Law Schools, Law Jobs and the “Second Wave” of Applicant Decline

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Law Schools, Law Jobs and the “Second Wave” of Applicant Decline

 

There is widespread speculation about how low enrollments in US law schools will drop. A recent report indicated another 5% decline in applications and another indicated 2.5% causing commentators to voice hope that the bottom had been reached. Along with the gross numbers there is an added and very troubling issue of the quality of the applicant pool and admissions as data suggest that many of the most intellectually talented applicant types are now shunning law school and pursuing other career tracks. In any event, the problem with analyses focusing primarily on gross applicant and enrollment numbers is that what has been happening to this point is only the crude “first wave” in the transformation of legal education, the legal profession and how law-related services are delivered.

Quality versus Quantity

The “bottom” of where law schools and law jobs are going, both quantitatively and qualitatively, probably hasn’t yet been reached even in the initial transformation of legal education and the legal profession. [1] My thoughts are that we are only entering the early phases of a overlapping but independent “second wave” of applicant decline and institutional transformations that will further alter legal education and law practice in fundamental ways. I wrote in an earlier post that there was a real possibility that quite a few law schools will (or should) close and that the scale of the law school “industry” could shrink to something like 15,000 to 17,000 new students per year.

Rather than shut their doors or pursue mergers or other steps to deal with what they face, many law schools and law professors have shown remarkable if less than admirable survivalist resilience as they seek to maintain their preferred “quality of life”. Even while law schools continue to proclaim the value of a legal education at a time where First Year enrollments have declined to something like 37,000 from a peak of 51,000, the qualitative slump in admissions has been much more stark. From a qualitative perspective the decline has been considerably greater than a reduction in overall law school First Year classes of 14,000 students over a five year period. If we analyze what law schools have done from the perspective of the quality of the applicants they now enroll we should take into account how deeply many law schools are dipping into the applicant pool that itself is not holding steady but shrinking in size and declining in overall quality, including at the upper end.

I’m not trying to be nasty but in many instances law schools are admitting “sludge” that they would have been embarrassed to have walk into their classrooms only a few years ago. [See, e.g., Natalie Kitroeff, April 15, 2015, “The Smartest People Are Opting Out of Law School: Fewer people with high test scores are going to law school, and low performers are filling their slots”, http://www.bloomberg.com/news/articles/2015-04-15/the-smartest-people-are-opting-out-of-law-school.]If we trust the judgment of law school faculties as measured by the credential quality of applicants to whom they were willing to extend offers of admission up until recently many of the people now attending numerous US law schools at this time could not have even gotten into law school only six years ago.

Law Schools as Parasites

The emergence of a near desperate state of mind on the part of far too many law schools coupled with the emergence of proprietary for-profit law schools seeking to capitalize on the ready availability of large government loans to students with credentials far below what were considered borderline or entirely inadequate only a few years ago has allowed schools to buffer the financial pressures produced by slumping applications and enrollments while undermining the quality of the law schools and their graduates. One commentator puts the situation as follows: “As the number of students going to law school drops dramatically, law schools are increasingly competing for students with lower undergraduate grades and LSAT scores. Thomas M. Cooley Law School – the largest law school in the country – is known for admitting students other law schools would not touch. [But] Last fall, seven law schools had entering classes with lower median LSAT scores than Cooley’s.… Equally concerning is that law schools are admitting and then graduating students who might not be able to pass the bar exam.” [Ry Rivard, “Lowering the Bar”, January 16, 2015; https://www.insidehighered.com/news/2015/01/16/law-schools-compete-students-many-may-not-have-admitted-past.]

I am not going to take the time to do the specific data analysis at this moment and have done some of the analysis in other contexts that are cited in this text. But if we drew a line across the admissions criteria that law schools were applying in making offers prior to 2010 I would be entirely unsurprised to discover that something like 10,000 First Year law students were now being admitted who would have been rejected prior to that time. This suggests that US law schools have experienced something closer to a 24,000 student “qualitative slump” in terms of their First Year enrollments.

If even close to accurate this means that in a five or six year period US law schools have experienced a 50% drop in the overall quality of their student bodies. For the elite law schools this is nothing more than a borderline inconvenience but for many others it represents a qualitative deterioration with significant implications. It is clear that a significant number of law schools have implemented strategies to protect their finances by engaging in an unjustified and unethical strategy of admitting students who only five years ago they considered unqualified. This brings a distasteful meaning to the idea that could be phrased as “if they are dumb enough to pay $120,000 or more for a pricey legal education when they should know no one is going to hire them, then it’s the students’ fault and not the faculties of the law schools.”

But enough critique. It is what it is and pampered law professors, deans and universities are going to do whatever is necessary to preserve their very comfortable lives as long as possible.[2] The main point I am raising is that while many are hoping the worst of the decline is over and that something approximating traditional normalcy will return to law schools my sense is that there is another evolving “Second Wave” building up that will intensify rather than mitigate the crisis for law schools and lawyers.

Coupled with this is the obvious fact that the cost of attending law school needs to be reduced rather than increased. Law graduates need to be able to provide quality legal assistance to people who presently lack access to representation due to its costs. This cannot be achieved without significant educational cost reductions. This means there is a need for a serious debate about how to achieve cost reductions while improving the educational outcomes. The problem is that for twenty-five years it has been possible to transfer all costs to students who were willing and able to borrow what in their naivete and the chase for the brass ring of becoming a lawyer they mostly felt was “free money”. I am not saying that law students are entirely blameless because for many I suspect that the three years of law school was in some ways a way to extend adolescence before having to “grow up” and face the hard facts of adulthood.

The “tuition bubble” that law schools rode for twenty-five years allowed an unprecedented expansion in faculty and administrative hiring and high-level salary increases and numerous perks. It also “greased” the relationship between law schools and their host universities due to the transfer of surplus revenues. Stephen Harper, author of The Law School Bubble, has observed: “demand for corporate legal work has been flat for years. But law schools’ business models generally have focused on filling classrooms, regardless of whether students will ever be able to repay their six-figure educational loans.” He adds: “For the fall of 2004 entering class law schools admitted 55,900 of 98,700 applicants — or about 57 percent. For the fall of 2012 class, law schools admitted 50,600 of 68,000 applicants — almost 75 percent.” [3]

What has become abundantly obvious is that the ability to increase the number of law schools and the size of law schools was subject to no real world market checks until very recently. One of its most odd and misleading characteristics is that the proclaimed potential to be gained from obtaining a law school degree fed off the supposed existence of well-paying or interesting and rewarding law jobs after graduation.[4] These implied outcomes of “brass ring” jobs provided the motivation for an applicant boom even though law school faculties didn’t bother to pay much attention to the dynamics of the employment markets for lawyers, including its oversaturation and decline.

It may seem a harsh critique to blame the members of law school faculties but a continual mantra one hears voiced by those highly intelligent groups is that “faculty governance” is at the heart of how law schools should be run. With the power of “faculty governance” must come “faculty responsibility and accountability” and the best we can conclude when looking at the combined intellectual prowess of those who comprise law faculties is that they engaged in self-centered “constructive ignorance” or put more simply “they blew it”. The negative trends in those real world markets and the production of law graduates as a surplus commodity were apparent several decades ago but, as expressed by former Vice President Al Gore in the context of Global Warming, it would have been an “inconvenient truth” for law schools to admit the reality and exercise any responsibility for mitigating the situation.[5] There was simply too much easy money to go around by expanding enrollments.

Most law school faculty members would have been among the first to condemn any other industry for operating in this manner. This was irresponsible for both law schools and the universities that siphoned off a significant share of the law school largesse because there was essentially no check on the power to raise tuition even though the “price” was disconnected from the value for many law graduates.  Law schools are now discovering a change in the attitudes of the universities in which they are housed due to the fact that most law schools are no longer “cash cows” for universities and the universities are experiencing their own financial and enrollment problems.[6] Of course we law professors can always point to the fact that we exposed our students to the “big ideas” of law and justice and that this more than justifies our value. Right!

The Core Elements of the “Second Wave”

The primary elements in the second wave of the law school and lawyer decline include the developments listed below. Each has significant impact on the legal profession and/or legal education. Individually they each present challenges. Cumulatively they generate forces that shrink law schools as they have functioned for decades from the perspective of curriculum and finance. They also alter the financial conditions under which law schools must operate to the point that traditionally very expensive faculty positions will increasingly disappear. No matter what the position is about the need for increased skills and writing it is also a situation in which it is probably unwise to decide that the way such topics have been taught over the past few decades is the way they should best be taught in the upcoming milieu in which law schools will be required to operate. Certainly, as we are working our way through transformational trends that alter the operating budgets and missions of law schools it is not the wisest thing to commit to high fixed costs for specific educational functions prior to the point we understand the most effective ways of achieving those functions in the new educational contexts, financial realities and technological and market conditions that will apply to legal education and law practice.

 

1. There are still too many lawyers and too few jobs. In many law practice niches and for many graduates of many law schools lacking adequate cachet or that are located in saturated or intensely competitive markets for law jobs this situation is likely to get worse. See the analysis in “Snakes and the Indigestibility of Lawyers”, http://lawnext.org/snakes-and-the-indigestibility-of-lawyers/.

2. Legal education is too expensive relative to the earnings potential of most available law jobs. Believe it or not most people don’t attend law school to become law professors or philosophers. They want to become lawyers for a variety of reasons including status and social justice concerns. But they also want to be able to pay bills, raise families and enjoy what they consider a fulfilling career.

3. The debt burden carried by law graduates removes the “justice” option in career choice. The cost of law school creates a financial barrier to graduates seeking jobs that advance social justice. http://lawnext.org/clinics-skills-employment-and-the-education-of-young-ministers-of-justice/; David Barnhizer, “The Justice Mission of American Law Schools”, 40 Cleveland State Law Review 285 (1992).

4. Communications and data storage and access technologies are greatly reducing the need for many labor-intensive activities of the kind traditionally done by lawyers. As this continues to ripple through the legal profession a significant number of jobs will be eliminated.

4. Consolidation and restructuring in firms are eliminating many “law” jobs. As efficiencies increase and labor costs decline the “rich will get richer” and some lawyers will be out of jobs. http://lawnext.org/these-jobs-are-going-boys-and-they-aint-coming-back1/.

5. Automation of numerous aspects of law practice such as case management, filing, research, data retrieval and search is eliminating law jobs. This is also making it easier to utilize intelligent individuals without law degrees on many traditionally “legal” tasks. This will not only affect law practice, it has implications for law teaching and staffing. http://lawnext.org/law-school-2020-rise-of-the-cyborg-law-professors-2/.

6. Outsourcing to other disciplines such as tax, real estate and insurance will replace some traditional legal work in transactional areas that have been lawyers’ “bread and butter”.

7. Increased outsourcing to other countries of specific functions will take place, particularly given the transnational nature of trade and business and the need to create connections with professionals in other countries.

8. Artificial Intelligence (AI) will have unknown effects but some are speculating that it will evolve rapidly to the extent that the capabilities will supplant even sophisticated analytical work we might currently think could not be done other than by the individual human mind. One response for those who think the effect will be slight or of a kind not relevant to what lawyers do is to ask whether in 1995 we could have possibly grasped what was going to occur through the combination of the personal computer, information technology, sophisticated communication development and the incredible development of computer applications. Ask yourself how these factors have transformed entire job markets.

9. There has been a sharp decline in the numbers of law school applicants from “the best and the brightest”. With the recent push to expand STEM (Science, Technology, Engineering and Mathematics) enrollments and the exciting developments taking place in those fields it seems obvious that there is an ongoing diversion of some of our best minds to more creative work than occurs in most law schools. Nor from the perspective of the society in general and the careers of people going into these exciting fields can we say the development is negative. But the shift will further “dumb down” the law schools and the legal profession.

10. There is a “Chinese Water Torture” effect on potential new law school applicants caused by the hostile complaints being voiced on social media by unhappy, unemployed law graduates. These are buttressed by the numerous reports in major news outlets about the problems and costs of law school and the slump in law jobs. The negative feelings have been emerging for most of the past decade but took a few years to reach a peak of intensity. See, e.g. the 2009 survey that indicated: “21% of Law Students Regret Attending Law School” in which a “LexisNexis State of the Legal Industry Survey of 550 respondents (300 private practice attorneys, 150 in-house corporate counsel, and 100 law students): 65% of law students (and 90% of lawyers) … [found that] 21% of law students say that based on the changing legal marketplace, they regret attending law school”. See also, “Most Law Graduates Dissappointed [sic]: Few Jobs, Low Salaries, High Stress, L. Student (Nov. 23, 2007), http://www.lawstudent.tv/2007/11/23/most-law-graduates-dissappointed-few-jobs-low-salaries-high-stress/.

11. There will be a rapid “revolution” in self-representation or partial representation by people who might otherwise have sought help from a lawyer. As access to information on law, law-related issues, and self-help sources expands some in need of help will have increased access to assistance they could not otherwise afford while others will be able to avoid lawyers they might have otherwise retained. See, e.g., the information at LegalZoom, a self-help web service. “LegalZoom provides an online legal portal to give visitors a general understanding of the law, as well as to provide an automated software solution to individuals who choose to prepare their own legal documents. To that extent, the site publishes general information on legal issues commonly encountered.”As such sites grow in sophistication it is likely they will siphon off a portion of lawyers’ “bread and butter”.
Of course LegalZoom must protect itself by adding the inevitable disclaimer about not being a law firm. It states: “This site is not intended to create an attorney-client relationship, and by using LegalZoom, no attorney-client relationship will be created with LegalZoom. Instead, you are representing yourself in any legal matter you undertake through LegalZoom’s legal document service. Accordingly, while communications between you and LegalZoom are protected by our Privacy Policy, they are not protected by the attorney-client privilege or work product doctrine.”https://www.legalzoom.com/disclaimer.html.

12. As law practice becomes increasingly nationalized large commercial entities will develop efficient internal law firms that will provide legal services to consumers at rates much lower than can be offered by individual lawyers. Just as Walmart and other massive chains drove huge numbers of “mom & pop” stores out of business the types of practices on the lower ends of law practice as a matter of scale will become increasingly non-competitive. Walmart has already opened such a legal department selling law services to consumers in Canada while Tesco launched this approach in the United Kingdom several years ago. http://lawnext.org/de-accrediting-the-aba-nationalizing-bar-admission-and-redefining-the-right-to-practice-some-forms-of-law/. “Walmart Canada stores offer law services”, May 16, 2014, Nicole Marie Melton, “Is Wal-Mart law coming to the US? Retailer adds lawyers on site for Toronto-area shoppers”.

My point is that even though the precise impacts of the developments stated immediately above can’t be stated with clarity, it is clear they will individually and cumulatively have impact on the legal profession in terms of job loss. The losses will be spread unevenly by location and practice niche. This locational effect and job niche dynamic has significant implications for individual law schools either located in territories saturated with lawyers or rank lower on the employer preference “totem pole” than other schools competing in that area or that traditionally fed their graduates into practice niches that are disappearing. It is equally clear that in this new “post-expansionist” period that law school applications and enrollments are directly related to the existence of law jobs. Along with this comes the cost factor. For many people thinking about whether it is even sensible to go to law school it is no longer a simple issue of “get a degree, get a job” but “given the high cost of my law degree can I reasonably expect to obtain a job that offers an effective Return on Investment (ROI) in a realistic time frame rather than a silly projection about how if I do obtain a decent paying position then over my entire lifetime I come out ahead?” For a very large number of potential applicants the answer now and for some years ahead is and will continue to be “are you nuts? Don’t waste your time.”

Any Answers?

  1. Expect the decline in students to continue. It should actually be much worse than it has but far too many law schools have padded the numbers by admitting unqualified students. The reality is that qualitatively law schools are about 50% of what they were five or six years ago. The decline is absolutely dramatic.
  2. Be ruthless about educating potential applicants about the situation and please, please, please, provide specific information about the employment prospects of graduates from proprietary and lower ranked law schools. For the proprietary law schools it is really disgusting that their tuition levels are quite high while their graduates’ employment prospects both qualitatively and absolutely are considerably lower than other law schools.
  3. For God’s Sake, pursue real mergers and efficiency adaptations between law schools whether in-state or regionally.
  4. Figure out how to achieve administrative efficiencies through technology and staff reductions and pass on the savings to students to reduce costs. Growth in administrative costs and staffing are one result of the budgetary expansions that enrollment increases allowed. New responsibilities imposed on law schools justify some of the growth but in part it represents the inevitable growth of management whenever resources exist. Now is the time when shrinkage in staff and salary need to occur.
  5. Reduce faculty size to reflect the smaller student bodies now in place in most law schools. If a school has been reduced by fifty percent this does not mean faculty should be cut by that amount but does impose the duty to take sensible steps. A number of law schools have implemented staff cuts, buyouts and salary freezes and this can help but even there it is often not the result of “faculty governance” but conditions imposed by the parent universities. As the financial pressures on universities become even greater and law school enrollments remain low or fall further in numbers and quality the situation will only deteriorate for numerous law schools.
  6. Engage in honest analysis of curriculum and break the lockstep approach to the “Harvard/Yale Syndrome” that has dominated law schools for well over a century. Law schools have different missions, purposes, markets, professional niches, influence and so forth and we need to develop a variety of new forms. But the insights for doing so cannot be generated entirely from within a law school due to self-interest. It requires a joint effort of the law faculties and administrations, university actors, graduates, consultants, potential employers and others with useful insights.
  7. Other than the points made above I can only offer those made in the following analyses: David R. Barnhizer, “Redesigning the American Law School”, 2010 Michigan State Law Review 249 (Summer 2010); David Barnhizer. 2014. “Survival Strategies for “Ordinary” Law Schools”: http://works.bepress.com/david_barnhizer/89; David Barnhizer. 2013. “”Practice Ready” Law Graduates”: http://works.bepress.com/david_barnhizer/83; David Barnhizer. 2014. “Law School Enrollments and Adaptive Strategies”: http://works.bepress.com/david_barnhizer/92; http://lawnext.org/we-have-met-the-enemy-and-he-is-us-traditionalism-and-faculty-as-legacy-costs/.

 

[1] Jerry Organ, The Legal Whiteboard, Tuesday, March 18, 2014, “PROJECTIONS FOR LAW SCHOOL ENROLLMENT FOR FALL 2014”,    http://lawprofessors.typepad.com/legalwhiteboard/2014/03/projections-for-law-school-enrollment-for-fall-2014.html. Karen Sloan, The National Law Journal, July 21, 2014, “Law School Enrollment Slump Continues: For fourth year, the number of law school applicants declined in 2014”.http://www.nationallawjournal.com/id=1202663837843/Law-School-Enrollment-Slump-Continues#ixzz3LPqrX9ss.

[2] David Barnhizer. 2014. “Self-Interest and Sinecure: Why Law School can’t be “Fixed” from within”: http://works.bepress.com/david_barnhizer/88; see also the posts at LawNext, David Barnhizer, http://lawnext.org/puffing-and-blowing-smoke/; http://lawnext.org/jobs-law-schools-and-the-body-count-mentality/; http://lawnext.org/the-declining-scale-of-the-law-school-industry/.

[3]Stephen Harper, “America Has Way Too Many Lawyers, And The Bubble Is Growing”, http://the lawyerbubble.com, Jul. 30, 2013.

[4] “Fast Forward 2030: The Future of Work and the Workplace”, http://www.cbre.com/o/international/AssetLibrary/Genesis%20Report_Exec%20Summary_1029.pdf.

[5] See, e.g., David R. Barnhizer, “Of Rat Time and Terminators”, 45 Journal of Legal Education 49 (1995); Thomas D. Morgan, The Vanishing American Lawyer (2010); Richard Susskind, The End of Lawyers? Rethinking the Nature of Legal Services (2008).

[6] http://lawnext.org/a-university-presidents-frank-look-at-law-schools/; http://lawnext.org/looking-at-the-law-school-crisis-from-the-perspective-of-the-university/; http://lawnext.org/deaning-in-a-period-of-transformational-chaos-part-i/.

 

 

 

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