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Sunday, April 23, 2017

Diamond:  Whittier's Decision To Close Its Law School Violates AAUP Tenure Protections, Harms Diversity, And Ignores The Rebounding Legal Employment Market

WhittierFollowing up on my previous posts (links below):  TaxProf Blog op-ed: Whittier’s Big Mistake, by Stephen Diamond (Santa Clara):

Inevitably law school critics are crowing over the recently announced closure by Whittier College of its 50 year old ABA accredited law school. The news shocked and angered students who appeared to have no advance notice. Faculty immediately filed for a TRO (represented by a recent star graduate of their own law school, by the way) which was denied but they no doubt intend to respond with a full lawsuit.

And they should.

As to the legal issues, the closure arguably violates the only two bases allowed under the AAUP 1940 Statement of Principles on Academic Freedom and Tenure to which Whittier is a signatory for firing tenured faculty, financial exigency (there is none) and educational considerations (this has to be a conclusion reached after meaningful consultation with the faculty as a part of shared governance).

As for the actual impact of getting a JD at Whittier, while the unranked school does not have the best track record of late with respect to bar passage, it has been a gateway school into the legal profession for a diverse array of students for many decades. In a state like California that is very important, particularly in the era of Trump when racist and anti-immigrant messaging is making life even more difficult for black, Hispanic, Asian and Native American students to enter the most rewarding professions.

And the decision is remarkably short sighted. It appears as if the trustees are suffering from a kind of cognitive disability — they are exiting a market that has shown steady improvement over the past five years. I have already blogged here on the recent new national data showing that the employment opportunities for law students have improved steadily for the last two decades. But that is just as true for the Orange County area, a market that Whittier has served for many years.

According to the Bureau of Labor Statistics, the number of lawyers employed in that area has grown from 5910 in May, 2013 to 7570 in May, 2016. (BLS data is published every spring for the data from the prior year – so that is the latest info we have.) That is a 22% rise in employment. And that number does not include solo practitioners and partners. Incomes have improved steadily as well, growing from $149,000 in 2013 to $161,000 in 2016, a 7.5% increase.

In other words, Whittier College is exiting an expanding market for its own graduates. No wonder the students and faculty are upset.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/04/diamondwhittiers-decision-to-close-its-lawsuit-violates-aaup-tenure-protection-rules-harms-diversity.html

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Comments

I find it disappointing that Professor Diamond accuses the Whittier trustees of suffering from “cognitive disability,” when his analysis appears to intentionally misstate and omit facts to support his conclusions.

He claims that the legal market has shown steady improvement over the past five years. The Bureau of Economic Analysis publishes GDP by industry data (also known as value added), including data on the legal industry. Over the past five years, the real GDP of the legal industry declined in 2012 (-3%), 2013 (-3.4%), 2014 (-1%), and finally increased 2% in 2015. Last year, the real GDP of the legal industry significantly increased by 3.6% (the real GDP data is in 2009 dollars). This is great news! But to claim the market has been improving over the last 5 years is objectively false.

Moreover, despite impressive growth in the legal industry last year, many 2016 graduates were unable to benefit from the growth because they failed the bar exam. Rather than lamenting the closing of Whittier, we should demand that failing law schools be held accountable. The students of Whittier could be entering an expanding legal market in a year or two. They would have far better odds of entering the market if they attended a better law school that can give them the education needed to pass the bar exam.

Professor Diamond also claims that the employment opportunities for law students have improved over the last two decades. But when Professor Diamond cites the BLS data, he fails to mention that the BLS projects “competition for jobs should continue to be strong because more students graduate from law school each year than there are jobs available.” There is also other data that contradicts this claim. The real GDP of the legal industry is still down about 1% since 1998. And since 1998, the number of licensed attorneys has increased 36% according to the ABA. The declining legal market and sharp rise in attorneys has put a lot of pressure on solos. According to IRS data from 2012, the average income of solos declined to $49,130. Keep in mind, there were over 350,000 solo practitioners in 2012. A substantial number of attorneys are not earning anywhere close to the $161,000 salary cited by Professor Diamond.

I have not seen the national employment numbers for the class of 2016 yet, but I have perused the individual school data. The job data of the lower ranking schools is absolutely abysmal. I wish Professor Diamond cared more about helping law grads pass the bar and obtain employment, rather than shamelessly sticking to an objectively false argument like the worst climate change deniers. If I shamelessly misstated and omitted facts in my medical research to support my conclusion, I’m not sure I would be allowed to continue a career in medicine.

Posted by: anon JD/MD | Apr 23, 2017 12:10:36 PM

We should keep Whittier open so URM students can look forward to a <25% first-time bar passage rate? Because diversity?

Posted by: David Bernstein | Apr 23, 2017 4:49:56 PM

"In other words, Whittier College is exiting an expanding market for its own graduates. No wonder the students and faculty are upset."

Hah! What a remarkably stupid statement. The state of the legal market has zero to do with the faculty being upset. Do we really think they wouldn't mind being fired just because the law school lost money for the university? That is the last thing on the minds of we faculty.

Posted by: Eric Rasmusen | Apr 23, 2017 4:59:14 PM

With all respect due to Professor Diamond's view that the "trustees are suffering from a kind of cognitive disability" for making a "remarkably short sighted" decision, the trustees are the ones with the economic interest. With better information than third party observers are likely to have, they've apparently decided that it's rational (economically or otherwise) to shut down. It seems hard for outside observers to credibly second guess that decision.

Of course, that is totally aside from whether the college has breached its obligations to the faculty under their contracts.

Posted by: Matthew Bruckner | Apr 23, 2017 6:22:40 PM

The professor is missing the elephant in the room - a sub 50% and sinking bar pass rate. Without a degree, the ability to catch the rebound (however real it is) is irrelevant. Also, how many Whittier grads get the "golden ticket" of Big Law salaries? If not, your income stinks and you've paid a significant cost to get it. See the NALP http://www.nalp.org/salarydistrib

Posted by: SN | Apr 23, 2017 8:31:38 PM

You notice the good professor here never really cites whitter specific data. Instead he makes these broad category error type logic fallacies. Honestly he reminds me of the guys on shark tank when asked about sales talk about "the addressable market for shoes is 8 billion!". This school had terrible outcomes, terrible debt loads, and I doubt under any realistic measure was a net positive for grads. Hiding behind the diversity shield is craven and disingenuous, I fail to see how 200k debt, low pass rates and pathetic job opportunities helps any diverse group. But of course, it's not about that. It's about the protected classes jobs

Posted by: Bobby | Apr 24, 2017 6:05:01 AM

Diamond clearly is worried about the fate of other expensive, low-ranked, not-well-known law schools in the over-saturated California market. I wonder why? Could it be that he is concerned about his own future employment prospects?

Posted by: Get a Clue | Apr 25, 2017 6:21:33 AM