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Tuesday, April 24, 2012
LSAC Responds to Balkinization Post
Brian Tamanaha
The Chair of the LSAC Board of Trustees sent out a mass email today with a pointed response to my recent post raising questions about LSAC's priorities. In fairness to LSAC, I will post his response (with a few comments).
Comments:
Dear Mr. Tamanaha:
Thanks for your great job in reporting this. The LSAC Chair's E-mail is a true and absolute masterpiece of lawyerly-doubletalk. It does everything except address the actual issues you raised. These people should be ashamed of themselves -- especially since their rhetoric is nearly an exact replica of what we've heard from the people on Wall Street who destroyed our economy. The same goes for the outrageous salaries being paid these people -- again just like the monstrosities going on on Wall Street. This group has an absolute monopoly on this situation, and are abusing that situation for their own gain. Keep up the good work. Ross Taylor University of Washington 1977
They tried paying the president only 300k, but it turned out the test wasn't compatible with No.2 pencils that year . . .
These posts have been very educational. It appears that LSAC is misjudging the shared interest of law schools and students in reducing the barriers to application at this critical juncture, and that its principals should force it to change course.
This part of the reply is striking: "When the recession hit, the LSAC also increased its direct subsidies to schools to help them weather the storm; for example, the LSAC began to pay more of the costs for admissions staff to attend candidate forums and the annual professional meeting." Does this mean LSAC not only subsidizes applications by lower-income students (which seems laudable, if and to the extent those candidates will be able eventually to attend), but also subsidizes less wealthy law schools? The idea of charging students more so that they can be exposed to schools less likely to be able to offer financial aid, and (as a rough correlation) perhaps even less likely to generate jobs for them, seems more dubious. Is LSAC understood to serve as a cross-subsidizing insurance vehicle for legal education providers?
Terrific critique. You've got to be kidding me on those salaries. The truth really hurts, doesn't it, LSAC?
I don't mind it that prospective law students suffer some pain in learning how monopolies burden the public; they are trying, after all, to enter one of the worst of the monopolistic professions, and their future income will depend in large part on screwing the public out of its options and its wealth.
The fault lies with the legal profession, which, in the interests of justice and as Milton Friedman often proposed, should simply abolish all barriers to the practice of law, including required courses, LSATs, diplomas, and state bars.
This exchange sheds critical light on the rising costs to applicants and potential law school students but LSAC costs are of the least of expenses on the balance sheet of those seeking a legal education. With this issue out of the way maybe Mr. Tamanaha can now shift his critique to the major prohibitive price, law school tuition.
This exchange sheds critical light on the rising costs to applicants and potential law school students but LSAC costs are of the least of expenses on the balance sheet of those seeking a legal education. With this issue out of the way maybe Mr. Tamanaha can now shift his critique to the major prohibitive price, law school tuition.
The LSAC would actually be doing both the legal profession and the undergraduate students a favor if they were to jack up the price to $5000 with no waivers, thus decreasing the number of kids who throw their lives away by going to law school. The only people who would apply then would be those who can actually afford law school without the life-crushing debt, or those who are truly dedicated to having a legal career and willing to suffer the costs.
The cost of the LSAT ($160 for the test, but there is a mandatory "Credential Assembly Service" for $155 added on) is $315, higher than the $235 for MCAT, $240 for the GMAT or $140 for the GRE. The business about $450 for six applications being one third less than the others is only true with the MCAT and then only true of the applicant uses the universal application which costs $160 plus $34 for each school beyond one.
I'm not sure why the LSAC chair was so evasive, everyone is raising their prices and what he says about overall cost of application and Fee Waiver is true of all the entry tests.
First, on the lobbying amount, the LSAC's response is valid. The $1,000,000 figure is actually from a table found in IRS Form 990 Schedule C for all filers. Pull up a blank IRS Form 990 Schedule C. The LSAC Form 990 for 2009, which can be found on the internet, does list $24,200 as lobbying in Schedule C.
Second, on compensation, what you really need is the comparisons and analysis done by the independent compensation consultant, and how the compensation committee used such reports. Having these reports or minutes would be very helpful. Simply saying the LSAC's compensation is too high without an understanding of how it was arrived is knee jerk, but if such reports and minutes could be obtained and carefully analyzed, then this discussion on compensation would be more useful. Third, on the cash and securities, query whether a written internal policy exists that explains why such amounts are being held. Having a copy of the written policy would be very helpful.
LSAC and rsm are right about the lobbying. The $1,000,000 is an amount used to calculate the ceiling on lobbying permissible under tax law. The "lobbying expense" is two lines below that, and is roughly $25K.
Although I don't agree with the fee increases, nor with the compensation paid (the president of a monopoly only needs to be competent, not able to formulate and execute a vision for the company that can out-compete competitors), I do think they serve a purpose: reducing applications to law schools.
One of the biggest problems with law school is that the bulk of the costs come at the end, whether it be debt repayment or fees to take the bar exam and retain one's licensure as an attorney. Anything that increses the up-front costs to be somewhat akin to the back-end costs is a good thing - especially when 22-year-olds are involved. That also makes me wonder about the wisdom of subsidising low-income students. If you can't cough up $160 to take the LSAT, how are you going to put down a deposit to school once admitted (mine was $750, back in the day), move to whatever school you attend, put down deposits for rent, and, after graduating, pay for the bar, and pay to be licensed? (Okay, yes, you can take out yet another loan for bar studying, but that's not necessarily a solution....) The $500 to apply to law schools is the least of your worries.
...which is to say: while I support the idea of making the legal profession more economically diverse, we are talking about college graduates. I'm not exactly clear on why we can't expect people to get a job after graduation and use their salary to pay for the LSAT, LSAC fees, application fees, and other costs. I spent a few thousand dollars of my own money on the law school application process, which, as a person with a bachelor's degree, would be an option available to me that isn't available to a high school senior applying to colleges. (Full disclosure: my parents helped out quite a bit once I was in law school.)
It's a waste of time to attempt to figure out the fair charge for the LSAT or the fair salary of the officers of LSAC.
The fair price of anything is what it would bring in a free market. There is no other valid measure. The problem is that in Law, as in Medicine, there is no free market. That's why Milton Friedman's suggestion that we abolish all barriers to professional practice, including residency, LSATs, JDs, bar exams and the like, is particularly apt. If such barriers had been in place for engineering, we probably wouldn't have the light bulb, electricity, car, airplane, and movies, much less the cell phone.
Brian,
If my money was being managed by a tree, it would be a tree fund. If my money was being managed by a hedge... Keep digging - and, as always - follow the money. Very awesome post , i am really impressed with it a lot فوائد الزنجبيل فوائد الرمان فوائد الحلبة فوائد البصل فوائد الزعتر فوائد زيت السمسم علاج البواسير فوائد اليانسون فوائد الكركم قصص جحا صور يوم الجمعه علامات الحمل تعريف الحب حياة البرزخ فوائد الزبيب
Try a thing you haven’t done three times. Once, to get over the fear of doing it. Twice, to learn how to do it. And a third time, to figure out whether you like it or not
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