LSAC Data and Predicting Number of Applicants for Fall 2015, Part 18

The LSAC is now reporting that "As of 6/5/15, there are 327,793 fall 2015 applications submitted by 50,269 applicants. Applicants are down 2.5% and applications are down 4.6% from 2014.  Last year at this time, we had 95% of the preliminary final applicant count."   If this year's applicants follow last year's pattern, there will be approximately 52,915 applicants this year.  The last post in this series is here.

As I've said before, I think we're about at the bottom of applicants and enrollment now.  This is a little above where I thought we'd be when we hit bottom.  I had thought that the low in enrollment would be about 35,000 first years -- and it looks like we'll be 1000 or so above that this fall.  Next year applicants may be down slightly, about the same, or up slightly.  It's too early to tell now.  We'll know a lot more after we get data on the number of administrations of yesterday's LSAT.

Declining numbers of applicants (and therefore three years hence number of entry-level lawyers) is good news for those who'll be looking for jobs in 2018.  There will be less competition.

For me one of the continuing questions is what does this decline in applicants mean for the fortunes of law schools.  How will they adjust to the substantially smaller classes?  And I've got to think that the decline in revenue will be greater than just the smaller number of students would suggest, because those attending will have more leverage in negotiating for financial aid.  Schools are proving remarkably resilient, but perhaps we'll see some more closures (or mergers).  (Though as close readers may recall, I think schools have a ways to go before they have to close.)  Faculty salaries I should imagine will shrink.  The easiest to cut are summer research grants, which I intuit are already on the way out at many schools.  But I should also imagine that salaries are going to decline, too.

I think deans who are pleading the case of their schools to central administrations will use what appears to be a stabilization of applications as a sign that things aren't going to get a ton worse.  They may not be improving any time in the near future, but if I were a dean involved in tough conversations about the future with my central administration I'd be arguing that applicants are stabilizing and that things are unlikely to get worse.  That may not be good enough for some central administrations.  My guess is that we're not going to see more than a dozen or so law schools close and that all of those will be in the "rank not published" tier of U.S. News.

Comments

[Former Editor]

I agree with most of this, but I'm not so sure that whatever closures do occur are certain to be in the "rank not published" tier. A number of schools in the 75 to 150 range are also on the list of schools with the largest enrollment declines since 2010 or 2011 (there are various lists covering various periods). E.g., Catholic; NYLS; Northeastern; Dayton; UNH; Vermont; Albany. I don't think those schools are any safer if their enrollments stabilize at current levels than are unranked schools with greater institutional support. One ranked school that saw a large enrollment decline, Hamline, is already the subject of a merger. It seems to me that enrollment decline v. overhead, applicant market saturation, and prestige value of the school to the parent institution (if there is one) are probably stronger indicators than USN rank outside of the top 50 or so schools.

[Derek Tokaz]

Imagine a kid who usually gets a 90 or so on his math tests. Then one week he gets an 86. It's a red flag, but not entirely out of reason. Next week an 82. Uhoh. Then a 79. Now the parents take away his cell phone and tell him he can get it back when he pulls his grades up. Next week he gets a 76. Then a 74. Finally, he comes to his parents and says "Next week I'm projecting to get a 73. Since I've turned things around, can I please have my phone back?" Yeah, I don't think so.

If law schools are going to plead their case, they're going to need something a lot better than "Next year we're only going to slightly worse off."

[anon]

Derek

Good analogy ... but, no one has taken away anything from law schools.

For all the hue and cry, the loss of millions of dollars and the incalculable loss of prestige and reputation associated with the pure nonsense (combined with anger) promulgated by so many in legal academia, there have been NO tangible consequences.

Sure, as Al mentions, "The easiest to cut are summer research grants, which I intuit are already on the way out at many schools." Wow! "Giving up" a payment for performing a pre existing duty, during an extended vacation that no other "full time" employee would expect or pretend to be entitled. This is precisely the sort of self referential arrogance that has destroyed legal academia.

Add to that "loss" bs titles bestowed to fleece additional dollars, foreign "study" programs, vanity "centers" ("Hey, I'm the Director!), endless travel budgets on expense accounts, teaching two or fewer courses per semester, etc. etc. Take all this "away" (it hasn't happened folks) and still NO tangible consequence. This is simply restoring sanity, not making a difference.

Al is right: law schools can cut expenses without "closing" because there is so much waste, based on nothing more than greed, to cut.

But, is this the best the legal academy can do? After all this, has the legal academy no shame?

Not one word about how self improvement might turn things around. Not one word that recognizes the responsibility of law academy for creating the conditions that left it so vulnerable. Very telling.

Derek, add to your analogy the student's explanation: "It was the economy."

[JM]

The decline of applicants with LSAT scores above 160 was still over 5% this cycle. This means that semi-elite schools (T15-T50) will likely continue to see major declines in the pool of applicants they consider admitting.

We will continue to see precipitous declines in law school applicants from highly prestigious undergrad institutions. Consider a strong (but not extraordinary) candidate from a school like Harvard or Williams. Numbers probably look something like 3.7/168. Under today's admissions standards, this means either (A) Full price at a T5-T14 school; (B) half price at a T30; or (C) Full scholarship at a lower ranked school. Students from terrific undergrads have the most to lose by going to a less prestigious grad school. However, the debt from a prestigious law school at full price will likely exceed $200k unless they are drawing on major financial resources. So the first 5 years of private practice will be spent getting back to square one, which is about the time where most associates are forced to leave or cannot take it anymore. Going the public interest route and relying on PSLF is a huge gamble that this type of individual will be averse to.

As tuition at top schools rises, so will the disincentives to attend for top undergrads. These kids have good options, so why would they take such a risky bet. Only the kids from rich families that can pay sticker price without a problem will choose law.

Expect the Baby Boomer generation in Biglaw and the Federal Courts to be absolutely mystified that the pipeline of their usual talent has run dry. They will be forced to replace them with scrappy overachievers that may be honored to be there but lack the real high end talent to do the work BIGLAW/Fed Courts require.

[Steven Freedman]

@ JM

Actually the decline in test takers with high LSAT scores was much greater than 5%, as reported by LSAC.

160–164 6,723 -5.6%
165–169 4,124 -12.3%
170–174 1,965 -10.4%
175–180 484 -19.7%

So it looks like the students who would probably gain the most from the current admissions environment (large scholarships at good schools with good employment prospects) are the ones turning away the most. My guess? These students are finding employment opportunities right out of college making them less likely to seek a graduate degree. My other guess - in time they'll find that career building without a graduate degree has its limits.

[PaulB]

JM, we won't have the talent that big firms and federal judges require? Even if you exclude the two affirmative action hires on today's Supreme Court, do you honestly believe that the current make up far exceeds the quality of the Hugo Blacks and Robert Jacksons that came up through night schools and third rate law schools in the past? As for plain old litigation, I'm tremble with fear that we may have to rely upon future Abraham Lincolns and Clarence Darrows because Princeton grads refused to attend law school.

[anon]

JM

Most who have practiced with (and, more particularly against) BIGLAW lawyers know that the myth of extreme competence in those firms is just that. Proof? Let's start with Wall Street. There's a bastion of genius and competence. Then, let's move out to the rest of corporate America. These are the clients advised by the "best and brightest" from the "finest" law schools, and the results are obvious.

(Let's leave aside avarice and amorality, taught so well at "elite" law and business schools, let's focus here on failing on such an epic, historic scale on Wall Street.)

The true quality and depth of legal academicians' thinking and arguments is often exposed here in the FL and elsewhere. Most of them don't know what practice entails, as they spent their brief time in practice basically doing low level work. That is the reason they trained the "elite" attorneys in BIGLAW to be so oblivious to the reality of their failures.

Legal academicians don't seem to realize that, in BIGLAW, the turds produced may be more highly polished, but the smell of them is nonetheless unmistakable. Instead they focus on the values so obviously important to them: prestige and money.

[JM]

@ Steven Freedman - Thanks for the clarification. Those numbers are striking.

@ PaulB - I believe that the current makeup of the Supreme Court is by and large excellent, including the two affirmative action hires. I think they are equivalent to their predecessors. There are no future Lincolns or Darrows because everyone must attend law school and basically run the same gauntlet. The one's who went to lesser schools just ran a bit slower (or had scholarships).

@anon - There is intelligence, if not competence. They perhaps don't desire to do anything productive with their intelligence. Nevertheless, a huge qualification for the job is to be smart enough to obfuscate issues in front of intelligent people (clients, judges) and create plausible counterarguments when clearly in the wrong. By the way, I too am not concerned that BIGLAW and Fed Courts won't get their little geniuses. In fact, I think it is hilarious. They are going to offload giant research/writing assignments on super highly paid associates while they go skiing for the weekend, and when they get back they will have to redo everything.

[anon]

JM

Point taken. I agree that lack of "intelligence" (as defined, by and large, by prep and then private school preparation leading to doing well on standardized tests, combined with attendance at elite UG schools, where "good grades" are the norm) is not the issue in BIGLAW.

What is at issue is the IMplausibility of so many of the arguments, when clearly in the wrong, propounded by BIGLAW attorneys. Anyone who has practiced with (or, as stated above against) these attorneys understand that, unfortunately (fortunately for BIGLAW attorneys) the playing field is level: these "giants" do the dance they have been trained to perform, and the judges deal with what they are dealt (most of such judges are products of the same backgrounds, training and experiences).

The result? Well, for one thing, the biggest collapse of the financial markets in nearly one hundred years. This was directly a result of, among other factors, the utterly incompetent and amoral training and ethos imparted to the relevant actors by elite law and business faculties.

Where are law schools on this? The collapse of the economy did indeed have an effect on law schools. But, contrary to the incredible assertion by so many law school status quo defenders that good economic times lead to reduced enrollments, and that bad economic times lead to the opposite, the effect isn't as direct as all that, and the cause of historically declining enrollments, while the government is still shoveling out dollars as fast as it can to anyone who cares to apply, is something quite different.

The collapse of the financial markets has helped to expose that law schools were engaging (and to some extent still engage) in the amoral, greedy practices that led to the collapse of those financial markets. Legal academicians are still, in the main, unwilling to confront the deep self inflicted wounds caused by their privileged and arrogant attitudes and the amoral and devious means to which they have resorted to preserve their privileged positions. The values that they imparted to their graduates led to the collapse: exposures caused by the collapse have helped to reveal the arrogant and cloistered society that produced the responsible actors.

Instead of copious mea culpas from the law academy, combined with sincere and demonstrable efforts to reform, we hear mainly shrill rejoinders, bogus defenses and assurances that all is well when all is demonstrably not well.

Just like on Wall Street and from its BIGLAW defenders.

[anon]

deletethesewordsthengoto-abovethelaw.com/2015/04/good-grief-these-law-school-debt-per-job-numbers-are-ugly/

[anon123]

Steven, my guess is that many of the students in the higher LSAT group have decided on a graduate degree other than law.

[Derek Tokaz]

"My guess? These students are finding employment opportunities right out of college making them less likely to seek a graduate degree."

Don't really need to guess, specialized Masters of Business degrees have been on the rise. (Not to be confused with an MBA, these are things like an MS in finance or management.)

"My other guess - in time they'll find that career building without a graduate degree has its limits."

That's pretty hilarious given how limiting having certain graduate degrees can be on career building. But, Steve, I'd like to hear just what specific hurdles you think the non-graduate degree holders will face down the road in their careers. I've been on the career hunt lately (just landed a second job, if I get a third I can make rent!) and companies requiring a graduate degree are few and far between. Those preferring one aren't much more common. Almost universal is a requirement or preference for work experience.

[Jojo]

Law school is fool's gold. It doesn't prepare you to practice law, and critical thinking and analysis skills can be developed as easily by taking a few rigorous philosophy courses as an undergraduate. Would be students: abandon hope all who enter.

[terry malloy]

"My other guess - in time they'll find that career building without a graduate degree has its limits."

I think you mean "My other *hope*" Admissions Dean Freedman.

[Anon]

Jojo, there is an ongoing shift occurring in legal education resulting in law schools emphasizing legal practice, be it with respect to the courses they offer, the faculty they hire, etc. Perhaps more important, all schools now place much greater importance on securing strong career outcomes for their students than at any time in the past. Yes, students need to carefully think through their law school choices, and yes certain schools' employment outcomes are quite poor, but to state that law school is "fool's gold" is, with all due respect, hyperbole.

[Just saying...]

Right on, Derek. Many graduate degrees are worthless to employers and students are now beginning to catch on. In no profession was the almost-automatic masters more prevalent that in K-12 education. In NY,for example, a masters was tied to an increase in base pay and thus pension benefits, too. Many districts are eliminating this perk because they have come to realize the degree does not produce a better teachers -- experience does. Business executives have long derided the MBA, a Masters in Library Science is the worst in terms of ROI, etc., etc.

[Steven Freedman]

@ Derek

You asked what hurdles someone might face without a graduate degree. I'd identify struggling to advance beyond entry or mid-level positions as one hurdle.

I don't think it's controversial to say that in many fields a graduate degree is either required or highly preferred in many hiring decisions, particularly once workers seek to move beyond entry level positions. Just to use my own profession as an example, there are very few jobs in higher education administration above entry level that do not require or strongly prefer a graduate degree. I've hired several people with the requirement that they have a graduate degree. I spent some time in the corporate world too, and I can guarantee you that a graduate degree can be very helpful or even necessary to rise in the ranks at many corporations.

[Derek Tokaz]

Anon,

"all schools now place much greater importance on securing strong career outcomes for their students than at any time in the past"

If we're looking at schools in the aggregate, this is pretty unimportant. The market (basically firms and the government) decides how many new lawyers will get jobs. Increased efforts by career services is worse than zero sum. No new jobs are created, they're just changing who actually gets them. And, students at all schools are picking up the tab for increased staff expenses. Unless CSO are calling up small firms and convincing them to hire more people than they initially wanted, the whole thing is a net loss for students.

Probably the best role for CSO (again, in the aggregate, not in regards to giving one school a competitive advantage over another) is helping students who strike out in the legal market to find a soft landing in a JDA position. That's where there's not already a cap in the number of JDs getting hired each year.

"there is an ongoing shift occurring in legal education resulting in law schools emphasizing legal practice, be it with respect to the courses they offer, the faculty they hire, etc"

And it will be very interesting to see what effect this actually has. In the sort term, again, we're probably just looking at a competitive advantage to certain schools and students, but not an improvement in the employment situation at large. In the long term, this may result in increased demand for legal services.

Perhaps I'm naive to think this, but I imagine that if lawyers are more competent and efficient (and clients perceive them as such), they will increase their demand for legal services. I know this goes against the conventional wisdom preached at many schools that demand for legal services is inelastic, but I think such a view ignores the DIY model that's grown quite a bit in the last few years.

I'd compare it to something like the market for fast food burgers. Burger King and McDonalds can increase the quality of their product, work on marketing, etc, but doing so won't do much to increase the number of people buying fast food burgers. All they change is which place those customers actually go to. But then Five Guys enters the scene. Because Five Guys is so much better, it not only gets a significant share of the existing fast food burger customer base, but it increases the customer base, attracting people who wouldn't otherwise even want a fast food burger, or fast food at all.

The reason Five Guys is able to increase the customer base is because it's a difference of kind, not just of degree. It's simply a different type of product, competing in both the fast food burger market and the delicious food market. For law schools' emphasis on legal practice to really affect the market, it has to produce a similar sort of differentiation. Having students who are just marginally better than the competition won't do it. They need their graduates to be so much better that they're a different sort of thing, such as producing the unicornesque Practice Ready Graduate. Achieving that is going to mean doing a lot more than retooling 6 or 9 credit hours for a student.

[Derek Tokaz]

Steven,

I'm not sure your response does any more than just restate your original position. (I'd imagine most people have getting a promotion in mind when they hear about career building.) The actual nature of the hurdle is what I'm after. When you require someone to have a graduate degree, why is that? What specifically are you hoping they will have learned during their Master's program which is essential to their job function?

And just for fun (I have a sick definition of fun), I looked at a bunch of job postings on my school's career web. First I filtered for those requiring 7+ years of experience, so I think we can call those beyond entry level, and then ignored a few non-professional jobs (such as personal assistants) and those that for some reason didn't think to include any requirements. Out of 25 postings:

8 required only either a Bachelor's or mentioned no educational experience, and did not state a Master's is preferred.

6 required a Bachelor's but said a Master's is preferred. Only one of these said a Master's would substitute for experience.

9 required a Master's (in every case it was a specific Master's rather than a general requirement). Of these 9, 3 preferred a PhD.

2 required a PhD.

So, do candidates with a Master's have a competitive advantage? Maybe. We also have to remember than they have several years less experience. It's not 7yrs vs 7yrs+MA, it's 10yrs vs 7yrs+MA. We can presume that all the jobs preferred a Master's would also prefer more experience, so it's very hard to say who comes out on top. Also, nearly all of these jobs required a certain number of years of very specialized experience. People with more time in the workforce may have the advantage there.

Now you might be thinking "Sure, the guy with 10 year experience has an advantage, but that person with 7yrs and a Master's will eventually get to 10 years, and then he can move into jobs that the person without a Master's is excluded from." But, that guy with only 10 years of experience can also decide to get a Master's. I don't know of any company that prefers specifically K-MA.

Finally, you have to consider that the recent college grad doesn't know if he's going to hit an education ceiling in his field, and doesn't know exactly what degree would crack through it (if you asked me 10 years ago when I graduated if a PhD in Composition Studies would be incredibly useful, I probably wouldn't have thought so). But, the student can go to work for several years, learn more about what education would be useful, and if a Master's becomes desirable, go get one. That seems like a monumentally better decision than going straight from undergrad and into a Master's program.

[(M)([a)(c)(K)]

But Steve, which graduate degree is useful to rise at many corporations.

Take the typical STEM graduate. There an advanced degree, an MSc or PhD is often required to rise to management of a lab - but not a JD. Similarly, the MBA was originally designed to provide knowledge of basic business tools to engineers and others whose undergraduate education did not cover things like accounting, marketing or finance - again, companies will often want to see someone without a BBA get an MBA or executive MBA to teach the relevant skills that they would need as a manager,

But a JD? Yesterday were were having an interesting discussion at an office lunch about the fact that music schools have business-of-music course, acting schools business-of-theater and art schools business-of-art but the typical law school has no business-of-law course whatsoever. Don't kid yourself, businesses are not queuing up to see aspiring managers march off to law school.