Balkinization  

Tuesday, September 06, 2011

Transfer Students are the New Normal (With Significant Implications for Law Schools)

Brian Tamanaha

Transfer students are sweeping across law schools, with about 5 percent of students moving annually. In 2008, the most recent year with publicly available records, every accredited law school in America but one saw transfers; at almost every law school, the transfer door swung in both directions: outgoing students departed for a better school, just as incoming students came in. It is an annual reshuffle of students up the law school chain.

Remarkably—a sign of how crazy things have gotten—even students at top fifteen schools transfer up to find a better perch in the law school hierarchy. In the four years on record (2005-2008), as many as 10 students have transferred up in a given year from Michigan, Duke, and Northwestern, and a greater number have left Cornell and Georgetown.

Law professors treat transfers as if a taboo. A recent article about transfers in the Journal of Legal Education supplies numbers, but redacts the identities of the law schools (declining to "name names"). This concealment is dubious for a scholarly article--especially considering that the information is openly published by the ABA--and it hides the full impact transfers are having on legal academia. (The fact that the editor of the preeminent journal on legal education allowed the author to artificially withhold this information is indicative of the transfer taboo.)

Transfer students are the new normal. When nearly every law school (that can) takes in transfers, and many do so in significant numbers, it is silly to treat it as a deviant or dirty practice. The scale of this phenomenon--the names and numbers--may surprise you.

This phenomenon starts at the top. Law schools try to strike the best balance between improving or maintaining their median LSAT and harvesting revenue. As LSAT-free revenue payers, transfer students are ideal: they are capable students who bring in money with no downside beyond a bit of institutional inconvenience.

Among elite law schools, the undisputed champions of cashing in on transfers are Georgetown (net student gain of 87, 87, 81, and 71 in 2005-2008) and Columbia (39, 54, 62, and 72 in same years). But the other industry blue bloods are not shy about it either. Almost all of the elite schools brought in transfers each year in significant numbers: one to two dozen at Yale, Stanford, Penn, and Chicago (adding 8 to 13 percent to their classes); two to three dozen at Harvard, Michigan, Berkeley; three to four dozen at NYU and Northwestern. (Gaining a leg up in the transfer grab, Northwestern sent “conditional admittance” letters to a bunch of students denied initial admission, informing them that they will be admitted as transfers if they meet a specified class rank in their first year elsewhere. ) Virginia went up and down. Only Duke, Cornell, and Texas consistently netted around 10 or fewer students (the net gain of the first two was depressed by the significant number of students they lost).

Once schools at the top absorb transfers in real numbers, the process inevitably cascades. Schools drained of students by higher-ups, in turn take transfers from schools lower in the chain, and so on down. That’s why virtually every school in the country sees transfers in or out, and in most cases in both directions.

An illuminating picture can be seen in the latest published statistics (keep in mind that this is just one year, 2008, and things are fluid). When measured in terms of the percentage of the second year class—which tells you the proportion of new bodies in the group that graduates—Rutgers-Camden is number one at nearly 23 percent of the class, and Columbia is second at 21 percent. One out of five Columbia law school graduates in 2010 did their first year elsewhere.

Flagship state schools are big players in the transfer market, placing eight schools among the top twelve in percentage terms. In 2008, transfers composed a significant portion of the second year class of Rutgers (22.71 percent), Buffalo (19.52 percent), Florida State (18.44 percent), Minnesota (18.14 percent), Arizona State (17.03 percent), Berkeley (16.79 percent), UCLA (15.59 percent), and Utah (14.29 percent). Apparently, state schools have been compensating for reductions in funding from legislatures by raising revenue from transfers in a way that does not damage their median LSAT. With strength in the local legal market and relatively lower tuition for residents, leading state schools, even those not among the national elite, are attractive destinations for transfers.

Ranking alone is not determinative. Whether a law school is in a strong legal market, and its comparative standing among other law schools within that market, bears on its attractiveness as a transfer destination. Loyola Marymount in Los Angeles (net +37) and Cardozo (net +20) in New York, for example, both ranked around 50, reap a significant number of transfers because they are the best non-elite schools in large legal markets, which makes them realistic and desirable transfer destinations for students from lower ranked schools.

A few observations will reveal some crucial dynamics. George Washington took in a large amount (+51) of transfers and lost a sizable amount (-24). In revenue terms the school did well, achieving a net gain of 26 tuition payers. But class composition suffered: GW exchanged a significant chunk of their best students for a passel of successful students from lower down schools. With a whopping 75 people switching places, this has a transformative effect on the class (albeit hidden from external view), stripped of many of its most outstanding performers. UCLA (+46, -9) and Washington University (+46, -12) also leveraged their top 20 prestige to yield a slew of transfers. Other schools in this rank-range participated at a more modest level. Southern California (net +15), Vanderbilt (net +10), and Notre Dame (net +12), took in fewer transfers and lost a handful. Illinois, Boston University, and Boston College roughly broke even with fifteen or fewer in and out. Transfers out from these schools are swept up in a talent suck to the top. (Remember, these numbers are from 2008.)

If more law schools in the top 15 begin to take transfers on a scale approaching Columbia’s, students from law schools ranked in the second group (15 to 25) will serve as their prime draft pool. Schools in this category will be shorn of a painful number of their better students and will have to take in more students to make up for the financial hit. Even if the top 15 maintain their current transfer patterns, schools in the 15 to 25 range can ramp up their transfer numbers on their own. Either of these scenarios would ramify through the remaining hundred and seventy five law schools. Every transfer student taken is a loss elsewhere, which losing schools would try to make up by taking transfers of their own. In this fashion, each transfer at the top can multiply several times down the ladder. The logic of the situation leans toward escalation because schools that currently moderate their transfer numbers are leaving money—transfer bodies—on the table to be grabbed by their less reticent cohorts.

No law school (outside of HYS) entirely controls its own fate. Every school is subject to the consequences of decisions made by higher ups as well as decisions by competitor schools in the same rank group. The 2008 numbers cited above likely understates current numbers of transfers taken by top schools.

And then there are the net losers (literally not pejoratively).

Two law schools, Cooley and Florida Coastal, incorporate transfers-out as an element of their economic model. These schools feed on students with rock bottom LSAT scores who have little chance of obtaining initial entry elsewhere. Many students come hoping to do well enough to transfer to a better school after the first year. For this to work financially, these schools must take in a large number of students, anticipating massive attrition at the end of the first year (transfers out, quitting, failing out). Unlike most law schools, which count on three years of tuition, these institutions will settle for one. In 2008, Cooley law school lost 188 transfers out, but it had 1,903 entering students. Florida Coastal lost 78 transfers out from a total class of 573. (Ramping up in size, in 2010 they took in 808 JD students.) These schools will be okay financially because they are built to operate that way.

Other schools that lose transfers in large numbers may be in trouble. Ave Maria saw 27 students leave a class of 127. Whittier lost 28 students from a class of 156 (4 transferred in). Ave Maria, Whittier, Thomas Jefferson, Detroit Mercy, Phoenix, and Widener (Wilmington) all suffered net losses of more than 10 percent of their class. Syracuse and Florida A & M were nearly 10 percent down. Valparaiso and St. Thomas (Minnesota) were down 8.5 percent. New England lost 8 percent, and Catholic was close to that. Hofstra, Oklahoma City, and Dayton suffered net losses of more than 7 percent.

Departures of this size are financial blows, not to mention the exodus of many of their best students. Each student who leaves is two years of tuition (discounted for scholarships) up in smoke. Few businesses could sustain revenue losses on this order without undergoing changes in how they operate. But there isn’t much that law schools in this position can do. They can up scholarship offers to dissuade students from heading out, but that would take away scholarship money needed for the next entering class, and many students will depart for greener pastures anyway. Alternatively, these schools can take in more transfers themselves, assuming they have drawing power.

Some schools might be pushed involuntarily toward the Cooley model of enrolling greater numbers of first years in anticipation of significant transfer losses. This would be highly problematic for schools that wish to maintain admissions standards. A number of these schools already accept close to half or more of the students who apply, and the pool of applicants to law school nationwide is contracting. They face a potential double hit: struggling to fill their first year class, and losing a significant number of students after a year. Serious financial challenges lie ahead for schools that find themselves in this position.

The article on transfers mentioned at the outset calls it a "tragedy," and portrays schools that take transfers as "poachers" engaging in sharp practices. Dean Matasar of New York Law School called it "predatory behavior." Critics speak as if law schools have some kind of claim over their students--implying that students who leave are disloyal (or worse, ripping off their former institution of its investment in a student's development), suggesting that schools that take transfers are behaving unethically and harming the collective good (read the article to get the full flavor).

It is understandable that schools on the losing end of the transfer phenomenon would perceive it negatively. But it has at least two positive consequences. First, it allows students who do well to maximize their employment opportunities by moving to a higher ranked school. Schools that lose students should not begrudge them this. (I willingly write transfer letters for my best students and I hope they succeed in the effort.)

Second, it is an avenue to partially correct the excessive weight law schools place on LSAT scores in the admissions process. Students who excel in the first year are just as capable as students at law schools ranked twenty or more spots higher (which initially denied them acceptance). In this sense, their ability was not correctly measured by their LSAT score. The transfer phenomenon constitutes a second sorting, with law schools making better informed decisions about the talent level of students.

Whatever one might think of the transfer phenomenon, it is likely here to stay (unless US News, bending to the urging of critics, decides to count the LSAT scores of transfers). We should discuss it more openly, without hint of scandal or taint. And we should treat transfers as valued students who have earned a place in their new school.

Comments:

The transfer phenomenon is almost entirely an artifact of USNWR's decision to use entering class LSATs and GPAs as a significant part of its ranking system.

If relatively high ranked schools were not seeking to manipulate their rankings by maintaining a small first year class with high entering credentials, they would prefer to set a class size and fill it in the first year rather than the second year, so that the institution and students would benefit from continuity and the institution's own first year curriculum.

Tamahana's argument that the transfer phenomenon benefits students is simply a fallacy of composition. Ranking is a zero sum game -- the number of top schools and the number of excellent jobs remain the same regardless of how the ranking game is played. So for every school or student that moves up the ranking scale, another one must move down an equal amount. There can be no net gain here.

On the other hand, all this churning imposes real costs on schools and students up and down the hierarchy, regardless of whether they transfer or not: loss of community, loss of continuity, loss of leadership.

We'd be significantly better off if USNWR based its ranking on the GPA/LSATs of a school's graduating class rather than its entering class -- which more accurately reflects the actual experience of graduating students anyway. To be sure, different students and institutions end up at the top of the rankings -- but the over all quality of legal education would be a clear winner.
 

Thanks for your response, General Welfare. Your argument is exactly the one Rensberger makes in the linked article. I encourage people to read it.

You are certainly correct that the transfer phenomenon is US News related. That alone does not make it a bad practice.

Given the high cost of law school and the importance of credentials within the legal profession, it makes sense that the best students should have the opportunity to move to a better school.

My argument is that the individual students who transfer benefit (at the loss of the school they leave)--there is no fallacy in this claim. The problem with Rensberger's argument, in my view, is his assertion that the interests of individual students (taking away their chance to transfer) should be sacrificed for the "common good" of law schools--which comes down to protecting the interests of the schools they leave behind.

It's also odd that we would try to restrict the ability of law students to move to better schools when many law professors actively seek to move up themselves.

Brian
 

I ran a soccer club for many years, and the situation you describe is exactly that which prevails in competitive athletics such as soccer. The top clubs regularly take players from the lower ones, and the process reverberates down the hierarchy. It might be worthwhile to use that analogy to examine the costs and benefits.

In soccer, there's a real loss to a team when a player leaves. The reason is that soccer depends on teamwork -- it takes time for the players to get to know each other and adapt their games to the common flow.

One possible counter, which I suspect law schools may use, is offering scholarships to players who don't need them, or increasing the aid above and beyond need. This, of course, diminishes the resources available for those who are in need.

The regular flow of players also, IMO, effects the coaching. It's good that players can leave bad or abusive coaches. At the same time, the constant movement has conflicting impact on the coaches. On the one hand they don't want to be perceived as harsh so the kids will stay. On the other hand, there's no real penalty for being harsh because they can always find new victims as long as they are harsh but successful.

Finally, there's a long run question in soccer: does this system increase or decrease the number of top players in the long run? My personal suspicion is that it does not -- we lose too many kids along the way who might have developed into much better players.

Anyway, just some thoughts.
 

Very interesting post, Brian. If one is a student at Yale, where does he or she transfer to? :) Seriously, do any students at Harvard or Stanford try to transfer to Yale? Now that would be scandalous!

Like you, I don't see anything wrong w/ students' transferring to "better" schools because pedigree matters so much when it comes to hiring in the legal profession (at least w/ respect to the BigLaw jobs that are so highly coveted). Law students do what's best for themselves and law schools do likewise. The idea that one isn't being loyal by transferring strikes me not only as silly but as shamelessly self-serving.

But I do have a question for you. Say you attend a third or fourth-tier school and finish at the very top of your class and tehn transfer to a first-tier school. Are you eligible for law review? How does that work?
 

Brian -- The fallacy of composition is clear. You are counting the benefits to students who move up the hierarchy without noticing that -- since the number of top slots has not changed -- a compensating number of students must be forced into lower ranked schools.

Instead, the first comparison must be between the losses to students who would have been admitted to a top school but were rejected because the school decided to keep its first year class smaller than its second year class, as opposed to the gains to those who are able to transfer in as second year students. Since the winners win only 2/3 of a Columbia or Georgetown education, but the losers lose a whole one, if the question is access to education, these two groups precisely balance either other.

Indeed, some students are clear losers: the ones who would have gotten into a bigger first year class and do get in as transfers, have lost a year of Columbia as nothing more than a ritual sacrifice to the gods of law school rankings.

The transfer system does mean that more people graduate with elite degrees, since an institution must accept 1.5 second year students to replace a first year slot it eliminates. But this is also not a gain to students. The number of good jobs remains the same. So every student who gets a job by convincing an employer that 2/3 of an top-ranked education is as good as a whole one, is offset by another student who loses that job -- perhaps the very same student they would have beat out with a lesser degree if there were fewer graduates with fancy ones.

In short, every gain to one student is balanced by an at least equal loss to another one. But that is only before taking into account any of the systemic losses, to students in both institutions, resulting from churning: loss of community, continuity, leadership and opportunities to lead. These go well beyond the "interests of the schools they left beyond."


***

There is one possible benefit to the transfer system that has gone largely unremarked.

Elite institutions that accept large numbers of transfers are implicitly stating that in their view, a first year education at a lower ranked institution is just as good as the one they offer. If that is true in the first year, which is generally regarded as the most important and must successful part of legal education, why not in the upperclass ones as well? Perhaps the transfer system eventually will help to undermine the fetishism of ranking that created it in the first place.

Daniel Greenwood
 

Daniel, excellent post. There probably is a lot to be said for increase the number of transfers in the following respect: law schools care far too much about LSAT scores --how could it be otherwise given USNWR law school rankings?-- but w/ transfers, they don't have to include their LSAT scores. There are people who deserve to be at much better law schools who don't end up at them initially because of their numbers (but often not due to their undergraduate GPA). I see this all the time as a pre-law advisor. I'll have students in my pre-law classes who aren't all that great but they get into great law schools because of their LSAT scores. And then I'll have a number of students who will make terrific law students and lawyers but who don't do well enough on the LSAT to be accepted at a top-tier law school, which is a shame.

The above is just a thought based on your comment that transfers may undermine the ranking system.

As Brian has pointed out elsewhere, however, third and fourth-tier law schools tend to lose their best and brightest students unless they throw a lot of money at them.
 

As a top 15 student in the first year of NYLS a few years back I can vouch for the fact that there is heavy, heavy pressure put on students not to transfer and even some outright obstruction.
 

Daniel,

I guess the difference between us is that I don't see it as one loser for every winner. First, as you note, elite schools are graduating more students to make up for the 1st year reduction--so there is an overall increase in the number of people who obtain these coveted credentials and the opportunities they bring.

Second, the "losers" you identify were those not admitted the first time around owing to the smaller incoming class, but they lost out because their LSAT score put them right at the margin. Your argument assumes that LSAT should be the measure of entitlement to entry. My view is that the second sorting (transfers based upon performance) is a superior way to judge the talent level of students.

If I am correct, the students who get in through transfers are more deserving of the spot (in terms of ability) than the students who would had gotten in initially had the first year class been larger. Notice that those you count as losers will be among those admitted later as transfers if they are able to demonstrate their ability. So they will not be losers after all. Only the ones who did not end up doing well at the lower ranked school will not be admitted--and it's hard to see why we should regret their inability to get in the first time around.

theottersden,

As you might guess--rarely do students transfer out from HYS, but it does happen on occasion.

Schools have different policies on law review. Some allow a write in opportunity for transfers, others do not. I'm guessing that more schools will shift to the former policy as we come to accept this "new normal." I have written this post in the hope that it will help break down the taboo surrounding transfers.

Brian
 

Thanks for your prompt response, Brian. And is this part of a book project?
 

The striving at the pinnacle of the class system get ever more frantic as the rewards get ever more gigantic.
 

Some comments from a transfer (top 35 school to Georgetown, now in the top 1% at Georgetown):

First, I haven't noticed the transfer taboo. I don't see Georgetown crying from the mountain tops that they rake in tuition dollars by accepting a hundred transfers, but transfer students themselves are treated like regular students (if not treated, always, so kindly by firms in 2L on-campus interviews). Though I'm an unusually successful transfer, and thus perhaps not such a great example, the school's doing its best to land me a clerkship; some of its biggest names volunteer to call judges on my behalf. I've probably exchanged 400 emails with my clerkship counselor in the past few weeks. So I don't at all get the sense that I'm a second-class citizen here.

Second, I think you romanticize the transfer process a bit. I think that some transfer classes are very strong; Harvard's, for example, is mostly comprised of people who were first in schools in the #6-#50 range. But the enormous classes, like Georgetown's, aren't selected in such a discriminating fashion. The school's doing it for the money, and it doesn't really seem to care too much whether it gets a very good student. This is obvious for two reasons; first, Georgetown takes people on the basis of one semester's of grades if they apply early. (So, shockingly, does Chicago.) Second, they admit quite a few people from Tier 3 and Tier 4 schools. Now, some will disagree, but I just don't see that it means much to be in the very top of your class at a school where the average LSAT is 150, or where the 75th percentile is as low as 152. It's like yanking an all-conference player from Division III basketball and throwing him in the NBA. I've known some of these transfers here, and they often do horribly at Georgetown, in spite of working quite hard.
 

Thanks for the information, Asher. You are right that my post assumed law schools would apply high standards when admitting transfers.

That was a generous (not naive) assumption on my part. One might wonder, for example, what law schools accepted those 188 students who transferred out of Cooley--and how far down the class they went.
 

I don't know enough to dispute Asher's point, but I do have to wonder why it is more advantageous for Georgetown to accept a bunch of mediocre students via transfer than to simply admit them as 1Ls in the first place.

On a related note, the post suggests that law schools suffer tremendous financial harm when a student transfers out, because they lose two years' worth of tuition and fees. But aside from the schools at the bottom of the pecking order, surely the school will just admit an extra student to fill that empty seat. So where is the financial loss?
 

There is one "transfer effect" that has not been noted. At least one law school admits very few minorities into its first year class. However, it accepts a large number of minority students on a transfer basis. This policy has the effect of making the percentage of minority students in the school as a whole well within the "acceptable" range although the entering class is overwhelmingly White and its LSAT relatively high. The overall LSAT of a school is not reported (in contrast to that of the entering class). I leave the ethics of this practice open for further discussion.
 

Selection of Transfer Students: Bar Pass and Money

The argument that these transfer policies are positive because they provide a way for good law students who are poor LSAT scorers to get to higher ranked schools relies, at least to some extent, on the assumption that schools are taking transfers in of high performing students. I’m not sure how valid that assumption is anymore now that it is an LSAT-money game. Or at least that assumption is an incomplete explanation of law school practices. My observation has been that schools seeking transfers in are just looking for someone who is good enough to pass the bar, not necessarily someone high up in their first year class. For example, I’ve seen a student from the bottom half of his class in a fourth tier school transfer to a first tier school. Statistically, his being in the top 60% of his first year class meant that he was very likely to pass the bar (first year grades are a very good predictor of bar success), even though he was not a top performer. I’ve also seen schools take transfers because they wanted that particular student as a future (giving) alumnus. The current transfer system removes much of the downside to admitting, through transfer, students based on who they are or who their parents are rather than admitting students based on purported, though perhaps flawed, measures of merit.
 

The Role of the ABA: Part I

The role of the governing body – the ABA – should not be overlooked. The LSAT loophole that has created the current transfer environment is basically legislated by the ABA reporting requirements, and that has anticompetitive effects. USNEWS uses entering students LSAT numbers as opposed to LSAT for all students because the former is what the ABA requires to be reported and the former is what is published by the ABA. If the ABA required the submission of LSAT numbers for all students (a relatively trivial administrative matter), then the USNEWS would use that data too (they’ve said as much). That would close this loophole pretty quickly.

Now we could argue whether that would be good or bad – whether the current transfer practices created by the LSAT loophole are a net positive or a net negative. But my point here has to do with the fact that the power of the ABA over schools has been used to create this loophole (likely inadvertently) and to perpetuate this loophole (deliberately). The issue of requiring reporting of LSAT numbers for all students was raised a year or so ago at the ABA level, but reform was brushed aside. I know of no principled reason not to report LSAT scores for all students. Any principled reason for requiring reporting of any LSAT scores (e.g. for entering students) supports the reporting of all LSAT scores (including transfers in). Nevertheless, the ABA decided not reform their requirements – a decision clearly made to further the interests of those who wanted to retain the status quo practices and the status quo hierarchy.

I’m all for schools competing for students, be it in the market for prospective students or in the market for transfer students. What I am against is the power of the ABA being used to suppress the competitive ability of schools at the bottom of the rankings - and that is what the ABA reporting requirements (and the LSAT loophole they create) do. The LSAT loophole allows schools just above the bottom of the rankings to inflate their LSAT scores (an inaccurate reflection of their student body) while the schools just beneath them in the rankings (those with net negative transfers or almost entirely negative transfer rates) cannot inflate their LSAT numbers. Thus the former schools gain a rankings advantage over the latter schools.
 

The Role of the ABA: Part II

Similarly, the transfer policies of the schools that are created by the LSAT loophole also suppress the bar passage rates of the schools at the bottom of the rankings. If the LSAT loophole were closed and that resulted in a reduction of the number of transfers, you would see the bar pass rates of schools at the bottom of the rankings (those with large net negative transfers) jump for the affected class years by a percentage amount almost equal to the percentage of transfers out. At some smaller schools, bar passage would jump by 10-15%. At the same time, the bar passage of schools just above those schools would probably dip a little bit. At the LSAT levels these schools are admitting students, the LSAT is not that good a predictor of law school success or bar exam success. Some percentage are likely to succeed and pass the bar while others are not, but you can’t tell which are which based on LSAT scores that differ as little as they do in these admittance ranges. In other words, a 151 versus 155 doesn’t tell you very much even though a 151 versus 171 probably would. The only way to tell which students are likely to pass the bar exam and which are not is to admit them give them a year of law school and see how they do. What schools just above the bottom are doing is using schools at the bottom of the rankings to filter those students likely to pass the bar (essentially students in the top two-thirds of the class) and then accepting those students on transfer. Schools at the bottom of the rankings take the LSAT hit and lose students that will almost certainly pass the bar while schools just above them inflate their LSAT scores while likely raising their bar passage rates a little bit, or at least without lowering their bar passage rates. This bar passage of course leaves the school at the bottom of the rankings (fourth tier) at a further rankings and student recruitment disadvantage to the school just above it in the rankings (third tier) – and it is all made possible by the power of the ABA to compel certain disclosures while not compelling other disclosures of equal worth.

The power of the ABA is being used to keep some schools at a competitive disadvantage that has nothing to do with the merits of their programs of legal education. I’m not against schools having an advantage over other schools; I’m against the governing power of the ABA being used to disadvantage certain schools.
 

Predatory transfer policies

I think you may be discounting what some mean by “predatory practices.” It’s not just about fairness to a particular school (although there are some valid arguments along those lines). It’s about pure bad behavior that I think would shock many faculty members at schools if they knew what their administrative counterparts were doing – from the arguably questionable practice of searching the published Dean’s Lists of first year students at lower ranked schools for students who were denied admission a year ago and then actively recruiting their transfer, to the unquestionably bad practice of calling a staff member of the registrar’s office at a lower ranked school and trying to browbeat them into sending a transcript of a student that hasn’t requested such a transcript be sent (or even apparently taken steps to attempt to transfer on their own) so that the higher ranked school can admit them on transfer. Yes, they tried to browbeat the staff member into violating federal law so that they could “admit” the student and then contact him with that admittance.
 

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