recovery.

If one were to make the same argument for law schools, law schools graduations/bar passage would need to fall below market demand for a few years before enrolment would start to uptick again. There is considerable debate about how many new lawyers the profession can absorb per annum - but numbers seem to be around the 18,000 to 22,0000 level. If so, the class of 2018 at some 25,000 admitted to the bar is still over the number the profession will absorb, and not enough below the line to spark a recovery in applications.

That argument is of course based on the idea that legal education is like an asset bubble - which is probably not a good one. But it is probably fair to suggest that until law graduates from most law schools are in short supply, and medium term career paths for lawyers openly improve very significantly, law school applications will continue to decline.

by the way, in case anyone is wondering why the [M ... K] handle is necessary - it seems that a mysterious gremlin set the spam filter to block posts from my regular handle and apparently a few other critics of law schools. This was uncovered a few days ago, and the gremlin has not yet woken up to how embarrassing this tactic is....

[Al Brophy]

[M ... K], agreed on this. What I was thinking about is the question of how likely those who apply late in the year are to go to law school. I was raising a minor point to the overall discussion, but perhaps people who apply late are more likely than others to attend. Might be the other way around, or there might be no difference. I might have thought that people applying in the fall are looking a larger range of options than those who apply in the spring. Presumably people aren't applying to law school only because there's been a fee waiver (they might apply to a specific law school because *that* school gives a fee waiver), but I'd think that the LSAT is a significant enough hurdle that only people who somewhat serious about law school are applying. Now it may very well turn out that they like other options better. I know this is now an old data point, but when I was in college I had friends who applied to both law and business school, as well as law and graduate school in other areas. A lot of them were also looking for jobs. They looked at their options in the spring, to see what was most appealing.

[confused by your post]

My theory is that the trend of more applicants applying later in the cycle will become more pronounced this year and at least a couple of years to follow. I believe this shift will not be the result of any natural inclination for people in general to apply later. It will be brought about by intense efforts by law schools.

Law schools are no doubt slow to adapt to change of all types. However, we have been in down a trend in applicants for a number of years and now admissions folks are adjusting. Gone are the days where law schools just sent out some shiny marketing materials in the Fall and waited for the applications to flood in before a set cut-off date. Much more thought, time, money and energy is being put into getting students to apply. These efforts now are sustained for a much longer period each year. There are no real application deadlines anymore. Schools recognize that in order to fill their classes, they must aggressively market and engage with potential applicants and those shopping financial aid offers all the way through the summer. Out of necessity law schools are getting better at attracting "late" applicants. Like many other competencies it takes time to learn what works to attract applicants late in a cycle. Admissions offices have made strides in this area and I believe they will continue to get better at it. I personally would like to know more about what works and what doesn't in terms of methods to attract "late" applicants.

Unfortunately, these new sustained efforts to attract applicants cost more money. Putting aside scholarship $ increases, I believe that the "marketing" dollars per applicant ($/applicant) schools are willing to spend in order to attract applicants has increased in the last few years. It will increase much more significantly in the next few years so long as the pool of people interested in law school continues to decline (which I predict it will).

My theory is that law schools' efforts to attract "late" applicants will alter these LSAC applicant charts by attracting more applicants than would otherwise be expected later in the admissions cycles. A couple of interesting related questions that will be answered in time:

1. How significant will the added numbers of "late" applicants be? Certainly, not significant enough to reverse the direction of the current down trend in total applicants. Otherwise I won't hazard a prediction.

Some schools will undoubtedly be slower to change to an extended "late" applicant marketing model. Some schools will simply be worse/less efficient at doing it. What will the negative effects be on such relatively "under-performing" schools? Sharper budget cuts, faculty attrition, decreases in enrollment and GPA/LSAT requirements all seem likely. Firing of admissions folks at under-performing schools seems likely as well.

[Jojo]

I'm inclined to agree with confused by your post. I think the late surge has an explanation not discussed before.

With the waiver of application deadlines, we likely are seeing more June LSAT takers enrolling two months later rather than the following year. Student X doesn't know what he/she's doing in May. Job hunt not going so well. Panic sets in. June LSAT and back to alma mater in August/September. I can't otherwise explain the surge we saw in July 2014.

That does two things. It robs from next years applicants. It also gives the admissions office a headache and makes budgeting and forecasting impossible for the law schools.

[[M][a][c][K]]

I'm inclined to agree with Al - how many 1Ls enrolled will result from the application is perhaps mysterious - I think there are reasons the yield may fall, but perhaps it might be higher. It is hard to tell without more detailed data. It is also hard to tell how the marketing efforts referred to by Confused impact the subsequent dropout rate - will it stay at around 11% - or be higher or lower? What about bar passage rates?

All of these factors are doubtless coupled - but how, and in what way each drives the numbers is hard to predict.

[JM]

Another interesting angle to this is that in the past few years, schools have been able to cover up the application decline by accepting students with lower credentials. So, for example, a 10% applicant decline has only worked out to a 6& enrollment decline. But how much lower can they go now that 80% of applicants are accepted to some school? Especially now that there is the spector of widespread bar exam failures. Starting either this year or next year, I would guess that any applicant decline is going to cause an equivalent decline in enrollment.

[optimistic green line]

awww yea! Applicants are higher than last year! Go green line!