Paul L. Caron

Thursday, November 6, 2014

'Throwing Furniture Into the Fireplace to Keep Warm' Is Not a Viable Law School Survival Strategy

Thomas Jefferson LogoFollowing up on yesterday's post, NY Times: 'A Troubled Law School Is Like Dracula: Hard to Kill':  Steven J. Harper (Northwestern), Bullet Dodged? Or Redirected Toward You?:

For the past six months, Thomas Jefferson School of Law in San Diego seemed poised to become the first ABA-accredited law school to fail since the Great Recession began. For anyone paying attention to employment trends in the legal sector, the passage of six years without a law school closing somewhere is itself remarkable. It also says much about market dysfunction in legal education.

In his November 5 column in the New York Times, University of California-Berkeley law professor Steven Davidoff Solomon has a different view. Solomon argues that recent enrollment declines prove that a functioning market has corrected itself: “[T]he bottom is almost here for law schools. This is how economics works: Markets tend to overshoot on the way up, and down.”

Solomon urges that the proper course is to keep marginal law schools such as Thomas Jefferson alive for a while “and see what happens.” I disagree. ...

Throwing furniture into the fireplace to keep the house warm is not a viable long-run survival strategy. Consider future students and their willingness to borrow as the “furniture” and you have a picture of the Thomas Jefferson School of Law’s business plan.

Meanwhile, Solomon echoes the hopes of law school faculty and administrators everywhere when he says, “[T]he decline in enrollment could lead to a shortage of lawyers five years from now.”

In assuming a unitary market demand for lawyers, he conflates the separate and distinct submarkets for law school graduates. His resulting leap of faith is that a rising tide — even if it arrives — will lift Thomas Jefferson’s boat and the debt-ridden graduates adrift in it. It won’t.

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TJ has the reputation of being the worse law school in the country besides Cooley, which is also having financial difficulty. I do not understand why professors ignore the consumer protection aspect of this. TJ has a terrible reputation in SD and Southern California and very low bar passage rates. It is also very expensive. Its a bit unethical to allow this school to keep its ABA approval and to accept students.

There is a great frontline documentary on the for-profit college system called "College, Inc." I think that the premise of the documentary can easily be applied to the current law school system.

@Bol--If you go to a higher ranked law school your are not in competition with the lower ranked schools. Most employers will not interview students from these schools.

Posted by: J | Nov 8, 2014 6:34:37 AM

. . . which isn't saying a great deal, to be honest.

Posted by: Camilla Highwater | Nov 7, 2014 9:57:22 AM

I never thought I'd say this, but Ted Seto has put it better than I possibly could. Bravo.

Posted by: mike livingston | Nov 7, 2014 4:14:44 AM

@Theodore Seto:

Actually, my claims are both descriptive and normative. They're descriptive of a legal education market that is broken. The resulting normative judgment is that, in a functional market that held marginal law schools financially accountable for their graduates' poor JD-required employment outcomes, TJSL would not be able to charge tuition comparable to schools where the vast majority of graduates are actually getting JD-required jobs. In all probability, a functioning market would have forced many such marginal schools to close their doors long ago.

Speculation about the value of a TJSL degree to students from underserved communities is an interesting rationalization for that market dysfunction. (Northwestern has plenty of those students.) But balance that unproven assumption against the undeniable facts that those TJSL students -- if they complete three years and then pass the bar -- are incurring debt approaching $200,000 and are unlikely to get JD-required jobs.

By the way, I've been a Northwestern Law adjunct professor teaching Trial Advocacy and Legal Ethics for the past 20 years. Prof. Seto's admitted "guess" about Northwestern's lack of practical training is simply incorrect.

Posted by: Steven J. Harper | Nov 6, 2014 8:10:50 PM

Glad Professor Seto has zero problem with schools like TJ taking students (I would say preying on) from "underserved communities." He fails to mention that the schools are also giving them disrespected degrees at an exorbitant cost. I will fully admit that I am rooting for schools of this ilk to fail. I also welcome the failure of payday lenders, check-cashing venues, pawn shops and others that serve "underserved communities."

Posted by: Cent Rieker | Nov 6, 2014 6:40:54 PM

Or put another way: do you have sufficient confidence in the current default rate that you would be willing to loan $200k to an applicant to TJL with an LSAT and GPA at TJL's median?

Posted by: Old 'N Grey | Nov 6, 2014 2:58:56 PM


CDR's ignore an important group -- "the 44% of borrowers that are not yet in active repayment due to deferments and forbearances." (According to the Fed:

Think about it this way: would you rely on your statistics to counsel your child to take on almost $200,000 in law school debt for a TJSL JD-degree.

Posted by: Steven J. Harper | Nov 6, 2014 2:36:31 PM

Prof. Harper's claims are normative, not descriptive. He's not saying that TJ will fail. He's saying that it should fail. Sorry, but what is his normative criterion? My guess is that TJ is teaching more practical legal skills than Northwestern and that its students come largely from underserved communities. It's true that they don't pass the bar at the same rates as Northwestern students, but Northwestern only takes students who will pass the bar regardless. I'm not hoping for any law school to fail -- Northwestern, TJ, or anyone else. But if we are going to root for failure, we should be clear about the consequences and about why we want those consequences.

Posted by: Theodore Seto | Nov 6, 2014 11:12:34 AM

I realize Mr. Harper never met a law school he didn't think was a scam, but one wonders what better alternative to law school he thinks the students attending TJ should pursue instead, and what evidence he has to back up his intuition that there are greener pastures elsewhere.

Posted by: Greener Grass | Nov 6, 2014 8:17:53 AM

Ben Barros did a study a while back of graduates of Widener Law School--a fourth tier, private law school on the east coast.

He found that a few years out, the students who had graduated into the worst job markets were doing much better on employment than 9 months after graduation.

If you're curious about TJ, just look at their student loan default rates from the department of education. (One of the older S&M working papers included a table that had this information for 25 law schools, including TJ).

For those entering repayment in 2011, TJ has a 3.1 percent 3-year Cohort Default rate, which compares favorably to the national 3-year CDR of 13.7 TJ’s numbers for 2009 and 2010 are also better than the national numbers.

And if you look at the 2-year CDRs (TJ vs. the rest of the country), available as recently as the class of 2012, it’s the same story, even in the worst years of the recession.

Posted by: meh | Nov 6, 2014 8:07:11 AM

People at higher-ranked law schools have an interest in destroying lower-end law schools so there's less competition for them and for their graduates (which is why so much anti-law school agitation comes from the professiorate). Prof. Solomon is an exception precisely because he doesn't see TJSL as competition with Berkeley.

Posted by: Bol | Nov 6, 2014 8:00:47 AM

@ Michael Livingston – Faculty at top ranked law schools are the only ones not threatened by the decline in applications so they can discuss the absurdity of modern-day law school economics in the lower tiers from a relatively dispassionate position. I don’t see them telling schools what to do; I see them helping to alert the public that obtaining a JD degree by itself does not guarantee economic success, and can instead result in hundreds of thousands in debt with few job prospects.

Posted by: JM | Nov 6, 2014 7:28:06 AM

Law professors,

Wonder why you have such a loathesome reputation among practitioners, especially young practitioners. QED.

Posted by: Jojo | Nov 6, 2014 7:26:54 AM

Why would TJSL's creditors care how many lives TJSL ruins so long as the rent and interest on their bonds are paid on time?

I wonder if Profs. McIntyre and Simkovic would like to conduct some field research among TJSL's graduates for the last six years to see how many are on track to realize that million-dollar-regardless-of-subsequent-work-experience JD premium.

Posted by: Morse Code for J | Nov 6, 2014 5:44:18 AM

There's something odd about people at ranking law schools telling people at lesser ranked schools what to do. Why not make your own school better?

Posted by: mike livingston | Nov 6, 2014 4:11:45 AM