The NYT misses the point about law schools

Larry Ribstein —  17 July 2011

Today’s NYT is among the last news outlets in the universe to discover the story of legal education being overpriced for today’s job market.

The article tells the tale of how NYLS’s outgoing Dean Richard Matasar, after years of lecturing about the need to reform legal education to better address its market, succumbs to legal education’s basic economics.  In 2009 he significantly expands NYLS’s class size in the face of a bad job market in order to pay the debt on the school’s new business. The result is that this third-tier school’s students will face an employment crunch when they graduate while being saddled with their own debt. 

The reporter concludes:

This is a story about the law school market, a singular creature of American capitalism, one that is so durable it seems utterly impervious to change. * * * [E]ven [Matasar] * * * is engaged in the same competition for dollars and students that consumes just about everyone with a financial and reputational stake in this business.

The article gets one thing right:  there is a problem with legal education.  But it gets just about everything wrong about the source of the problem, and therefore offers zero guidance about how to fix it.

To begin with, the reporter’s quest for a nifty zealous-reformer-sells-out plot misses the point that NYLS isn’t typical.  It’s a standalone law school which keeps 100% of its revenue, unlike typical law schools which give up revenue to their universities (as the story points out).  Indeed, the article, in order better to pin the blame on its villain Matasar, refutes his yield-based explanation by showing that his university-based peers did not similarly increase class size.  The unexploited angle here is how non-profit universities benefit from the peculiar economics of legal education. 

Moreover, Matasar is an unlikely villain.  As the article says, he has “argued for a student-centric approach to education.”  Indeed, at an Iowa Law Review symposium on legal education I attended earlier this year I heard him say exactly what I’ve argued: that legal education’s price can’t continue to increase without an increase in value, and that it has to get better without getting costlier.

True, the NYT article suggests that in 2009 Matasar focused on bodies in seats in order to pay the debt on the building, which seems inconsistent with the student-centrism he was preaching.  But the reporter confesses at the end that this isn’t what he purports to be writing about:

The tale of Mr. Matasar’s career is not primarily about a gap between words and actions. Rather, it is a measure of how all-consuming competition in the legal academy has become, and how unlikely it is that the system will be reformed from within.

Instead of cheap shots at Matasar’s words vs. actions, the reporter might have asked the important questions about his purported subject, the “legal academy” in general.  He might have started by wondering why the students NYLS admitted decided to come.  Why did they pay one of the highest tuitions in the country to earn salaries on graduation that the law school told them (exceeding existing disclosure requirements) are likely to top out at $75k and may be as low as $35k? 

The story makes the usual nod at US News, the legal education version of “the devil made me do it.”  But the problems with the US News ranking (including its perverse emphasis on the cost rather than value of legal education) have been shouted from the rooftops for years.  Moreover, the rankings did NYLS little good given its third-tier ranking.

In the end, the NYT reporter is left with the explanation that law schools are just a business, “and what industry has ever decided that for the good of its customers, it ought to charge less money, or shrink?”  The answer is, every industry.  Although a businesses may not want to do anything “for the good of its customers” it nevertheless makes that decision because if it doesn’t its competitors will put them out of business.

But legal education is not like every industry.  As I’ve said in my forthcoming article about legal education (footnotes omitted):

Regulation, other exceptional government treatment of the legal profession, and law-school accreditation freed legal educators from the market without imposing any substantive constraints. Accrediting agencies lacked the expertise and resources to micromanage law-school teaching and curricula. Moreover, practicing lawyers had reason to prefer to train law graduates rather than to delegate this task to denizens of the ivory tower. Accrediting agencies were satisfied with imposing certain quantitative and formal requirements concerning factors such as library size. Accreditation and licensing mainly insulated lawyers and law schools from general market competition rather than dictating a particular content of legal education. Universities and academics accordingly replaced the practicing bar as the main institutions responsible for determining the content of legal education.

But my article goes on to point out that law schools’ insulation from market forces is ending:

[T]raditional markets for the skills learned in law school are shrinking, and legal education’s regulatory protection from market forces may be fading. At the same time, the changing environment is creating markets for skills not currently taught in law school and the globalization of law practice is changing the market for legal education. The cumulative effect of these phenomena may be to pressure law schools, for the first time, to better understand and serve the markets for the skills they provide.

In other words, lawyer licensing is the elephant in the bedroom that the NYT somehow missed.  As long as you can purchase a monopoly on transmitting legal knowledge from NYLS for almost $50 grand a year you will continue to buy it in a depressed job market that offers a paucity of alternatives.  And of course you will then use your bar certificate to charge what the regulation-determined market will bear for those services.

But even legal monopolies ultimately are vulnerable to market as well as political pressure.  And that’s a good thing, as I’ll argue this Friday.

Larry Ribstein

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Professor of Law, University of Illinois College of Law

8 responses to The NYT misses the point about law schools

  1. 

    Two economics points:

    1. Law schools sell degrees to students because that’s what students want. They merely respond to demand. If students were really unhappy with what’s being taught in law schools, a law school could deviate from the norm, attract better students, charge higher tuition, and gain in the US News rankings. I conclude students are satisfied, however much they may grumble (tho maybe they shouldn’t be satisfied).

    2. A rational business does not increase sales merely because it has an extra debt to pay (e.g. for a new building). If increasing sales is unprofitable, it doesn’t help pay the debt. If increasing sales is profitable, the business will do it whether it has debt or not. The law school in the article being for-profit, it is probably rational.

    • 

      Eric

      Re point 1: The demand here is shaped by regulation (lawyer licensing). Students need the ticket of admission and they can only get it from an accredited law school. Schools can’t really deviate too much given accreditation standards (see my article, Practicing Theory). The students grumble because the ticket is worth less than it used to be. In a free market, different schools could prepare students for different types of jobs. They could match their school with their preferences and would likely be happier with the result.

      Re point 2: The NYT narrative about Matasar was idiotic.

  2. 
    Arthur Leonard 18 July 2011 at 11:14 am

    I wish those who claim that law schools are not teaching the skills students need to practice would not base those claims on what they remember from when they went to law school and take a hard look at what law schools are doing now. At NYLS we are implementing a new program that was planned over the last few years, first rolled out in our evening division last year, and will be fully implemented in our day division this year, focusing on skills and allocating an unprecedent proportion of first-year credit hours on skills. These will include not just legal writing and research, which will be incorporated into the course, but other practice-oriented skills that have been required as part of our first year required lawyering course for several years. Taken together with upper-level skills courses (including transactional skills, internships, advanced writing seminars, and both live-client and simulation clinics), an NYLS student who is so inclined can devote a substantial portion of their legal education to acquiring necessary skills for practice. The new first year Legal Practice program represents a substantial investment by the school, because it is going to be taught in small sections by full-time faculty members, many recruited from practice or from clinical programs.

    • 

      I recently attended one of those schools that claimed to implement skills training. We had ONE day (ONE!!!) in our legal writing and skills class that was dedicated to interacting with a fictional client. The school heralded this as some sort of breakthrough in legal education.

  3. 
    Robert D'Agostino 18 July 2011 at 7:59 am

    Law schools are essentially vocational schools no matter how much they resist that description. In order to prove they are not, even the low end schools place an emphasis on “scholarship”, that is, writing worthless law review articles for worthless (from the point of view of advancing knowledge) law reviews at the expense of spending time with students and offering hard to teach skills courses. Much of the blame for law school deficiencies lies with the ABA Section on Legal Education whose main function is to advance the interests of faculty even at the expense of student services.

  4. 

    You are quite correct that law schools are missing the boat in connection with teaching the skills now required for a law firm and its lawyers to succeed, as I noted at http://kowalskiandassociatesblog.com/2011/05/19/it-takes-a-village-to-build-a-successful-law-firm-fewer-residents-of-that-village-are-actually-lawyers/

    Add to this calculus the fact that law firms no longer have a monopoly to provide legal services: http://kowalskiandassociatesblog.com/2011/06/21/grabbing-slices-of-the-diminishing-legal-spend-pie-legal-project-outsourcing-downsourcing-and-insourcing/

    But, as I said earlier, with the demand for lawyers decreasing regularly, the anomaly of increasing enrollment, skyrocketing tuition and the creation of even more law schools is a by-product of the hype and hucksterism of law school academia, as David Seagall has covered so well in the Times. The blatant deceptive reporting by law schools of the employment results of graduates is an ignominious stain on the profession and borders on criminality, illegality and certainly is completely inconsistent with the high ethical standards the profession purports to profess. See more at http://kowalskiandassociatesblog.com/2010/07/25/what-if-they-built-a-new-law-school-and-nobody-came/

    The failure by law schools to educate students in the new skills required in the market only adds to their ignominy.

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