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Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Law School: Caveat Emptor

0516-Student-DebtIn 2014, Minnesota licensed a total of 752 new lawyers,1 most or all of them presumably eager to join the 25,272 lawyers already licensed in the state. Unhappily, Minnesota’s legal profession did not (because it could not) greet them with open arms. Instead, according to ABA data, Minnesota’s net total lawyer population decreased by 750 lawyers between 2014 and 2015—a nation-leading 3 percent drop.2 

A few years ago this statistic would have been startling. But the palpably diminishing employment outlook for lawyers described in the previous section is far more startling; it is now clear that this seemingly aberrant decline is much more than a fluke. Yet even as demand for lawyers diminishes, the nation’s law schools continue to deliver an unrelenting stream of new lawyers into a contracting marketplace. The obvious result: Huge numbers of newly minted lawyers are finding literally no toehold in the profession. A steadily increasing percentage are unable even to pass a bar exam.3

The problem is very clear: There are too many (arguably far too many) law schools in the United States today. With the exception of the recently approved Hamline-Mitchell merger in St. Paul, almost nothing has been done nationally to reduce the steady stream of new and often heavily indebted law graduates, most of whom face dismal job prospects. Academic heads are buried in sand because applications keep on arriving, tuition remains high, and there is an unending flow of federally guaranteed loan money for prospective admittees to borrow for graduate school. A profession that tripled in size during the 30 years before 2000 has been growing at about 1.4 percent a year since then, and yet there are 22 more law schools today than there were at the start of this century (from 184 in 2000 to 206 in 2016)!4

The largest and most prestigious firms draw heavily from the U.S. News & World Report’s Top 20 law schools, as they always have. But even these top schools—of which the University of Minnesota Law School was one until a few months ago—have, with few exceptions, steadily lost both applicants and enrollments since 2011.

Big debt, dubious prospects

But the vast bulk of the profession consists of graduates of the more than 180 law schools that are not in the Top 20. And it is most often the graduates of these institutions who are finding themselves with huge debt and no prospects for meaningful legal employment.

The numbers below paint a remarkably bleak—and even, I would argue, cynical—picture. I include bar passage rates in this list because they speak so directly to the legal education that immediately precedes them:

  • In 2004 there were just over 100,000 applications for admission to one of the 190 U.S. law schools then operating. In 2015, there were fewer than 55,000 applications to the (now) 206 law schools.5 
  • Law school applications from 11 of the nation’s most prestigious undergraduate colleges and universities have dropped by more than 40 percent since 2008.6
  • Beginning as early as 2011, many of the upper-tier law schools began to reduce the size of their first-year classes. Since that year, the number of applicants to Top 20 law schools has dropped by a median rate of 18 percent.7 The University of Minnesota Law School has been heavily affected by this phenomenon. The reason is clear, as outgoing Dean David Wippman recently explained:8 In order to maintain a full-sized class, the law school would necessarily have had to accept students with weaker credentials than in the past, because the academic credentials of the overall applicant pool have dropped so markedly. But if Minnesota admitted candidates who were less qualified, the law school would jeopardize its status as a U.S. News Top 20 school. A Hobson’s choice, if ever there was one. The school therefore willingly decreased class (and faculty) size and suffered financial losses in an all-out effort to maintain its Top 20 status. As we now know, the strategy failed, at least for the current year; Minnesota has dropped to 22nd on the 2017 U.S. News & World Report scale.9
  • According to the National Conference of Bar Examiners (NCBE), U.S. law schools have produced about 60,000 new graduates per year for the last 10 years, based on the number of first-time bar examination takers each year. Of those, about 50,000 eventually pass a bar examination.10
  • Since 1985, tuition at private law schools has nearly doubled every decade; at public law schools the rate of increase has been even greater. From 1988 to 2008, law school tuition grew at a rate exceeding all other sectors of higher education. Even during the Great Recession, the cost of a JD rose at virtually every school.11
  • Three-year tuition for law school at the upper end is currently likely to be between $125,000 and $160,000; average tuition in 2015 at private law schools was $40,500, and for public, $23,600; 90 percent of law students borrow for at least part of their legal education.12
  • Law students now amass loans averaging $127,000 for private and $88,000 for public law schools. Since 2006, law student debt has surged at inflation-adjusted rates of 25 percent for private schools and 34 percent for public schools.13
  • Twelve years after passing the bar, fewer than half (47.6 percent) of the more than 3000 lawyers surveyed in the American Bar Foundation’s “After the JD” study had paid off their student loans.14
  • The overall bar passage rate for all exam takers in 2014 was 64 percent—51,808 out of 80,913. For first-time takers, the pass rate was 74 percent; only 35 percent of repeaters passed.15
  • 2015 bar examination results were even worse. July 2015 and February 2016 exam takers notched the lowest multistate scores nationally in almost 30 years; Minnesota’s July pass rate also fell to a new low, with only 77.5 percent passing (February’s rate was 60.34 percent).16

“We made a conscious decision in order to maintain the caliber of the student body, the quality of the education, and frankly, to keep our ranking high,” said David Wippman, dean of the University of Minnesota Law School, which has reduced first year classes by 29 percent since 2011, the largest decrease of any school in the top 20. Undergraduate grade point average and Law School Admission Test scores make up 25 percent of U.S. News and World Report’s evaluation of law schools. “We cannot ignore the fact that rankings influence behavior,” Wippman said. Admitting more students with lower credentials one year and thereby risking a slot in the rankings could make it much harder to draw new students in the future, he added.

– “The Best Law Schools Are Attracting Fewer Students,” Natalie Kitroeff, Bloomberg News 1/26/2016

One readily measurable consequence of the changing economics and diminishing employment prospects for new law graduates is that the brightest undergraduates today are choosing to pursue graduate degrees other than law. One key by-product of this migration of top students away from law schools is that the LSAT scores of new law school admittees are rapidly plummeting, which in turn has led to larger numbers of new law graduates who cannot pass bar examinations.

There are a number of studies that establish a very close correlation between LSAT score and eventual success on the bar exam; there appears to be a widespread consensus that an LSAT score of 147 or less is a strong predictor of future inability to pass a bar examination.17 That truism notwithstanding, a watchdog organization called Law School Transparency found that, in 2014, at least 25 percent of the first-year students at 48 law schools were admitted despite LSAT scores below 147; just four years earlier, only eight schools had dipped that far into the sub-147 pool of applicants. Worse yet, at least five law schools in 2014 accepted 75 percent or more of their first-year class from the applicant population scoring under 147 on the LSAT.18

Some law schools dispute the alleged correlation between LSAT score and bar passage. Many variables can be considered, they argue, including the four-year (or more) gap between a college senior taking the LSAT and the same student, now a law school graduate, taking the bar examination. There are three for-profit law schools in good standing whose most recent grads had bar passage rates of 59, 47 and 30.6 percent respectively. That last figure was recorded at Arizona Summit Law School, where this passage rate applied even though the school recently offered “high risk” graduates a cash payment of $10,000 not to take the exam!19 But even in those cases where clearly marginal students manage to graduate from a bottom-tier law school and pass a bar exam, thereby allowing them to start looking for a job in a badly overpopulated profession, what do they realistically have to look forward to other than a mountain of debt?

No Incentive to Change

On this evidence, it would be reasonable—easy—to conclude that law schools generally, and bottom-tier law schools in particular, are facing threats to their very existence. But although two Minnesota law schools recently merged, not a single U.S. law school has closed its doors, and tuitions are generally rising, not dropping. Most schools are still doing everything they can to fill their first-year classes. The students they admit can readily find “full ride” federal loans that are apparently both need-blind and disinterested in future job prospects. Did I mention that these loans are also non-dischargeable?

First-year enrollment trends at top-ranked law schools, 2011-2015
  • +16 Berkeley
  • +7 Duke University
  • +1 Harvard
  • 0  Stanford
  • -1 Cornell
  • -1 Georgetown
  • -2 Yale
  • -4 University of Chicago
  • -4 Columbia
  • -4 New York University
  • -5 Emory
  • -8 UCLA
  • -10 University of Pennsylvania
  • -14 Washington University
  • -15 University of Virginia
  • -16 Vanderbilt
  • -19 Northwestern
Source: American Bar Association, Bloomberg News

The plain fact is that new lawyers are looking for jobs in law firms just as they always have, but 10 months after graduation, only 60 percent of the national law school class of 2014 had found a full-time job that required them to pass the bar examination, and this was an improvement over the 57 percent success rate of 2013.20 As noted recently in a New York Times op-ed piece by Steven Harper, author of The Lawyer Bubble: A Profession in Crisis,

“Amazingly (and perversely), law schools have been able to continue to raise tuition while producing nearly twice as many graduates as the job market has been able to absorb. How is this possible? Why hasn’t the market corrected itself? The answer is that, for a given school, the availability of federal loans for law students has no connection to their poor post-graduation employment outcomes.”21

Harper, who has studied this counterintuitive phenomenon in depth, seems to hit the nail squarely when analyzing the fact that law schools keep on raising tuition in the face of increasingly poor employment outcomes for their graduates: “The system of virtually unlimited federal loans for a legal education has allowed deans to operate without meaningful long-term financial accountability for their actions.”22 

One way to deal with the problem of too many law schools is to put a pretty face on the likelihood that an ever-increasing percentage of law graduates will never practice law. Former Hamline Law School Dean George Latimer attempted to do just that in a fall 2015 op-ed piece in the Minneapolis Star Tribune. His rationale is summarized in these excerpts:23

“Not everyone who goes to law school wants to practice law in the traditional way, and both Hamline and Mitchell have strong traditions of training students for a variety of careers. Hamline has a Dispute Resolution Institute, perennially ranked in the top five nationally, that teaches law students … the skills to resolve conflicts outside of the court room—an important social good….

“We need good lawyers to be litigators, but we also need them working in government, banks, nonprofits, housing agencies, community organizations and elsewhere.

“[The new dean of the merged Mitchell-Hamline Law School has]
the perfect approach for the leader of a law school in today’s world, where not every law student is dreaming of joining the partner track at a big firm. As [the new dean] is fond of saying, ‘There are two reasons to go to law school. Either because you want to be a lawyer or because you don’t want to be a lawyer. If you fit into one of those categories, you should come.’”

Call me cynical, but it would take more—much more—than this to persuade me that entering first-year students (or even a very small segment of them) are even a little bit comfortable with the idea that after three years and upwards of $100,000 in tuition and living costs, much of it borrowed, a large percentage of them will never find a meaningful job as a lawyer!

A related—and unwelcome—addition to the language of law schools is the recently coined “JD Advantage,” a term now in wide use that suggests the existence of a wide range of jobs (jobs that do not involve the practice of law or require bar passage) that will be easier to get if you have a law degree. Does a doctor who can only find work as an orderly or an assistant pharmacist enjoy an MD Advantage? For me, this term only heightens the cynicism reflected in the ongoing production of almost three times as many lawyers as the national market can bear in the foreseeable future.

Whose Problem to Fix?

It comes as no surprise that class action suits against law schools have sprung up nationally claiming prospective students were misled by promotional literature promising a rosy employment picture upon graduation. These suits, however, have met with little success, and most have been dismissed. Those that survived summary judgment were denied class certification. One school is reported to have paid $95.5 million to settle a U.S. suit claiming the school falsely obtained federal and state education funds, but that was a fine, not a damage award.24

Whose responsibility is it to try to establish some sort of balance between supply and demand? At this point, no obvious answer exists. At all law schools, it is basically business as usual. Caveat emptor is rough justice indeed for those who borrow heavily for a degree they may never be able to use. Thousands and thousands of aspiring lawyers are falling into this trap.

The law of supply and demand is not working for lawyers, partly because hope springs eternal and partly because the allure of low-interest long-term loans is a powerful antidote to the grim statistics that keep (and will continue to keep) so many new graduates out of the profession or at its nether margins. Some pushback is happening within academia, because professors at all law schools know exactly what is happening, and many have openly expressed outrage. But law schools themselves, particularly those with the least demanding admission criteria, are pushing back hard. And I see no evidence that organized bar groups have tackled this sordid quandary.

But the fact that the solution isn’t obvious does not mean there is none. Here’s what I think: Until the ABA gets actively—and seriously—involved and sets demanding and responsible new standards that must be met for continuing accreditation—standards that examine average LSAT scores of entering students, bar passage rates of graduates, and real law-related employment rates after graduation—this sad and arguably exploitative process will go on indefinitely. And though a committee of the Legal Education Section of the ABA (at the urging of the watchdog organization called Law School Transparency) has very recently recommended a requirement that at least 75 percent of a school’s graduates must pass a bar within two years after graduation, the ABA review process (and any meaningful action that might flow from it) will in all likelihood consume several years before meaningful disaccreditation standards are adopted, and more years still before they are meaningfully enforced.25

In the meantime, debt-laden students will continue to emerge from a glut of underperforming law schools, and will continue to encounter historically high barriers to meaningful legal careers. This is a tawdry situation that reflects badly on the entire profession. And yet, as a profession, we are doing nothing about it. Nor is it obvious what we could do, even if we were highly motivated.

 

Next: Getting Paid: Is Time Running Out on the Hourly Rate?

 


ABOUT THE AUTHOR

Wood R. Foster, Jr. practiced law in Minneapolis from 1968 through 2013, most of it as a litigator with the firm now known as Siegel Brill. He served as HCBA president in 1992-1993 and as MSBA president in 1999-2000. He conceived and edited “For the Record: 150 Years of Law and Lawyers in Minnesota,” which was distributed to all lawyers and libraries in Minnesota in 1999. Wood served as a member of the Lawyers Professional Responsibility Board for eight years beginning in 2001. He was a founder, 1993 president and 30-year board member of the Advocates for Human Rights. As a retiree, he works one day each week with the “St. Paul Regulars,” a Habitat for Humanity crew.  


Notes

1 “Admissions to the Bar by Jurisdiction 2014,” p. 28, National Conference of Bar Examiners, http://www.ncbex.org/pdfviewer/?file=%2Fdmsdocument%2F164 

2 ABA 2015 National Lawyer Population Survey, 10-Year Trend by State. http://www.americanbar.org/content/dam/aba/administrative/market_research/national-lawyer-population-by-state-2005-2015.authcheckdam.pdf . It should be noted that Minnesota was one of six states whose reporting data for this period covered more than one calendar year (roughly 1 year and nine months). Of those states, only Minnesota posted a year-over-year differential of more than +/- 1 percent.

3 See, for example, “Multistate Bar Exam Average Score Plummets To Three-Decade Low,” Above the Law 4/1/16 http://abovethelaw.com/2016/04/multistate-bar-exam-average-score-plummets-to-three-decade-low/

4 “ABA-Approved Law Schools,” American Bar Association http://www.americanbar.org/groups/legal_education/resources/aba_approved_law_schools.html 

5 “Is It Time to Start Shutting Down Law Schools?” Natalie Kitroeff, Bloomberg News, 7/1/ 2015; http://www.bloomberg.com/news/articles/2015-07-01/is-it-time-to-start-shutting-down-law-schools- 

6 “Smart Kids Stay Away From Law School, Girls Take Over,” Keith Lee, Above the Law http://abovethelaw.com/2016/03/smart-kids-stay-away-from-law-school-girls-take-over/ . If you are offended by the title of this post, you are not alone: see http://abovethelaw.com/2016/03/some-sexist-bullsht-on-this-website/ 

7 “The Best Law Schools Are Attracting Fewer Students” Natalie Kitroeff, Bloomberg News 1/26/2016 http://www.bloomberg.com/news/articles/2016-01-26/the-best-law-schools-are-attracting-fewer-students 

8 “U Law Dean Sees Reasons for Hope,” Mila Koumpilova, Star Tribune, 2/12/ 2016, http://www.pressreader.com/usa/star-tribune/20160212/281878707424251/TextView 

9 “The 2017 U.S. News Law School Rankings Leak: The Top 50,” Above the Law 3/9/16 http://abovethelaw.com/2016/03/the-2017-u-s-news-law-school-rankings-leak-the-top-50/ 

10 “Bar Examination and Admission Statistics 2014,” p. 17, NCBE http://www.ncbex.org/dmsdocument/164 

11 “Bankruptcy and Bad Behavior – The Real Moral Hazard: Law Schools Exploiting Market Dysfunction,” Steven J. Harper, American Bankruptcy Institute Law Review , Vol. 23, No. 1, Winter 2015; http://ssrn.com/abstract=2599627 

12 “4 Ways to Pick a Cost-Efficient Law School,” Delece Smith-Barrow, US News & World Report, 1/22/2015.

13 “Too Many Law Students, Too Few Legal Jobs,” Steven J Harper, New York Times 8/25/2015, http://nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html?_r=0 

14 “10 Interesting Stats from the After the JD Study,” by John Glynn, http://www.americanbar.org/news/abanews/aba-news-archives/2014/02/10_interesting_stats.html 

15 “2014 Statistics,” The Bar Examiner, March 2015,
pp. 11, 17.

16 2015: “Bar exam pass rates drop across the country,” Sheri Qualters, National Law Journal 11/23/2015 http://www.nationallawjournal.com/id=1202743222671/Bar-Exam-Pass-Rates-Drop-Across-the-Country?mcode=0&curindex=0&curpage=ALL; https://www.ble.state.mn.us/bar-results/ ; 2016: Supra note 2.

17 “Seeking Clarity – Some Dangerous Questions for Professor Lyke,” David J.R. Frakt, The Faculty Lounge 12/2015, http://www.thefacultylounge.org/2015/12/seeking-clarity-some-dangerous-questions-for-professor-lyke-.html; see also “Impact of the Increase in the Passing Score on the New York Bar Examination,” Report Prepared for the New York Board of Law Examiners by Michael Kane, Andrew Mroch, Douglas Ripkey, and Susan Case; National Conference of Bar Examiners, 10/2006.

18 Harpers Index, Harpers Magazine, January 2016; lstscorereports.com, 2014 “admissions data,” 25th, 75th percentile LSAT scores; see also “Incoming Law Students Have Weaker Exam Credentials,” Jerome M. Organ, New York Times 9/24/2015, http://www.nytimes.com/roomfordebate/2015/09/24/is-the-bar-too-low-to-get-into-law-school/incoming-law-students-have-weaker-exam-credentials .

19 “The Law-School Scam Continues” Paul Campos, The Atlantic, 10/23/2015, http://www.theatlantic.com/education/archive/2015/10/law-school-scam-getting-worse/412159/ 

20 Supra note 13.

21 Id.

22 Supra note 11.

23 “Law School Not Just for Lawyers Anymore,” George Latimer, Star Tribune 10/12/2015.

24 “A guy with $170,000 in student loans who can’t find a job in the legal profession is suing his law school and working full time for Uber,” Abby Jackson, Business Insider 12/21/2015 http://www.businessinsider.com/thomas-jefferson-lawsuit-2015-12 

25 See “ABA Poised To Tighten Accreditation,” Kyle McEntee, Above the Law 3/8/16 http://abovethelaw.com/2016/03/aba-poised-to-tighten-accreditation/

One Comment


  1. Seymour Mansfield
    Jun 24, 2016

    Excellent article. Very much agree: Caveat Emptor is not enough. Did you see the NYT Article on Valparaiso actions?
    http://www.nytimes.com/2016/06/19/business/dealbook/an-expensive-law-degree-and-no-place-to-use-it.html?_r=0

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