Wednesday, July 17, 2013

"Fundamentally Changing the Conversation about the Economic Value of Legal Education"

Frank Pasquale

Like any educators, law professors need to be open to criticism. We need to find ways to make legal knowledge more accessible and effective, to serve the public interest. To the extent the costs of education are too high, we need to address that, too.

However, we also need to fully understand the data fueling calls for cost-cutting. A paper co-authored by a former colleague of mine is a major step toward such clarification. In fact, I agree with Brian Leiter that it should "fundamentally change the conversation about the economic value of legal education." From the abstract:
[G]iven 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.
I plan on blogging about various aspects of this paper in coming weeks and months. At the outset, I just want to note: I don't share Simkovic's outlook on many matters, including, say, his proposal for risk-based student loans (which is a bit too close to Rick Scott's education agenda for my comfort). I am much closer to the Bady/Konczal view of the role of education (and the state in funding it). I think Simkovic & McIntyre may be too sanguine about the politically driven changes in demand for legal services. (Regardless of how well law schools teach and train, there will be less demand for lawyers in an era of corporate impunity.) Nevertheless, I am deeply impressed with the paper (and the authors' PowerPoint presentation anticipating many critics' concerns). This is important work that should be carefully considered by anyone proposing deep changes in legal education.