Spivey: How Will COVID-19 Impact Law Schools?

Mike Spivey (Spivey Consulting Group), How Will COVID-19 Impact Law Schools As The Summer Progresses?:

With the [Covid-19] growth factor still curving upward, where does this leave law school applicants and law school classes? First to the applicants. The March LSAT was recently canceled, and the April administration is looking precarious (for context, combined those tests had/have about 20,000 registrants). This is actually good news if you are on a waitlist at a law school and you did not plan to retake the LSAT. Why? Schools will likely not be getting an influx of either new applicants from spring LSAT exams (although this is heavily stratified by score range, with top ranked schools generally having nearly their entire applicant pool already in and lower ranked schools having closer to 80 percent, 70 percent, or even 60 percent) nor a heavy supply of retakers hoping to increase their score. Put another way — look for significant waitlist movement below the top range of schools. While we expect almost all schools to have some waitlist movement, the effects of canceled LSAT
administrations will compound the lower a given school’s LSAT median. ...

[A] significant swath of what would normally be applicants in this cycle’s pool (or retakers) are now not in the pool. Many schools were counting on those folks. As the summer carries on, we expect this to mean considerably more admits — especially below the 165 LSAT score-band threshold where applicants were already down this cycle. ...

One final issue is that of the overall economic viability of law schools. Since the Great Recession, many law schools have been underwritten by central universities. This poses a problem because universities are currently facing a much greater financial threat than law schools. As a factual matter, Moody’s Investors Service just recently downgraded the outlook on higher education as a whole from “stable” to “negative,” driven primarily by the fact that many auxiliary sources of income for universities (housing, dining, parking, athletics, etc.) and enrollments are threatened.

If law schools stop receiving university support, they will be faced with some hard choices — particularly if we become mired in a recession. Perhaps a select number will move entirely online and lower tuition. The American Bar Association has already signaled their intention to loosen accreditation requirements for temporary online learning, and our firm is closely monitoring those developments to see if those changes become permanent. If not, and if a certain number of schools are indeed threatened due to a longer term recession, we may not be looking at just a summer of COVID-19 woes, but the complete closing of some law schools.

For complete TaxProf Blog coverage of the coronavirus, see here.