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Tuesday, November 05, 2013
The History of the Law School Crisis: "Great Men" or Societal Factors?
Paul Campos had this to say in a recent post about the crisis:
Almost exactly two years ago, in the fall of 2011, Brian Tamanaha took
part in a forum at the National Law Journal regarding whether law
schools were in crisis. Tamanaha noted sardonically, and correctly, that
“law schools are doing just fine, thank you.”
* * *
Since then, in part because of Tamanaha’s work, the situation has changed drastically.
It's the "in part" I want to talk about. The law school crisis seems to present a very interesting case study for the Carlyle-Spencer debate about the drivers of history. Is the substantial decline in applicants due to anti-legal-education prophets such as Tamanaha, Campos, Henderson, McEntee, and Tokaz? Or did applicants respond to the change in market conditions based on a myriad of market signals, ranging from the New York Times to law blogs to their undergrad classmates to their Aunt Getrude who's a lawyer and knows it's really bad out there? Without key players, would the decline in applications have been as swift and deep?
This is more than an exercise in historical theory. It may give us insight on how to respond to market changes in the future, and what institutions are necessary to convey certain kinds of market information. Do markets self-correct? Are they dependent on a critical mass of information providers to establish the baseline dynamics? Are they prone to lag initially? Is there a tipping point? Are they then prone to over-correction? And what is the moral responsibility for market players? Do you have to keep dancing while the music is playing? Or framed more positively, should market players respond to the market? Or should they form their own independent assessments about the market itself, and respond to those instead?
A lot of questions -- your thoughts would be appreciated.
Posted by Matt Bodie on November 5, 2013 at 05:46 PM | Permalink
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Comments
"I am not sure how influential Campos is at his own institution"
As the Good Book says, "A prophet is not without honor, but in his own country."
Posted by: MC | Nov 6, 2013 6:56:54 PM
Matt Bodie,
I also think that the law faculty should be harder on the "not for profit" diploma mills and the for profit diploma mills than they are.
It's survival time folks, and you've all been grouped into the "law school" category. Do you really want to be paired up with those other schools?
It's a shame what's happening to a bunch of nice people in Iowa. It's justice that's happening to Cooley.
Posted by: Anon | Nov 6, 2013 1:44:54 PM
"And what is the moral responsibility for market players?"
In short? Not to s**t where you eat, or more specifically on those who will feed you.
If law schools had led on candor about near-term employment outcomes before crisis set in, I doubt that we would have seen the last decade's rise in tuition and applications, but the reputation of legal education wouldn't necessarily have suffered the way it did during an unrelated downturn in demand for legal services.
Posted by: Morse Code for J | Nov 6, 2013 1:30:25 PM
What should really trouble the schools, is that they will have difficulty filling their seats in a system that is not market driven and heavily subsidized in their favor.
A market correction would resemble 10,000 applicants. Right now there is limitless GRAD PLUS funding with PAYE on the back end. When that disappears -- and it will disappear for law schools -- look out below.
What's driving this? The Internet has made it difficult to lie and get away with it for a prolonged period of time. Anecdotal evidence of law school being fool's gold has given way to data conclusively showing that law school is fool's gold (Simkovic's backward-looking apology using old data and comparing above-average inputs [law matriculants] to an unsorted pool [bachelor's holders] notwithstanding).
The BLS states that there is a market need for about 25,000 law graduates per year. Doubling such output has a result on the market for your product (i.e., the market demand for lawyers). When students realized this in a highly vivid dollars and cents kind of way, the luster came off the fool's gold.
Posted by: Anonymous | Nov 6, 2013 11:17:18 AM
The decline in the number of applicants is a decade-long trend began in the mid 2000s (although slightly interrupted in 2009 and 2010). In a series of blog posts ("The Coming Crisis of Legal Education"), and the book, I note this decline and predict it will continue, warning law schools about the consequences. So it is not correct to attribute the overall decline to what I have done. I don't know what explains this general trend, but the enormous rise in sticker price has likely played a role. If this is correct, then perhaps market players (per Matt's question) should consider reducing sticker price to more closely reflect the discount rate.
Posted by: Brian Tamanaha | Nov 6, 2013 10:10:56 AM
I think the key players are responsible for something. In this specific case, I think it was hugely significant that the key players were "insiders", law professors, as that created a special interest in the message that didn't exist before. People were happy to blame the "whining" "losers" for failing to make good on their law school investment if they dared to make a complaint. It took the special status of law professors to give credibility to the message, and this attracted the attention of media and students and parents.
Posted by: Steven | Nov 6, 2013 7:58:28 AM
PS - The first person I remember speaking about an employment crisis for law school students was Loyola 2L (did we ever find out who he/she was?) back in 2006/7. Clearly there was a crisis, and word-of-mouth about a crisis back then, but we didn't see any decline in enrollment. Instead, enrollment continued to climb.
The conclusion I would draw from the above is it took the emergence of people with credibility who recognised and talked about the crisis for it to become know to potential enrollees. Pre-2011, not only were most 'big men' not talking about the crisis, but many were actively denying that there was any such thing - if you like, maybe the continued increase in enrollment from 2007 until 2010 is evidence not only of the power of 'big men' to drive change, but also of their ability to lock a bad situation in place.
(Apologies if this is a double post, my intial comment appears to have been eaten)
Posted by: Gil (AKA FOARP) | Nov 6, 2013 6:39:35 AM
Seems to me looking at the employment statistics that the law student employment crisis already was well in progress in the middle years of the last decade. This, however, did not stop it becoming much worse, even after the economic downturn in 2007-8.
The above being the case, it's clearly unlikely that word-of-mouth, or market signals such as job adverts, by themselves could have led people to avoid law school as they are now doing. People closer to the problem than law students are (you would think they would be closest to the problem, but a cushion of wishful thinking separates new LS students from the market) had to take a look at these market factors and highlight them first before they could become known to society in general. Brian Tamanaha, among many others, was one of the people who helped expose the true situation to the people it was most relevant to.
Posted by: Gil (AKA FOARP) | Nov 6, 2013 5:39:32 AM
One thing that drove down applicants, and ameliorated the information asymmetries in the market, were the requirements for Law Schools to publish detailed information about the employment of their graduates. Prior to these requirements, it looked like most grads of most law schools got jobs paying $160K, now we know half don't get legal jobs at all. This is a major reason I think the changes we are seeing are permanent. They result from people having better information. Even if applicants don't see this information, its available to journalists and others who applicants do read.
Posted by: matt | Nov 5, 2013 9:33:04 PM
One thing that drove down applicants, and ameliorated the information asymmetries in the market, were the requirements for Law Schools to publish detailed information about the employment of their graduates. Prior to these requirements, it looked like most grads of most law schools got jobs paying $160K, now we know half don't get legal jobs at all. This is a major reason I think the changes we are seeing are permanent. They result from people having better information. Even if applicants don't see this information, its available to journalists and others who applicants do read.
Posted by: matt | Nov 5, 2013 9:33:03 PM
Some thoughts:
In this context in particular, "the market" in the classic laissez faire sense of the term is a fictional and misleading concept. The market for law degrees is affected by severe information asymmetries, important cognitive biases, (optimism and confirmation respectively, plus sunk cost fallacies, and risk seeking by people who are "in the losses") and profound price distortions via subsidies, in the form of no-doc government loans. It is, in other words, a pretty dysfunctional market as such things go, with this dysfunction reflected in the price of law degrees. That price is a monument to successful rent-seeking behavior, which is enabled by the foregoing factors.
Markets don't exist apart from the other social networks in which they're embedded. The work that the critical law school studies people have done and continue to do is a factor in the market for law degrees -- that work is part of the market, and helps to shape it.
Indeed, drawing distinctions between various market factors is difficult. For example, I had many email exchanges and telephone conversations with David Segal when he was putting together his NYT pieces, which provided him with data and interpretations of that data. I speak regularly with other media actors on this subject, as well as producing journalism of my own, to go along with the publishing I've done in traditional academic venues regarding it. Brian and Bill have also done a great deal of media work, in addition to their scholarly contributions.
The Law School Transparency people -- Kyle, Derek, and Patrick Lynch -- have had, in my opinion, a huge impact via their web site, to which prospective law students are sent on a daily basis by posters on sites such as Top Law Schools. I know that Kyle is heavily involved in the law school reform movement on all sorts of levels.
And many other legal academics are playing a role as well, including Deborah Merritt, Paul Carrington, Jim Chen, and lots of others, either in the academic literature or the popular media, or both.
This is hardly a great man (or woman) theory of history, but rather an example of how complex social reform movements always are, and of how concepts like "markets," while useful heuristics, always run the risk, if taken too literally, of producing oversimplified descriptions of social life.
Posted by: Paul Campos | Nov 5, 2013 7:16:58 PM
It's all speculation, of course, but my guess is that Tamanaha and Campos played a significant role in speeding up the dynamic. My guess is that it worked something like this:
1) Brian and Paul's writing brought these issues to the major law blogs.
2) All the attention on law blogs brought these issues to the mainstream press.
3) The stories in the mainstream press brought these issues to the applicants and their families.
Posted by: Orin Kerr | Nov 5, 2013 6:44:22 PM
I am not sure how influential Campos is at his own institution, where they lowered standards but increased the class size 21% this year.
Posted by: KP | Nov 5, 2013 6:43:29 PM
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