TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, July 6, 2017

'Is Whittier Law School An Outlier Or A Bellwether, A White Elephant Or A Canary In The Coal Mine?'

WhittierFollowing up on my previous posts on the closure of Whittier Law School (links below):  USA Today, Law Schools Hunker Down As Enrollment Slips:

Whittier Law School in California is closing its doors for good next spring, and students and faculty are stunned. It is, after all, a shocking milestone — to be the first ever accredited law school to shut down. ...

Future lawyers, heed this. Whittier's demise could be a sign of things to come.

As several trends hit the law profession — fewer graduates, fewer jobs and the specter of growing automation in legal services — experts say more law schools could take a hit.

For young lawyers in all but the most elite schools, jobs are already harder to find. While a newly minted Harvard, Yale or Stanford Juris Doctor (JD) will nearly always find security and top-paying work, those attending non-rated or poorly rated schools will struggle as their profession contracts. Even students at moderately rated schools could see their prospects shrink, statistics suggest.

Whittier’s travails are fairly well-known — it has long struggled to stay afloat, with downturns in both applications and average LSAT scores. But its struggles are taking place, in some form, at schools nationwide. That’s making many wonder: Is Whittier an outlier or a bellwether, an unfortunate white elephant or the proverbial canary in the coal mine?

Over the past six years, Whittier’s first-year enrollment had dropped precipitously, from 303 students in 2010 to 132 last year, according to Law School Transparency, an online watchdog. Average student GPA and LSAT scores dropped, and its state bar passage rate fell to 22%. Whittier’s estimated full price — $284,377, according to the transparency site — put it at 28th highest nationwide, even as its “employment score” put it among the bottom 10 law schools nationwide. Only 2.3% of graduates in 2016 landed jobs with large law firms, a common measure of quality, according to the site.

Even with its difficulties, Whittier is “not an isolated case," said Michael Horn of the Clayton Christensen Institute, a business think tank that focuses on innovation. "A lot of non-elite law schools are in this situation.” Like many schools hovering below the top tier, he said, “They’re hunkering down just long enough until it thins down at the bottom.” ...

Chas Rampenthal, general counsel of LegalZoom, said the startup is “not looking to put lawyers out of business.” But he estimated that 70% to 80% of every hour billed by lawyers “probably doesn’t require a law license.” Finding new clients, wining and dining them and fretting over billing, he said, can be done by someone else. “That is not what lawyers should be spending their time doing.”

If technology can take over low-level tasks, he said, law firms can bring down costs. That could make legal services cheaper, which would make them more widely consumed by those who can't afford them now. ...

[Andrew M. Perlman, dean of Suffolk University Law School in Boston, noted that ... “The kind of work that lawyers are going to be doing in the future is going to be quite a bit different, and in many ways could be quite a bit more interesting than the kind of work that I did when I graduated law school,” he said.

It’s actually “a great time” to go into the legal profession, he said. “From my perspective, it is an especially exciting time to be part of the legal industry, because I think it is changing more significantly and more rapidly than at any time in anyone’s memory.”

LegalZoom's Rampenthal said technology may well shrink the job market in the short term, but if costs go down, public demand for legal services will eventually rise. In the long term, he said, demand for lawyers could rebound and more law schools may open.

Actually, he said, if technology can make legal help more widely available, the profession has a moral duty to make it happen.

“There’s no doctor in the world, no research scientist, who would say, ‘You know what? I’d rather (assign) 30 research scientists to spend two or three months to crack a protein instead of having an artificial intelligence do it in three minutes so I can start treating people,’" he said. "They don’t look at it and say, ‘Geez, it might put me out of a job.’ They look at it and say, ‘It might save millions of lives.’ We can’t look at technology as a demon when it’s doing such great things."

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/07/is-whittier-law-school-an-outlier-or-a-bellwether-a-white-elephant-or-a-canary-in-the-coal-mine.html

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Comments

"Andrew M. Perlman, dean of Suffolk University Law School in Boston, noted that ... “The kind of work that lawyers are going to be doing in the future is going to be quite a bit different, and in many ways could be quite a bit more interesting than the kind of work that I did when I graduated law school,” he said.
It’s actually “a great time” to go into the legal profession, he said. “From my perspective, it is an especially exciting time to be part of the legal industry, because I think it is changing more significantly and more rapidly than at any time in anyone’s memory.”"

This is amusing/ironic on multiple levels, given that

a) Suffolk Law doesn't even place half of its graduates into FT/LT/license req'd jobs within ten months of graduation at any salary (most recent class was a mere 178 of 412, with 63 still unemployed),

b) Suffolk Law being one of the most egregious "let's lower standards to keep classes full" offenders, dropping their median LSAT from a 156 in 2010 to a 146 by 2014, and

c) Suffolk University itself is in a bit of disruption, what with being on their sixth president since 2010, having at least twice as much bond debt as endowment assets, and selling off real estate to pay the bills.

Posted by: Unemployed Northeastern | Jul 6, 2017 2:10:49 PM

Oops, forgot to mention d) those Suffolk bonds are rated at a precarious Baa2 by Moodys and BBB by S&P; the latter with a "negative" outlook. And maximum annual debt service now comprises 1/8 of the school's budget (and student tuition is ~95% of school revenue, meaning they have little ability to hold the line on or discount tuition).

Posted by: Unemployed Northeastern | Jul 6, 2017 2:16:09 PM

Again, one-third of your census needs to go. Close as many schools as necessary to make that happen.

Posted by: Art Deco | Jul 9, 2017 10:10:55 AM

About half the schools need to close ASAP. The lawyer job market is not robust enough to absorb the numbers of people graduating from law school. There are too many grads who never get work as lawyers, or who end up working for predatory employers at very low salaries relative to the massive amounts of student loan debt that too many grads carry. Close half the schools. Tomorrow.

Posted by: Evergreen Dissident | Jul 9, 2017 12:23:14 PM