An ABA Accreditation Standard on Employment Outcomes?

Thank you to Bernie for his introduction of my article, and for his comments and questions. Bernie’s reaction is similar to that of others who have read the manuscript: initial skepticism, followed by basic agreement with the argument, with some caveats and questions regarding important details. In this post, I will define the major problems facing legal education, and respond to one of Bernie’s comments in particular (and will respond to others as I lay out the rest of my argument in the next few posts).

In the article, I carefully describe the major problems facing legal education, and then make the case that an accreditation standard on employment outcomes is a viable response to those problems. It is abundantly clear that there are far more law school graduates than there are entry-level law jobs for those graduates, that entry-level salaries have been stagnant or declining for at least the past 16 years, and that the cost of a legal education and the resulting debt burdens are severe. (I would not describe the drop in applications and enrollments as a problem facing legal education; rather, they are a reflection of the job market and the high cost of a JD.) There has been a great deal of debate about how to address the crises, but to date, we have seen very little in the way of meaningful reform. The problems just continue to fester.

First, a bit of detail regarding the scope of the problems. The number of ABA-accredited law school graduates has exceeded the number of entry-level full-time (FT), long-term (LT) bar passage required (BPR) jobs by more than 30% in every year since 2001, ranging from a low of 30.7% (class of 2001) to a high of 45.1% (class of 2011). (2001 is when NALP began collecting and reporting law graduate employment outcomes in the current format.) The decline in FT, LT BPR employment has been substantially offset by an increase in the number and percentage of law school graduates employed in FT, LT J.D. Advantage (JDA) jobs – jobs for which the JD provides a significant advantage in either obtaining or performing the job. Counting JDA positions as law jobs somewhat reduces the oversupply of law graduates compared to law jobs, but the difference is still quite large. The number of graduates has exceeded the number of entry-level FT, LT BPR and JDA jobs combined by more than 25% for every class except one since 2001, ranging from a low of 23.7% (class of 2007) to a high of 37.0% (class of 2011).

Not surprisingly, the oversupply of law graduates has been accompanied by stagnation and deflation in entry-level salaries. Starting salaries declined in real terms between 2001 and 2015, and have been essentially flat since 2011, with a modest increase across the board for the class of 2015. The median salary has decreased by 12% between 2001 and 2015, and by 19% between 2009 and 2015, in inflation-adjusted dollars. The picture is similar for private practice and government salaries. The median private practice salary has decreased by 17% since 2001, and by 30% between 2009 and 2015. Government salaries appear to have fallen from their pre-recession high of just over $65,000 for the class of 2007 to less than $55,000 for the class of 2015.

The legal employment rate varies greatly across ABA schools. The following chart tells the story. At the 10^th percentile (21 schools) fewer than 40% of graduates in the class of 2016 were employed in LT, FT BPR jobs at 10 months after graduation; and just over 50% were employed in LT, FT BPR and JDA jobs combined.

 Range of Employment Rates Across Schools, Graduating Class of 2016

Percentiles	LT, FT BPR	LT, FT BPR+JDA
5th	32.9%	45.1%
10th	36.4%	52.0%
25th	50.0%	62.5%
50th	62.6%	74.3%
75th	71.0%	81.3%
90th	77.2%	86.7%
Range	0%-93.5%	0%-95.7%

At the same time, the cost of a legal education and the resulting debt burdens for graduates have continued to increase at a rate much higher than inflation. The following table summarizes the data on graduate debt for the class of 2015.

Average Amount Borrowed, Class of 2015 Graduates

Type of School	Schools Accounted For	Average Debt Per Student (% of all graduates borrowing)
Private (Non-Profit)	104/115 (90.4%)	$131,162 (77.6%)
Public	77/80 (96.3%)	$94,342 (76.6%)
Private (For Profit)	3/6 (50%)	$153,509 (82.8%)
All	184/201 (91.5%)	$118,230 (77.4%)

Of course, there is also considerable variation in the average amount of debt incurred by students at different law schools due to variations in tuition, cost of living, and perhaps other factors.

 Average Amount Borrowed Across Law Schools, Class of 2015

Percentile	Average Amount Borrowed
10th	$74,890
25th	$90,065
50th	$114,725
75th	$132,245
90th	$146,288

Having described these critical problems, my next post will take a close look at how schools with the very weakest employment outcomes appear to have responded to the problems – or not.

For now, I conclude by responding to one of Bernie’s comments in particular, that to address the critical problems in legal education with a minimum employment rate standard is to say that the legal academy should shrink even more than it already has. I believe that with an employment rate standard in place, most underperforming schools will make the adjustments necessary to comply with the standard. For some, that may very well mean reducing class sizes. For others, it may mean more expertly tailoring their academic programs to the employment market. Likely, schools will adapt in a variety of ways. Any new standard should have a phase-in period.

When I served as deputy managing director of the ABA Section of Legal Education from 2011 to 2014, which coincided with the precipitous drop in law school applications, which itself was likely a result of the sharp drop in law graduate employment outcomes in 2008-2011, I would often get this question from academics and practitioners alike: “What in the world is the ABA doing continuing to accredit new law schools?” Aside from the obvious answer that the anti-trust laws would not allow us to limit the number of school in order to limit competition, I would usually note that a 25% reduction in law school enrollments across schools was the equivalent of closing 50 law schools, although no individual school had closed at that point, but with the benefit to students of greater competition among the (now mostly smaller) schools to innovate, reduce costs, and improve outcomes, while complying with all accreditation requirements. The same is true with the introduction of an employment rate standard. Schools may focus their efforts on fewer students, among other changes or innovations, but an employment outcomes standard is not intended to eliminate schools nor does it necessarily lead to that end.

Comments

[anon]

I am in general agreement, but differ on one of the throwaways toward the end of the blog post: "I would usually note that a 25% reduction in law school enrollments across schools was the equivalent of closing 50 law schools ..."

Really? So, if HYS reduce their class sizes by a factor of 10%, that is the same as closing 2 bottom feeders?

The illogic there is fascinating. No wonder the ABA has no credibility on these issues. That statement tells it all.