LSAC Data and Predicting Number of Applicants for Fall 2014, part 3

I think they forgot to update the "38%" number–the graph below for applications says "Last year at this time, we had 47% of the preliminary final application count," and I would guess that the applicant number would be closer to 47% as well. If so, that would suggest that there will be less than 50,000 applicants this cycle.

CBR, you must be right that the 38% hasn't been updated from last week. But I don't think that last year they'd had near 47% of the applicants this early. It looks more to me from that first graph that last year at this time LSAC had closer to 40% of the applicants.

What is sort of interesting is looking at the total number of entering applicants divided by teh number of law schools.
If my excel spreadsheet is telling the truth, the increase/decrease in students per/school does not seem as dramatic, i.e., wouldn't one expect the total number to have increased as number of schools increased, and to level off when the increase in the number of schools slows down?
Is this possible, or am I missing something here?

Interesting observation, anon — I hadn't considered this. Let me make sure I know what you're saying. You're referring to this table: http://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/statistics/jd_enrollment_1yr_total_gender.authcheckdam.pdf

And you're observing that the students/school remains relatively stable over time? I guess that isn't shocking to me — that as more people want to go to school new schools open rather than existing schools expanding. I'm not a huge believer in the ability of the market to respond in a precise way to increasing demand (or falling demand as we're seeing of late). But I guess I might have predicted that new schools would be opening more or less in response to increasing in numbers of people who want to go to law school. (One other thing that I think is somewhat confusing in that ABA table is that until around the mid 1960s there were a lot of non-ABA accredited schools that were turning out a lot of students who took their state bar. So what looks like an increase in law schools is an increase in ABA-accredited law schools, though maybe those aren't so much new schools.)

I think you guys are reading way too much into this. We went from "As of 1/03/14, there are 131,097 Fall 2014 applications submitted by 19,529 applicants. Applicants are down 13.6% and applications are down 15.8% from 2013.
Last year at this time, we had 38% of the preliminary final applicant count."

To "As of 1/10/14, there are 152,230 fall 2014 applications submitted by 22,093 applicants. Applicants are down 13.4% and applications are down 15.1% from 2013.
Last year at this time, we had 38% of the preliminary final applicant count."

So in a week they went from applicants being down 13.6% to being down 13.4%. That seems to be fairly insignificant. As far as the preliminary applicant count staying at 38% in one week in probably went form something like 38.1% to 38.9%.

Alfred: Yes, I used that table. I converted it to an excel spreadsheet and added a column immediately to the right of total first year enrollment. Then, I asked excel to divide total first year enrollment by the number of ABA law schools.
What I saw was variance that was fairly constrained, or, perhaps, not a volatile as what we might expect.
I would say that demand may not be the only factor in opening law schools. Profit seems to have been a big factor, and perhaps we are onto a means of reconceptualizing the problem here.
In other words, as loans in nearly unlimited amounts became more and more available, and law schools in response began to increase tuition to effect a huge transfer from the US taxpayers, using students as conduits, then a business model emerged and others joined in the bubbling wealth creation.
It is, after all, possible to create a market for tulips, as compared with simply capitalizing on a pre existing demand!
How else to explain opening law school after law school in teh same market (other than a ripe orchard of young people ready to buy into slick marketing)?
So, as more law schools gain ABA sanction, more law students in ABA schools are "created" simply as a matter of logic.
Just some thoughts, certainly unproven but open for discussion and development.

Anon–got it. Interesting. I want to do the same thing and look at that some more.

Couple of quick thoughts on this — if the average class size at individual law schools seems fairly stable over time I wonder if that suggests there's sort of a natural ideal size for law schools? Or maybe as students in one market grow, other schools enter the market. This happens when it's viable to sustain a new school, that is when there are enough students in a market to sustain another school with the mean class size. The market for legal education is often local, because lots of people aren't going to move beyond their city or state to obtain it. (I think this was even truer in before the 1990s.)

Judgment Day is Coming: I think you're reading way too much into this post.

Alfred: I will read with interest your thoughts after performing the experiment. I didn't save the results, but I recall that the average class size hovered around 250.
Of course, as I said in an earlier post (to which Mack provided some useful further information) Harvard admits far more than 250 (and, of course, Yale fewer) … (Mack pointed out that some schools in the "lower tiers" admit vast numbers, though I am wondering whether that has changed … i.e., can we determine how many of the total new admits were admitted by teh T100? THis would be a very useful bit of data.)
As for "demand" this is a valid economic concept, but I wonder how it applies, for example, to hamburgers. Why have a Burger King, McDs, Wendy's, etc. all within sight of each other? Gas stations, same. I don't think the overall demand supports all these options (otherwise, prices would increase), but I don't have data to support this observation and I don't have the training in economics necessary to properly evaluate this issue from the pov of that "science."
Can someone explain the reason that new law schools open in seemingly saturated markets? Is this solely because of untapped demand, or, can it be simply be the result of a "monkey see, monkey do" attempt to ride the wave of student loan money?
Is it valid to attribute increases in the number of new admittees to the increase in the number of schools, and a slowing of the rate of increase to a slowing in the rate of increase of new schools?
On a related point, tuition increases contributed to the hostility of the recent grads who could (and can) not find employment, and that hostility has contributed to press attention which has caused many to question whether attending law school at this level of tuition makes sense.
The tuition increases occurred even though job prospects were declining.
Again, how do economic models explain this?

Anon, businesses within sight of each other are generally there because of Hotelling's Law; they locate so that they serve the largest area of customers possible. Wikipedia has an explanation though the best way to explain it is through simple maps, maybe you can find something online if you're really curious.

Law school siting is generally driven by whim and happenstance. Some legislator or university president gets it in their head that they want a law school somewhere specific, and generally the evidence is marshalled to support that decision. Because unlike a McDonald's there is little market pressure (or there WAS little market pressure) due to government-subsidized loans, poor siting does not become a liability.

TWBB: The portion of your comment that is most interesting to me in this context was this statement:
"Because unlike a McDonald's there is little market pressure (or there WAS little market pressure) due to government-subsidized loans, poor siting does not become a liability."
Thus, the notion that law schools proliferated at least in part to take advantage of students' access to amounts of loan money all out of proportion to employment outcomes does seem to find some support.
The notion of student "demand" remains somewhat unclear to me, however. Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?
Also, massive tuition increases occurred while job prospects were declining.
Again, how do economic models explain this?

Law faculty,

Apart from the obvious threat to your comfortable existence, isn't the decline in applicants a good thing for the profession, the bar, and for the remaining law schools? Isn't it better for society not to have scores of thousands of young people burdened by debt each year for an unlikely shot at a miserable existence actually practicing law? I'd welcome law review articles on the subject from the naval gazers.

Former law review editor, are you primarily concerned about limiting your competition so you can make more money from your clients?

FLRE: insulting people is not usually the best way to get them to agree with you. And your point is not obvious to me. Perhaps we can agree that the issue of the ideal size of law school enrollment is not clear, but merits more study.

Oracle,

I actually want fewer economic barriers to entry — a combination of fewer, but better funded public universities with low tuition and a return to an apprenticeship model. The current system of debt funded, subsidized law school for everyone makes zero sense and serves no one but universities. The market is doing just fine limiting competition. In our "all pay" auction system, though, that means a lot of ruined lives.

Anon,

Perhaps we can agree that nondischargeable federal loans for the full cost of attendance has had unintended consequences on graduates and inflates the cost of attending schools?

It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

Former Law Review Editor,

I think the most important question is not what is good for the bar or remaining law schools, but what is good for the country as a whole. I think it's probably good for the country that the number of applicants is declining, regardless of the employment picture for lawyers.

Anon @ 1:17am

In response to your question:

"Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?"

If you look back to 2003, law schools accepted only 56.6% of applicants. http://www.lsac.org/lsacresources/data/lsac-volume-summary

Given that just about every applicant had access to student loans, there was clearly a market for additional law school seats in 2003. Where there is a market opportunity to sell an extremely profitable product, like a law school education, history has shown that "legal educators" will spring up to take advantage.

In other words, the opening of new law schools did not create additional demand, it already existed. However, the supply of law school seats was somewhat restricted in 2003 by law schools choosing to accept only the more qualified applicants.

Fast forward to the present, many law schools are now admitting individuals that would not have been accepted to any law school in 2003, hence the almost 75% acceptance rate in 2012. The percentage of accepted applicants will undoubtedly continue to climb, as more and more law schools hold on for dear life.

Anon @ 1:17am

In response to your question:

"Did demand support a proliferation (an increase in the number of law schools to meet demand, accounting for the number of incoming students increasing because a law school is likely to admit about 250 students per year)? Or, did a proliferation at least in part increase the number of students by "creating" new seats (using the appeal of easy US taxpayer money, exploding scholarships and slick marketing)?"

If you look back to 2003, law schools accepted only 56.6% of applicants. http://www.lsac.org/lsacresources/data/lsac-volume-summary

Given that just about every applicant had access to student loans, there was clearly a market for additional law school seats in 2003. Where there is a market opportunity to sell an extremely profitable product, like a law school education, history has shown that "legal educators" will spring up to take advantage.

In other words, the opening of new law schools did not create additional demand, it already existed. However, the supply of law school seats was somewhat restricted in 2003 by law schools choosing to accept only the more qualified applicants.

Fast forward to the present, many law schools are now admitting individuals that would not have been accepted to any law school in 2003, hence the almost 75% acceptance rate in 2012. The percentage of accepted applicants will undoubtedly continue to climb, as more and more law schools hold on for dear life.

It is hard to know. I am reminded though of a study of real estate agent economics – or why it is that a strong property market does not make real-estate agents earnings rise – and why realtors in areas with high prices do not make significantly more than realtors in low price areas. The explanation, curiously enough, is that there are very low barriers to entry in the real estate business, which means that in strong markets the number of agents tends to rise, and the number of transactions per agent fall.

Orin:
How can a country so underserved by attorneys be benefitted by fewer attorneys?
We often assume that BigLaw is the measure of success in the legal profession, just as we often assume that Wall Street is the measure of the success of the economy.
The reason law school “training” is becoming less and less relevant, in my view, is the failure of the recent administrations in the legal academy to recognize the overwhelming needs of the US population for legal services. Legal academics often slip into a simplistic dichotomy, comparing "public interest" to the "greedy pursuit of money" and thus ignore the increasing irrelevancy of the “training” provided in law school to the changing needs of the country for legal services: training increasingly provided by PhDs in history, or economics, or other disciplines who have little or no experience practicing law, and who have little respect for those who do.
Clinics are, in this context, a risible but sad response, as these sterile efforts are often so divorced from the main street needs of the "country" (with, of course, notable exceptions).
When legal education was more often taught either directly by practitioners (see, e.g., “reading the law” as Lincoln did it), or taught in law schools by those who were familiar with the mores of practice and who imparted respect for the profession in which they purported to prepare others to engage, legal education was more tuned to the needs of the “country.” Now, not so much.
Is it any wonder that the product of US law schools is gaining less acceptance in the market?
Is this good for the “country”?

Guy:
This is a very important point.
SO, there was a cadre of applicants to be tapped.
THis makes sense.
However, we need to know: did the "new" schools by and large tap that cadre?
In other words, if I am reading the table correctly, 14 new ABA law schools since 2003. Did those schools tap students with credentials like the 43% of applicants denied admission in 2003?

Anon,

I find it hard to talk about the demand for lawyers without talking about cost. There is a great demand for free lawyers, certainly. A lot of people would like to have the help of a lawyer in various ways if it means getting very valuable services from them but not paying them anything. But I think it makes more sense to talk about demand for lawyers in light of the costs of lawyers; the question isn't the demand if legal services are free, but rather the demand for legal services at the rates that lawyers may charge to be able to make a living. More broadly, when someone decides to become a lawyer, they don't do something else, so an assessment of the social benefit or loss of the size of the legal profession should account for what the lawyers might do as alternatives to lawyering. See Justice Scalia's comments: http://blogs.wsj.com/law/2009/10/01/scalia-we-are-devoting-too-many-of-our-best-minds-to-lawyering/

anon@1:17am:

I'm sure there is some economic model that fits the law school industry, though I am not an economist and don't know exactly what it would be. The notion of student "demand" in this context is inherently strange because law schools in many ways create demand rather than demand causing law school.

I wonder if some sort of commodities model would make more sense; exuberance leads to the purchase of a law school education at overinflated prices because it's perceived as an investment whose value will go up, aided and abetted by sellers who inflate the value to the point of absurdity, and buyers who don't really have the full of risk of loss. It could be analogized to the subprime crisis, with students as the borrowers, the law professorate as the mortgage company that then sells the debt to the investor, in this case the government/taxpayers, who is on the hook in case of default.

I may sound naive on this one, but I really think that educators should be fiduciaries to their students. At the very least, they should not be trying to stick it to them actively (or even passively). There's a crisis out there in legal employment. It can be summed up quite simply:
"There are too many law students, taking on too much debt, competing for too few jobs, in a market that has too much surplus inventory."

Shoulder shrugs about the recession, or law school versatility, or curricular changes, or would be reformers trying to limit competition, or anti-intellectualism, or the litany of other projections and dismissals from those in the tower ignore the problem. Make no mistake, I don't think that law faculty intend to harm or to do evil to their students. I do think, however, that too many are unwilling to recognize that there is a problem and that solving the problem may require law schools to be harmed.

Piggy-backing on FLRE's comments, the fact is that the legal profession is pedigree obsessed. This isn't necessarily the fault of the law academy. Nevertheless, the law academy becomes dismissive and defensive when that fact is broached. Just look at the schools they attended and compare them to the schools they teach at. Why should prospective students not be as particular when they are deciding whether to enroll in law school and where to attend? This is especially true now that the LSAC/ABA allows for the submission of solely an applicant's highest LSAT score. Moreover now that it's a buyer's (law school applicant) market, they can gain acceptance at schools that would've been out of reach a decade ago, and in some instances receive scholarships.

The law profession and legal education is also subject to signaling, like much of higher education. The law and skills taught by many law schools are comparable. Nevertheless, prospective employers will judge potential hires because of the name of a school judging that as a signal, versus skills attained. It's the same reason why I-banks and hedge funds hire art history grads from Amherst, or Princeton, sometimes even over economics grads from Berkeley or Chapel Hill.

With $1 trillion outstanding student debt that hampers the whole economy, prospective students at all levels need to, and finally might be making more rational choices on what schools to attend and fields of study to pursue. Maybe instead of going to a non-elite private school (whether undergrad or law), they are opting for public schools (which are also unfortunately have experienced exponential tuition rate increases, due to lack of state funding, building fancy amenities, hiring football coaches, etc) or other fields of study with greater earrings potential.

In light of all this, I don't completely dissuade prospective people from attending law school, but explain to them that the LSAT is the most important legal test they'll take (yes even more than the bar- nobody cares if you pass the first time, and honestly it's not difficult to pass). I also explain the costs and benefits in terms of stress, quality of work life, demanding clients, passive aggressive jerk partners, etc (if you're lucky to even GET a job). So devote a good month or two for the LSAT as if it's your job, try to get in the 170s/high 160s at absolute minimum, and if you can't get that, then there are other ways to enjoy life and make a living without being a lawyer.

A paper well worth reading on the motivations of some law professors is David Barhizer's

http://works.bepress.com/david_barnhizer/88/

Pretty harsh it's true

Cent Rieker:

I also advise those thinking of going to law school to take the GMAT and GRE as serious practice tests for the LSAT – it does of course lead more than a few in a direction other than law school

An interesting article on the way at less some law professors view the world is Prof David Barhizer's

http://works.bepress.com/david_barnhizer/88/

Rough stuff at times

I have tried to post a link to David Barhizer's article a few times, but it keeps getting rejected:

It is pretty harsh, you can find it easily by searching:

Self-Interest and Sinecure: Why Law School can’t be “Fixed” from within
David Barnhizer, Cleveland State University College of Law

It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

Orin:
Does a careful observer say this: "A lot of people would like to have the help of a lawyer in various ways if it means getting very valuable services from them but not paying them anything."
Anything? Really?
"the question isn't the demand if legal services are free"
Exactly.
Read your Lincoln.
He took every case that came in the door.
He tried cases on a circuit.
He handled the needs of his community.
Fast forward:
LegalZoom

TWBB:
I think you've got the right point, here. Economic models are wrong and wrongly conceived in this instance.
Tuition skyrocketed as the economy and job prospects tanked.
Law schools began hiring profs with no meaningful connection to or affinity for practice oblivious to the needs of the profession into which the vast majority of their students would enter.
And, law schools proliferated in areas already overserved, as measured by regional employment stats.
"I wonder if some sort of commodities model would make more sense; exuberance leads to the purchase of a law school education at overinflated prices because it's perceived as an investment whose value will go up, aided and abetted by sellers who inflate the value to the point of absurdity…
Yes. Indeed. Enter S and M. According to those with a vested interest in such things, they have "proved" that a law degree has increased the earnings of BAs … this is "settled" … for all time!

From 1996 to 2009 salaries at all size law firms roughly doubled. So did law school tuition. So did health care costs. So did housing costs.

Barnhizer ignores one problem: you can cut law prof salaries and increase teaching loads and drain the profession of actual thinking and if you do the best students from the best law schools will do something else with their lives. In fact the drop off of top LSAT scorers suggests they are already doing that.

"you can cut law prof salaries and increase teaching loads and drain the profession of actual thinking and if you do the best students from the best law schools will do something else with their lives"

You assume that law students go to law school to ensure that law professors are well paid and have light teaching loads, that they care…..

Indeed "get real get a life," I find it ironic that your post proves so many of Barnhizer's points – did you read his article?

get real get a life:
You have made some bold assertions.
What are your sources for these statements: "From 1996 to 2009 salaries at all size law firms roughly doubled. … So did housing costs."
Actually, these assertions seem to be at least in part totally false. And, not only false, but risibly so in certain instances, such as the reference to "housing costs" (of course, the point is so vaguely stated as to be meaningless in any event, e.g., are we speaking of new housing, existing housing, mortgage interest rates, rent, utilities, furnishings, insurance?).
Please also cite your data for health care costs.
Or, get real and get a life, get real and get a life!

"From 1996 to 2009 salaries at all size law firms roughly doubled"

I don't have the data to hand – but I'd question that number – for all sized law firms. However, some useful data is at http://www.volokh.com/2012/07/21/new-lawyer-salaries-and-the-creation-of-the-bimodal-distribution-1991-to-2011/

And reflects that the bimodal salary distribution started to show up around 1996. Moreover, all of this data needs to be converted into constant dollars.

Now, I'm going to make a harsh comment – but a safe guess "get real get a life" is teaching at a school the vast majority of whose graduates are on the lower peak of the bimodal income distribution and "get real get a life" does not bother to find out about their real lives.

I don't wish misfortune on anyone, but karma for one to three people I'd encourage (and most people here know who they are), but still, it is hard to be sympathetic to self deluding law professors at trap schools.

Guys (I'm guessing all the anonymous commenters recently are men) — I think we're reaching the point of diminishing returns on this thread. When LSAC puts up the data on applications through last Friday (which should be Thursday or Friday of this week) I'll put up another post and we can re-start the debate. That'll give everyone a chance to get a solid four or five days of work in and also collect some links to studies of salary, income, etc.

Sound like a good plan?

'get a real life's comment is, on its face, one of the stupidest things I've ever read in my life. Most law students coming from top law schools who I know think that law school is just as useless as many of the other students at lesser schools. It's an overly-long exercise in rent-seeking to add prestige.

"you can cut law prof salaries and increase teaching loads and drain the profession of actual thinking and if you do the best students from the best law schools will do something else with their lives. In fact the drop off of top LSAT scorers suggests they are already doing that."

There are a lot of other things that the drop off in top LSAT scorers is probably suggesting other than their concern who law professors having to teach too much. A few possibilities: other opportunities in an improving economy, debt aversion from sky-rocketing tuition, increased knowledge about structural changes in BigLaw hiring or a decision not to want to live that lifestyle to service the debt (even though many of these top students are very likely to have BigLaw offers).

Prof Brophy
A good plan … and I would agree.
That is not to say, however, that I agree that "all the anonymous commenters recently are men" and also would not agree that "we're reaching the point of diminishing returns on this thread."
These threads do tend to drift toward open hostility, but, I would say that attitude orginates more often from the "defensive" posture adopted by those attempting to rebut honest analysis about the reasons apps/enrollments are declining. It isn't all one way, of course. But, on the whole, an objective reader of this thread would likely conclude that sweeping and unsupported generalizations, accompanied by sort of nasty statements, tend to be found more often in comments defending the status quo, or, more precisely, in comments defending the status quo modified in some trivial and ineffective respects.

"As of 1/17/14, there are 171,899 fall 2014 applications submitted by 24,500 applicants. Applicants are down 12.4% and applications are down 14.1% from 2013.

Last year at this time, we had 47% of the preliminary final applicant count."

This projects to 52,000 applicants in this cycle.