Tuesday, May 10, 2011
Huffington Post, Market Irrationality in the Law School 'Arms Race', by Daniel J. H. Greenwood (Hofstra):
In Sunday's New York Times, David Segal correctly identifies so-called "merit" scholarships -- tuition discounts given to students with high LSAT or grades in order to induce them to attend a particular law school -- as a serious problem for students. But the story is headlined How Law Students Lose ... as Law Schools Win. This is wrong.
In fact, everyone loses. These discounts ought to be banned as illegal price discrimination. As long as they are permitted and US News and World Reports rankings remain influential, Adam Smith's invisible hand of the market will lead students and law schools alike to act in ways that make us all worse off.
"Merit" scholarships should more properly be called "US News & World Report Ranking Rebate Fees": schools give them because they need to maintain entering class GPA and LSATs in order avoid sinking in the rankings -- not because they believe recipients are likely to be better law students or happier, competent, just or successful lawyers. ...
Students lose -- but not primarily because of the issue David Segal identifies, that students who get unexpectedly low grades unexpectedly lose their scholarships. Instead, students, faculty, the profession and the justice system suffer because competition for USNWR rank leads schools to abandon core aspects of their mission.
First, USNWR rankings distort admissions. No admissions officer would place as much weight on undergraduate grade point averages and LSAT scores as USNWR does. Grades need to be interpreted, not averaged: only a news magazine on a limited budget would treat an "A" in Military Marching from a local community college as a better predictor of legal acumen than a "B" in Organic Chemistry or Ethics from Harvard. ...
Second, the market for school rank damages the strongest part of the law school curriculum -- the first year -- and the relationships that underpin the later years. Most obviously, the threat of losing grants leads students to focus on grades rather than education, and on competition rather than cooperation. ...
Third, the zero-sum competition for rank distorts law school budgets in irrational ways. Instead of using tuition to educate or research or run clinics or help students find jobs, the ranking game leads law schools to spend it on Ranking Rebates to run as fast as they can just to maintain their relative position. If Ranking Rebates were illegal, or if USNWR lost its influence today, law schools could drop their tuition by a third tomorrow and leave their budgets better off.