Law Schools' Attention Spans Remain Short
NYTimes Elizabeth Olson, who has been writing about law schools for many years, offers some short thoughts about how law schools might become more scrupulously focused on two rather large external threats on their basic business model. Helpfully, she reminds us of the looming student loan caps, caps which simply cannot be aligned with present rates of law school tuition (in the aggregate, and at most private and many public law schools). As well, she notes the uncertain, but potentially disruptive, impact of AI on law firm employment. These are not new insights, and yet these reminders appearing in the paper of record is telling, as we think about New Year resolutions and the way forward.
What remains striking is the seeming lack of serious, constructive attention by law schools on these issues. The AALS’s contributions to these debates seem rather fuzzy. They have commented around the edges of the financial aid impact, something that seems to be approaching a true cliff and, if applicants risk topping over the cliff, there will be a tremendous reckoning among law schools seeking to maintain enrollment. The arithmetic simply doesn’t wash; law schools will need to sharply reduce tuition to meet their numbers and, given now profoundly tuition dependent are most law schools, there will certainly be major cuts, if not bloodletting on a large scale. It is possible that law schools have available useful back-up plans, but my anecdotal experience chatting up deans and other stakeholders suggests that the loan cap can has been kicked down the road.
AI presents a different sort of puzzle, to be sure. It could be that the shiny new(ish) object of AI will not significantly impact law firm hiring in the short to intermediate term. In his “legal education news of the week” substack, Prof. Derek Muller wryly notes that fears of a big cutback seem belied by the fact that high end law firms are scrambling to hire 1Ls at a fever pace. But, as he knows, this is just one segment of the market, and perhaps the more interesting and urgent question if how AI might impact hiring below the AmLaw or Vault 100. I have no crystal ball, nor do law school deans. But I do believe that some meaningful energy and ultimately strategy should be developed, if not necessarily bespoke then in tandem with many law schools (or at least law schools of like circumstances). Having come back from the AALS annual meeting earlier this month, my observation is that there is precious little attention from either the association that represents American law schools or, at least in organized ways, the collection of law school leaders and other faculty to the potential disruptions that AI poses to employment and curriculum.
One fears that the reasons are fairly prosaic: Immediate pressures loom large, and, interestingly, the usual pressure to admit a class has become ameliorated for now by the spike in law school applications. And so deans may simply be content to leave off until later the medium-term and long-term planning necessary to account for a major shift in the financing model for legal education. Moreover, AI seems even more speculative. Law schools seem (for the most part) content to fulfill its duties by furnishing table stakes. We hardly see a coherent, evidence-based, and collective conversation brewing among law schools. Law schools’ attention spans are famously and vexingly short. So much the worse for our present and future students, eager to invest in a scheme of legal education that will provide ROI and advance societal progress.
At the risk of belaboring the obvious, the reason for the “seeming lack of serious, constructive attention by law schools” is because they don’t care. I was a Great Recession / Law School Crisis-era graduate. I’ve seen this song and dance before. The business of law schools is not creating new lawyers. The business of law schools is the enrichment of law school professors and administrators. It is a fabulous gig with high pay, no clients, no billables, no real responsibility, and certainly the most lucrative field in America where experience is disqualifying (it's still two years' legal experience at most to be a serious law professor candidate, right?). They are loathe to ruin this little party, and as the years 2008-2011 at minimum showed, are perfectly willing to lie to their applicants and the public about outcomes to keep tens of thousands of new law students borrowing billions per year to keep them in luxury.
And before that, in the pre-GradPLUS 2000s, what did we see? Newspaper articles about fourth-tier law schools charging almost the same as Ivy League law schools, while claiming the same post-graduate median salaries. The latter were brazen and cynical lies to justify the former,* and the former was set to shower those who ran the law school in money and also kick back 25% or 30% to their parent universities to underwrite electron microscopes or IT services or whatever. There is no serious reason to think that the institutional operations & mindsets of law schools have so meaningfully changed that they will not revert back to this norm now that GradPLUS loans once again do not exist.
Let us remember the revelation in the 2011 NYT article “Law School Economics: Ka-Ching!” that from 1989 to 2009, the average undergrad tuition increased 71% while the average law school tuition increased 317%. Those dates are very important, because GradPLUS only existed for three of those twenty years. And the federal lending limit before it was like $18,000/year, a fraction of what law schools routinely charged long before GradPLUS came around (NYLS, not NYU Law, charged almost $40k in tuition alone the year before GradPLUS). And yet, law school tuition far outpaced undergrad. We know exactly how law schools act in an age of limited federal student loans, because we have decades of data about it: they act exactly the same. That is why the “loan cap can has been kicked down the road.” It will be kicked right to the door of Sallie Mae and Access and Nelnet and that lot, where new students are free to borrow $50,000 or $100,000 or $200,000 to make up the difference between what they can borrow from the feds & whatever tuition discount they can wrestle, and the cost of attendance. As I recall, almost half the student body at Columbia pays sticker and the new federal student loan ceiling of $50,000/year will only cover 40% of their current annual cost of attendance of $125,000, a number only that low because the maximum living expenses budget might cover a hovel two hours away in Bridgeport. But hey, private loans are not just nondischargeable in bankruptcy but also securitized and sold to investors so at least we can rest assured that the banks in this terrifyingly unregulated sector won’t blink at throwing huge sums of money at anyone who can sign their names, just as was the case back in 2004 when a Moody’s ratings report on all asset-backed securities classes concluded private law school loans would have among the highest default rates in all of higher education, with some offerings over 10%. And so it will be once again.
Similarly, law schools are not concerned about AI taking away entry-level lawyering jobs, because it is just not their concern. It will only become their concern when circumstances are such that once again law school applications tumble 40% or 50% as they did in the Great Recession, and once the specter of jobless, shatteringly indebted, and supremely pissed off law school graduates become a staple in the news. Until then, expect a resurgence in law schools pointing to that silly Million Dollar Degree “study.”
*Even my own very self-righteous and “public interest oriented” law school claimed a median salary to USNWR >20 years ago that is, after adjusting for inflation, about 50% higher than what the College Scorecard says it is today – and that’s before we get into College Scorecard data being taken 5 years after graduation versus the USNWR claims being “taken” nine months after graduation. We know the College Scorecard data is accurate because it is taken straight from graduates’ tax returns, so there are only two possibilities: 1) the value of that law degree has crashed over the last two decades or 2) the former salary claims were fraudulent. Hint: it’s 2).
Couldn’t agree more. Law schools need to adapt to the changing AI world. Law students need to demand this change or risk becoming obsolete as lawyers.