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Monday, January 6, 2014

Merritt: Five Reasons Why Most Law Schools Will Stay in Business

ClosedDeborah Jones Merritt (Ohio State), Will the Competition Close?:

As law school enrollment continues to fall, industry experts have started to speculate about how many schools will–or should–close. Law schools themselves have a great interest in this. Some are worrying if it will happen to them. Others wonder whether the closure of competitors will ease their own distress.

The latter line of reasoning concerns me. Over the last few years, I’ve heard both academics and practitioners suggest that, once the market closes the weakest law schools, all will be well for the remaining 50, 100, or 150 schools. This analysis, I’m afraid, is too simplistic for the market we face.

As I explain below, at least five forces will keep most law schools in business. ... Law schools undoubtedly have been graduating more JD’s than the US economy needs. Students have gotten wise to that fact, and law school applications have plummeted. Why, then, won’t the weakest fifty–or one hundred–law schools simply close? That’s what would happen in many industries. Higher education, however, has several features that will keep most law schools alive.

  1. It’s very hard to close a public law school
  2. Law schools have powerful alumni
  3. Law schools are part of a product line
  4. Law schools are cheap academic units to operate
  5. Law schools can reduce their costs

A few law schools, especially stand-alone ones, may close their doors in the coming years. Most law schools, however, will remain open. Their universities will tell them: “Stay in business, but cover your costs.” This will be tough to do at a time when applications are declining and students are increasingly price sensitive. To balance budgets, schools will cut costs, modify curricula in ways that appeal to students and employers, build stronger relationships with employers, and seek new sources of revenue. All of this will happen, not in a stop-gap manner while we wait for the old days to return, but as part an ongoing, highly competitive environment. Most schools will survive, but the happiest and most prosperous ones will be the ones that appeal most to students and employers. In its own way, the market will speak.

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