The Third Year of Law School and a Comment on Credentialing, Education, and Grades in Higher Education

One of the more practical debates over the law school business model asks about the third year of law school.  Is it actually necessary – and even if, in principle, it might be a good idea, is it at the prices law schools now charge?  If it is kept – which seems pretty likely for most schools, given the existing business model – how can it be changed to make it more useful to students?  The New York Times has a good business page story today on changes underway to the third year at NYU Law School, but also talking about other schools and the broader issues of the third year relevant to any law school.  (Peter Lattman, Dealbook, New York Times, “N.Y.U. Plans Overhaul of Students’ Third Year,” October 16, 2012.)  The article is already making the rounds of faculty at my school and I imagine most everywhere else as well.

The usefulness of the third year of study ranks high among the growing chorus of complaints — which includes soaring tuition and a glutted job market — about law schools.   ….  There has been much debate in the legal academy over the necessity of a third year. Many students take advantage of clinical course work, but the traditional third year of study is largely filled by elective courses. While classes like “Nietzsche and the Law” and “Voting, Game Theory and the Law” might be intellectually broadening, law schools and their students are beginning to question whether, at $51,150 a year, a hodgepodge of electives provides sufficient value.

“One of the well-known facts about law school is it never took three years to do what we are doing; it took maybe two years at most, maybe a year-and-a-half,” Larry Kramer, the former dean of Stanford Law School, said in a 2010 speech.

The absolute cost of legal education and the declining market for lawyers seem to me the fundamental issues confronting the law school business model.  Those are not really about education as such, however; it doesn’t really matter how great the education is if it simply costs more than its rate of return to a student once (if) employed can bear and if the demand for people with the skills is simply in decline, with employment increasingly out of reach.

I’d be astonished if most law schools didn’t have some kind of committee trying to grapple with these questions.  But I’d also imagine that most discussions tend to shy away from the questions of cost and lawyer-job demand, and instead ask what can be done better to prepare lawyers for practice and how to improve the quality of the educational outcomes.  Those questions certainly need to be addressed – I don’t slight in the least the serious discussions about pedagogy and how best to educate students – but if the specific business model issues are cost and demand for lawyers, to a certain extent the quality of the pedagogy is somewhat beside the point.

NYU isn’t similarly situated to most law schools in having to address the cost and demand questions, of course – likewise Stanford and similar schools that have looked to revamp the third year curriculum.  Those schools can afford to allow the pedagogical question to dominate the discussion. And while I don’t think it is the fundamental question for most law schools, it is an important one all on its own, and worth debating and looking to see what can be learned from other schools’ experience.  So what is NYT doing with the third year?

N.Y.U. Law’s changes are built around several themes, including a focus on foreign study and specialized concentrations. Some students could spend their final semester studying in Shanghai or Buenos Aires. Others might work at the Environmental Protection Agency in Washington, or the Federal Trade Commission. Another group, perhaps, will complete a rigorous one-year concentration in patent law, or focused course work in tax ….

N.Y.U. Law’s new curriculum plan is highlighted by experience outside of the school’s Greenwich Village campus. While the school has dabbled in foreign study, it is now redoubling its focus on international and cross-border legal practice. N.Y.U. Law is preparing to send as many as 75 students to partner law schools in Buenos Aires, Shanghai and Paris, where the students will study the legal systems and the languages of those regions. With the ever-increasing influence of government and the regulatory state in private legal matters, N.Y.U. Law will also offer students a full semester of study, combined with an internship, in Washington.

Another key initiative gives students the chance to build a specialty. Called “professional pathways,” the program will offer eight focused areas of instruction, including criminal law and academia. None of these programs will be mandatory, as students can still choose a conventional course load.

I have been told that some are privately referring to NYU’s “send them abroad” plan as  “the new colonial model” – cute but not fair.  Still, fair enough to hint at something just real enough to sting.  I suppose one might also call it the third year as “grand tour,” in the ancient European tradition of a young aristocrat’s education – it smacks more of that than neo-colonialism.  (The grand tour, however, unaccompanied by Adam Smith.)  This doesn’t make it necessarily any less valuable to particular students in particular ways.  It’s a question of what price and what it adds to the ability to get a job – and for NYU students, the markers are likely different than for other places.  And just to mention some other schools’ reforms, Stanford Law School is making it easier for students to pursue joint degrees in the third year.  Washington and Lee has replaced the third year curriculum with a mix of clinical work and outside internships.


The idea of “specializations” that could be acquired in the third year, with some kind of certificate attached for completing certain courses in certain areas or perhaps an annotation on the transcript that students could highlight on the resume, is a popular discussion topic at law schools.  I’ve had extensive discussions with faculty at many schools around the idea of specializations, and there seem to be upsides and downsides.  The upside is the ability for a student to distinguish himself or herself from others in the class in a certain area, anything from antitrust to human rights to intellectual property.  The question is whether employers actually care about the specialization – my suspicion is that they don’t, and that they are looking mostly for signals of overall brains and competence, for which the specialization is not really a signal.

If that’s the case – and it might be more true of some specialities than others – employers will prefer, all things equal, the highest class standing and specialization will not help much.  However, turning the argument yet again, this might be a reason why students who see themselves coming out not at the absolute top of the class might want to do a specialization in order to have something to distinguish themselves from other students, including those at the top.  It might not be the best signal, but if you don’t have the possibility of the best signal, it might still serve as a second best signal for the middle ranked student.

This implies, though, that the students at the top of the class will tend to avoid specializations as being second best and, moreover, in many cases will increase the risk of a lower GPA, insofar as it means taking classes that might be harder than otherwise.  So they opt out of specializations; this doesn’t necessarily change the signaling value to middle tier students looking to show an area of substance in lieu of the most general class-standing credential.  And still another twist – in practical terms, if the law school does not have a mandated mean or curve for grading, then grading tends to be toughest in the first year; once students have essentially electives, they can choose classes to maximize GPA.  A specialization might make that harder to do – and if you are in the upper-middle-tier, you might easily think your time is best spent getting yourself into the top 10 or 15% of class standing by graduation, because at the end of the day, 98% of the attention in the real world will go to that and not to anything else on your transcript. So even in the middle tier, you might skip the specialization to focus on GPA maximization.


I run through all these twists and turns because it is often hard for outsiders to the process to understand just how complicated the incentives, consequences, and unintended consequences of these kinds of changes can be, in the context of major career-affecting decisions.  None of it is as simple as it might look.

Note, however, as with most clashes between educational value and credential maximization, serious grade inflation – grade compression against a top line – makes the decision to go for educational value much more costly in terms of credential, because often the areas of the most educational value are those for which you have the least preparation and hence the greatest likelihood of getting – heaven forfend – a B+.  Which, at schools without a required grading mean or curve, might be bad grade and one that can push you out of the top ranks.

Hence the student in my office a few weeks ago who, trying to make up her mind whether to stay in my business law class or drop it, found herself in tears precisely because of the pressures created by grade inflation.  She lacked any undergraduate background in these fields, understood correctly that she needed this course as a matter of lawyer education, and yet knew that if she got a straight B, she would pay hell trying to overcome it in later classes.  I’m not opening this post to comments because I don’t want to read abuse about what an idiot she is in this way or that – she’s not.  She’s a very bright student who unfortunately assumed that we, institutionally, would have made the tougher call to align educational incentives more closely with credentialing ones – rather than taking the easy way out of allowing them to drift apart.  The problem lies in how very, very unattractive we’ve institutionally made her incentives – and the price tag attached to what is essentially a bet rather than investment.  It’s a bet with many more bad payoffs than good ones.

(Also remember that most of what I’m saying here can easily be understood as applying to undergraduate liberal arts education as well as law school.  My advice to liberal arts undergraduates is simply to drop any class in which you’re is likely to get below an A-.  Do I feel bad about that as an educator?  Yes.  Do I feel bad about that as parent?  No.  Can everyone make that tradeoff? No.  Does it serve as a way in which grade inflation advantages the better-off or those with fewer children?  Yes.  Do I think the tradeoff between education and credential is the students’ fault or that of higher education?  Need I answer?  Again, I’m not opening to comments because I don’t want to read a bunch of supercilious jabs at undergrads in liberal arts who are presumably too stupid to major in STEM and should be grateful for a job at McDonalds.  They’re not stupid; there is a severe disconnect between the world of jobs at the moment and liberal arts education, at least at these prices, among many other problems.  But an economy and society as complicated and specialized as ours needs a far wider range of workers, even in the knowledge fields, beyond STEM – and it is easy, and certainly has happened in the US economy over the past fifty years, that we overproduce STEM graduates, as many commenters here at Volokh have noted over the years.  I don’t have a good answer to the disconnect, but the students majoring in the liberal arts are not all of them idiots and, yes, they should be in higher education.  Those most likely to benefit from reducing the number of students in liberal arts higher education will be the upper-upper-middle tiers, who would benefit from a reduction in competition for the remaining positions for liberal arts majors who can read, write, and think effectively.)


Well.  The study abroad option that NYU is pushing has some value for students in certain situations.  Travel can be broadening, etc., and the grand tour was a remarkably humane institution at its best.  Unfortunately, I’m not sure that the benefits of the go-abroad third year amount to a pedagogical or curricular benefit, as distinguished from a much more diffuse benefit.  And given that, the cost is a crucial question – are you willing to pay professional school prices for a broadening experience?  For NYU students, it might well be worth it – including from a career standpoint.  It certainly worked that way for me, albeit at lower law school prices – travel grants from Harvard Law School enabled me to cold-call the head of Human Rights Watch, then a new, tiny organization working out of a couple of nondescript offices in NYC, and tell him I had my own funding, and would he like me to go to Central America for them?  Things are entirely professionalized in the human rights world these days, but in fact much of my subsequent career revolved around that initial phone conversation, and the fact that I had the law school’s money to bring to the table.  It doesn’t work that way today, and to the extent it does, it’s only a handful of students outside of the top schools.

Where travel abroad can be professionally useful, I think, is as part of new thinking at law schools in which it is possible to get a joint degree with a European law school that can finally result in licenses to practice in the US as well as the EU.  It involves more time and money, and you have to be in a special situation.  But certainly each year I have students whose background means that their careers are signficantly advantaged by licenses across the Atlantic.  But that’s not a gigantic number of JD students, of course.

The externship focus is a popular one for law schools for re-configuring the third year, and it makes sense.  But it makes sense most of all for DC area schools, with the wealth of government agencies of every variety, and an admirable willingness to take on law student interns.  In that regard, I wonder whether an easy way of adjusting the third year in DC schools would be to encourage many more third year daytime internships – with more classes offered in the late afternoon and evening, to make that more valuable.  For that matter, DC schools have always had a special niche market in government workers who traditionally – and even more so these days – will not and should not give up their day jobs but would like to night law school.  Some of that focus on night education appears to have slipped in the last few years – with a focus on part time programs aimed less at genuinely “night” students and more on students wanting to join the regular program.  Perhaps it’s time to make adjustments to make law school more available to genuinely part time evening students, at least in a special market like DC.


At bottom, however, I question the premise of whether, for most students at schools outside the top tier, the third year is actually a waste of time, at least if spent in traditional courses. I don’t agree, in other words, with Dean Larry Kramer – at least not applied outside the top tier.  Law school is essentially a liberal arts, generalist education in the law – and for many students, it includes their first introduction to subject areas crucial to ordinary law practice in the civil, commercial, and regulatory settings.  Maybe they should have acquired this background as undergraduates – but that comes close to saying that students planning on law school, or potentially thinking about it, should plan to study business as undergraduates.

I don’t think that’s right.  The American model of professional education on top of generalist education is the right model, if there were more substance to liberal arts education and a lower cost.  This is a rich society, still, and the social payoffs in a diffuse way have traditionally been substantial, as both public and private goods.  They’re not now because liberal arts education is no longer teaches very much that’s analytic in most fields and because, in any case, the price tag is simply too high.  As a society, when it comes to the liberal arts, as well as law schools, student loans have subsidized the expansion of university administrations, on the one hand, and funded an extraordinarily expensive free-agency market for tenured and tenure-track professors revolving around scholarly, but oftentimes pointless, markers set on a positive feedback loop, on the other.  It’s the Glass Bead Game – with real money attached.  The institution of the university has been abandoned by faculty and given over to administration; the tenured and tenure track faculty have abandoned an institutional sense of the university in favor of a market of academic free agency.  That market’s currency is driven by scholarship and underwritten by the the ability to shift teaching onto non-tenure track instructors who can’t get into the market and leverage off of their lower wages and non-benefits through student loans.  The surplus, among other sources, funds the institutional administration and the academic free agency market.

It’s hard to be sympathetic to my vocation, I’m sorry to say.  Scholarship in the liberal arts, as well as law, seems to me substantially red-queen behavior.  I don’t believe any of us individually see our production that way – I certainly don’t, and on the contrary see my work as intellectually vital and I’m sure that other professors, in perfectly good faith, see their work the same way.   I don’t think one can or should try to pick and choose among it, because things that seem immediately useless do turn out to be keepers, but often only across generations – the fatal sin of Britain’s attempts to systematize scholarly production and evaluation.  Not is utility, short or long, the only measure of truth and beauty.  But, still, without trying to pick and choose intellectual winners – without engaging in British higher ed style industrial policy for scholarly production – we can recognize the incentives induced by so much money fueling scholarly signaling.  Where the signaling might well be about deer striving to grow bigger antlers.  We need to try and shift those incentives. Unsurprisingly, this involves bringing costs down.  (For reasons I won’t elaborate here, I do think tenure is important to intellectual production.)


Carried back to the law school business model – the business law courses I teach are often the first introduction for students both in the liberal arts, but also sciences and technology students, to business and the commercial world.  There’s a lot made about third year seminars driven by professors’ theoretical interests, of little or no practical value, to students once out in the world – but students can pick and choose to focus on doctrinal courses at any law school I’m aware of.  And I just don’t think it’s the case that, if your first exposure to business and commercial law is in the second year BA class, you are actually educated to where you more or less thought you would be (if you understood what you needed to know, so speak) by the end of the second year.

Even focused in a practical, doctrinal sense, that will not leave you enough time to learn something about – just focused on a commercial law curriculum – the principal areas of the UCC.  I think the third year is underutilized by students as a time to get more doctrinal, yet more specific – fields of law that will be hard to study on one’s own later on, because one needs to approach them systematically, and law practice is not usually conducive to systematic study; it is too reactive and opportunistic to substitute for organized coursework.  That is why, I might as well add, I favor an additional required course for all students in law and accounting, even if it is just designed to expose lawyers to the basic concepts of accounting and in introduction to financial statements.

Law school is a combination of trade school and graduate school – the intellectual glory of American lawyers in practice, at its best, lies in this peculiar combination of trade-craft and the ability to conceptualize whole new ways of thinking of things.  The theoretical law-and courses, taken in moderation, do have value.  But one reason, I suspect, that students take them is, yet again, the rational desire to use the third year to take the courses dear to professors’ scholarly interests in which one is far more likely to get an A.  Not the whole of it, I’m sure.  But in any case, I’m not persuaded that turning the third year into a transition to practice, skills based, externally focused year at the expense of doctrinal courses is the best idea, at least not for all or even most students.


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