LSAC and Predicting Applicants for 2016-2017, Part 12

With all due respect to the Prawfs and deans here, the appropriate number of applicants should be 0. Until every currently barred attorney has secured long term, middle class sustaining work or income that wants it, nobody should be attending law school. The numbers and work just do not add up.

Cptn Carswell,

I disagree that no one should go. We need about 20,000 matrics per year, but no more. Frankly, if the ABA held the line on quality, we'd be there.

I find it interesting that the apps are flattening out. I suspect we'll be down about 5 percent from last year when all is said and done because I do not see the continuation of late applications that we've seen for the last four years.

IF the applicant number is down, then I would say that someone should go back and aggregate the proclamations about a significant increase this year, and the end of the decline.

Those who made these boastful predictions, in the main, seemed to have been the same ones who usually rely on a certain strain of voodoo "economics" peddled by JDs posing as economists.

Remember all the tripe about economic cycles (when the economy is down, apps go up, when the economy is up, apps go down, when the economy is up, apps go up, etc.)? It was all so clearly demonstrated in the data!

Remember all the tripe about late applications can continue, can't continue, won't continue, must continue?

And last, but not least, let's not forget that we are getting closer and closer to the BEST TIME IN HISTORY TO GRADUATE FROM LAW SCHOOL!!! Jobs will go unfilled!!! Grads will have their pick of plum employment! It's right around the corner!

Let's look back: to April 2014:

"#1 – Intro – Enroll Today!

Why 2017-2018 Will Be a Fantastic Time to Graduate from Law School

… I want prospective law students to know that this time I mean it. Enroll today or you will miss out on what might be a once-in-a-lifetime opportunity. Namely, the chance to graduate from law school in 2017-2018, which will likely be one of the best times ever to graduate from law school."

We now have pretty strong evidence of stabilized market. This will be the third straight year with about 55,000 applicants, which will yield around 42-43K admitted students, and about 37K-38K matrics.

For the handful of people who follow this stuff closely, note that LSAC changed its reporting criteria last fall to count everyone who applies during a cycle, not just people who apply for fall admission. This change boosts reported applicant totals by about 2%, so going forward the three-year volume summary isn't directly comparable to the previously reported summaries.

This stabilization isn't consistent across all schools of course, as some are continuing to see significant declines in applicant totals. But on a national level things have clearly flattened out, and will probably stay that way for awhile, unless there are major changes to GRADPLUS and/or PAYE/PSLF.

@ Paul Campos,

I think you are probably right that applicant numbers have stabilized, but there may be other changes going on that will impact law school revenues significantly. Notably, I think there continues to be a huge increase in the amount of negotiating over tuition discounts (I can't call them "scholarships" with a straight face). I believe prospective students are far more willing to go lower ranked schools for heavy discounts rather than semi-elite and even truly elite law schools at or near the sticker price. I think each year this group of 55,000 becomes an even more hardened, cynical group prior to enrollment (some may call this "maturity"). I believe you wrote about this as on ISTLSS the "adversarial system," by which students gradually learn that professors and administrators are not really there to help them, but to take from their future.

The legal profession is still a lucrative field, and a good option for thousands of grads each year. It has definitely worked out well for me (2009 grad, no debt, married, child, homeowner), and I would do it all over again. The only thing I would do differently is, like most applicants now, plan to take the LSAT up to 3 times and negotiate for a full scholarship from a T50ish school.

I agree with Paul and JM. This is the new normal, and it appears stable.

I credit the results we see to the transparency movement, which is unquestionably good for students (and for the legitimate law schools alike). It may mean less revenue in the law school pot and more competition for applicants among schools, but you have students who know what they're getting into.

I do not think the majority of law schools were "scamming" students in the before times, but a significant minority of schools certainly were.

At 20 to 25,000 new lawyers per year, you actually will have a stable profession with satisfied practitioners. That helps them, and helps clients. Neither the bar nor society benefits from a law school model that was a sucker's game for 25 to 40 percent of all students.

Good comments here. The issue hasn't been "do we need new lawyers, ever" or even "do some lawyers obtain good results, in some universe," but "how can the ABA and the academy continue to look in the mirror while these long-standing policies and practices cause significant financial harm to thousands upon thousands of students, year after year after year?"

Rhetorical questions, of course. The code-of-silence, along with actions and proclamations that were clearly self-serving, explain the whole story. In any event, the invisible hand of the market works, even in the hallowed halls of academia – it just took a long time to manifest due to the significant socio-political buffer in place.

So, Paul, it is a cyclical phenomenon after all?

Anon 7:19PM, not the Paul you're directing that question to but there's no reason to believe that the countercyclical phenomenon of more applications during recessions and fewer during booms shouldn't continue. However, it's reasonable to believe that the secular decline of the last five years has been played out and that absent changes to government treatment of student loans, the application numbers should bounce around where they currently are at.

Law schools came out of this better and stronger than before. There is much more transparency, recognition that employment outcomes matters, considerably more emphasis on practice (including by professors), and the recognition that law school is intended to train students to be lawyers and secure them jobs. The last few years were hard but things have stabilized and hopefully all of the positive reforms stick.

The problem, Anon, is that many if not most schools are stuck with an unsustainable business model; something has to give, and I suspect in more and more cases it will be the faculty.

Don't you just love how the reactionaries now take credit for all the reforms that they so vociferously claimed were unnecessary, berating anyone who dared even to suggest a need, and the very reforms they now tout so proudly? (Now they've taken to a new strategy: declare mission accomplished on all of these reforms, despite the clear absence of meaningful progress on most of these items).

And, the jargon! Just love the "secular" claim. Not even close to an appropriate use of the term "secular" in this context, combined with a serious misstatement about a "countercyclical phenomenon of more applications during recessions and fewer during booms."

As shown in a prior thread, the latter claim is completely unfounded, but this unadulterated bs is peddled over and over in these forums as if it were the truth.

Twbb, there are many faculty who do not fit the mold you have in mind. While you may say they are the exception, those faculty are focusing on job outcomes, increasing transparency, and learning the practice of law. Something may have to give, but I don't think one can paint with such a broad brush.

Anon, I am not talking about virtue or lack thereof; I'm simply pointing out a harsh economic fact. The massive buildup in faculty over the past 20 years combined with the recent drops in enrollment plus the tendency for law schools to give tenure early and generously has resulted in payrolls that are not sustainable in even the short term. It doesn't seem like there is any other option other than either across-the-board salary cuts or the invocation of financial exigency and the termination of tenured faculty members. In many cases this will likely hit faculty unfairly who have truly tried to improve the lots of their students, but I can't see any other option.

I'm not sure what you think is unsustainable about the business model other than the headcount. I think the strength of the surrounding economy together with the near term over hang of supply is weighing on application numbers. That is putting short term pressure on schools, who have reduced head count in response but likely will have to do more to ride it out.

twbb,

I'd differ with you on how unsustainable the business model is at most schools – you have to consider student loans and their availability, and the the "siren songs" of IBR and PSLF as part of that model, in fact a key part. But as long as the loans continue to flow and schools can tout IBR and PSLF – the model can keep going for the most part, with some trimming.

Of course the model is totally dependent on the lending – and curtailment, any real underwriting and it implodes.

Lending is indeed the key. Without it, enrollments would decline even more dramatically.

Moreover, the top tier is safe: they depend on the 1% or so for their student base (not any smarter applicants, obviously, just better schooled and connected, which of course, for these elitists, is exactly the mirror of their own lives they find valuable, so, no problem, so long as a few crumbs are thrown out to assuage their guilt and plenty of lip service is paid to the "correct" way of thinking about hot button issues).

MacK, I agree with that up to a point: the funny thing is we've reached the point that tuition is so high that even though the government fronts it at first and despite PSLF, IBR, etc. etc., a lot of people are still passing just because of the enormous size of the amount they'd have to borrow.

If Congress and/or the DoE were really paying attention they would nip the PSLF-as-marketing-tool right in the bud; these programs were intended as a safety net for the few, not as the primary payment scheme, and I think the schools who have been pushing them in their brochures are both self-destructive in the long term as well as, frankly, unprincipled.

The lending reliance is precarious; first, no matter what you tell students about PSLF/IBR/etc., there apparently is a level of debt which just scares many of them away (with good reason). Secondly, the government has explicitly said they're not going to write blank checks to the schools in perpetuity, and I think several law schools have stepped over the line both morally and tactically by incorporating PSLF-style plans into their marketing materials. These plans were meant as a backup safety net to help students who fell through the cracks, and not as a primary vehicle for financing graduate school.

Whether the current popular plan of reducing hiring and offering faculty buyouts will get save the schools the necessity of either across-the-board salary cuts or large-scale layoffs of tenured faculty is uncertain, but I really doubt it's efficacy. I think a lot of schools are at the moment scrambling desperately to meet operating expenses, though they are also desperately trying to maintain the facade that it's business as usual.

twbb,

I don't disagree that many schools are looking to cut costs and are facing diminished income. But until there is a limit on lending, the model is not broken – not collapsing. It is highly vulnerable.

They are in crisis, but except for a few it is not to their existence. That of course could change, and if it does the change will be abrupt and devastating for many schools.

Reading from the "Rank Not Published" list of law schools, it looks awfully familiar like the ad pages of a 50s-60s era Popular Mechanics magazine. Blackstone College of Law and LaSalle Extension University. "Be a law trained man." Today, we have these Rank not Published schools and banner ad law schools….junky. I guess everyone needs a gig….like a new Sport Clips franchise advertising on radio…."get into the money game…"

The "model" is vulnerable but mostly the pressure is on law schools that do not have strong universities behind them. Some of the latter are clearly being funded to wait out the current downturn. In fact, take a closer look and note that several are engaged in major capital projects, like shiny new buildings even as enrollments and LSATs plummet.

Having a university behind them certainly helps at a survival level, but I don't know if too many universities are going to be willing to subsidize the typically enormous law school facultlies at their salaries, which tend to far outstrip that of other academics, particularly at the lesser workload. This will especially be a problem if any decisions are placed with faculty senates; try convincing a history professor who took 7 years to finish their PhD, teaches 4 classes a semester, publishes several articles a year, and advises multiple graduate student that a law professor with 3-year course-based non-thesis JD who teaches 2 classes a year with minimal publication requirements absolutely needs to be paid twice as much as the former and the university should make sacrifices elsewhere to do so.

Well as one Stanford prof was alleged to have said in a faculty conversation about law school salaries to a complaining colleague in the humanities, trying using Shakespeare next time you get arrested. In any case, law school salaries often lag behind those of faculty in the business schools or medical schools. In any case, salaries are not the major source of the problems. Tenure track faculty as a proportion of the costs of a law school likely have been falling, though it would be useful to have some data.

Was the legal academic in your anecdote offering to be the humanities' colleague's criminal defense lawyer? "Other people who work in this overall area do important things, therefore I should make a lot of money" makes little sense, especially since the vast majority of criminal defense attorneys make far, far less than legal academics.

If the assertion is that teaching criminal procedure is just far more important to society than teaching Shakespeare, I hope that is not true, for humanity's sake. But even if it were it doesn't follow that it must be massively financially rewarded.

Tenured and tenure-track faculty salaries make up the lion's share of law school expenses; that is true whether the proportion is falling or not, and I suspect that even if the proportion is falling it is falling at a very small amount. In any event, I am not making a call to action, merely pointing out that when the hard questions are asked of law schools now being subsidized by their parent institutions, the current salary level is not going to be eyed favorably by non-law academics.

"Salaries are not the major source of the problems."

What is? It ain't lab costs that are hurting the schools.

Law schools are cheap to run (relatively), which is why there are so many of them. You need a building – or a palace – depending on the wealth of alumni and the gullibility of the university president. You need 10 rooms with 75 to 150 desks and chairs. You need a library, 10 conference sized rooms and 25 to 50 faculty and administrative offices. That's it.

The costs are faculty and administrative salaries. The marginal cost of one additional student is under four figures, and the marginal revenue from that almost free student is $40,000 per year. It's a nice work if you can get it.

The problem is that when schools lied (I'm sorry, too harsh for polite company). . . When a very few deans carelessly and optimistically puffed in a way that was overly optimistic about the outcomes that she/he believed were enjoyed by historical data as arguably reflected in certain data (much better, right?), the industry scared away customers. The difference between the sales pitch and the truth became evident to the educated consumer with the transparency movement. Then the bottom fell out.

You're left with the same fixed costs, but no hope of the marginal revenue that greased the wheels. What can you cut? Answer: only bodies because there's nothing much else to a law school.

Lost in all of this is my unemployed buddy out from a Tier 1 School with 30 years experience who can not find a job that will sustain a middle class lifestyle. I just lost a gig paying me 250 to appear in court for traffic violators. They found a desperate soul to do it "well under two hundred dollars." Folks know this. Six figures from a Prawf gig is way out of line given poor outcomes.

I'd be interested in the source for the oft-repeated but never supported allegation that law profs categorically only teach two classes per year. Puh-lease. We do in fact have lighter teaching loads than colleagues in the humanities, but I know of only a minuscule number of law faculty who only teach 2 courses per year, and those who do are at the most elite law schools (which, of course, are the ones that the scam bloggers say are the only ones worth attending).

And Jojo: the marginal revenue per student is far less than $40,000, once you take into account financial aid.

I meant to type 2 classes a semester, which is still an insanely low workload, particularly as they are frequently the same courses every year with little changes made.

Just remember, there are hoard of attorneys, underemployed and unemployed who will teach law school for $1500 a semester. We are desperate for work. I go to court now for two bills and nearly kill a morning. Why not teach a class and kill a morning for the same two bills? Plus, I think most students would rather hear from an attorney like me than any prawf who has not seen a courtroom.

Law School and University administrators will figure out that there is a HUGE glut of attorneys willing to teach for two bills per class. They will get rid of the overpriced labor….6 figures to read a case book to students and ask does the Long Island Railroad owe a duty to Mrs. Palsgraff? Not worth it. In memory of Mrs. Reagan, the law schools will just do what Ronald did to the Air Traffic Controllers….fire everybody and put us in. I need the two bills. My IBR is due on the 20th of each month.

"Just remember, there are hoard of attorneys, underemployed and unemployed who will teach law school for $1500 a semester."

And of course there are plenty of law schools willing to pay you that amount but the demand for entrance into law schools where there are faculty capable of doing serious research is much higher and thus much more expensive.

But I know the laws of supply and demand are a little beyond your ken, Hruska.

There are a lot of economic ideas being bandied around but one that has been forgotten is opportunity cost. Law faculty compensation is guided by opportunity cost — in particular, the amount faculty would make outside of academia. Law faculty, as specialists in their field, could make high amounts in private practice, which explains the amounts that are needed to keep them at law schools.

The immediately preceding anon's comments would be correct if phrased as follows:

"Which explains the amounts that are needed to *get them to* law schools."

That is, it is correct that (for those working in the kinds of jobs that law profs disproportionately come from, I.e., BigLaw, Art III clerkships, or both) the market rate they are making at the time they are considering a transition to academia influences the market rate schools must pay to *get* them. In my cases, I was making approx. $160K in BigLaw, and took over a 50% pay cut when I entered legal academia well over a decade ago. Not complaining: it was still a lot of money compared to nearly everyone else in America. But there's no way I would have taken a 75% or 80% pay cut – which would seem to equate to the dollar amount critics of legal eduction think is appropriate – from my then-salary.

But the reason the preceding anon is incorrect is that, having left full-time practice, very few of us could transition back into that same level (I.e., pay) in practice after more than a couple of years in academia (at most). Firms are unlikely to re-hire someone in that position at double their pay from their most recent job for several years as a non-practicing lawyer (I.e., as a prof).

So law prof pay does indeed relate to market conditions in terms of *initial hiring,* not retention.

Law faculty are not experts in the law if they don't practice or are licensed. Let's see you deal with a guilty as hell client who fully confessed and expects his attorney to waive a magic wand and makes her problems disappear. Since there is a glut of lawyers, and very good ones at that, the value of your services would go down. Supply and demand. Simple. Serious research? What Lexis, Westlaw? Going to the library? Big whoop. Do it for a client who is facing double digits when it really matters. Then come talk to me.

Anon@9:50,

Not necessarily true; all we know is most law professors started on a potentially lucrative track, but in most cases we can't establish whether they would have had the ability or perseverence to keep it up. Considering the majority of biglaw lawyers leave or are pushed out of biglaw, evaluating the lost opportunity cost therefore needs to be discounted by the significant probability that they would not end up in a highly lucrative position. Honestly, if law faculty had that kind of earning potential generally you would think that large law firms, the partners at which are probably best equipped to evaluate the economic value of a JD-holder, would heavily recruit them to leave academia and join their firms. I would suspect this is not a particularly common occurrence. In any event we will eventually test that hypothesis, because it seems that most observers agree some schools are going to have to close, and those faculty will be on the market.

Correct, TWBB. The idea that the thousands is law profs in this country would have all become Biglae partners is ridiculous. First, there are fewer and fewer of those slots today. Second, many law profs lack the drive, social skills and personalities to succeed n the Biglaw environment. If they were honest with themselves they would admit they won the lottery when they became law profs. Best gig ever.

Leo,

I and every faculty member I've ever worked with do count ourselves very lucky and consider it the best gig ever. Why assume to the contrary?

Leo,

I have the best legal gig ever. The only problem is getting paid.

I think it's pretty clear to everyone here Hruska that you drool at the prospect of an academic gig….

Wow, anon

I find Hruska unbearable, and likely a prof.

But, your snide, condescending comment gives one pause:

Which one is more disgusting?

I'd say yours, anon. Well done.

It takes a lot to trump that Hruska for being a total tool.