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Friday, January 11, 2013

Diamond: Law School Is Not a 'Scam'

Following up on Tuesday's post, Stephen Diamond and the Law School Crisis:  Stephen Diamond (Santa Clara), Law School Is Not a “Scam” but You Don’t Want to End Up Like Liz Wurtzel:

The law school is a “scam” argument depends, in my view, on some tendentious ideas. A “scam” implies that law schools take people’s money and leave them with nothing. It is a serious charge. It is in my view unsustainable. It appears to depend on the idea that law schools bore some responsibility for the sudden and unpredictable collapse in the job market in post-08 period. But there is no disclosure language or data I am aware of that could have been provided to law students in, let’s say, 2006 that would have allowed students to plan for the waterfall towards which they were headed. ...

My own view is that college graduates need to take a page out of The Social Network when considering an application to law school: as simplistic as it may sound, imagine you personally are a potential startup and you have a chance to invest a significant amount of time and money in adding to its human capital. Are you ready to drop everything and move to Palo Alto? There are risks and rewards. The law school, its faculty, and its alums may all be able to add useful information to your analysis. In the end, though, it is your decision. Will you be better off than you would be without a JD? In many cases, perhaps most, I think you will be. A JD is a powerful degree to have in our kind of society and despite the current mismatch in the job market a relatively rare one. ...

There was nothing I can think of that law schools could have done in 2006 to warn aspiring lawyers about the crash of 2008. An argument that law schools “should have known” the good times would not last forever reminds me of the old saying that a broken clock is right, twice a day. There is zero chance that a large complicated bureaucracy, which the modern university has become, can turn on a dime in response to vague fears of a future calamity.

But if law schools are worth their salt as academic institutions, and I believe their place in the university setting must remain secure, they should be able to learn about the nature of their profession and implement change as needed to respond to the demands of that profession. ...

In my view the secure place of the law school as an academic field is, to borrow now E.P. Thompson’s comment on the rule of law, an “unqualified human good.” The twin pillars of tenure and academic freedom secure that place for our field. ...

There are two macro trends impacting law schools today that schools must confront. First is the one that I have focused on in the recent debate, the deep financial and economic crisis. A second longer term but less visible trend, however, is the technological and institutional change underway in legal practice. Firms seem finally to be getting smarter about hiring, after suffering traumatic downturns twice in the last decade. The era when BigLaw firms could generate huge leverage hiring lots of first year associates, most of whom would quickly be burned out or turned off by the drudgery of some aspects of corporate practice, may finally be over. ...

The university has entered into a social contract of sorts with society as a whole: academics accept lower salaries than can typically be found in the private sector in return for a commitment to train the next generation of our society while attempting, as well, to generate ideas about, and solutions to, important and even not so important problems.

It is true that this endeavor, at least the attempt to find useful ideas and solutions, is a hit and miss affair. It is true that only a handful of academics will ever produce work that secures a MacArthur fellowship or a Nobel prize. But there is a reason that American universities are the envy of the world. And there is a reason American law schools have assumed a leading role in spreading concepts like democracy, human rights and the rule of law in the post Cold War era.

While there are certain aspects of Tamanaha’s critique of this effort that ring true (see his “Dark Side” article, for example), it is also the case that the United States has long protected and nurtured, in ways that other countries deeply envy, what we call “intellectual capital.” Our universities are a vital part of an ecosystem that allows thousands of smart creative people the time and space to come up with new ideas, new solutions, and new problems. The legal culture as well as academic culture is a vital source of support for this effort.

Thus, when I hear the kinds of reactions among law students that I have heard in the last few days as I entered into discussion and debate about the law school environment, I become concerned that a new form of “anti-intellectualism” is taking hold.

I can understand the anger and anxiety induced by the ongoing economic meltdown but it is precisely at this point that we must resist the pressure to sacrifice the place of the university in our culture and as well the place of the law school in the university.

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Comments

"There are two macro trends impacting law schools today that schools must confront."

How is one of these two "macro trends" not cost of attendance? If academics want the public to focus on the intrinsic value of their work rather then the monetary value, then they shouldn't constantly grab for more money.

Posted by: Anon | Jan 11, 2013 6:49:22 AM

Well wrtitten. The real danger I perceive is that we will confuse the unjustified complaints of the disenchanted/disappointed would-be white-shoe lawyers with the justified criticisms of the legal academy. I do not mean to suggest that the unemployed, debt-ridden J.D.s of the classes of 2008-2011 are totally unjustified in their complaints; I deplore the dishonest statisics put out by Villanova and others, but at the same time doubt very much that many of the loudest complainers relied in any way upon them. The real problem with legal education remains what it has been for at least the last 50 years--with few exceptions, our law schools are focused on educating law professors, not lawyers. This is misguided and must be changed.

Posted by: Publius Novus | Jan 11, 2013 7:47:29 AM

"But there is no disclosure language or data I am aware of that could have been provided to law students in, let’s say, 2006 that would have allowed students to plan for the waterfall towards which they were headed."

He repeatedly tries to blame the problem on the current economic crisis:

Did we lose over 20,000 new jobs per year since the economic downturn began?

Was the bimodal salary curve caused by the current economic downturn?

No and no. The bad economy has made things worse, but we have clearly been graduating (i) too many lawyers with (ii) too much debt for some time.

"Are you ready to drop everything and move to Palo Alto? There are risks and rewards."

The risk of moving to Palo Alto is lost time (but possibly some valuable experience), the risk of law school is lost time and $125,000 in non-dischargeable debt.

"A JD is a powerful degree to have in our kind of society and despite the current mismatch in the job market a relatively rare one. ..."

The "versatile JD." Let's see some stats to back that up. For every school NALP form I have looked at, the JD-Advantage, Professional, and Non-Professional job categories invariably make less money than the the JD-Required. And the number of students taken the non-JD jobs decreases as you go up the rankings.

"A second longer term but less visible trend, however, is the technological and institutional change underway in legal practice."

This means less lawyer jobs in the future, so even as the economy receovers, we can't expect the legal market to receover with it. Brings me back to my earlier point, the overproduction of lawyers isn't a temporary thing that is just about a bad economy.

"academics accept lower salaries than can typically be found in the private sector"

Law profs are the highest paid in all of academia. More even than business, computer science, or engineering.

http://chronicle.com/article/Chart-Average-Faculty/64500/

Posted by: john | Jan 11, 2013 3:52:27 PM

"Will you be better off than you would be without a JD? In many cases, perhaps most, I think you will be. A JD is a powerful degree to have in our kind of society and despite the current mismatch in the job market a relatively rare one. ..."

When you have to account for the time cost, opportunity cost and especially monetary cost to obtain said JD TODAY, can you really still say that "in many cases, perhaps most, you'd be better off with a JD than without"? Really???

Okay, tell you what. Why don't your law school and others who tout this nonsense offer a money-back guarantee of some sort. If after, I dunno, 8 years, a person feels like the JD is NOT worth it, you offer, say a 75% money back and in return rescind the JD. Deal?

Until you can prove this ridiculous assertions and until you are willing to put your (and your law school's money) on the line on this, its just self-serving claptrap.


Posted by: Cyferion | Jan 11, 2013 4:11:41 PM

It's really simple, Steve. Does Santa Clara publish statistics that it knows or should know will mislead the people for whom the statistics are intended? You bet they do.

Is Santa Clara worth 40,000 dollars per year, excluding living expenses and opportunity costs? No. And yet, does your school take great pains to convince students that it is? Yes.

Do graduates of Santa Clara have a reasonable expectation to have a halfway decent R.O.I.? No. Does your school represent to them that they will? Yes.

I don't think YOU are a scammer because you would have to be smarter and more in tune with the realities on the ground to qualify for that title. You are just a pin-headed pseudo-intellectual. I think you believe what you're writing. That doesn't make you bad, it just makes you naive. If you aren't inquisitive enough to discover the reality of the situation, or if you have investigated and have drawn these hilariously off-base conclusions, then you are no legitimate intellectual, notwithstanding the gorgeous name on your degree. Yale ought to be ashamed.

Posted by: Shawn Spencer | Jan 11, 2013 4:51:57 PM

“There was nothing I can think of that law schools could have done in 2006 to warn aspiring lawyers about the crash of 2008”

There was something simple they could have done, Mr. Diamond. They could have been honest and transparent in their reporting of employment data, so that prospective students could have made well-informed decisions to determine whether law school was worth their investment. Instead, such students were deprived of this opportunity – honesty and clarity were sacrificed in favor of maintaining a profit.

“[A]cademics accept lower salaries than can typically be found in the private sector in return for a commitment to train the next generation of our society.”

What planet are you living on Mr. Diamond – the Planet of the 1%? Most academics earn northward of $200,000. Given that NALP indicates that the average salary for attorneys is $174,000, it seems a stretch of credulity to assume that a salary of $200,000 is lower than the salary an academic would earn in the private sector. What arrogance or overestimation of your skills makes you assume that academics would fare much better than the average attorney in the private market, especially in this recession?

“[I]t is also the case that the United States has long protected and nurtured, in ways that other countries deeply envy, what we call “intellectual capital.”

Unfortunately, Mr. Diamond, it is the colleges’ own greedy, money-oriented ways that have now undermined the respect with which the academic world was once treated in the United States. When you continue to raise tuition disproportionately to the job market, with no concern as to whether graduates, current students and potential students will be able to afford an education, can you then complain when the world begins to see your institution solely as a money-making machine instead of an esteemed organization focused on promoting and protecting intellectual capital?

If law schools and other institutions wish to maintain or, I would argue, regain their place as educational institutions that are “the envy of the world,” I suggest they return to acting like educational institutions instead of seeing themselves as profit making machines willing to sacrifice educational integrity in order to maintain and generate a profit. There is a reason why the general public and so many graduates have lost respect for legal educational institutions – such criticism, anger, and disgust are not without merit. It would be well worth the effort for law schools begin to ask themselves ‘why.’

Posted by: M. M. | Jan 11, 2013 11:24:28 PM

M.M.

Law schools "could have been honest and transparent".

There is limited evidence that a handful of schools were dishonest. It appears that many schools did not provide data that some people now claim, in hindsight, would have swayed some students not to go to law school. But I have seen no proof that this would, indeed, have been the case. Nonetheless, I was I believe one of the first people in this debate to post widely on line the call for candor issued by the Appellate Division of NY Supreme Court in the New York Law School case.

"Most academics earn northward of $200,000."

This is wild exaggeration. See URL provided by "John" - eyeballing the chart he provides it appears that average salaries for academics are about 90K. I have made no assumption or expressed any opinion about how "academics" would fare in the private sector. I do know that I personally took a substantial pay cut to leave the private sector. But unlike some people in this debate I am not trying to stretch an anecdote into a theory.

regain their place as educational institutions that are “the envy of the world,”

There are reports that interest in LLM programs by foreign students is actually increasing now. In any case, across many fields of study I think it is fair to say that American colleges and universities are a global magnet.

Shawn,

"gorgeous name on your degree" Have you ever been to New Haven?

"Does Santa Clara publish statistics that it knows or should know will mislead the people for whom the statistics are intended? You bet they do."

Evidence, please? I am fairly certain that the plaintiffs bar out there is doing its job and if they had a cognizable claim for fraud against SCU they would make it.

John,

There is no connection between the "bimodal" distribution and the oversupply of lawyers. That distribution stands independently of the ups and downs of the macroeconomy. While the graph itself may have been of relatively recent origin, the data upon which it is based has existed for decades. And whether they expressed this or not law students, law schools, and lawyers all knew about it or should have and if they didn't it would have been reasonably easy to figure out.

Posted by: Steve Diamond | Jan 12, 2013 9:21:20 PM

"There is no connection between the "bimodal" distribution and the oversupply of lawyers. That distribution stands independently of the ups and downs of the macroeconomy."

That's my point -- it's not the bad economy. Based on actual income potential, schools like SCU have been grossly overcharging for years.

And, of course, they have been overproducing lawyers, too. Why don't you address that issue? Did we lose over 20,000 jobs to the bad economy? Will we be able to employ 45,000 new grads per year after the economy picks up?

Posted by: john | Jan 12, 2013 10:06:21 PM

If I may, allow me to add one more comment: let's call an end to this debate about the law schools. I think the courts have settled it in any case: as far as I know only cases where there is an allegation of actual fraud have been able to move forward. What the courts have not settled the markets are settling as applications continue to fall as sharply as they rose, and even more. That follows a pattern we have seen in the past.

But that leaves one huge problem: tens of thousands - how many I am not sure - of law students with large amounts of outstanding debt in whom we, as a society, have placed a significant amount of training in useful skills who cannot put these to use. The question that should be raised in the political arena by those students is to propose federal financial support for them to practice law in underserved areas of our economy in return for debt relief.

Law schools and current lawyers should be engaged to organize the program, which we could call, after Teach for America, Lawyers for America. If we can sustain those students for a 3-5 year period they would be better trained lawyers, their clients in that period would sustain improved lives and businesses, and the students would emerge with either no debt or significantly reduced debt at a point when they can find jobs in what we all hope is an improved economy.

Posted by: Steve Diamond | Jan 12, 2013 11:47:30 PM

Correction: My statement in the second to the last paragraph that educational institutions do not exist to preserve intellectual freedom should be corrected to say: "they do not exist to preserve YOUR intellectual freedom." Academic institutions do not exist for the benefit of the professors. They exist for the benefit of the community, to ensure EVERYONE'S intellectual freedom. By depriving access to our educational systems by making tuition too costly, we are infringing on the right for EVERYONE, regardless of their class or economic background, Mr. Diamond, to have the intellectual freedom that you value so highly.

Posted by: M. M. | Jan 13, 2013 11:10:28 AM

Steve - your last idea is a great one. All of the federal financial support should be moved from unlimited student loan dollars from law schools to this Lawyers for America program - instead of subsidizing law profs leading profligate, comfortable lives and leaving their students destitute, your proposal would lead to the necessary 'market correction' in terms of law schools and tuition in addition to steering dollars to where they would be much more socially beneficial. I think you should use your energies working towards this worthy goal.

Posted by: ab | Jan 13, 2013 12:13:52 PM

So the government should continue to artificially prop up the law schools by providing easy money, and then spend more money by hiring all of these heavily indebted, surplus lawyers?

Easier solution, reduce the funding up front. This will force schools to charge reasonable tuition, and will allow more students to make the choice of doing public interest work because they aren't saddled with ridiculous debt.

Of course, under that scenario, law profs might not be the highest paid in all of academia, so I can see your reluctance.

Posted by: john | Jan 13, 2013 1:50:49 PM