Monday, October 31, 2011

Law Schools are Not in Crisis

Brian Tamanaha

The National Law Journal is hosting a discussion of the state of law schools, with contributions from the current Chair of the ABA Section on Legal Education, John F. O'Brien, the President of AALS, Michael Olivas, Erwin Chemerinski of Irvine, Bill Henderson of Indiana, Lucille Jewel of John Marshall (Atlanta), and Kyle McEntee of Law School Transparency. Here is my initial post:

Many law professors would be disgusted at hearing that culinary institutes—which charge $30,000 annual tuition for two-year Associate degrees—advertise 97% percent employment rates for recent graduates when many of the grads counted as employed are working as fry cooks at fast food restaurants in positions they could have obtained without the degree. What if culinary institutes, to boost their advertised employment rates, hire a bunch of recent graduates in temporary part-time positions to clean up and wash dishes. On top of that, what if culinary institutes routinely claim that recent graduates earn $60,000 or more, although only a fraction get that pay, while most grads earn $30,000.

I don't know whether culinary institutes are guilty of any of this, which would be brazenly unethical. I do know, however, that law schools across the country have done things like this systematically for years. Conduct we would find unacceptable in others has been normal operating procedure for law schools.

To kick off this discussion the National Law Journal asks, "Are law schools in crisis?" We should be clear: law schools are NOT in crisis. Although a number of law schools shrank their entering class in 2011, enrollment at most law schools remains near all time highs, and tuition is sky high, especially at private schools. Law schools have more resources than other university departments. Law professors are paid far more than other professors and earn more than most lawyers.

The real crisis is suffered by our recent graduates, who find themselves burdened by mountainous debt, with limited employment opportunities.

Nearly 90% of graduates have law school debt. The average debt for the class of 2010 was $92,500 (not including undergraduate debt). To comfortably manage the monthly payment on this debt, a graduate needs to earn $120,000; if she could squeeze expenses, a salary of $86,000 might suffice. On a salary below that the monthly debt payments would be tough to make (in addition to taxes, rent, transportation, food, etc.).

Now consider that, according to NALP, only 64 percent of the class of 2010 secured full time lawyer jobs, with a median salary of $63,000. At least half of the graduates who landed lawyer jobs earned far less (twenty grand less) than the minimum salary required to manage the average debt. And let us not forget the more than one third of graduates who failed to land full time lawyer jobs at all.

As high as the average debt is, many law graduates are worse off. According to a recent poll, nearly one third of current law students expect to graduate with at least $120,000 debt. The 2010 graduating class of Cal Western had an average debt of $145,000 (88% of class). The graduating class of Thomas Jefferson had an average debt of $137,000 (95% of class). Few of these graduates will earn enough to manage their monthly payments. Law schools are graduating a slew of economic casualties.

Thousands upon thousands of law graduates have debt far above what their salaries can bear. Meanwhile, law schools are doing fine, thank you.


That's what makes the law school scam so disheartening. They've figured out the perfect crime. It's evil genius of a type that would make the worst Bond villain envious.

1. Publish very attractive "99% employed with median salary of $60k for those who chose government, and $120k for those who chose private practice" job placement numbers that an unemployed graduate would have to be crazy to turn down.

2. Immunize yourself from fraud claims by coopting the ABA committee in charge of determining the "proper" way to disclose job placement numbers.

3. Only admit very risk averse and non-combative types (others will be weeded out by the C&F process in admissions).

4. Beat them down during the three years, so that once they graduate unemployed the only thought in their head is "well, I wasn't top x% so I didn't deserve to be taught skills that the economy can use."

5. Get the government to guaranty the financing, so private sector prudence doesn't gum up your plan.

6. Vigorously fight anyone who poses a serious challenge to your scam (see e.g. Cooley/NYLS motions to dismiss).

I'm just waiting to see how the law schools stifle Senator Boxer, Coburn and Grassley's request for a DOE investigation. Something tells me they'll coopt the DOE too.

Another way in which the ABA (which has been co-opted by the schools) allows the schools to publish a fraudulent statistic:

They now require schools to report student loan default rates. However their definition of "default rate" is misleading and does not represent the true number of students who are not making their payments. Students who go on deferment or IBR will not count as defaulters under the ABA's definition, even though the graduate is not making his/her requirement payment.

The ABA - masters of statistical fraud.

I'm sorry, but I have a hard time feeling bad for law students who fail to make the big bucks after graduating. Maybe folks who go to law school as a business investment should assume some risk that their investment won't pay off. (FTR, I personally have almost 100K in law school debt, and I'm no longer practicing law.)

In my daily review of legal blogs/websites, this morning's (11/2/11) TaxProf posts "Symposium: The Future of Legal Education," 96 Iowa L.R. 1447-1717 (2011) with links to the various articles by law school deans and assistant deans. Law schools may not be in crisis, but there are apparently concerns that fill up over 250 pages.

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