The NYT on why law school is expensive

Larry Ribstein —  18 December 2011

It’s Sunday so the NYT has another David Segal screed on legal education.  This time he presents the insight that law school is expensive because of accreditation standards that prevent law schools from containing costs even if they wanted to.  Segal says, “[t]he lack of affordable law school options, scholars say, helps explain why so many Americans don’t hire lawyers.” He quotes several law professors — my former colleague Andy Morriss, now at Alabama; USC’s Gillian; Emory’s George Shepherd.

The article seeks to rebut the claim of the chairman of the ABA’s legal education section that high accreditation standards are necessary to give students “what they have a right to receive in terms of education” and “protect the public and make certain that graduates who offer themselves as qualified lawyers know what they’re doing.”  It examines the experiences of a start up law school in Tennessee, the Duncan School of Law, which is seeking ABA accreditation. The school must have a big library and professors with tenure and time to write law review articles.  This setup is great for law professors. So, as a couple of former law deans tell Segal, the professors exert their power through the accreditation process to maintain the status quo. 

In the end, the Duncan folks had to fly to a beachfront Ritz-Carlton in Puerto Rico to meet with the ABA to meet and make a 15-minute argument for provisional accreditation. The ABA’s questions indicated they were interested in the lawyer market in east Tennessee, suggesting that lowering clients’ costs mattered less to them than threatening lawyers’ income.

As usual (see my posts on past Segal screeds here and here) Segal presents common complaints in an overwrought stew with little cogent analysis.  Law is high-priced because the ABA is powerful and wants to keep it that way. Clifford Winston, co-author of First Thing We Do, Let’s Deregulate All the Lawyers, says this ABA-enforced “near-total absence of competition” is the big problem.  Raise your hand if this shocks or surprises you.

If you want more thoughtful analysis on the modern issues confronting law teaching you need to look beyond the NYT to a blog — namely this one, and especially our “Unlocking the Law” symposium, which had essays by, among many others, Gillian Hadfield and Winston’s co-author, Robert Crandall. My law review article, Practicing Theory, discusses many of the issues presented in Segal’s paper.

The NYT article typically fails to articulate the causes and cures of our over-priced legal system beyond the commonplace that the ABA somehow manages to restrict competition.  Segal blames the law professors, finding comfort in the scam-bloggers’ simple-minded denunciation of high-priced legal scholarship. But since Segal doesn’t explain how a bunch of eggheads sitting around writing useless articles came to control the ABA, he sounds like he’s blaming the mosquitoes for banning DDT.  This narrow focus isn’t surprising given Segal’s mission, which not to analyze or educate, but to entertain with simplistic narratives and pithy quotes.

So what’s really happening?  The cause of the current situation, as I make clear in my Practicing Theory, is obviously the practicing bar, a powerful lawyer interest group with an incentive to keep the price of legal services high.  Lawyers operate not only through the ABA but also local bar associations. Legal educators (law professors, law school and university administrators) come into the picture because they manage the key instrument for doing so — the academic institutions that keep the price of entry high. If the lawyers really wanted to make law school cheaper and more “practical” they could do it in an instant.

Gillian Hadfield’s suggestion to Segal of alternative accrediting bodies is one possible future world, but there are others.  The route to all of these worlds isn’t simply changing the law school accreditation system (accreditation is pervasive throughout the education world), but changing the system of lawyer licensing which maintains the current one-size-fits-all approach.  But how to do that when the powerful lawyers’ guild has maintained its grip on the process for almost a century?   

As I have discussed (Practicing Theory, Law’s Information Revolution, Delawyering the Corporation, Death of Big Law) the answer lies in the current rise of technology and global competition, which are combining with the soaring costs of legal services to crack the foundations of the current regulatory system.  Systemic changes such as changing the choice of law rules regulation of the structure of law practice and changing the intellectual property rules governing legal information products (Law’s Information Revolution, Law as a Byproduct) could hasten this process. 

Reform of law school accreditation ultimately will come along with significant changes to lawyer licensing whether lawyers and law professors like it or not.  Regulation of legal services will be unbundled, with only core legal services (however that comes to be defined) subject to anything like the current level of regulation, and other areas regulated at different levels or deregulated altogether. 

While lawyers and law professors can’t stop change they can shape the future.  In particular, they should start to provide a rationale for why the world needs at least some high-priced legal experts.  What, exactly, is it that lawyers do that’s so valuable?  The answer is clearly not “nothing,” although in a world of increasing competition and sophisticated technology may not be enough to maintain the current level of lawyer employment.

With respect to legal educators, as I discuss in Practicing Theory, law schools should continue to do what they do best — teach theory.  Although the theory should be relevant to what lawyers do, this doesn’t mean that law school should devolve to three-year apprenticeships overseen by practitioners.  The new world of law practice will leave the more menial and routine stuff to machines and non-lawyers.  Lawyers will handle the high-level legal planning and architecture.  They will have to learn how to build that legal architecture using disciplines such as philosophy, economics, political science, psychology, and computer science.

This leads me to the most interesting, if unspoken, aspect of Segal’s article.  All of the non-ex-dean law professors quoted in the article trained as economists. This isn’t surprising. An economist would not ask how we make sure lawyers remain important, but rather what it is that lawyers contribute on the margin.  (Perhaps it’s that tendency to ask such pesky questions and their skepticism about the government regulation that secures the demand for lawyers that some law professors don’t like about economists.) This is the kind of multidisciplinary perspective (as noted above, not just economics) that will provide the intellectual foundation of the future of legal services.  It’s going to come from law professors writing the high-priced articles that Segal and the scam-bloggers decry.  Of course, there will be fewer of them, at fewer schools, but that’s a story for another day.

Larry Ribstein

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Professor of Law, University of Illinois College of Law

11 responses to The NYT on why law school is expensive

  1. 

    My impression may be incorrect, but it seems to me that competition is not only with ABA standards, but also with law schools themselves, such that removing regulations associated with the ABA would do nothing to reduce the large number of applications law schools receive every year.

    Isn’t it true that law schools would continue to charge $40-65,000 a year EVEN IF regulatory standards were removed from the ABA? Law schools, which routinely admit around 150 students a year, receive about 900-1200 applications annually. With those numbers, they can charge whatever they want. The demand for legal education, in other words, is EXTREMELY HIGH.

    The problem, of course, is endemic. People believe that going to college is mandatory. So, they shell out around $100,000 for a B.A. in philosophy. Upon receiving his degree, however, the student realizes that he has not been trained with ANY useful skills. So, the next logical step is graduate school, and LAW, for most kids with degrees in the “soft sciences,” is the only realistic option.

    Kids have to realize that getting a liberal arts education does not give you any useful skills. If you want useful skills, then you should go to trade school, and learn how to become a plumber, an electrician, or a builder of homes. Now, that is not to say that receiving a liberal education at a four-year university is not valuable, because it is, but I don’t think students value it for the right reasons.

    • 

      But you wouldn’t have as many people willing to shell out that 100K if they could become a lawyer by way of an apprentice program, for example.

      Perhaps we will see more like the solicitor/barrister-type distinctions as in the UK, though not quite so dramatic. A solicitor could be trained via apprentice-type programs. No-one who wants to do day-to-day real estate, family law, employment law, med mal law, trust and estate, tax, etc. needs the full scope of legal theory training. Reserve the legal theory stuff for the litigators (or, if you wish, let law schools focus on corporate, litigation, administrative).

      As a senior litigation law partner, over the past 5 years we’ve rapidly outsourced more and more to tech advisors, document search firms, copy services, corporate filing specialists, etc.

      The harder stuff the clients value are taking a good deposition, figuring out the strategy for a case, getting the details of a complex license/contract correct, negotiating the best settlement terms, identifying the key “gotcha” documents, selecting the right experts, quality briefing, and getting the procedural stuff right (jurisdiction/venue). You just can’t get that value out of the average law grad, and quite frankly, there have been some people who have been in the field for 5 years or more who have billed the cumulative 10k hours who just don’t “have it.” More and more, you need to intimately know your client’s business and give them guidance in areas where maybe they didn’t even spot the potential issues or implications. That is why you see such a split in the salaries. If the clients want you, you can command high fees and feed a solid team. If you are good, but not outstanding, you max out in the 250-400k range in the big cities (or are excellent in-house counsel). Everyone else with years of experience who are not in non-profit hovers in the 50-120K range, which is a nice salary, but you still have to bill @200 bucks an hour if you hope to meet that and pay the rent, malpractice insurance, health insurance, office, secretary, etc. etc.

      • 

        But there are places where people can do this now.California and NY, for example, have alternative routes to the practice. Why aren’t people taking advantage of them?

  2. 

    Some part of this has to rest on how broad the required expertise is for a JD. It’s like insisting that for someone to get a science PhD, they have to qualify in physics, biology, chemistry and astronomy. It is time to start forking into discrete disciplines. A transactional lawyer doesn’t need to know what a litigator needs to know. A bankruptcy lawyer doesn’t need to know what a real estate lawyer needs to know. Yet all of them have to pass all four parts of the bar.

  3. 

    The failure by the legal academy to recognize this reality may well contribute to its collapse.

    Is there any rational basis for the outrageous cost of law school tuition? Not by any measure.

    There are currently billions of dollars in defaulted law school tuition loans, much of it guaranteed by the federal government. At the same time, the number of law school graduates obtaining meaningful employment continues to plummet, while law schools continue to raise tuition and increase the number of seats for law students. Even as the number of jobs for recent law school graduates continue to plummet, starting salaries for lawyers are also on the decline to the point that recent graduates cannot afford to amortize their student loans and provide themselves with food, clothes and shelter.

    In a classic game of passing the buck, the law schools blame the ABA for imposing costly requirements, law school professors disclaim any responsibility, claiming that to attribute blame to them is akin to blaming the proliferation of roaches because of the ban on DDT is akin to blaming the roaches, as Professor Ribstein suggests. They also claim that the high cost of legal education is due to outmoded guild rules and that law firms need to justify high hourly rates to pay for recent graduates. Law firms blame the schools because new associates need to earn enough to pay for their student loans. Law firm clients are saying “whoa, this is none of our business; we’re not paying for training first and second year associates.”

    This whole Alphone and Gaston thing is slowly crumbling, while nobody seems to be paying attention, as unregulated providers of legal services, not having even attended law schools or having been admitted to any bar, are gaining significant market share.

    The entire existing eco structure is simply crumbling before our very eyes.

    In the end, I am seeing both some real merit in the notion of deregulating the profession and, in point of fact, the market is now creating this deregulation, as I describe in http://kowalskiandassociatesblog.com/2011/12/18/a-cost-way-too-high-to-pay-the-new-york-times-on-the-price-of-law-school-tuition/

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