A Closing Argument of Sorts

This will probably be my last entry at this particular blog address. This is something I've been mulling over for the last few months, and I think the time's right to put it out to the internet pasture for a number of reasons, only a few of which I'll get into here.

When I started this blog, my goal was, as the title suggests, to be a small, positive force in changing legal education to match the ideals that almost everyone seems to agree it should have.

As it turns out, few people give a shit about doing that. Those who believe the system is rotten have little to no faith that it can be salvaged. Those who refuse to believe the system is rotten continue to blame students for their apparent sloth, misunderstanding, etc. Those open to reforming the system from within have little use for voices from the pseudonymous crowd, who is like little more than dirty, dried flecks of chewing gum on the bottom of academia's $500 shoes.

Personally, I've grown far more pessimistic about reform's prospects over the last year, and I've grown far more cynical about the legal profession as a whole. There are some things that, frankly, should be as plain as the sun is the sky: the fact that we're graduating 30-40% too many entrants into an allegedly-regulated profession; the fact that accredited law schools engaged in misleading advertising; the fact that the ease of federal loans and the strict limitations on federal bankruptcy have created a severe distortion between students and student loan lenders; etc.

And yet people - otherwise intelligent people - oppose these basic truths and fight them with every logical fallacy in the politics-for-dopes playbook. Take, for example, Scott Greenfield's recent post on today's law students viewing law school as a consumer product. Scott runs a solid blog with generally-good commentary, and by all accounts he's a great attorney. Yet, on this issue, flaws that should be ironed out the sophomore year in college appear: the straw man ("$160k job and a Ferrari"), the factless distortion (scambloggers "are usually unemployed"), the false dichotomy (in this case, between consumer good and education), the inconsistent rhetoric (if education, and the people who run it, is fundamentally different now, how can he credibly claim it meets the same normative values that it did 30 years ago?), etc.

Human psychology being what it is, those who purchase a product defend it, and the successful defend whatever they attribute their success to. Many in the boomer crowd would rather believe that the younger generation is lazy, stupid, careless, greedy, etc. than believe for one second that there's so much as a fingernail scratch on the immaculate, motherly system that birthed and breast-fed them. Curiously, many of these same people can readily recognize the flaws of other social systems, but when you mention higher education, they give you an earful about "the privilege of having an education" and "renowned research institutions" and all sorts of other shit that no one should, objectively, care about.

The idea that they would rather assume young people are lazy, stupid, careless, greedy, etc. strikes me as shockingly cynical and inherently narcissistic.

The critical thinking skills that should be taught in the freshman year of any self-respecting liberal arts education - and as a last resort, the first year of law school - go out the window.

It only goes to show how thoroughly screwed up the system is. This is supposed to be a profession where things like truth and justice are valued. And yet the system that breeds new entrants is muddied with concealment and arbitrariness and somehow that is not only acceptable, but justified when it disadvantages smart, hard-working people with disabling debt.

I've heard of multiple interviewers that tell interviewees that the interviewees' resumes are far more impressive than the interviewer's was when he or she first got hired. There are magna cum laude graduates working in retail and as support staff. There are second-tier law review editors forced to take temporary positions that lead to doc review. Likely a minority of new graduates in 2010 will be practicing law in a mere decade, and this is with tuition resembling a suburban mortgage payment.

It's a mad world, and not one that lacks proud, thumb-in-the-chest apologists. I've tried to reach them and rebut them all in the hopes of a positive restructuring. In retrospect, this might have been a poor move. The title is certainly something I'm no longer a fan of, and frankly, I'm not even sure I care about reform actually succeeding. There's part of me that believes the only thing that will change this part of the world is economic implosion, although I still think eliminating the ABA's monopoly on legal education would be a respectable start to lowering student debts and allowing for broader labor mobility.

Personally, going to law school was a horrible life decision. I have achieved respectable honors at every educational level, and gotten excellent performance reviews at every job I've ever worked. I went to a name-brand (read: top 30ish) undergraduate school and a law school that I thought would set my career on a decent path.

All I've ever asked for a decent middle-class lifestyle where I can pursue my few hobbies, have a family, etc. I know many individuals who gained that with two-year degrees without that much of a problem, and I'd be fine with that, a decent, $40k salary. I figured law school would at least secure that if I put the work in. On my most pessimistic, bottom-floor projections, I figured if I worked hard and did "well" in law school, I'd land a job with a $50,000 salary, which would be sufficient to pay off my loans long-term, live comfortably, have a family, save for retirement. I've done slightly better than I expected and I will be thrilled to have full-time work making $35k or greater within six months. With my "stats," the brochure projected I'd have no problem securing full-time work north of $65k, with a fair crack at a $100k+.

But apparently, to some people, the malfunction was my own. And my peers who finished with experience and solid academics, who would be thrilled to land $45k jobs working for the public defender or a legal aid, well, they're malfunctioned to.

The big question, thus, is this: To them, is there any scenario in which law school resembles a consumer scam?

Surely, the answer is "yes" to anyone capable of examining human nature, isn't it? Even the most out-of-touch bastard would have to concede that, right? And yet, apparently, a system where the students pay $200k in debt for a rather arbitrary crack at a any permanent work when jobs were advertised to them in the triple digits is on the "not fraud" side.

Thankfully, that view is receding into the minority. Today, Kurzon Strauss announced it was filing lawsuits against fifteen (15!) more schools: Cal-Western, Southwestern, San Francisco, Florida Coastal, Chicago-Kent, DePaul, John Marshall, Baltimore, Albany, Brooklyn, Hofstra, Pace, St. Johns, Villanova, and Widener. Can we call these the second-tier sued?

The thing is, there are so many more that are indistinguishable. Where are the two (three, for that matter) Loyolas? What about Golden Gate, Touro, Barry, Ave Maria, Florida International, St. Thomas (both, for that matter), John Marshall (Atlanta), St. Mary's, Phoenix, Elon, etc. etc. etc.? And is the ABA and/or US News going to be joined?

Is it a good time to mention that the aforementioned Scott Greenfield went to NYLS ("first-tier sued") when it was far cheaper and far more beneficial to one's life prospects? That today's Scott Greenfields may very well get sucked into permanent doc review through no choice of their own?

So many questions, but alas I must leave them for now. A year of growth and learning has made this blog stale. The title was chosen with the best of intentions but doesn't fit the message as nice as I would have liked. A reflection of its creator, the format has too often become long-winded (see this entry for Christ's sake). The blog-roll has become lengthy with blogs I don't even read.

As I might have to do with my job (if nothing else is weird about the legal job market, it's the ambiguity and arbitrariness), it's best if I start over. Thankfully, the internet gives me that prerogative so denied by our bankruptcy code.

It's been a good year. More people read my entries here than probably read the average journal article. I got my email address sued. I thrashed Indiana Tech to bits (god, that was a fun entry, albeit depressing since I imagine they'll open a law school anyway). I got hits from every law school from Albany to Yale.

I've learned a lot, too. Sometime soon, time permitting, I'll be back at the dance in new clothes. In the meantime, kids, have a good one, stay away from law school, and watch the headlines to see if - yuppee - you're a class action member. Don't laugh, Harvard kids. The way things are going, it's only time.

Silly Irrational Rich People

In today's episode of "non-profit" capitalism, I have a strong negative reaction to this article.

Hofstra University School of Law will be renamed in honor of a graduate who has agreed to donate $20 million to the Long Island school, the school announced yesterday.

It will become the Maurice A. Deane School of Law at Hofstra University in recognition of a wealthy retired pharmaceutical executive who enrolled in the school at age 50 and was the valedictorian in the class of 1981, receiving awards for both constitutional law and evidence.
...
The school said that for 30 years Mr. Deane, now in his mid-80s, has been an adviser and benefactor of the university and its law school. He served on the university's board of trustees from 1982 to 2007 and was the board's chair from 1989 to 1991. In 2008, he was named chair emeritus.
...
Mr. Deane passed the bar in 1982. Though he did not practice after graduation, he thinks his legal education "really served him well," Ms. Demleitner said.

Mr. Deane is "exceptionally fond of the law school," she said, adding that a condition of the donation was that it exclusively benefit the law school.

And the answer is "yes," you can be technically magnanimous and a complete turd at the same time.

I'm sure some of this money will trickle into scholarships and reduce someone's tuition. But if a game is rigged, it's hardly moral to bankroll the organizers. I'd almost rather the wealthy spend their money on hookers and blow, or buy some crappy artwork or something. At least then they're not supporting a fundamentally broken system that's a detriment to a field they never had any serious involvement with or dependence on.

Univ. of Illinois May Have Reported False Information

From Law.com:

The University of Illinois has launched an investigation into the accuracy of information about the median grade point average and LSAT scores disseminated by the College of Law about its incoming class.

According to a statement released by the university on Sept. 11, ethics officials on Aug. 26 received "credible information" that the law school might have reported inaccurate data regarding the class of 2014 on its Web site and in promotional materials.

Not much comment required here, but:

1. If the allegations prove true, U.S. News should immediately drop Illinois to the third tier to retain any credibility. The absurdity, theoretical and otherwise, of the U.S. News Rankings is, and always will be, a flawed driving force behind these shenanigans. Unless U.S. News actually has some type of penalty for blunt lying, the rankings' sponsor would only prove again how worthless they are.

2. If the allegations prove true, the ABA should immediately pronounce a rule allowing it to audit these institutions at will, if it doesn't already have one. Actually, the ABA should do it anyway.

3. If the University of Illinois - a school whose reputation would keep it in the top 35 regardless of a 2-3 point drop in LSAT score - has to fudge its numbers, how can anyone's numbers be taken at face value without scrutiny?

4. Undergrad stats are stupendously easy to keep track of for an admissions office. The students all wrote them on their applications, and I imagine most schools use a sort of spreadsheet/database-style calculator to ring these numbers up. If schools can't even get those numbers right, how in the firecrackin' hell are they getting the post-graduate numbers even close? A common defense to the post-graduate numbers is that they're accurate when taken with the disclaimers. Can we eve say that? Really?

See additional coverage here.

This Problem is Your Problem is Our Problem

In 2005-2007, I imagine a lot of people had a caveat emptor that's-what-you-get attitude towards people who failed in their housing ventures. I imagine that upon hearing about someone overpaying for a "flipping" property and then failing to sell it, failing to make the monthly mortgage payments, etc., that there was a lot of shadenfreude, remarks about irrational greed ("You paid $300k for a house in the ghetto?"), and such. TV shows used to show the foibles - and often failures - of those trying to flip properties to take advantage of irrational home prices. Real estate exuberance, it seemed, was a public spectacle, like a boxing match. You could participate or not, but there wasn't a sense of connection between person x's failure and the failure of the economic system.

I bring this to mind after reviewing the comments on articles like this and this. It seems there are a lot of idiots in this country who view the fraudulent nature of higher education - law school in particular - as an individual problem, one we should welcome if our attitudes towards greedy lawyers is one of antipathy, one in which we should find head-slapping entertainment if our political views prefer robust, responsible individualism and abhor people exercising their legal rights or exposing flawed systems.

Regardless of where your politics swing, the problem of young people being sucked into the educational-student loan vortex is absolutely a nationwide problem, bigger than abortion, bigger than gun control, bigger than 95% of the issues that the vacuous ruffle their feathers over. It will likely come to rival the mortgage meltdown in impact on the economy. And one of the biggest culprits is higher's education's absolute rejection of transparency, refusal - in spite of its philosophical mission statements - to present an objectively-honest self portrait, and its warm embrace of shyster marketing techniques.

According to the Census Bureau, almost 70% of our high school graduates enroll in post-secondary education. Many more attend school later on in life. In any given year, there's about 3 million who graduate high school, so in excess of 2 million enter into post-secondary education. Around 20 million are in post-secondary education at any given time, with 4-year colleges taking double the number of students at 2-year schools.

The average annual tuition at a 4-year school (public and private both) is around 21,000. Three years ago, the average debt for undergraduates was in excess of $27,000 and around 2/3 of those at 4-year schools took out undergraduate loans.

Using some very crude math and ignoring attrition, we're talking about almost a million every single year taking on almost $30,000 in non-dischargable debt. And for what purpose? The vast majority wind up moving back home. Millions wind up working in jobs that require the skill-set of a 16-year-old.

While the $30,000 figure may seem modest: 1) it's increasing every year; 2) it's above what the federal government advises for a rational student loan debt load, given the employment prospects; 3) 80+% of the time it's a wasted expenditure.

And make no mistake: many of the people borrowing these loans are among the more sophisticated people in the society. The ones that "should" go to college, but have the audacity to come from lower- and middle-class backgrounds. Each one of those one million has to service that $30,000 debt (which becomes $40,000 over a 10-year repayment) instead of buying a car, spending money on entertainment, investing, or otherwise contributing to the economy. Instead, the debt is used to support the bloated and cost-inefficient university system now.

Even at such "minimal" debt levels, the student has a $350 a month handcuff placed on them. And if the student doesn't take the debt, someone else often winds up paying the deficiency. If mom and dad pay for your education, kids, it wasn't free. Absurdly high tuition is a serious economic problem precisely because it diverts resources away from productive uses of capital and towards non-productive ones (debt service and "research" by 3rd-tier anthropologists).

In ten years, there will be millions upon millions of our most education citizens who will be unable to purchase homes or new automobiles precisely because of the debilitating effect of student loans that were thrown on, in part, by a perpetuation of fraud. How can you not see the long-term systemic effect of this?

For law school students, the picture is about five times more dire. Most have undergraduate debt, and then are forced to expend between of $100,000 to 200,000 more to gain a law degree. If $350 a month is nothing to sneeze at, what is $1000 a month like? Because of the fraud of law school admissions departments, these students grossly overpaid for tuition. There are maybe 10% of law students who will achieve salaries capable of paying off these debt levels with ease. For the remainder - approximately 35,000 per year - the high debt will crush their finances and prevent them from having meaningful participation in the economic society.

Say what you will about law students, but 1) most are among the top 10% of the society in terms of intelligence and work ethic; and 2) most never would have gone to law school if they knew the reality of post-graduate employment. Do you think anyone really wants to desperately be a lawyer? Maybe like 15%, tops, have a Perry Mason boner.

The schools deliberately obfuscated the post-graduate employment situation for years. They induced - and still induce - people to pay high tuition amounts to support building projects, professor salaries, faculty retreats, swank soirées, and absurd marketing ventures. As a result of their huckster tactics, tens of thousands will see their discretionary income slashed to almost nothing.

As victimized consumers, graduates are using one of the few weapons in their arsenal that's useful against multimillion-dollar corporations. They're suing. This is one of the few ways to correct the Grand Systemic Flaw, and yet you fucking morons act like it's the students who have a problem. Fuck you; you're as blind as the mortgage lenders circa 2005. In your mania of "personal responsibility" and staring at the trees instead of the forest, you can't see the system imperiled right in front of you.

Education certainly has its normative values, and I'd be the last person to deny that there's a civic virtue in broad knowledge. But because of the high esteem education has, and its place in our democracy myth, the educational institutions have a responsibility not to abuse their station. Instead, they've pissed all over it in an orgy of unbridled greed, exorbitant consumption, and pretentious self-aggrandizement at the expense of tomorrow.

The "underwater" and fraudulently-incurred debts that will disable the next generation are not just the problems of the individual debt holders. They're our problem, all of us, and we should act now, not later. If you learned anything from the mortgage debacle, it should have been that individual problems can become systemic problems under the right conditions, when institutions have an incentive to act anti-socially, as schools have done.

My guess is that naive critics of lawsuits like these and those who robotically spout PERSONAL RESPONSIBILITY every chance they get are not quite "educated" enough to understand such complex problems. The present is the past is the future. My problem is your problem is our problem. C'est la vie.

Forget Nebraska, the Gold's in South Dakota

From the Wall-Street Journal:

There is at least one region of the country actively seeking more lawyers: rural South Dakota.

According to this piece in the Argus Leader, the State Bar of South Dakota is launching Project Rural Practice to try to lure more attorneys to the state’s less populated regions.

“A lot of our rural attorneys are nearing retirement and looking for someone to carry on the practice,” state bar president Pat Goetzinger told the Argus Leader.

Yee-haw.

Of course, the University of South Dakota still spits out eighty new lawyers every single year, and even though eighty plus people pass the bar every year, the state is only projected to have 53 openings per year 'til 2015.

And let's not forget that in South Dakota, wages are among the lowest in the country. It's fine, I suppose, if you went to a state school out there, but I wouldn't expect a William Mitchell, Hamline, or U. of Denver grad to service their private school debt on 29k a year.

And don't ignore that there are only two cities in the entire state above 30k in population. A town of 5,000 needs probably ten to fifteen attorneys, max. There might be a lot of older attorneys retiring in rural South Dakota, but my hunch is that many of them may supplement their income. You could probably fill all of rural South Dakota's needs with just the unemployed Cooley grads from 2010 alone.

Rural life actually appeals to a lot of people. It's safe, quiet, low-stress. In a rural county, you probably know the clerk and the judge personally and unless they hate you, your life should be easier. In many rural counties, they'll protect you and your clients from out-of-county forces if they can. Lot of perks, but I'm highly highly skeptical that the opportunity are really there, or that if they are, they're being sopped up immediately by the spillover from the (relatively) nearby law schools.

If there really are openings, there's no need to spend a dime. Just run a Symplicity advert for the twenty closest law schools. You'll have ten applications the next time you check your email, and at least five will be somewhat-impressive.

Ready for an Even Bigger Laugh?! Law Degrees Still Worth the Debt, Says Kiplingers

From Kiplingers' "5 Advanced Degrees Still Worth the Debt:"

Avg. annual tuition and fees, public in-state: $18,461

Avg. annual tuition and fees, private: $35,622

Avg. debt: $82,601

Avg. income (lawyer): $129,020

Monthly loan payment: $960 (10 years); $544 (30 years)

Hiring is down compared with prerecession levels, and competition for jobs will be fierce as law schools churn out more lawyers than the market can bear.

The biggest paydays now are at big private firms, where new lawyers earn a median annual salary of $160,000. Public-interest attorneys bring up the rear, with median starting salaries of $42,000.

There is so much wrong with this general entry, I wouldn't know where to start, save saying that the "competition is fierce" stuff is the only accurate portrayal.

A Labor Day Laugh from Fox News

In this article, entitled "Internet to Bring Down the Sky-High Cost of Higher Ed, Experts Say," Blake Snow ignores reality in a way I think Fox News is only capable of.

Similar to how media began “supplementing” printed newspapers in the 90s with free online editions -- which transformed business models and made the news largely “free” on the web for consumers -- free online courses might (perhaps unintentionally) ultimately force tuition closer to zero.

Exhibit A is Stanford's new "Introduction to Artificial Intelligence” class. It’s entirely online. It’s free. And it even promises student feedback, in addition to an unaccredited but still résumé-worthy “Statement of Accomplishment.”

Resume-worthy? Uh...sure.

Does anyone in their right mind think that the private university system is going to move to low-cost model where current costs would have to be slashed? The analogy to the newspaper industry is dumb; newspapers are all genuinely for-profit, and the sole purpose of reading a newspaper was to learn what happened in the world. There's a prestige in reading The New York Times, I suppose, but it's not something you put on a resume and you get the exact same pseudo-intellectual cred by reading the online version.

In contrast, people don't take college classes to learn whatever is being taught. If that were the case, non-profit education would be dying simultaneously with the newspapers (if not sooner given the prevalence of libraries). But they're not. That's because people don't really go to college to learn. They go to be credentialed. You can learn whatever it is they teach in the Stanford English or Political Science departments for a very, very, very low cost. Yet people still pay tens of thousands so they can tell everyone they went to Stanford, that Stanford accepted them, and that Stanford put its silver sword on the student's shoulder.

That is the commodity, and until that is offered for free, there's no revolution forthcoming, and students will pay ever-more-insane prices for their "top-tier" degrees. It won't matter if hundreds of other colleges go to cheap online models and teach the same thing. If the only way to get the stamp is to attend the school (and there's no incentive for the elites to do otherwise), people will attend the school and pay out there nose, alternatives to the same practical end be damned.

The article seems to realize that these sorts of free online courses are nothing more than cheap marketing, and yet it retains this optimistic tone that soon our educational costs will be drastically cut by the internets. Bullshit. If that could change the current model, it would have changed 10 years ago. Places still offer actual credit classes online for identical tuition as their brick-and-mortar stuff. Why? Because they can, and no misreading of the economics at work will stop them.

Specifically to the case of law schools, all it takes is an accrediting organization to say "no" and any cost reduction by internet technology would be instantly nipped in the bud. Don't you think the same protectionist measures will surface the second any serious movement happens that threatens professor and administrator livelihood?

Egpytian Grads Should Just, Like, Network More

From Al-Masry Al-Youm, the leading independent newspaper of Egypt:

Dozens of law school graduates protested on Saturday at the Supreme Court demanding equality with chancellors' and judges' sons who have been appointed to the State Council and prosecution service. They called for putting an end to the practice of inheriting judicial posts.
...
“I received my bachelor degree with a ‘very good’ grade. Although my colleague got a pass grade, he was appointed at the State Council for being the son of a chancellor at the council,” said Ahmed Abdel Rahman...."

You mean people actually protest nepotist systems that expose the ruse of the meritocracy?

In America, these people would be called whiners with a sense of entitlement. Instead of complaining about an unjust system that screws the unconnected, they would be told to network better, so that they could be connected, so that someone else (preferably someone docile) could be screwed. Either that or they should "hang a shingle."

But I guess protesting at the Supreme Court is what happens is such a vulgar place where people actually complain about social injustice and absent-minded leadership. Thank goodness we respect civil democracy here.

Flooding the Market Will Not Lower Prices

Previously, I've advocated that there are benefits to taking a "free market" approach to legal education, i.e. reducing entry barriers and letting anyone practice law. And there are: the risk of a mis-allocation of labor and capital reduces significantly, people who might be excellent lawyers who would otherwise not go to law school might be enticed to practice, etc. etc.

But drastically reducing the cost of legal education and eradicating entry barriers will not reduce the high costs of sustained litigation, high-caliber representation, and other examples of lawyers costing oodles and oodles of money.

And yet three "economists" continue to spout the simplistic view that good ol' supply and demand will lower average attorney salaries and the cost of representation. From - of all places - the Economist:

In 2000 the average American law-firm lawyer made $191,000. Exactly comparable numbers are scarce, but the average salary for all lawyers in Canada in 2002 was just $64,000; in Australia in 2000 it was $90,000. American lawyers are clearly reaping some kind of premium, and the economists behind the Brookings study carefully control for a host of factors including long hours, areas of specialisation, and inherent talent. They reckon that of the $170 billion spent on lawyers every year in America, some $64 billion is a premium produced by market distortions....

I'd like to know how these "economists" factored in that they're comparing completely different legal systems - much less "inherent talent" - but in any event, they make some rather audacious claims:

[T]hose without the bar exam or law school under their belt could still, with training and experience, dispense routine guidance and offer legal services, such as drafting wills and arranging simple divorces, to poorer clients. Doing so today risks getting a false “lawyer” sent to prison.

What, exactly, does legalzoom do? What are legal aid facilities for? There are very, very few dirt-poor divorces and simple will needs going unmet, and flooding the market with new lawyers isn't going to lower the price of getting a simple will or a simple uncontested divorce. Why? Because there are tons of lawyers perfectly qualified to do this type of work who would probably do it for low flat fees who aren't running robust practices.

If there really were a demand for these sorts of services, there wouldn't be a 20k surplus of lawyers graduating every year. There would not be lawyers working at the Gap. There would not be lawyers toiling in doc review and taking part-time internships for free. Res ipsa fucking loquitur.

In any event, LSTB, as usual, has a much more detailed, statistically-based entry ripping these views to shreds. He, too, believes that there will be no substantial reduction in fees by flooding the market.

[F]irms are risk averse, valuing credentials over their cost. They’re cautious because their clients are. If clients believed they were overpaying for private school law grads, they’d demand firms hire from public schools, or they’d stop paying new associates’ exorbitant salaries. Oh wait, they’ve been claiming to do just that. If the legal labor market were this cartelized, no one would care about U.S. News’ rankings, and grads would have jobs at graduation, even in a period of high unemployment.
...
The high costs of legal services are due less to ABA accreditation requirements and more to hourly billing practices, poor price signaling, and risk aversion by purchasers of legal services.

And the authors seem to concede that there is a major flaw in their basic reasoning:

The Brookings authors acknowledge that the most complex matters will still go to the best-educated and qualified lawyers.

I write separately - a concurring opinion, if you will - to underscore the flaw and place it in precise terms.

First, I'd like to reiterate that there is very little "simple" business floating around out there waiting to be sopped up or have prices driven downward by people who aren't concerned with going to the "best-educated and qualified lawyers." Criminal defendants, injury victims, insurance companies: these people aren't going to avoid the most qualified lawyers and bargain hunt. If you were injured in a car wreck, would you go with the experienced p.i. shop offering a 15% contingency cut or the newbie with no experience offering a 9% cut? Unless you're a moron, you go with the former. It's not complex litigated, but you can bet your bottom dollar that the most-qualified lawyers will still soak up the best business.

That, in a nutshell, is the giant pink elephant in the theory. The major problem with these feel-good libertarian screeds about restricted markets in the legal profession is that lawyers are not, and never have been, fungible goods. For supply and demand to work - to even apply in the first place - the product at issue has to be fungible, which means more or less that the consumer wouldn't differentiate between different producers on any basis other than price. Oil, for example. Or sugar or cheapo utilitarian furniture or standard grade screws or 20 lb white paper.

Attorneys are not on that list. A new graduate is not fungible with an experienced litigator. Thus, no matter how many new graduates you pump into the market, no matter how lax the entry barriers become, the experienced litigator - be it p.i., civil rights, housing, workman's comp, divorce, etc. - will not feel any price pressure. For him to lower prices or his share of the pie, there'd need to be a flood of experienced similar litigators. That's unlikely to happen; even if you continually pump thousands upon thousands of new graduates into the market, only a few will ever become experienced personal injury litigators. Thanks to it being a pyramid system, the additional operation of any supply and demand would be negligible.

This seems self-evident, but people who argue from a juvenile supply-and-demand perspective constantly overlook it. There's no guarantee that a million more law graduates would ever produce any sort of drop in legal prices. The consumers just don't buy it. Filling out a securities filing is a fairly straightforward matter as far as things go. And yet the business goes to white shoe firms. As LSTB notes, it's risk aversion. It also proves that no supply and demand analysis will work.

No matter how hard you try, you can't flood the market with high-caliber, prestigious law firms, or with experienced attorneys in subfield [x]. Prestige, experience, and expertise are valued (and reinforced by the court system in determining attorneys fees awards) across all fields. Thus, without a revolution in how consumers select attorneys or how attorney costs are approached by the courts, there is no possible way lower barriers of entry would really reduce the cost of 90% of legal representation. Other trends - increased efficiency or contracting business - might lower prices, but flooding the market with minimally-qualified participants will not.

Again, if it could happen this way, it would have already (as it has in areas like traffic ticket law). Three "economists" wasted a lot of time writing a book whose prime thesis can be killed on little effort.

US News Still Trying to Wash Its Hands

Want to see Bob Morse deflect whatever gets flung his way onto the ABA and cover the complete lack of a journalistic ethos at his organization?

Here you go.

The ABA's new placement questions are lagging on what is still needed, based on a July 27 ABA memo on Reporting Placement Data on Annual Questionnaire.

1. The ABA says it will not publish school specific salary data, but instead will publish salaries by state and region not linked to the performance of any school. These state and region results are not limited to the data from any particular law school. Prospective students want to know the average salaries [ed.: a "statistician" arguing for an average as a helpful indicator where there's a sharp bimodal distribution? Uh...okay...] of the graduates from each law school as part of being able to determine the economic viability of earning a J.D. degree from that school. The ABA should have the power to get law schools to report accurate salary data on a school-by-school basis and should trust law students to be able to understand the meaning and limits of such data.

2. In terms of employment data, the ABA is currently not asking law schools to report to them whether a graduate's job is full time or part time or whether a new J.D. graduate's job requires bar passage, whether a J.D. is preferred, or whether the job is a nonprofessional one. This is vital information that prospective students and current students need to be able to make a truly realistic assessment about the job prospects of graduates at each law school....

Emphasis mine. To be fair to Bob, he's right that more detailed information is better.

But therein we have a problem. For years, U.S. News has done little more than parrot the schools' numbers and serve as an advertising platform for flawed data. And even though Bob is clearly capable of reading a questionnaire and figuring out the deficiencies from the reader's perspective, his publication spent years (and may continue to spend years) obfuscating - not clarifying - the information available to the student by reprinting and reinforcing the schools' flawed data.

If information about whether a job is legal or nonprofessional is "vital" to making a "truly realistic assessment" among law schools, why was U.S. News so willing to ignore such niceties when republishing the schools' past employment rates during the past decade?

Here, Bob has basically admitted that the data published and implicitly endorsed by U.S. News in the past was flawed and failed to give students a helpful, realistic picture of their employment chances. Is there any other way of reading this? If student [x] can't make a "truly realistic assessment" without knowing a breakdown of legal/nonlegal jobs or more precise salaries, how could student [x] have possibly found previous editions of U.S. News helpful in forming a "truly realistic assessment" of whether law school makes a good investment?

Generally, when a journalistic enterprise screws something up bigtime, it issues a formal apology.

Has Morse/US News ever apologized? If not, when can the reading public expect it? And, better question, when can we expect Morse and US News to actually undertake some journalistic pursuit of the truth of law student graduate instead of merely profiting off a rankings-drunk public by blindly relaying whatever data the ABA (truly, an unbiased party) puts out?

In other news, California has just appointed a state supreme court justice who, as far as I can tell, has *zilcho* experience practicing in California. I get that Prof. Liu gets rave reviews from students and legal insiders, but in what way does that make one more qualified to interpret a state's rules, constitution, etc., than the numerous appellate judges and other legal figures already there? I suppose it's California's choice and not mine, but I suppose from my view, it's part of a general problem where we value pedigree, name, and legal scholarship over actual worthwhile experience that might prove necessary. It's not like this is a new phenomenon, but I think it's one that continues to be detrimental to the system on the aggregate.

The Tennesseean Questions the Value of College; Future Law Student Doesn't Want to Listen

This is a great article from the Tennessean about the dubiousness - and awakening consciousness of said dubiousness - of the four-year college degree in the current economic climate.

Just check out this gem of an excerpt:

Nicholas Holland, founder of Centresource, a Nashville Web design and development company, said he’ll pay a developer who has completed at least two Web projects $50,000 or more starting out, with or without a college degree. But a recent college graduate with less hands-on experience would get $35,000 a year at most.

College graduates “are typically worthless when it comes to programming and worthless when it comes to graphic design,” said Holland.
...
“They’ve spent 90 percent of their time learning stuff not relevant to their trade. And, in addition to all that, they are often taught by people who spent 90 percent of their time doing stuff not relevant to their trade. Show me a Ph.D. who knows how to program in any of the latest Web technologies.”

Sound familiar? There it is, in black and white, with elegant, yet brutal, simplicity: the guy will pay you $15k more if you know what you are doing, and he doesn't give a rat's ass if you go to college or not.

Just so we're all clear, I'm going to repeat the two pillars of my educational advice to 18-year-olds: 1) intellectual stimulation is a worthwhile endeavor, and highly recommended, but it is not synonymous with credentialing; and 2) you should only seek higher education if the expenditure of time and money will be worth it in terms of the benefit to your marketability as an individual.

Employers in the computer sciences have figured out that well-trained grads from the community colleges and technical schools may actually know more than their 4-year counterparts, and they often hire accordingly. (Obviously, the computer sciences need some sort of mandatory licensing mechanism to ensure that their four-year professors are taken care of).

In any event, I found myself nodding multiple times to this article, as it conforms everything I've read about how higher education actually interacts with the economy (rather than how it does in college brochures) and, in some cases, learned the hard way.

And then we get to a student who fights for the value of the degree. You'll never guess what she's studying and where she's planning to go.

Students at Vanderbilt University, which costs an estimated $59,248 a year to attend without financial aid —including $40,320 in tuition alone — said the expense and effort would be worthwhile.

Liesel Burks, a junior from Madison, Ala., said the bachelor’s degree in political science she plans to have on her résumé in 2013 will pay off in law school and beyond.

“It’s definitely worth it,” Burks said on her way to class Wednesday. “Just the education and experience you gain is so applicable to the future. In this economy, getting whatever edge you can is a really good thing.”

Thinking about having an "edge" is a great start (wish more would do that - I really didn't), but why in God's name does anyone think there's an edge in any kind of political science degree? Even from a school like Vanderbilt, the market is horribly oversaturated for employers who actually want to hire whatever skill set that education provides (which doesn't seem like much). And law school is no different.

In any event, the appearance of this article in a newspaper is yet another sign that the facade of educational prestige is crumbling, and that the free market is dictating that grads actually have applicable skills rather than some crap spewed at them by stuffy people who haven't done a truly economically-productive activity in decades. Again, law school is no different.

Another Sign that Change Will Come Whether the ABA Wants it or Not

This article is about Educating Tomorrow's Lawyers, an initiative that at least makes the attempt to change legal education from the nearly-useless Socratic model to a more pragmatic version where students actually get some skills that they may need after graduation.

Two comments:

1. This is hardly the only "reform" movement or initiative we'll see. As the bottleneck of new entrants becomes tighter and tighter, schools will continue to attempt ways to differentiate themselves from each other. Previously, they didn't have this same level of pressure, where most law schools could virtually guarantee some type of legal work for the median graduate, and everyone reported the same meaningless numbers as everyone else. Now that the truth about law school enrollment and lawyer need has become more mainstream, schools will push the envelope on how finding new ways to appeal to local hiring firms. It may (probably will) cause pressure from the bottom up as administrators at TTTs seek to ease the ABA's various restrictions, such as in-class required hours, tenured law faculty, etc.

It's clear at this point that the Socratic method and relying on firms to (1) hire and (2) train new attorneys in what they'll actually have to do is as dead as Ben Cardozo and Oliver Wendell Holmes. For law schools to preserve their own existence, they'll need to push initiatives like this (even if their actual success is debatable) and that necessarily means pushing the ABA and the state bar associations/state supreme courts/whomever to ease the restrictions.

2. As a corollary to the above, I find the list of schools adopting/paying into Educating Tomorrow's Lawyers telling: Cornell, Stanford, Vanderbilt, and USC are among the 15 schools. Two T-14s, one of the top law schools in the south, and a school that places quite well on the west coast. If schools at that level are willing to alter their methods, it's a sign of how deep these issues hit law schools. It's not just the schools at the bottom that have to change how they operate, it's schools like USC and Cornell as well. The bottleneck is so severe that mid-level graduates at those schools are being squeezed out.

In fact, the risk is very real that many hirers may pass over the median USC grad in favor of a polished, well-trained Pepperdine, San Diego, San Francisco, etc. grad. Of course this doesn't happen at the Latham and Watkinses of the world, but if you're running a small PI shop, would you prefer hiring a top 20% TTT grad who had a clinical legal education or a 60% grad from USC/UCLA/Cal/Stanford who studied Law and Socioeconomics for three years?

There's anecdotal evidence that many firms prefer the former. If schools like Stanford are buying into these sorts of reforms now, it's a sign that legal hiring may not be as rigid from the prestige standpoint as many think, and that the Tier 1s will change even if their above-median grads can rake in the big money by taking garbage Socratic courses.

Selections from Cooley's President

So you're a law school president whose school has been sued for manipulative data. Wouldn't think it's a good idea to avoid making any comments in the media that might admit the case has some kind of merit? Apparently Don Deluc thinks otherwise.

About the school's new Florida campus:

The economy in Michigan is worse than elsewhere, so we were looking at a way to take our program to a location where students are, rather than try to entice students to come to Michigan where the economy is below par.

If the economy in Michigan is that bad - so bad that you're following Ave Maria's lead in high-tailing it to Florida - why was Thomas Cooley advertising promising salaries for its incoming graduates? If the local economy is "below par," can a law school really justify sucking in prospectives by the hundreds?

I realize the connection is not direct (and that it's indisputable that Michigan's economy sucks), but if I were representing Cooley, I would not be happy that the president is on record as saying the local economy is below par, especially when one of its recent studies shows relatively low unemployment for lawyers nationwide. If I'm trying to defend the accuracy of Cooley's representations to prospective students, I do not want the dean on record as saying the local economy was "below par" during a recession, especially when Cooley's representations looked surprisingly like its peers in non-"below par" states.

LJ: There are 11 ABA-accredited law schools in Florida. Is this really an underserved market?

D.L.: Florida is probably average for law school enrollment based on its population. It's 80% bigger than Michigan, but it doesn't have 80% more law school seats....

What we have here is, in my opinion, an admission that the "underserved market" - from Cooley's point of view - is not the amount of lawyers in practice or the amount of law school graduates looking for jobs, but rather the amount of people looking to go to law school. And he compares it not by looking at surveys of underserved populations, but rather by arguing that there are less proportional seats in Florida than in Michigan (of course there are, Cooley makes Michigan one of the most saturated law school states in the country).

One of the chief allegations of the suit, it seems to me, is that Cooley advertises an output (employment prospects of students) that is significantly rosier than it is. And here, the President of the school responds to a rather ambiguous question with the proportional input (government-backed demand for legal education) instead of even thinking that the "market" might be that of graduates' employability.

On the Kurzon Strauss lawsuit:

In effect, without commenting on the merits overall of what they said, they could have said what they said about the practices undertaken by any law school in the United States.
...
Without going into the details, because we haven't filed an answer to this yet, what we will be saying is that we are doing exactly what everybody else does.

Isn't lesson 8 or 9 in a course on negligence that this argument does not work because an entire industry could be out-of-compliance? Why would it be different for fraud? And why the hell would your defense be that "we're doing what everyone else does" when your defense should be "we're doing what's right," shouldn't it?

For that matter, could Kurzon Strauss really have filed a suit against Yale? Seriously? Cooley is no different than a T-14 or a solid state school like Texas or UCLA or Florida or Iowa?

Sometimes I think the arguments seem surprisingly childish. "Caveat emptor," "everyone else does it, so why can't we?", and my new personal favorite courtesy of the lawprof debacle "anonymous speech is cowardly and has no merit." None of these ideas has much serious legal heft anymore, and yet they get trotted out by parties that should have a sophisticated legal awareness and, often, bought wholesale by the same class of people.

How can Cooley defend a liability lawsuit on the grounds of 'all the kids are doing it" while (hopefully) telling their students that that argument hasn't flown since the century before last?

I'm not saying any of these statements will have legal relevance, but if I'm Cooley's attorney, I wouldn't be exactly delighted that my client's CEO is making comments that may bolster the opposition's points on some level.

One School, One Class, One Hundred Million in Debt Alone...for a 2-year degree

From Fortune/CNN Money:

In all likelihood, [the Wharton School of Business incoming class] will be the first MBA class in history to pay more than $100 million in loans and interest payments for the privilege of gaining the degree. In fact, if the class of 2013 continues to borrow at rates similar to their predecessors, it will take on a staggering $112.4 million in debt, loan origination fees, and interest payments. That heart-stopping sum includes interest payments of about $33.5 million. All this, for just a single class of MBAs, one in four of which is likely to incur no debt at all

.
Emphasis mine. Do you think the 1-in-4 who incur no debt will have any problem finding a remunerative job?

In other places, the article states that there are 845 students in the class. So 634 are going to carry $100+ million between them. $157k per person.

You might argue the job prospects for Wharton grads are outstanding, but the article points out that median salaries were only at around $110,000 last year. And I can tell you that there are a lot of MBAs from even elite programs floating around working at jobs that simply don't require such credentials.

Sound familiar? Wait, there's more!

As one incoming student puts it, "The tuition is a big number when you look at it. But I think an MBA or an education in general is a long-term investment. When you graduate from a program, you might get a salary, which is not all that great. But that's a short-term phenomenon. At the end of the day, you take a calculated risk. There's a lot more that I'll gain from the program, and if I have to repay the loan over a longer time, that's okay."

Jesus Hardtack Christ, you really think this is a long-term investment that will pay off when there are a gazillion other MBAs out there, and thousands more coming through the pipeline?

Oh yes, they have saturation, too:

For the Harvard Class of 1949, of course, the rich life was easy. They ascended the ranks of business in the Go-Go years as the U.S. bestrode the world as an economic colossus. When they graduated, there were only 2,300 other students getting MBAs that year -- and only 50,000 living MBAs in the entire U.S. Today, roughly 250,000 people in the U.S. alone are enrolled in MBA programs, which pump out more than 100,000 MBAs a year. There are some 40,000 living Wharton MBAs alone.

Years from now, I wonder how historians will write about our hysteria for severely overpriced education, and how sharply history will frown on the cheerleaders who talk about education being great at any cost.

Roughly 30% of the University of Pennsylvania's graduates are having trouble paying back their student loans, according to government statistics.

This is one of the top 20 universities in the country.

Higher education has become little more than a lottery, where the winners apparently get to break even on their investment.

The Free Market Approach, Summed Up

From openmarket.org, I bring you a recommended piece on how taking the free market approach to law school reform can improve the present situation. Included are comments on some questionable comments on deregulation in general, some excellent comments on law school price competition and practicality, and some arguments about standardizing court procedures:

To stimulate the economy, and make it cheaper to obtain justice, Congress should require the abolition of local federal court rules that differ from one trial court to another, and one appeals court to another, making a uniform set of rules for each for civil trial and appeal by supplementing the existing Federal Rules of Civil Procedure and Appellate Procedure. It should also consider conditioning federal funding to states (some of which ends up funding state judiciaries or participants in the state court system like prosecutors, police departments, and state child-support agencies) on their adopting simpler court rules for their own state courts. For example, it could require each state to adopt procedural rules in civil cases that are uniform across each state, and are organized to correspond where possible with the Federal Rules of Civil Procedure.

Good luck with that one. No one way in hell are the reigning baby boomer niche lawyers going to make it easier for people to compete across county and state lines.

As I've pointed out previously, there are solutions where law becomes more regulated, and I think the results could be similar. But it's clear that there are a lot of things that could be done to fix a variety of problems that aren't being seriously considered.

And that brings me to another point. It seems that in the wake of LawProf beginning his blog, a lot of law professors have started talking more seriously about legal reform. This actually concerns me for two reasons: first, I worry that innovative voices (such as the author of the piece I linked to) may be effectively shut out of the debate by the entrenched parties, beliefs, and interests, which, let's face it, law professors represent; second, and I mean no offense towards law professors, these issues are too important to be left to academics.

1194% Incrase in Student Loan Debt over 15 Years; Why has this not been front-page news?

From the Rochester Democrat and Chronicle:

Shannon Chaudhry knows what it's like to be saddled with student debt.

The Victor native, who graduated from Rochester Institute of Technology with a degree in business administration, limited her undergraduate debt to about $16,000, but borrowed another $166,000 to earn a degree from Albany Law School.

"I'm hardly putting a dent in what I owe," said Chaudhry, 30, who now practices law in Washington, D.C., and uses a sizable chunk of her income — $921 a month — for payments, most on a 20-year plan.

A 30-year-old lawyer has a whopping 11k in annual take-home pay in one of the most expensive metro areas in the country. It should be earth-shattering given TV- and film-fueled perceptions, where even the grubby lawyers wear $500 suits. How are folks still blind to what is going on out there?

Nationwide, student borrowing is estimated to have mushroomed to $931 billion — for the first time eclipsing the estimated $798 billion in credit card debt.

"We are going to hit the $1 trillion mark this year," said Mark Kantrowitz, who publishes two websites focusing on financial assistance for college students.

Total student debt 15 years ago was about $72 billion, according to Kantrowitz's estimates.

Student loan borrowing has increased 1194% in 15 years. Our media has ignored this to the point of irresponsibility.

When borrowing suddenly increases that much, it's a signal that something is terribly, terribly wrong.

After the housing crisis, people look in hindsight with scorn at those lower-middle class people who borrowed six figures to houseflip in mid-level suburbs and upstart exurbs, and give even greater scorn to the people who approved the loans with no inquiry into payback.

And yet, we have an even greater problem going on right now in the student loan industry, and very few people want to acknowledge that it's a potentially bigger problem than the housing bubble. I realize the two, and that housing is about ten times greater in raw number, but because of our "go get it" attitude towards higher education, an entire generation of lower- and middle-class students are being saddled with non-dischargable debt at levels that will delay or prevent them from contributing to the economy.

Mortgage debt doesn't really do that, at least not at the same level. Generally, mortgage debt only comes into existence for those above certain income thresholds. It also can be discharged if there's a housing price fall and the property value plummets. Parties have ways of protecting their income and wiping their hands clean.

Student loan debt does not work that way. It's given out like candy to students on the pure hope - unsupported by any type of empirical proof - that they'll have the income to cover the debt later.

There could be a few "checks" on the situation that would ensure more reasonable lending standards. Private lenders could have to bear the risks as they would with other unsecured debt, like credit cards; yet, our spendthrift stupidity has the federal government back-stopping these economically foolish trainwrecks. The students' payback prospects could be more carefully scrutinized, but yet schools are allowed to spread marketing myths that would get a private company hauled into court immediately. Those schools with their hands on the faucets could be more tightly regulated to ensure that they're not abusing their power, but yet they admit sub-par students and ensure that socially-worthless professors make six figures.

A 1194% increase in student loan debt in fifteen suggests that none of these things are properly happening. And because student loan debt is non-dischargable, an entire class is going to be disabled in purchasing homes, having children, spending discretionary income, etc.

Although people complain more about credit card debt, student loan debt is a far bigger problem, and potentially as big as mortgage debt. It's happening right now.

Another Worthless Ranking

A few days ago Rose linked to an article that ran on Philly.com that talks about some survey that apparently showed Philadelphia's law schools outproduce their peers in terms of BigLaw placement:
The study counted the graduates from the last 25 years who are now partners in one of the nation's top 100 law firms.

The results, which the study claims are the first ever to measure such a statistic, rank Temple Law 26th in the nation, with 160 partners placed in law firms over the last quarter-century.
...
In contrast, Temple Law ranks 61st in the controversial U.S. News and World Report's graduate-school rankings, which weigh everything from a school's student-teacher ratio to its LSAT scores.
...
In top-law-firm placement, Villanova Law ranked 35th in the nation. It placed 84th overall in the U.S. News list.

Widener Law, which has campuses in Wilmington and Harrisburg, is unranked in the U.S. News standings, but 70th in law-firm placement.

The article later notes that UPenn somehow did worse than its U.S. News placement.

I bring this ridiculous study up only to show the intellectual vapidity at work in research/propaganda about the legal field.

And here it is:

The study ignores that some schools have larger student bodies than others, Seto wrote.

"If employers cared solely about per-capita outcomes, they would all interview at Yale. They don't. For employers attempting to allocate scarce recruiting resources, aggregate numbers matter."

This should raise a question: who, exactly, is the professor doing this for? Employers trying to allocate those resources, or - you know - objective truth? As a so-called legal scholar, he doesn't exist to serve as a free consultant to his old buddies in BigLaw, does he?

But I digress again. The real problem I see here is that this ranking is even more useless than the U.S. News rankings, and yes, I think those are fairly useless.

Who the hell cares what school produced the most BigLaw partners from the last 25 years? For one, partnership is generally something attained like 7 years down the road, so you're looking at who made partner from the group of people who graduated law school between 1986 and 2004 or so.

Since we're not factoring in enrollment sizes, we're basically rewarding schools for cranking out the most students between said years. And obviously, schools located in large metro areas are going to be at an advantage, as they would have a better chance at their mid-level graduates later lateralling into BigLaw partnerships. (You can see the list here and see the schools that out-perform their "other" ranks are almost all in large urban areas).

How the hell such a limited and non-proportional study is supposed to show anything of relevance for prospective students now is beyond me. Temple Law enrolls 1000. Many "better" law schools enroll far less.

This is the same type of screwy, illogical accounting error that allows Cooley to rank itself second in the country. And there it is being published by a law professor and appearing on a major newspaper's website.

Never mind the fact that population shifts and the fortunes of large law firms affect these sorts of things. And never mind that becoming a partner almost always features variables that have little to do with one's legal education aside from the prestige of the name on the degree.

This list would lead one to believe John Marshall and NYLS are better options that Alabama or Colorado, or that Georgetown is a superior school to U. of Chicago or Yale by virtue of its size.

In other words, AWAC (as worthless as Cooley's). Of course, Elie Mystal calls them "rankings worth paying attention to."

Of Course Salaries Matter at These Tuition Levels

New York defense attorney Nathaniel Burney has a scathing post ripping the recent fraud complaints filed against Cooley and NYLS. Like I've stated before, I'm skeptical that these suits will go to trial, but I still think the suits have strong value in illuminating fundamental problems with the current legal education model.

Burney, apparently, doesn't see things that way.

Nobody forced you to go to that particular school; it was your own choice. Nobody forced you to take on more debt than you could reasonably afford; it was your own choice....

The school did not “saddle” you with debt. You did it to yourself. And now you regret it. Frantically trying to blame anybody besides yourself for your own foolish decisions only makes you look… well… foolish, at best. At worst, it’s almost like the girl who regrets her drunken orgy and accuses her fellow partiers of gang rape. Either way, you certainly don’t come off as someone with the requisite judgment and brainpower to make it as a lawyer...

It's a classic caveat emptor-style approach. Thoroughly unsustainable as an economic behavioral model, but hey, it sounds nice.

The biggest problem [with these suits] is that, if you really were defrauded, then you had to be basing your decision on whether to go to this particular law school based in large part on how much money its graduates make....If that is true, then you have no business being a lawyer in the first place. You’re in it for the money, and don’t belong here. You selected this law school not because you thought it would help prepare you for a life of service, but because you thought you’d be able to get “a job” and make “good money.” Those are the wrong reasons, entirely.

Did you catch that? If you base your decision on whether to buy a product on what you materially get of the product, you shouldn't buy the product. Regardless of what you might pay for law school, it's "wrong" to go in order to make "good money."

Really?

Sure, law is a service profession. I'll concede that. But it's also a business in most iterations (even the public defender and government employee is "in business for himself"), and a business that runs on cost/benefit principles like any other. You never file a lawsuit that will cost $10,000 to recover $5,000 from empty pockets. You don't take a job where getting there and coming home at night burns 50% of your paycheck, and you don't pay for training that costs twice what your lifetime increased earnings would be.

There is a lot of noble service qualities to social work, art history, and the ministry, but no one in their right mind would pay a non-dischargable $150,000 at 8% interest to enter any those fields. I'm confident that they wouldn't do so even if the entry barriers were what they are for law. Why? Because those professions generally don't make money, i.e., they don't offer a solid return on investment or a benefit that would justify the cost. Law is different precisely because the sellers propagate the myth that the cost is justified by high entry-level salaries.

Virtually every decision that humans make has some sort of cost (including risk)/benefit analysis involved, and I would want no one to make a long-term commitment (including kids, marriage, etc.) without heavily weighing the benefit against the cost. And yet Burney claims that anyone who went to law school "basing [his] decision on whether to go to this particular law school based in large part on how much money its graduates make" has no business making that decision.

This makes no sense. If anything, the world needs more people who fully appreciate the costs and benefits of something, rather than the people who jump headfirst into something they want to do without considering the high costs. The latter has been Congress' strategy for the last few decades; look where it's gotten us?

But Burney apparently thinks that people really don't consider the possible benefits of a course of action, at least in selecting a law school:

It is hard to imagine that anyone would have thought [salary presentations] really were all that material. Would law schools really think their students are so mercenary that the main reason why they chose one school over another was the average alumnus salary? That’s absurd on its face.

Really? Then why does virtually every law school in the country openly advertise its recent grad salaries?! Why does US News publish data on it as a key element of a law school's worth?! Why would they do it otherwise? OF COURSE THEY'RE MATERIAL, especially when the people buying the product have to pay triple figures.

If law school A advertises 120k median salaries and law school B advertises 75k median salaries, and they're in the same rough geographic area, which one do you think will draw students, either directly or through the reporting/ranking of US News?

Maybe he and I just have different views of the world, but people do - and should - base almost every decision they make on the cost of the action versus the benefit to them, generally expressed in and reduced to base financial terms. Hell, Burney seems to admit that students should be doing such a thing:

Nobody forced you to take on more debt than you could reasonably afford; it was your own choice.

So one has to wonder how he can chide students for considering the reported salaries as material when that - and cost - are the two sole determinants that would make a debt "reasonable" or not from the prospective student's perspective.

Thus, in Burney's world, recent non-wealthy graduates are damned if they did, and damned if they didn't. If they considered the payoff at the end of the rainbow, they had no business being lawyers. If they didn't consider the payoff, it was their choice to take on more debt than was affordable.

That seems to be a common motif I see among the older generations (Burney is G'Town, '96), attorney or not. There seems to be an assumption that any type of complaint or gripe about higher education being a "fraud" emerges from greed, sloth, and/or stupidity. The inquiries never go beyond the shallow end of the pool, because they end once that conclusion can be sustained through the quickest means possible. As a general rule, the older generations seem to staunchly refuse to believe that hard-working, intelligent, bases-covering people are being fucked by the triple-team of escalating tuition, non-discharable debt, and a job market that is considerably weaker than the schools advertise (or as it was 15 years ago).

After reading Burney's post, he seems like a lawyer who cares about the profession, but I have to wonder if is he aware that prospective lawyers who want to devote their lives to monkish service in legal aids and public defender's offices now have to, in many cases, take on 100k in nondischargable debt to do it, even living frugally and working non-stop. Those are people who don't enter or stay "for the money," and yet the economics affect them just the same.

Trying to pay that debt back on $25k a year is rough; trying to do it on $15k working at the Gap - because getting those jobs at legal aids or the public defenders office is quite difficult right now - is even rougher. Many people who might have balked before embarking on this quest (and maybe turned to teaching or social work or the military) instead chose law on the assertions that the debts would be easier to pay off than they actually are.

At these tuition levels, often paid by non-dischargable debt, salaries have to be considered, and they have to be material in determining whether to go to law school and which school to attend, for everyone.

Because in the end, it's rarely about the kids who want to get the $160,000 salaries. Rarely. It's about the people who went and took out $100k in debt thinking that a $50k job would be easy to get, and likely the ground floor. It's the people who took out $50k in debt thinking it would be easily repayable with the salaries advertised. It's the people who took out $80k in debt because the school presented that as an "average" salary, and they "reasonably" borrowed on a 1-to-1 ratio as the federal government advises.

Those are the real, ground-level calculations that go on (and should go on!), and for anyone except the spoiled rich kids (who don't take out loans) and the most naive of law students, people actually consider the cost and benefit before enrolling.

If the schools were chronically boosting their numbers to show that the expected pay-off was much better than it was in reality, and thereby distorting those types of cost-benefit calculations, the school was committing a fraudulent act, in theory no different than a car company that ups its mpg by using selective data.

Why do people understand how fraud works in every other context, but when higher education is involved, their knees recoil and they suddenly proclaim caveat emptor and start spouting off on the greed and ignorance of the consumers?

Legal Minds at Work, I Guess

Something called "PrawfsBlawg" recently did a post on the alleged professor posting at Inside the Law School Scam. The article itself is a decent, honest response to the anonymous posts, albeit unreadably professorial in some places*.

The comments section features a bit of a spat between a few professors/professor supporters and people who support the usual "scamblogger" criticisms.

I was struck by an argument made by someone posting under the name Orin Kerr, directed at someone named "Tom:"

[I]f you oppose high law professor salaries, do you also oppose high law firm salaries? Law firms can pay 25-year-olds $160,000 plus a bonus because they bill out their work at hundreds of dollars per hour. Is that also a scam, in your view? Or do you think lawyers are worth every penny?
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[I]t sounds to me like you're not concerned if lawyers scam clients, but you think it's outrageous if law students are misled into thinking that they can take part in the scam.

This argument is so facile and devoid of economic sense that I had a hard time believing anyone would make such a comparison.**

And yet there's an Orin Kerr who apparently is one of the most-cited legal scholars focusing on criminal law in the country. A Princeton grad in engineering. Master's from Stanford. J.D. from Harvard. Supreme Court clerk. Lots of titles and credentials that mean little to anyone outside the legal stratosphere.

If it is the real Orin Kerr, one has to wonder why he's spouting an argument so utterly braindead. Also, one has to wonder why a major legal scholar apparently doesn't understand what a "scam" is.

I don't expect professors and experts to be perfect; no one is, not even the best at their profession. But I'd expect something more than what a freshman economics student could debunk fairly easily after reading a few articles.

It seems to me that, inadvertently, Professor Kerr may have provided support for some of the anonymous professor's main points regarding law professors and legal scholarship.

*Actual sentence from the piece: "...the kind of honesty that anonymity allows can sometimes lack a deeper level of integrity: that is, it can pride itself on its brutal frankness without exhibiting the kind of humility, care, self-doubt, and acknowledgment that one might be wrong that comprises full honesty, the kind of honesty we are often constrained to engage in when we attach our reputations to what we say."

**For the completely unenlightened: Law professor salaries are determined by administrations whose operating budgets are determined by the demand as expressed by students (consumers) willing to pay increasing tuition amounts with federally-backed, non-dischargable guaranteed loan money versus a supply that's abnormally restricted by the presence of tenure. The consumer in this set-up has no say - and often no clue - what professors are paid; they have no discretion over whose salaries they pay. Finally, law professors are paid as part of "public service" institutions, almost all of which are officially not-for-profit/non-profit.

The salaries of BigLaw associates are determined by law firm management committees whose operating budgets are determined by the demand for high-end legal services on which they can bill junior-level associates against the supply of firms that can provide high-end legal services to large corporate clients. The revenues of biglaw are not boosted artificially by a guarantee that all bills will be paid. The consumer who pays these bills has discretion and, most importantly, bargaining power. They are usually directly billed for the labor expended, and can protest exorbitant bills, and/or request that work not be done by overpriced associates doing glorified paralegal work (which some companies have started to do). And these are for-profit corporations that make no serious claim to serving the broader public.

I'm not arguing that high salaries for 1st-year associates are entirely sane, but it's a completely different issue than professor salaries. The former presents no moral problem because we have for-profit parties contracting in a free marketplace, where the salaries are determined by market forces and are fully transparent to the ultimate consumer. Any risk of payment above market demand harms the paying company as well as the ultimate consumer, and no one is "stuck" with the risk of non-dischargable debt should the process lack economic efficiency. Said problem is also immediately correctable once revealed: the ultimate consumer can find a new law firm with lower billing rates, and quickly.

This is not how higher education works at all, and woe upon ye who can't tell the difference, or see the possible moral issue that develops when relatively posh professor/administrator lifestyles are propped up by ABA regulations, tenure, guaranteed payment, and non-dischargable student loans, which relatively unsophisticated consumers are going to be responsible for when they have no conception of what repayment will be like. Nor, in this set-up, do the lenders have any incentive to consider the possibility of repayment or default.

I see the professors, surely all hearty advocates of the First Amendment when it's convenient for them to believe in the principles of free speech, have closed the comments section after less than one day, and after people started showing up and calling them out for not understanding the issues.

The issue whether they're "worth" the salary; in that case, neither the law professor nor the young lawyer are. The issue is where the money comes from, and who and under what conditions the high salaries arise.

Misinformation Runs Rampant in this Business

It's kind of astonishing that, with all the articles and data and simple graphs out there, people still pop up on these blogs and say things like "any licensed attorney can land a job or hang a shingle!"

Um...yeah, and if you make toast and scrambled eggs, surely you can set up a diner somewhere. And surely if you can drive a car, you can just get a job driving a truck. Golly, unemployment would just be solved like that if people would just "hang a shingle" at whatever they're competent.

But I digress. 2011 has been a year of almost nothing but articles and studies confirming what the so-called "scambloggers" have alleged for some time now. And yet the misconceptions not only exist, but in many cases plague the dialogue.

I give you, for example, this column by Chris Mondics at the Philadelphia Inquirer. It's not a bad column; it highlights the need for employment transparency. But then I read lines like this:

...the high paying jobs at big firms that justified high tuitions...

And this:

The concern raised by Grassley and others is this: Law students have been taking on loans of $100,000 or more on the assumption that they will obtain lucrative employment once they graduate. And that was a reasonable assumption until 2008, when big firms in New York were starting first year lawyers at $160,000; the going rate in Philadelphia was $145,000.

Just to make sure readers don't continue these misconceptions after reading this post:

1. The high salaries never justified the rising tuition at the 150+ schools where less than 5% of the student body had any prayer at getting those jobs, which exist on a do-or-die basis thanks to the bimodal salary curve.

2. The concern raised by Grassley is not limited to those who go to law school on the assumption they'll get "lucrative employment," an assumption that was never reasonable at 180+ law schools. Grassley's concern - and that raised by these bloggers - is that law schools misrepresent their data to make law school seem like a much better investment than it is.

Columns like this inadvertently do exactly what the law schools want them to do: make it seem like prospective law students are greedy gamblers who only went for six-figure jobs.

In reality, the six-figure, top law school job market is a small potato. The bigger issue is that 95% of the schools out there lure students in with implied promises of a better life and white collar prestige in a profession where they'll get to help people and practice law, a reality that only 1/2-2/3 of their graduates see under the best-case scenarios.

Very few people go - or ever went - to fourth-tier schools expecting a big payday. Multitudes, however, go - and went - expecting a stable middle-class escape from Baristaland. The schools didn't just advertise the $160,000 jobs to pull in greedy people seeking those, they also used them to imply that making $60k as an attorney is really easy, and therefore worth a larger debt load.

Kurzon Strauss Files Suits Against Cooley and NYLS

Rounds two and three of the class actions against law schools have commenced as Kurzon Strauss has filed class actions on behalf of students from Thomas Cooley and NYLS. (AEM's take here).

I've read through part of the NYLS claim and while I wish the language was a bit more formal ("forking over?"), I love the overall tone of the introductory statement.

I have no idea if these will be dismissed, settled, or taken to a Perry Mason-esque trial (dibs on front row seats), but it's clearly a trend that many of us have seen coming for some time. I wonder what long-term defenders of the status quo think, those who believe (still!) so-called "scambloggers" are just disgruntled crazies in the internet wilderness? Those whose faith in caveat emptor has an antiquated, almost Ayn Randian level of silliness?

In any event, we now have pending class actions against three of the more notorious 3rd- and 4th-tier wonderkids. Surely, some intrepid members of the plaintiff's bar will see this trend and want to stake their claims, right? If any of the three currently pending suits is certified as a class and escapes a motion to dismiss (which I think is extremely likely, at least on the negligent misrepresentation counts), I think 3-5 more suits would be filed in very quick order, if not earlier.

Without knowing which states have the harshest fraud statutes, my best guess is that we see them in larger states attacking more 3rd- and 4th-tier privates, probably stand-alone schools. That means California would be rife to see another lawsuit, Florida is probably on someone's watchlist.

What a coincidence I would mention said latter state, as Thomas Cooley has just announced it will open a campus in Tampa Bay, and no, it doesn't seem to be an April Fool's joke. After all, kids who can't get into Stetson, FIU, FAMU, Barry, Ave Maria, St. Thomas, and Florida Coastal deserve a legal education, right? 700 students, by itself larger than many notable law schools.

Your Congres Hard at Work

So the nation's economic recovery is placed in jeopardy (if it ever left jeopardy). In a rational country, its highest representative bodies might roll up its sleeves and try to if the nation's fundamental economic problems.

In our crony elitist system, we don't fix problems, we witch-hunt people for their contrary opinions. Thus, when S&P gives its opinion on the United States' credit-worthiness, it's not an objective party performing a vital public function safeguarded by First Amendment principles, it's a totally irresponsible economic terrorist.

The Senate judiciary committee is collecting data for an Official Investigation. The House Oversight and Government Reform Committee is reviewing a letter from an irate Massachusetts congressman:

US Representative John F. Tierney called for hearings today on Standard & Poor’s downgrade of the US government’s long-term credit rating, saying the agency displayed a “flagrant disregard for the facts” in its decision.

One has to wonder what a Suffolk law graduate who specializes in health, labor, and education knows about ratings of governments' credit-worthiness, and why he seems to think his apparent three-day inquiry into the matter is superior to a company that does almost nothing but financial analysis. But hey, I guess he's entitled to his opinion unless, apparently, it goes against what the U.S. Congress wants.

A couple of extra points:

1. If a random in-debted jackass says that Experian had a "flagrant disregard for the facts" after it gave him a 410 credit score, unless they completely made stuff up (which, to be fair, some Nobel laureates have suggested), the person would look crazy, and generally the presumption for lower-class people is that the creditor/credit rating agency is right. Why should it be any different for governments?

2. Ratings agencies are pretty much damned either way. If they go along with the bankers, conservatively ratings things so that people have confidence in the system, they set themselves up for post-hoc blame for not doing their job (see, e.g., the inflated ratings in mid-2008). If they try to grade institutions realistically or pessimistically, they're accused as being in someone else's pocket, or being a political agent, as if S&P would risk its organization's existence for temporary political benefits.

Truth is, our Congress has better things to do, especially Rep. Tierney, who is on the higher education committee of the house that's supposed to listen to the "common people."

You Cannot Build a "New Kind" of Law School

Indiana Tech has put forth a lot of crappy reasons for opening a new fourth-tier law school, the most recent of which are outlined here and debunked - again - by Matt at LSTB here.

The one that's annoying the hell out of me today is this idea, often repeated by lower-tiered law schools, is this mantra that the schools will "distinguish" themselves by offering all sorts of novel bells and whistles. Here's Indiana Tech's version:

“We don’t need another law school,” Snyder said. “We need another kind of law school.”

The school, he said, will pair students with attorney mentors, place them in internships at local law firms, and draw on other local resources to ensure students are prepared to practice as attorneys immediately after graduation.

Once Snyder appoints a dean, which he hopes to do by September, he said he will have a better idea of how the school will distinguish itself.

Every single non-t14 first, second-, third- and fourth-tier institution in the country tries to tell itself and its consumers something similar.

Indiana Tech's prospective rival, Valparaiso, tries to set itself apart by requiring three years of legal research and writing, deliberately maintaining a smaller study body, offering clinics in sports law and other specialized fields with a variety of externships, etc.

What the law schools never admit is that no one who matters gives a shit, and nothing Indiana Tech can possibly do will "set itself apart." Because frankly, if there was a golden ticket to making one's graduates employable, every other third- and fourth-tier hole would be doing it as well; does Arthur Snyder, who decided to build a law school last year according to the article honestly think he can innovate a field with 200+ other participants, most of whom have been there for decades?

New businessman's arrogance. Thanks to some rather stringent ABA regulations, there's little any school can do to truly "set itself apart," and so regardless of what little gimmicks the school's push, the student's education and prospects virtually never change.

Reality of today: Employers hire on prestige, experience, and rank. The only real bypass is if you know someone on the inside. Indiana Tech can give its students all the mentors and legal writing classes and international law experience in the world. It won't mean a damn thing unless it can boost one of those categories (which relevant clinics can do, but again, almost every law school has clinics in areas like criminal law, domestic relations, etc.).

Thinking you can be a revolutionary while following 200 others marching with the empowered (i.e., ABA accreditation) is foolish. There simply is no such thing as "a different kind of law school" where current ABA accreditation is involved, no matter how hard the marketeers try to distinguish their beige Corolla from the off-white, light tan, latte, and sand-colored Corollas surrounding them.

On America's Credit Downgrade

All the talk this weekend has been about S&P, but first I'd like to give you Moody's, whose analytics divisoin put out this damning report about student loans.

My "favorite" is probably the charts and graphs at the bottom of page 58 and page 59. For all the fist-shaking our policy leaders do at the for-profit schools, this is clearly a systemic problem that includes non-profit public and private schools. My only complaint about this report is that it's written in the tone of an article that should have been written a decade (if not more) ago:

[M]any students may be getting their loans for the wrong reasons, or that borrowers—
and lenders—have unrealistic expectations of borrowers’ future earnings. Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.

Of course, one problem is that you often pick an in-demand degree that is not in-demand 4-7 years later when you emerge onto the job market. Our politicians and ratings agencies can't project 4-7 months into the future, and yet 18-year olds are supposed to have some crystal ball that helps them know what job will be hot and hiring in 5 years lest they be saddled with non-dischargable debt. That's why bankruptcy reform is so essential, and why it almost certainly won't be lead by people tied to the mast of the current model.

And that brings me to the financial shipwreck known as the United States of America.

I'd like to note that many of the libertarian/right-wingers are being disingenuous in proclaiming America's spending the big problem. You can shoot this argument dead merely by looking at the list of other nations with sterling credit. Canada, France, Sweden, Norway, Denmark, the UK: it's like a who's who of so-called socialist republics.

It isn't the spending. It's the spending in conjunction with the refusal to raise the funding necessary to support the spending in addition to slowed economic growth. As S&P said, it's the politics.

And the politics didn't start yesterday. One on the central reasons the U.S. runs a budget deficit is that the American public has been suckered into thinking that income taxes are evil, and has passively sat by as the rich have gotten richer - and the middle class driven into non-existence and poverty - as income taxes for the wealthy have fallen like a rock.

In the 1960s, the top .01% of the population paid 60+% of their income to taxes. Today that same group pays well under 40%, and in the last decade, that same group has seen its wealth dramatically expand while the middle- and lower-classes suffer comparatively. Yet, if anyone in Congress so much as suggests a tax hike for the wealthiest of Americans - let's face it, the best tool our government has for immediately raising revenue - you get a whole bunch of yay-hoos screaming about taxing "our most productive citizens" and how you have to work until June to pay Uncle Sam. Of course, these idiots never realize that disproportional drops/loopholes for the superwealthy damage them far more than paying a higher income tax. And they can never explain how states like Germany and Sweden can maintain strong economies - complete with recognizable domestic manufacturing - paying a higher tax rate than the U.S.

All its served to do is handcuff Congress. That's fine if spending is kept to a minimum, but jackwagons on both sides of the aisle have no problem demanding that the government spend when it's convenient to their cause. Bank bailouts? Military spending? Go for it!

S&P hit the nail on the head that this is a political failure. A mere decade ago, America ran a budget surplus and loss of its credit rating would be laughable. In the in-between days, we've had two horrendously bad administrations who've watched spending balloon without any rational plan to increase revenue, who've guided an economy that has drained jobs to overseas countries and seen real unemployment skyrocket, has seen its economy become more dependent on bubbles, and watched as middle class life becomes more and more elusive for a majority of Americans.

Real leaders would have addressed these issues long ago - or at least tried - instead of hand-wringing over [random stupid faux controversy while the wealthy elite got rich at the expense of everyone else]. Instead, we vote in the same putzes year who find new ways to give their cronies and their funders a bigger share of the pie.

I should note that the treasury department is disputing S&P's opinion, claiming S&P made a $2 trillion dollar mistake and that there is "no rational reason" to downgrade America's credit rating. Right, which is why China's leading ratings agency downgraded the U.S. last November.

It's all the more scarier when you realize that the people who will be charged with getting us out of this mess (the fact that we ever left recession status should have economists reassessing the definition) will almost certainly be hand-picked and anointed by the people who steered us right into the iceberg, and I wouldn't expect the credit ratings agencies to look any favorably on American public debt unless Washington suddenly grows some balls and stands up to the wealthy elite.