Archive | Law School Tuition and Loans

The “New Normal” in the Legal Profession

UNC’s Bernard Burk has an interesting new paper on changes to the legal profession and legal job market, “What’s New About the New Normal: The Evolving Market for New Lawyers in the 21st Century.” Here’s the abstract:

Everyone agrees that job prospects for many new law graduates have been poor for the last several years; there is rather less consensus on whether, when, how or why that may change. This article analyzes historical and current trends in the job market for new lawyers in an effort to predict how that market may evolve.

The article derives quantitative measurements of the proportion of law graduates over the last thirty years who have obtained initial employment for which law school serves as rational substantive preparation (“Law Jobs”). In comparing entry-level hiring patterns since 2008 with those in earlier periods, a significant development emerges: While other sectors of the market for new lawyers have changed only modestly during the Great Recession, one sector — the larger private law firms colloquially known as “BigLaw” — has contracted six times as much as all the others. Though BigLaw hiring has historically accounted for only 10%-20% of each graduating class, it is responsible for over half the entry-level Law Jobs lost since 2008.

While some observers predict a return to business as usual as the economy recovers, this article is skeptical of that account. The article identifies significant structural changes in the way that the services traditionally provided by BigLaw are being produced, staffed and priced that diminish BigLaw’s need for junior lawyers both immediately and in the longer term. These observations suggest that entry-level BigLaw hiring, and thus the market for new lawyers overall, will remain depressed below pre-recession levels well after demand for the services BigLaw has traditionally provided recovers. At the same time,

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Sixth Circuit Affirms Dismissal of Suit Against Cooley Law

Today, in MacDonald v. Thomas M. Cooley Law School, the U.S. Court of Appeals for the SIxth Circuit affirmed the dismissal of a suit by several former students at the Thomas M. Cooley Law School. Here’s the court’s summary of its opinion.

The plaintiffs, twelve graduates of the Thomas M. Cooley Law School, sued their alma mater in district court, alleging that the school disseminated false employment statistics which misled them into deciding to attend Cooley. The graduates relied on these statistics as assurances that they would obtain full-time attorney jobs after graduating. But the statistics portrayed their postgraduation employment prospects as far more sanguine than they turned out to be. After graduation, the Cooley graduates did not secure the kind of employment the statistics advertised—or in some cases any employment at all. They claimed that, had they known their true—dismal—employment prospects, they would not have attended Cooley—or would have paid less tuition. Because their Cooley degrees turned out not to be worth what Cooley advertised them to be, they have sought, among other relief, partial reimbursement of tuition, which they have estimated for the class would be $300,000,000. But because the Michigan Consumer Protection Act does not apply to this case’s facts, because the graduates’ complaint shows that one of the statistics on which they relied was objectively true, and because their reliance on the statistics was unreasonable, we AFFIRM the district court’s judgment dismissing their complaint for failure to state any claim upon which it could grant relief.

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Debating the Value of a Law Degree

The new study by Michael Simkovic and Frank McIntyre estimating the value of a law degree has sparked a substantial amount of debate and commentary, as I noted here and here. Most recently, WUSTL’s Brian Tamanaha, author of Failing Law Schools, went after the study on Balkinization arguing it systematically overstates the value of a law degree and understates the risk of assuming debt to obtain a law degree. Simkovic has responded forcefully against Tamanaha’s “straw men,” here and here. John Steele, Frank Pasquale and Stephen Diamond also have comments on the exchange.  I am quite certain there will is more to come.

UPDATE: There are more entries in the debate. One from Tamanaha, another from Simkovic. Pasquale also comments again here.

UPDATE: Simkovic has yet another post respnding to Tamanaha’s critiques here.

THIRD UPDATE: Another round from Simkovic and Tamanaha. [...]

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More on the Value of a Law Degree

Following up on his posts at Concurring Opinions discussing his study (with Frank McIntyre) attempting to measure the value of a law degree, Michael Simkovic rounds up the commentary and critiques of the study on Leiter’s Law School Reports. I noted prior coverage of the study here, and Paul Caron rounds up some additional coverage here. [...]

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On the Value of a Law Degree

In the NYT‘s Dealbook column, Ohio State’s Steven Davidoff discusses a new study, “The Economic Value of a Law Degree,” by Michael Simkovic and Frank McIntyre. This study purports to show that a law degree remains a good investment for many people. Here is the study’s abstract:

Legal academics and journalists have marshaled statistics purporting to show that enrolling in law school is irrational. We investigate the economic value of a law degree and find the opposite: given current tuition levels, the median and even 25th percentile annual earnings premiums justify enrollment. For most law school graduates, the net present value of a law degree typically exceeds its cost by hundreds of thousands of dollars.

We improve upon previous studies by tracking lifetime earnings of a large sample of law degree holders. Previous studies focused on starting salaries, generic professional degree holders, or the subset of law degree holders who practice law. We also include unemployment and disability risk rather than assume continuous full time employment.

After controlling for observable ability sorting, we find that a law degree is associated with a 60 percent median increase in monthly earnings and 50 percent increase in median hourly wages. The mean annual earnings premium of a law degree is approximately $53,300 in 2012 dollars. The law degree earnings premium is cyclical and recent years are within historic norms.

We estimate the mean pre-tax lifetime value of a law degree as approximately $1,000,000.

A PowerPoint file highlighting the study’s findings is available here, and co-author Michael Simkovic is blogging about the study and the debate it has triggered at Concurring Opinions. Davidoff’s column also discusses what the study does and does not show.

A one might expect, this study has provoked quite a bit of response. ATL’s Elie Mystal calls it [...]

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More on Washington and Lee Law School

Professor Jim Moliterno of Washington and Lee Law School has a lengthy post over at The Legal White Board, which is in part a response to my post on this blog suggesting that the jury remains out as to whether W & L’s innovative curriculum is a hit among prospective law students.

I noted that despite what appears to be have been a banner year last year in admissions, “W & L’s median LSAT score was in the top 20 of law schools when it announced its experiential curriculum in 2008, and that it’s gone down every year since.”  Moliterno replies, “Actually the W&L median LSAT was steady at 166 from 2005-2010, dropped 2 points to 164 in 2011 and stayed at 164 for 2012. It has not ‘gone down every year since [the new curriculum was announced in 2008].’”

Moliterno seems to have misunderstood what I wrote, and, in retrospect, I can see that I wasn’t clear.  I did not mean that W & L’s median LSAT score went down every year.  I meant that relative to other law schools, W & L’s median went down every year.  As a result, W & L’s median LSAT was in the top 20 among law schools in 2008, and was not even in the top 30 in 2012.

I also noted that to the extent W & L’s admissions stats are taking a dramatic turn for the better, it may not be because of its curriculum, but because W & L is being especially generous with financial aid, making it, on average, one of the least expensive law schools in the U.S. News top 40 for out of state students.

Moliterno replies that when asked about the strengths of the law school, students ranked the curriculum number one, and financial [...]

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Too Soon to Pronounce Washington and Lee Law School’s “Experiential Curriculum” a Hit with Law School Applicants

Bill Henderson has a post over at The Legal Whiteboard that has been getting a lot of attention in law school circles, praising W & L’s innovative curriculum, which focuses on practical lawyer skills, as both an educational success and as a hit with law school applicants.   Bill goes over some of W & L’s recent admissions data, and concludes:  “A sizeable number of prospective students really do care about practical skills training and are voting with their feet.  W&L has therefore become a big winner in the race for applicants.”

Some caution is in order here.  My understanding is that W & L’s median LSAT score was in the top 20 of law schools when it announced its experiential curriculum in 2008, and that it’s gone down every year since, while its GPA rank has, after a plunge, more or less returned to where it was.  As Bill points out, W & L had a banner “yield” last year, with many more students accepting offers than places available, with a substantial percentage of students being asked to defer, and the first-year class still filled beyond capacity.  So we’ll have to see whether future statistics reflect strong gains in GPA and LSAT ranks, or whether W & L is attracting many students, but the “best” (most sought-after because of their LSATs and GPA, which are for the most part all law schools care about thanks to US News) students are still avoiding it.

Even if W & L does wind up with increasingly strong classes while everyone else is struggling, it wouldn’t be clear that its curriculum is the primary cause, or perhaps a cause at all.  Washington & Lee has a tuition “sticker price” of around $42,000,  but is known for being among the most generous law schools [...]

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More on the Law School Business Model

A few days ago I posted on WSJ and NYT articles talking about the opening of new law schools in the midst of a crash in law student applications.  Since then, a couple of other professors have posted comments on the topic, and I thought I’d flag them.  NYU law professor Robert Howse, writing at Prawfslawblog, argues that the gloom and doom is overwrought, and suggests that American law schools will be able to look to foreign students, not just to fill LLM slots, but JD classes as well:

Application for JD slots are down-we all know that. But even assuming that’s a longer-term trend rather than a reflection of th economic anxieties and difficulties of the last years, there is no reason for panic or despair.  The potential of America’s law schools is only starting to be realized.

The global market for US legal education was traditionally regarded as composed of a relatively small group of foreign-educated lawyers seek advanced degrees. But this changing. Increasingly, a US JD degree is an attractive option for foreign students. And you have probably noticed more non-US JDs in your classes. In most countries law is the subject of a first degree after high school. The market could be expanded of US law schools were to offer a combination undergraduate degree in another discipline and a law degree-what about a 5 or 6 year program that leads to a BA in economics or political science or philosophy and a JD?

The fact is that American law schools have a competitive advantage. To be sure there is excellent legal education in some other countries. But my considerable global experience suggests to me that those countries are few. In most places, legal education is dominated by old-fashioned rote learning and by professors who spend

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More New Law Schools Opening

Coming on top of news of the sharp declines in law school applications, the Wall Street Journal reports today on new law schools opening.  The headline captures it: “A Crop of New Law Schools Opens Amid a Lawyer Glut.”  Jennifer Smith reports that thought law school applications are at “their lowest in a decade,” a handful of universities are moving forward to open new law schools:

 Some of the new schools are intended for regions where law schools are scarce or are being built to round out a university’s suite of professional schools. But many of them are likely to find themselves competing for a shrinking pool of would-be lawyers and sending hopeful graduates into one of the toughest markets in years for law jobs.

Indiana Tech’s new law school in Fort Wayne will be the state’s fifth when it opens this fall. The law school the University of North Texas plans to open in Dallas next year will be just down the road from Southern Methodist University’s Dedman School of Law, and less than an hour’s drive from one in Fort Worth that Texas A&M University is in the process of buying from Texas Wesleyan University, one of nine in the state.

The numbers don’t favor these new schools. Last year the pool of law-school applicants shrank to about 68,000, down about 13% from 2011 and more than 30% from the past decade’s peak of about 100,000 in 2004, according to the Law School Admission Council, a nonprofit group that administers the Law School Admission Test and compiles admissions data.

Probably many of these universities figure that they can afford long time-lines, as the article points out, and so can treat the current downturn as merely cyclical.  These law schools have also probably been in the university pipeline for [...]

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Law School Applicant “Capitulation”

Back in 2008 or so, a VC reader told me that because of my blogging about the housing bubble in 2004-05, he put off buying a house and was very glad he did.  Now, he said, he was wondering when would be the best time to buy a house from a capital gains perspective.  I responded that the best time to buy real estate, or really any investment, is when “everyone” is saying it’s a terrible investment.  On Wall Street, when buyers have almost disappeared from a market, and prices seem in permanent free fall (as in March 2009), it’s referred to as “capitulation.” (Both then and in October 2008, I was busy buying closed-end mutual funds, which “capitulated” to an even greater degree than the market as a whole, and for which I had an objective measure of their relative undervaluation.)

If we’re not as this stage with regard to demand for law school, we are damn close, with applications running about half the level  of six years ago.  Law school certainly isn’t for everyone, and how worthwhile economically it might be for anyone in particular has to start with that individual’s opportunity cost and where he gets admitted–it’s a very different decision if you currently are thriving as a consultant than if you are currently advancing your barista skills at Starbucks, and very different if you get into Harvard than into a newly accredited school in a saturated legal market, and very different if you can keep your current job and get an automatic pay raise (as in some government jobs) for getting a law degree and if you will likely need to hang out a shingle but have poor social skills.

But there hasn’t been a better time to apply to law school in a long [...]

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Brian Tamanaha’s “Failing Law Schools”

Last week I had the pleasure of reading a pre-publication draft of Brian Tamanaha’s new book, Failing Law Schools, which has not yet been released but can be pre-ordered now. I found the book engrossing and its argument powerful. I read it in 2 days after receiving a copy, and I think it should be required reading for all legal academics.

Brian’s basic argument is that law schools have been on an unsustainable path fueled by the ready availability of student loans, the cartel power of the ABA, and the influence of the U.S. News rankings, all of which have led schools to adopt policies that help law professors more than they serve students. In most states, you can’t be a lawyer unless you graduated from an ABA-accredited school. Law professors have run the ABA accreditation process, however, and have done so in ways that ensure that all ABA-accredited schools treat professors extremely well and that law schools are quite nice places to work. This has led to a surprisingly uniform educational system in which nearly every school adopts a high tuition model that gives professors low teaching loads, nice salaries, and lots of time for research. Some professors work extremely hard and produce important scholarship, which is the goal. But many other professors just coast and take advantage of their good fortune after making it past the (typically low) tenure hurdle. And Deans generally can’t treat the hard workers and productive scholars better than the dead wood because Deans generally require faculty support to stay in office: A Dean who favors the productive scholars and top teachers too much may not stay in office long. So salaries for all professors are high and course loads are low, whether the professors work 80 hours a week or 20. [...]

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NLJ on Misreporting Law School Costs

The National Law Journal reports on the under-reporting of estimated cost-of-living expenses at many law schools. The story begins:

The news just keeps getting worse — at least as far as financing a legal education goes.

Law School Transparency has recalculated its estimates of the debt that law students stand to incur after discovering that a number of schools had low-balled the cost-of-living figures that they provided to U.S. News & World Report. On average, schools underreported those expenses — upon which the organization pegged its initial estimates — by $5,000, according to the Law School Transparency’s executive director, Kyle McEntee.

Additionally, the organization made several mistakes in its handling of the U.S. News data, which contributed to the problems, he said.

Here is the post that led to this story. [...]

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Misreporting the Costs of Going to (Some) Law Schools

In an effort to educate potential law students about the real costs of attending law school, Law School Transparency has launched a “Data Clearinghouse”, a database of “consumer information” on law schools, including much information law schools have been reluctant to disclose.

The latest addition to the database are projections of the full cost of attending each law school in the nation. Based on Law School Transparency’s calculations, these costs can vary widely. As the NLJ reported:

As part of the comprehensive database of law school employment statistics it launched this week, the organization has projected the total cost of law school loans for students who will graduate in 2015 and 2016 — that is, the ones who will start law school this year or next. The former will owe an average of $195,265 and the latter will owe an average $200,595.

“My jaw dropped when I ran the numbers,” McEntee said.

He added a few caveats. The calculations are based on the assumption that students will borrow the full tuition amount in the form of federal loans, even though many students receive some scholarship money. They also assume that students at public law schools pay out-of state-tuition levels, which generally are higher than in-state rates. . . .

The City University of New York School of Law features the lowest projected debt for the class of 2015, at $96,242. The University of California, Berkeley School of Law had the highest, at $273,667, although that figure assumes graduates paid out-of-state tuition rates; most students from outside California qualify for in-state tuition after one year.

New York University School of Law had the next-highest projected debt at $266,462.

Some of the numbers are quite revealing — and some of the numbers are quite wrong. In a quick review of [...]

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Legal Ethics Forum Symposium on the Legal Education and the Legal Profession

This week the premier legal ethics blog, Legal Ethics Forum, is hosting a symposium on “Legal Education’s Response to the Economic Realities Facing the Profession.” In this symposium, “scholars on the legal profession from the United States and around the world will post contributions about the implications of economic pressures on the way we teach our students.” They have what looks like a fantastic line-up (including my colleague Cassandra Burke Robertson), so this will be a must read for those interested in how legal education and the legal profession are responding to broader economic changes. [...]

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