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Monday, September 24, 2012

Davidoff: The Economics of Law School

NY Times DealBookNew York Times DealBook:  The Economics of Law School, by Steven Davidoff (Ohio State):

Law schools have come under fire during these tough economic times, with critics saying that they leave too many graduates in debt, chasing too few employment opportunities. ...

There may be valid criticism about lower-ranked law schools, particularly those U.S. News places in the third and fourth tier. Such private schools often charge significant tuition but do not obtain the same employment outcomes. The question is whether changes can be made to lower their costs, and whether this will lead to better opportunities for their graduates.

The problem of law school is one that is ubiquitous to higher education — the current model is inherently expensive but even today, lower-priced alternatives don’t seem to meet the standards or be desired by many students.

It is here where revolutionary technologies like online learning may come into play. If it becomes accepted that many basics like contracts law can be easily taught by one professor online to thousands of students, then a law school can charge a lot less. But this is still mostly a theoretical change embraced by those outside academia that has yet to sweep universities. Even with one online course, some local presence will be needed to facilitate learning, particularly if there is skills training involved.

It may not be simple enough to just pin the blame on the costs of law school education. For 2011 law school graduates, as of nine months after graduation, only 65.4% were employed in jobs requiring passage of the bar. And law schools should learn to be more innovative, as other types of graduate programs are doing.

Law schools have also hurt themselves badly by failing to fully disclose certain statistics, including their employment rates. It is clear that the number of lawyers in the United States will fall as fewer people apply to law school. But this trend will probably shrink enrollment, not decrease the number of schools over all.

In the longer term, the question is whether there will be a recovery in law jobs as the economy heals. There is hope that will be the case. One study has found that the average lawyer will earn about $4 million — or twice as much as someone with a bachelor’s degree — over their lifetime of employment. In addition, law school provides a general education that is useful in other areas. Both presidential candidates have law degrees, as do the chief executives of a substantial number of companies in the Standard & Poor’s 500-stock index.

A hard look at reform appears to be a worthy goal, but any changes should consider whether they will actually reduce costs, and provide something students want. The problem of law school is thus the problem that all schools of higher education, even veterinary school, face.

Update:  Paul Campos (Colorado), Bad DealBook

http://taxprof.typepad.com/taxprof_blog/2012/09/davidoff.html

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