Reviewing Indiana Tech's Feasibility Study

If you're like me, you've probably been wondering how in the world Indiana Tech concluded that the world needs more lawyers, sufficient to justify opening another law school. Well, they've posted their feasibility study online, although it comes with the following warning:

This feasibility study is proprietary information and is not intended for printing, copying, or other distribution.

Yes, this community institution made something available for free on the internet to support their absurd cause, but they don't want you to print it. In any event, I see no warning about fair opinion, commentary, and criticism (not like the First Amendment would actually allow that), so let's explore the inanity of this assume-the-conclusion, Soviet-style venture that may cause a variety of public harms (see Conclusion below). Besides, it was lauded in local media, so take this as contributing to the established public debate.

Problem 1: The Players
This monstrosity was authored by a "Feasibility Study Committee," composed of fifteen individuals: six local attorneys, five Indiana Tech administrators (including the President, the VP of Finance, and the Director of the Center for Criminal Studies), a sports medicine specialist, a regional Chamber of Commerce rep, a consultant, and the founding dean of the Elon University School of Law.

The consultant, sports medicine specialist, and one of the attorneys are also Trustees of the University, with the attorney being Chairman of the Board. In other words, it looks stacked: if the President and select Trustees wanted a law school come hell, high water, or 30% unemployment, there was seemingly no way the feasibility study was going to slow them down, given that it looks like they had eight 'votes' in their favor, plus the founding dean of another likely-profitable private ABA law school (built, I might add, in a city and state that didn't need it).

Bear in mind that the ABA requires a feasibility study in application of provisional approval, including an inquiry into "the resources necessary to . . . sustain the school." If the feasibility study blatantly distorts the community need for the school (i.e., understating the ability of the school to sustain itself long-term by producing bar-passing graduates), I don't think this criteria would be met. Note that this committee has no independent economist or statistician, which comes into play on our next few problems.

Problem 2: Ignoring Efficiency Improvements in Calculating Lawyer Oversupply
In their summary of factors that cause a reduction of the need for attorneys, the report notes efficiency as one cause, including technological advances, increase in support staff use, outsourcing, and cheap substitute providers. It also notes that the recent downsizing has been on a greater proportion than other recessions.

Yet, its selected method for calculating the under- or oversupply of lawyers uses GDP/number of lawyers. Theoretically, it seems to assume there's a constant amount of GDP that demands a lawyer to service it, and that the need for lawyers rises and drops proportionally with GDP.

I'm not kidding: it's on page 6. Looking at the charts, the Committee actually argues that the market for legal services right now per lawyer is improving and better than it was in the 80s/90s and the report states, boldly, that "as long as GDP per lawyer exceeds $11 million . . . there will be a healthy demand for legal services."

This is, of course, bullshit, because it completely ignores improving efficiency, reallocation of legal labor, and concentration of legal service providers. There is a much better indicator of the demand for legal services than GDP: actual jobs available for lawyers, or the actual work available for lawyers right now. At the very least, they could have checked out the BLS, which is in the business of projecting labor growth of various fields.

If the Committee had any interest in actually fulfilling its duty to the University, I think it should have asked these questions and looked to these sources. But no where does the report mention that only about 2/3 of recent law graduates find full-time J.D./J.D.-preferred employment. And if the Committee had surveyed actual lawyers and recent graduates, it would have found very few believing there was a demand for more licensees.

But it did not do these simple, straightforward things. Instead, the report makes some calculation with GDP that bears no little to no relation to the actual demand for new lawyers.

Problem 3: The Net Gain Projections
Potentially worse is the report's claims that its projected 28% increase in law school enrollment between now and 2035 is inadequate to meet the demands of legal services. You read that right: according to these numerical whiz-kids, 56k+ law graduates will be completely inadequate in just 25 years.

Besides assuming constant 2.5% GDP growth, the study assumes that a lawyer has a 35-year career, which has no justification in reality. I would submit that it's rare for a Partner to retire at 60 or 65, and it will be even rarer for the Class of 2000 (who they cite) and beyond. Attrition should not lower this number. Those who leave the profession before graduation or shortly thereafter shouldn't matter in calculating the replacement value: a Partner working for 50 years is going to have a much, much bigger book of business than a solo who flames out after 3 years.

Furthermore, the report assumes, without proof, that every retiree yields a place for a new graduate. This, too, has no support in reality. Often when people retire, their business diffuses and is absorbed by other experienced attorneys. For Partners at large firms, the firms generally retain the business with no correlation to hiring a new attorney.

Despite this, the report somehow argues that the net gain in attorneys must steadily increase or else the work available per lawyer will skyrocket to an all-time high (see chart on page 8). The report actually suggests that having 78,000-86,000 law school matriculants in 2032 will be reasonable to keep GDP/lawyer between 12-13 million, albeit unlikely (thank God!).

Again, the study's assertion of a strong and constant correlation between GDP and the need for lawyers seems wildly misguided, radical, intellectually-dishonest, irresponsible, divorced from reality, and a variety of other negative adjectives. But since this is an official committee with titled community leaders hood-winking taxpayers, it's all good.

Problem 4: Having No Proof for an Indiana-Specific Need for Lawyers
The report then notes that Indiana has a relatively low lawyer-per-capita rate AND a high GDP-per-lawyer rate. The former is great for Indiana, not bad. The latter is neutral (and it shows that more lawyers do NOT increase GDP or benefit the economy, see an inconsistent argument below).

Incidentally, given the vast discrepancies of GDP-per-lawyer ratios across the states, you'd think the Committee would have seen the red flag in its hallmark metric. Wyoming and North Dakota have GDPs-per-lawyer in excess of $25 million. Earlier in the study, it told us that there's a "healthy demand" north of $11 million. Wow, Wyoming and North Dakota must be desperate for new attorneys. According to the numbers and the Committee's premises, everywhere except Massachusetts, New York, and D.C. should have a healthy demand for lawyers. Except the opposite is true.

Again, there were no independent consultants, economists, or statisticians on this thing. Not even a real attempt at objectivity.

Anyway, back to the alleged Indiana-specific need for lawyers, the study notes that Indiana has a higher proportion of solo practitioners and a lower proportion of BigLaw firms than the rest of the country. But it claims that Indiana needs more lawyers, not just to catch up with the rest of the country, but also to make the rural economies go boom:

If Indiana's non-urban counties are to realize their fair share of future opportunities, they will need more lawyers.

Doesn't this assumption conflict with the GDP numbers? Anyway, don't go looking for any substantive proof that rural Indiana is being repressed for lack of local lawyers - you won't find it. Any numbers about unrepresented parties? Overworked law firms in small towns? Businesses that moved for a lack of "environmental lawyers" hassling them? People who stayed married for want of a divorce attorney? None of the above.

The report also notes later on (p. 18) that Indiana has a lower rate of law school applicants than other states (see below), but this doesn't seem to bother them at all; rather, it's reason to open a new school.

Problem 5: Awareness and Purposeful Ignorance on Salaries/Debt
When looking at the demand for law schools, the report engages in a discussion of starting salaries for lawyers and concludes that entry-level lawyers made around 35-60k in northeast Indiana (though with apparently no factoring in of unemployed new graduates or that 10% assumed attrition). The report acknowledges bimodal hiring. It also acknowledges the large amount of debt being accrued at other Indiana law schools (90-110k).

Yet, it concludes that "most lawyers make a comfortable living." It also explores a study on the Class of 2000 that seems to suggest lawyers are happy and paying back their debts. How this is relevant to the Class of 2015 is beyond me. It also seems from Appendix P that that study sampled lawyers and not necssarily a population of J.D.-holders. Also note that 20.6% of Tier 4 graduates thought law school was not a good investment from the Class of 2000. How will people think when job prospects are far bleaker and debt repayment is a much, much greater burden?

The study doesn't address this.

Problem 6: Absurd Statements Regarding Indiana Students' Interests
Why did Indiana residents lose interest faster than the rest of the country?

Th[e] weakening of of Indiana students' interest in pursuing legal education may be the result, at least in part, of a lack of an opportunity to attend an Indiana law school.

Such reasoning may apply to regions like Fort Wayne where one could not attend part-time while maintaining a job, or where one did not want to move, but northeast Indiana is hardly the only region of the country without a law school, and part-time applicants are a small minority. They can't seriously believe that people are turning down applying to law school in whole because northern Indiana doesn't have a second fourth-tier school, can they? Or maybe it's that Indiana has a relatively low number of bachelor's degree holders (see App. p. 1), which a new law school isn't going to change.

The report also states that many Indiana residents are forced to go out of state because of the "excellence" of the in-state schools (p. 18-19), and it seemingly writes-off fourth-tier bottom-feeder Valparaiso, as it's "Chicago's southeastern-most suburb."

First, many students choose to go out-of-state thanks to the higher-ranked schools surrounding the state: U. of Chicago, Northwestern, Michigan, and Illinois, all of which provide equal or superior BigLaw/clerkship/economic opportunities than Indiana or Notre Dame. Many in Indiana likely see all three of the Chicago 2nd-tier schools as superior to IU-Indianapolis, not to mention Kentucky, Ohio State, Cincinnati, Michigan State, etc. Many of these institutions may offer better scholarships than their Indiana counterparts. And then there's the small amount of residents that likely leave to attend east-coast and west-coast T-14s.

Second, it's awfully convenient to forget the state's weakest school. Looking only at the IU and IU-Indianapolis admission numbers, they show the number of "applicants not admitted to the two schools indicative of the ability to perform satisfactorily in law school."

What's their criteria for "satisfactorily?" Apparently, it's 145 LSAT/3.0 GPA or 150 LSAT/2.75 GPA.

If you use a better measure of "satisfactorily" and go with 155 LSAT/3.0 GPA, there were about 100 "qualified" applicants rejected from IU-Indianapolis, a spill-over that could certainly find a place at Valparaiso or at a neighboring school that will be higher-ranked (with overall better job prospects) than Indiana Tech. And for anyone who really wants to go to law school with a 147 LSAT, there's always Cooley, a mere half-state away.

That leftover pool does not justify a new private law school in Indiana. Most Indiana Tech students would likely be 145-155 LSATs and 2.75-3.25 GPAs, who are marginal law school candidates with a relatively poor track record on the bar exam.

The numbers themselves show this, but the Committee seems willfully blind.

Problem 7: Overvaluing the Non-legal Intangibles of a Law Degree
At multiple points in the report, the Committee stresses that lawyers are community leaders and that there are considerable career benefits to getting a law degree even when one does not practice law.

For example, this is from the Conclusion:

Before the tremendous expansion of MBA programs, many persons intending to pursue careers in business obtained law degrees as preparation for their life's work. It remains excellent preparation for business, for teaching in a broad range of subject areas, and for other work requiring critical thinking and policy analysis.

The second sentence has no foundation in fact, at least with respect to non-elite law schools. On the contrary, businesses routinely reject J.D. holders for positions because they have a J.D. Many J.D. holders leave the degree off their resumes. And the idea that you can teach "a broad range of subject areas" with a J.D. is laughable. Good luck competing with those who have master's degrees in education, if and when you go through the certification process.

Problem 8: The Fort Wayne Economy
As Appendix A notes, the northeastern Indiana economy stinks. It's had declining per capita income in the last fifteen years. Jobs are manufacturing-heavy and the number of jobs requiring a bachelor's degree has declined in the last nine years. It's better than Detroit, I suppose, but this isn't a booming metropolis in the sun belt here. Why do they expect the demand for attorneys will rise at the national rate in the next 25 years? Even if there were a need for law schools nation-wide, I doubt it's in a place with this economy, even if the report's fanciful projections of economic recovery take hold for good.

Problem 9: The Big Omissions
The article notes declining applications, cyclical application waves, bimodal hiring, and a variety of other truths, even though it refuses to see the full picture they illustrate.

But despite some nice commentary on the U.S. News rankings and law school curricula, nowhere does the report mention David Segal's New York Times work. No where does it mention Bureau of Labor Statistics projections. No where does it mention the actual available employment numbers for recent graduates. No where does it mention the Wall Street Journal's coverage on lawyer saturation. No where does it mention Paul Campos, Brian Tamanaha, or the other academics who would likely oppose another law school or more lawyers. No where does it mention "scamblogs" or any of the other countless examples of media outlets publishing reports on the oversaturation of the legal market.

The Committee cherry-picks sources, and egregiously so, to the level of intellectual dishonesty. If this report were peer-reviewed, it would be rejected by anyone with two brain cells and a Google search box. The fact that it's an official-sounding report from a university makes it all the more embarrassing.

Conclusion: Why You Should Care
Indiana Tech is private. If they want to blow their money on a law school, why should we care?

First, Indiana Tech will be relying heavily on federal student aid to pay its 28,000 annual tuition. If they can induce a new group of students into an ever-more-crowded legal profession, those students will find it increasingly harder to pay back loans. Those loans are backed by the federal government, so we all stand to suffer if Indiana Tech takes risk-free money at a handsome profit, and then the students abscond on paying the debt.

Second, if Indiana Tech brings in a hundred new graduates, the recent reductions by other schools will be offset and the national oversaturation problem will become worse. As nation-wide precedent has shown, oversaturation does not lower prices for legal services, so there's no benefit to ordinary consumers. All it does is encourage borderline candidates who want to chase a mystical, often-impossible dream at exorbitant costs, both personal and social.

Third, if you're like me, or if you're a member of the Indiana Tech community, you probably get upset when an accredited university collecting federally-backed loans publishes something so ludicrous with the imprimatur of a Committee selected by the University Trustees. This study reads like FoxNews doing a feasibility study on electing a Republican. I knew nothing of Indiana Tech prior to these news articles, and I can't say my regard for the school is high after reading "work" lead by the school's president.

Fourth, the Fort Wayne media seems to encourage this insane idea, as this editorial with no byline points out.

The law school announcement has prompted some complaints, almost all from lawyers and law students.

“The world is not crying to mint more lawyers,” attorney and City Councilman Mitch Harper posted on his Fort Wayne Observed blog.

But Indiana Tech’s feasibility study for the program, posted on its website, shows a thoughtful and thorough examination of the proposal.

One has to wonder if anyone at the Fort Wayne Journal Gazette even read the study.

Anyone who actually opened the document and started reading with a clear head should instantly see an intellectually-flawed piece of propaganda grounded in false assumptions and amateur-hour methodology. Even a lay person or a dim-witted journalist should be able to figure out that GDP and lawyer need do not correlate constantly over time.

Fifth, the Fort Wayne community stands to suffer greatly if there's an influx of recent graduates whose employment prospects are grim, especially given the dearth of bachelor's degree-required jobs in the area. Recent graduates scrambling to make ends meet in a profession with too little rope will have less money for discretionary consumer goods, and may risk non-payment on things like mortgages, rent payments, car payments, medical bills, and utilities. Good for Fort Wayne's debt collector industry, bad for almost everyone else, even considering the community jobs and revenue funded by those federal loans and/or the bank of mom and dad.

It's not just law students and lawyers who oppose this, or who should oppose this. There simply is no need, social or economic, for more lawyers or for a law school in Fort Wayne.