LSAC and Predicting Applicants for 2016-17, Part 4

The LSAC is reporting that "As of 01/01/16, there are 117,498 2016 applications submitted by 20,095 applicants for the 2016–2017 academic year. Applicants are up 0.7% and applications are down 2.3% from 2015–2016.  Last year at this time, we had 36% of the preliminary final applicant count."  Based on this preliminary data, one would predict that there will be around 55,819 applicants for 2016-17.

The previous post in this series is here.  The next post in this series is here.  We should be getting the data on the December administration of the LSAT very soon.  Much like the presidential race, we'll know a lot more in March.

Update: The discussion has gone far enough off the rails that it's time to close comments; I also deleted a comment.  We can start the discussion again when there's an update from the AALS.  

Comments

[Jojo]

Will we continue to see the late applications that formerly were non-existent, but recently have been significant.

There was forecast a bump in apps based on early data. That seems to have slowed or reversed. If there is not the same late push in apps that has existed since 2013, we could be in for a sizable decline in apps at end of cycle.

The market correction requires that admissions standards not drop, but student quality (rather than matriculant numbers) keeps falling. If 20,000 students graduate per year, almost all will be able to make a living (50k per year, plus health ins) doing it. If 40,000 students graduate per year, about 20,000 will be able to make a living (50k per year, plus health ins) doing it. If you can't make 50k per year plus health insurance practicing law, then you're a fool to stay in the game long term. You are smart enough and competent enough to get a non-law gig that you could have gotten as a 0L. Just leave the JD off your resume.

[anonandproud]

Like a battleship the demand for law school turns slowly but it is turning upward and will soon enough leaving the law school truthers foaming at the mouth.

[PaulB]

During the years of declining applications, the size of the decline each year compared to the previous one would lessen. This of course meant that a growing percentage of applicants and applications were coming in later. This trend could not continue indefinitely. It appears based on the data so far that this trend has ended and may be reversing slightly.

One positive sign for law school application numbers is that they have traditionally been countercyclical to the economy. Given the relatively strong job market this year, it would have been reasonable to expect a further decline in applications. When the next recession arrives, there should be a meaningful increase in applications although not nearly back to the peak of a few years ago.

[anon]

"During the years of declining applications, the size of the decline each year compared to the previous one would lessen. This of course meant that a growing percentage of applicants and applications were coming in later."

Why is this so?

"This trend could not continue indefinitely."

Please explain.

"When the next recession arrives, there should be a meaningful increase in applications."

Many have blamed the "Great Recession," and terrible results in BIgLaw in particular (lay offs, rescinded offers, etc.), for the fact that applications subsequently tanked.

Also the "strong job market" is questioned by those who note, inter alia, that the labor participation rate is at historic lows.

One is just not quite sure your economic predictions are grounded in the best training, experience and track record (especially because the predictions by economists with such credentials are so often so fully bogus).

[PaulB]

Anon 3:59, let me help you through some basic arithmetic. For several years in a row, the proportion of applications that came in late in the season has increased over the previous year. At a certain point, this must come to an end because you can't get more than 100% of the applications after, say, June. The trend of a greater and greater percentage of applications arriving late can simply not continue. It's math, not a matter of professors arguing their views of what's happening in their world.

If you look at the LSAC web site that lists the number of exams taken each year going back to the mid-1980s, you'll see a clear cyclical trend whereby recessions led to an increased number of test takers. This makes sense-if the best job you can get out of college is being a barista, why not go to law school or grad school instead? This cyclical pattern was overwhelmed by a massive secular decline starting in 2009-10 when it became widely known that attending law school was a high risk low return proposition for a huge percentage.

I seem to recall that Professor Diamond was making the point at that time that the decline was due to the recession. The data available clearly suggests that this had never been the case previously and if anything, the secular decline in applicants should have slightly offset by the recession and weak recovery. I can think of no reason to believe that the countercyclical pattern has disappeared, but has instead been overwhelmed by the change in attitude of undergrads toward the desirability of attending law school.

Given that, the essentially flat numbers for this year so far means that the underlying trend is in fact slightly upward and may be more obviously so when the next recession comes. However, if more significant changes occur in the secular pattern, either plus or minus, the cyclical pattern may be far less obvious than in the pre-2009 era.

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

One factor that needs to be considered is the aggressive recruiting efforts of law schools, especially the lower ranked, which have been at least anecdotally reported. These efforts have been directed at those who would not normally consider a legal education, or even if they did would be unfamiliar with how to comply with (the plunging) matriculation requirements - and anecdotally at least arise late in the application cycle. This is potentially, and I'll admit I'm speculating, be behind the recent rise in applications as well as the back end loading of those applications.

Of course if that conjecture is true, law schools are storing short and medium term problems, for example a higher post 1L dropout rate (just when the class rank grade based tuition waivers and financial aid ends) and down the road at bar exam time, and later yet at the 9 months post graduation employment reporting point.

[anon]

PaulB

Condescending as your response may be, it is more notable for failing to address the issues raised (except by claiming a putative exception to your supposed "rule" to prove the "rule"), for complete incoherence as to the timing of applications over a given season, and quite frankly, risible as to your conjecture about the effects of the "next recession" on law school applications.

I especially enjoyed your quite typically amateurish (in these pages) conjecture about "undergrads" weighing the choice between becoming a "barista" and attending "graduate school." In these comic book versions of "economic analyses," the paucity of real expertise to which I referred can be discerned.

But, perhaps you can return to the tripe about how "full employment" explains increasing applications.

[JM]

PaulB,

I think you over-rely on historical data about cyclical trends in applications. The super high cost of legal education now drives decision-making, where in the past, cost was not much of a factor. While I think a particularly booming economy may pull JD candidates out of the pool, I doubt a recession will drive them into it due to the debt factor. The younger generation is very aware/concerned about the debt issue.

[Jojo]

Legal Ed is in a little bit of a pickle regarding funding. Future law students are going to be unhappy to learn that they must fund their educations with a 25-year-long tithe under REPAYE. Even accepting as true the assumptions that (1) historically the median pre-tax, pre-tuition earnings of a law degree approach $500,000 per Simkovic; and (2) that nothing has changed structurally in the legal sector (per various Anons); much of any gain disappears at 10 percent over 25 years.

Either you drop your tuition, and lose revenue, or sell REPAYE and scare away students with the sticker. Scylla and Charybdis of legal ed financing.

[anon]

Let's also debunk PaulB's "conclusion" that "If you look at the LSAC web site that lists the number of exams taken each year going back to the mid-1980s, you'll see a clear cyclical trend whereby recessions led to an increased number of test takers."

We have LSAC date from 1987 forward.

There were three recessions since 1987:

From July 1990 – Mar 1991 (8 months);

From March 2001–Nov 2001 (8 months); and

From Dec 2007 – June 2009 (1 year 6 months).

Increases in LSAT administrations, year over year, occurred in:

1987–1988
1988–1989
1989–1990
1990–1991
1998–1999
1999–2000
2000–2001
2001–2002
2002–2003
2005–2006
2006–2007
2007–2008
2008–2009
2009–2010

PaulB's theory doesn't even begin to account for the recent crisis in declining LSAT admins, and shows only a weak correlation between recessions since 1987 and increasing LSAT admins (e.g., the significant increases from 1987 to 1990).

[Cent Rieker]

Anonandproud,
Your reaction to the slight uptick in law school demand is the equivalent of a wide receiver doing a celebratory dance for a first down when trailing 49-3 in the tail end of the 4th quarter. The vast majority of law schools have almost open door admissions compared to a decade ago, and law school demand won't get back to the point where you need at least a high 150s/low160s to gain admission to a respectable law school. But you can continue your attacks on the "truthers." I find it entertaining that this is what you're doing with your outstanding legal pedigree.

[anon]

Like locusts, the hive has swarmed on this thread. Law schools are improving and enrollment is increasing. Both are good things.

[anon]

anon at 11:55 PM

You forgot to capitalize!

"Applicants are up 0.7% and applications are down 2.3% from 2015–2016."

I guess it's time for a headline: "Law school admission test administrations reach a new high."

Your absurd point (it is an absolute good to increase law school enrollment at any cost to participants and to the legal system) is dwarfed, however, by the snide, smug, slurring way that you deliver it (calling every commenter above "locusts").

Why do this? Do you believe that your comment is persuasive on the merits, or is it your intent to infuriate others, or do you email your colleagues on the side to gloat about your clever comment?

[Jojo]

I don't understand the vocal status law school quo defenders at all. I understand the quiet ones, who have self-interested bias and are personally invested in the system. I understand angry critics who feel disappointed by the system (at best) or lied to and duped (at worst).

I don't get vocal defenders of the current system at all, and law faculty are usually above average in reasoning and critical analysis skills. This isn't a sporting event. I know of no critic or reformer who wants to end the rule of law or even legal education. I fail to understand how any serious observer of legal education could look at the massive classes from 2008 to 2011, and think that they were good for anyone. I fail to understand how anyone could be against the 509 reforms and data disclosures given the deceit that made its way into the recruiting material a short time ago. Further, I fail to understand how it does anyone any good to sell a very expensive debt-backed legal education to someone with a sub-145 LSAT in the current legal employment marketplace. Seems very odd to me, and I suspect to most law faculty.

[JM]

Lost in the bickering here is the real point to be taken out of this data. It does not appear there will be any meaningful turnaround this year. The number of applicants will likely be within a 1 percent margin of last year (+ or - TBD). That is three consecutive years at about the same level. So this is probably the new normal for applicants. The real topics of interest now are 1) scholarship money (which is outpacing tuition increases every year) and 2) bar exam failures (which will increase again for the next 3 consecutive years).

[Sy Ablelman]

JoJo and Cent Rinker are spot on. You fellers and ladies can argue over the data and what it means. I will tell you what it means to ME! I am sitting at my computer for a second day this week with no new clients, prospects or work. Prior to '07, I used to have 3-4 matters diaryed daily for court. I was routinely over billed on my cell service for hitting 2500 minutes, my phone rang daily with new prospects. Talk to 10 solos or small firm folks. They will tell you the same thing. Major Big Law firms have disappeared over night, and legions of attorneys have been unemployed. The profession has lost 50K jobs since 2009. What did the law deans and professors do? Increased capacity, enrolled higher number of graduates, opened new law schools and decreased admission standards. The complete opposite of the auto industry that was dying in 2009. They cut manufacturing capacity, renegotiated labor deals and sold innovative, high quality vehicles without spiffs and rebates. They restored they auto industry to health. I got to hand it to you guys, you somehow gamed the economic system for your own utility.

[anon]

It was so easy: money from the taxpayers, funneled thru conduits (students) to greedy operators (who were capable of misrepresenting facts to further their ends, notwithstanding the absence of reliance generally found by courts). Like most such schemes, this one was exposed when the economy turned in a very, very wrong direction. (Making theories like PaulB's above all the more ridiculous.)

As pointed out above, because their greed has been laid bare, overbroad statements like "law school enrollment increasing is a good thing" by reactionaries in the law academy, in the face of the bottom feeders accepting more and more unqualified students, are inexplicable. These statements are also somewhat risible, and the glee evident when these individuals proclaim any tenth of one percent increase a turnaround is actually quite pathetic and sad.

The regulators - of student loans, of law school standards - have allowed this. But that doesn't make it right, and certainly doesn't justify the haughty and condescending attitude of some law profs in these pages. Much of the clap trap these profs promulgate is either false or poorly reasoned reactionary agitprop in an effort to hold on to the status quo.

[Anon]

In May of 2009 there were 556,790 people employed as lawyers earning a median annual wage of $113,240.

In May of 2014 that number had grown to 603,310 with a median annual wage of $114,970.

Stable growth in a relatively stable industry.

[anon]

Anon

Perhaps you need PaulB to "help you through some basic arithmetic."

[Sy Ablelman]

2:58 Anon. Really? $114K? In your dreams. Take a look at the salary offerings in Craig's list, The Daily Law Bulletin. Folks are answering ads for 40K jobs. I answered an ad for a 32K gub'mint job and they were flooded with applicants. Have you spoken to lawyers stuck in doc review? Real stable work. My buddies and I think a Public Defender job starting around 50-60K is the golden ticket. We would kill for 60K a year! We are not dumb, stupid or lazy and we graduated from Top Tier, ranked schools. So, Professor Paul Campos raw data from the Internal Revenue Service is not correct? Talk to lawyers on the street. We will set you straight.