November 29, 2020

Bucks: Online Reaction: Law School Economics

Peter and Maria Hoey

In Sunday’s Times, David Segal wrote about the legal education system, in which the interest of schools and students are often in conflict. From Mr. Segal’s article:

Legal diplomas have such allure that law schools have been able to jack up tuition four times faster than the soaring cost of college. And many law schools have added students to their incoming classes — a step that, for them, means almost pure profits — even during the worst recession in the legal profession’s history.

It is one of the academy’s open secrets: law schools toss off so much cash they are sometimes required to hand over as much as 30 percent of their revenue to universities, to subsidize less profitable fields.

In short, law schools have the power to raise prices and expand in ways that would make any company drool. And when a business has that power, it is apparently difficult to resist.

The article focused in detail on the case of New York Law School. Its dean, Richard A. Matasar, has been a vocal critic of many practices common in law schools, even as New York Law School employed many of them:

N.Y.L.S. is ranked in the bottom third of all law schools in the country, but with tuition and fees now set at $47,800 a year, it charges more than Harvard. It increased the size of the class that arrived in the fall of 2009 by an astounding 30 percent, even as hiring in the legal profession imploded. It reported in the most recent U.S. News and World Report rankings that the median starting salary of its graduates was the same as for those of the best schools in the nation — even though most of its graduates, in fact, find work at less than half that amount.

Quite a few law professors and legal bloggers have picked up on the article, offering their own takes on the subject.

At the blog Lawyers, Guns and Money, Paul Campos argues that legal academics should investigate why costs for law students have risen so rapidly. He calls particular attention to rising salaries for law school professors:

One main driver of increasing costs across legal academia has been an increase in the size and the compensation of law school faculty. For example, 30 years ago the salaries of Michigan’s tenure-track law faculty ran from about $75,000 to $155,000 in 2010 dollars. Today the comparable figures are about $140,000 to $300,000 (This counts only base salary. Actual salaries are about 15 percent higher for most faculty because of “summer research grants” that for most faculty are de facto salary supplements.) Interestingly, 30 years ago the law school’s dean’s salary was no higher than that of several other senior faculty. Last year the dean’s published salary was $442,000.

Matt Leichter, who writes a blog called the Law School Tuition Bubble, suggests that the system of rankings and incentives makes it unlikely for schools to reform themselves:

To me it’s obvious that non-Ivy League law schools have no hope of internal reform without losing their place in the U.S. News rankings and by consequence access to high LSAT-scoring applicants, for they should realize by now that the legal education system has over-expanded and will certainly contract. If they’re not going to make symbolic gestures personally, reformers at lower status law schools might as well save their breath and tell the board of trustees that it’s time to close up shop.

Further, Mr. Leichter notes, “demand for lawyers is separate from demand for law degrees, and the American Bar Association’s goal of law as an elite profession contradicts its concurrent goal of law as a democratic profession open to the masses.”

Ann Althouse, a professor at the University of Wisconsin Law School, suggests that the U.S. News and World Report rankings for law schools provide a service primarily for law professors, helping supply them with students by creating the “appearance of an orderly market in which potential buyers can see the value of the thing they will buy at such a high price.”

A graduate of New York Law School, Daniel Gershburg, offered a strong defense of the school and Mr. Matasar.

Mr. Segal has also responded to some of the hundreds of comments that his article inspired. One of his responses addresses the issue of reform:

The people inside the system, even its most ardent critics, can’t reform it. There is too much pressure to compete, and once you start competing, there is really no way to enact reform.

Mr. Segal has previously written about law students’ reliance on loans to fund their education and the use of merit scholarships as an incentive:

  • Is Law School a Losing Game? (January 9, 2011)
  • Law Students Lose the Grant Game as Schools Win (May 1, 2011)
  • Article source: http://feeds.nytimes.com/click.phdo?i=06b4ad7702d2440003f1fdbbbab5b437

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