The Volokh Conspiracy

Prof. Dennis Crouch, at the respected and often-cited Patently-O blog, had a post several weeks ago with a heading that was good advice, Don’t Write This Letter to the Patent Office:

We all get frustrated. After an examiner rejected his client’s application for a telescoping tripod sprinkler, patent attorney Andrew Schroeder could no longer resist and filed the following remarks:

REMARKS: Are you drunk? No, seriously…are you drinking scotch and whiskey with a side of crack cocaine while you “examine” patent applications? (Heavy emphasis on the quotes.) Do you just mail merge rejection letters from your home? Is that what taxpayers are getting in exchange for your services? Have you even read the patent application? I’m curious. Because you either haven’t read the patent application or are… (I don’t want to say the “R” word) “Special.”

Numerous examples abound in terms of this particular Examiner not following the law. Clearly, the combination of references would render the final product to be inoperable for its intended use. However, for this Special Needs Examiner, logic just doesn’t cut it. It is manifestly clear that this Examiner has a huge financial incentive to reject patent applications so he gets a nice Christmas bonus at the end of the year. When in doubt, reject right?

Since when did the USPTO become a post World War II jobs program? What’s the point of hiring 2,000 additional examiners when 2,000 rubber stamps would suffice just fine? So, tell me something Corky…what would it take for a patent application to be approved? Do we have to write patent applications in crayon? Does a patent application have to come with some sort of pop-up book? Do you have to be a family member or some big law firm who incentivizes you with some other special deal? What does it take Corky?

Perhaps you might want to take your job seriously and actually give a sh.t! What’s the point in having to deal with you Special Olympics rejects when we should just go straight to Appeals? While you idiots sit around in bathtubs farting and picking your noses, you should know that there are people out here who actually give a sh.t about their careers, their work, and their dreams.

Your job is not a joke, but you are turning it into a regular three ring circus. If you can’t motivate yourself to take your job seriously, then you need to quit and let someone else take over what that actually wants to do the job right.

See U.S. Patent Application No. 13/068530 (PAIR). [Update: It appears that the PTO has now removed the letter from the file history.] ...

An effective way for a patent lawyer to communicate with the patent office? You decide.

But Andrew Schroeder wasn’t done — instead of posting an apology (which I expect Patently-O would have been glad to post), or even just ignoring the publicity, he doubled down on rude, with several posts such as this one, calling Prof. Crouch a “dickhead” and then using various further vulgarities. This unsurprisingly led to more coverage, for instance at Above The Law and TechDirt.

The reputational consequences of these communications to Mr. Schroeder can be seen by Googling Andrew Schroeder patent. There is one bit of good news from this, though: The winners are Mr. Schroeder’s prospective clients, who can now more easily get a sense of the sort of conduct that they can expect from him.

Law students thinking ahead about not just passing the bar exam, but also the fitness and character requirements might take a lesson from a former student of mine.  He contacted me with some alarm a few days ago to tell me that the Virginia bar committee that has to approve fitness and character of applicants had expressed concern in his case on account of a large number of traffic citations.  Not unpaid tickets or parking tickets, or anything as serious as a DUI – simple speeding, in nearly all cases caught by automatic cameras in DC.  How many?  Nine in the past 18 months – he says many for the same stretch of DC road caught in the middle of the night by automatic radar/camera.

I don’t think this will cause him problems in the end, but it’s not something one wants to have a discussion about with the bar fitness and character committee either.  I’m submitting a special character reference about his general sense of responsibility and law-abiding nature.  Anyway, word of caution to law students looking down the road to getting sworn in.  (At least until self-driving cars take over DC roads and remove temptation; some commentators see a future in which insurance companies give lower rates to self-driving car users, precisely to remove these kinds of issues, once the insurers conclude that on balance the robot car is safer.)

Richard Epstein reviews Steven Harper’s The Lawyer Bubble: A Profession in Crisis in today’s WSJ. The review begins:

Law schools are under siege. Applications have dropped to around 54,000 annually, from around 100,000 in 2004. First-year enrollment has slipped to under 40,000 students, from 50,000 in 2010. Jobs are scarce—especially for students coming from lower-tier law schools. The average annual tuition has risen to just over $40,000 per year, from about $23,000 in 2001. Average debt on graduation has followed suit, jumping to about $125,000 in 2011, from $70,000 in 2001. No wonder many experts expect perhaps a dozen schools to close their doors within a year while other schools slash their class size, faculty and staff to stay open.

Meanwhile “Big Law”—the largest 200 or so law firms, which serve elite corporate clients in major urban areas—are under stress. Firm size has topped out, and both partnership shares and entry salaries are treading water at best. Clients now scour bills and disallow certain fees. Alternative, transaction-based fee arrangements are now more common. Competition has replaced cushy long-term relationships.

Terrible news, for sure. But is the “Profession in Crisis,” as the subtitle of Stephen J. Harper’s “The Lawyer Bubble” has it? The answer is no. A bubble may have burst, but not for the high end of the profession or for the thousands of attorneys working in specialized niches. Mr. Harper, a former partner at Kirkland & Ellis, a 1,500-lawyer global firm headquartered in Chicago, and an adjunct at Northwestern University Law School, takes undue pride in chronicling how the mighty have fallen. But he misses how they may rise again.

Paul Campos has posted a farewell post at his “Inside the Law School Scam” blog.

UPDATE: Comments from Paul Horowitz and Brian Leiter.

Professor Jim Moliterno of Washington and Lee Law School has a lengthy post over at The Legal White Board, which is in part a response to my post on this blog suggesting that the jury remains out as to whether W & L’s innovative curriculum is a hit among prospective law students.

I noted that despite what appears to be have been a banner year last year in admissions, “W & L’s median LSAT score was in the top 20 of law schools when it announced its experiential curriculum in 2008, and that it’s gone down every year since.”  Moliterno replies, “Actually the W&L median LSAT was steady at 166 from 2005-2010, dropped 2 points to 164 in 2011 and stayed at 164 for 2012. It has not ‘gone down every year since [the new curriculum was announced in 2008].’”

Moliterno seems to have misunderstood what I wrote, and, in retrospect, I can see that I wasn’t clear.  I did not mean that W & L’s median LSAT score went down every year.  I meant that relative to other law schools, W & L’s median went down every year.  As a result, W & L’s median LSAT was in the top 20 among law schools in 2008, and was not even in the top 30 in 2012.

I also noted that to the extent W & L’s admissions stats are taking a dramatic turn for the better, it may not be because of its curriculum, but because W & L is being especially generous with financial aid, making it, on average, one of the least expensive law schools in the U.S. News top 40 for out of state students.

Moliterno replies that when asked about the strengths of the law school, students ranked the curriculum number one, and financial aid awards number nine.  I don’t know if the students were given a list or just asked to volunteer strengths (it wouldn’t be obvious that one should volunteer “financial aid package” as a law school “strength”), but in any event I find this an odd way to determine whether the curriculum is popular among law school applicants, most of whom, of course, do not attend W & L, including most of those who receive offers of admission.  He also claims that matriculating students are increasingly likely to flag the curriculum as a factor in attending, which does at least suggest that the curriculum is either helping more or hurting less than it had been among prospective applicants, but we still don’t know whether it’s making an overall positive difference in admissions, nor is it easy to determine how much of a factor the curriculum is as opposed to generous financial aid.  Moliterno doesn’t deny that W & L has, in fact, positioned itself as a less expensive alternative (after financial aid) to other prestigious law schools. In my view, this is especially advantageous, more so than it would have been ten or even five years ago, given legitimate concerns among students about their ability to pay back large law school debt in the current employment environment. Even students who are enthusiastic about the curricular innovation would be (much?) less likely to attend if their tuition bill was 20k a year higher.  I also would like to see more than one real banner year in admissions.  For unknown reasons, George Mason had such a year in 2010, and wound up matriculating an unexpectedly large class, but it didn’t repeat itself.

Finally, I suggested that it struck me as unlikely that W & L’s curriculum will make a significant positive difference with prospective students until W & L can show that it improves employment outcomes.  Moltinero replies, “It is too early for employment data. One full class has graduated from the new curriculum, in May 2012, and that in a time of such incredibly reduced employment of new lawyers.  No innovation, no matter how much it might improve graduates’ abilities to perform, will change employment data until employers become convinced.”  I agree, but I also think it will hard to persuade hiring partners , who, as I noted, tend to think that any innovation that they didn’t benefit from in their law school days couldn’t possibly be that important.

Note that I’m not saying that W & L’s innovative curriculum won’t eventually improve W & L’s ability to attract top students.   I can’t even be sure it hasn’t started to do so.  I just think we need more evidence before we can draw the sort of wildly enthusiastic conclusions that prompted my original post.

(Posted inadvertantly before it was ready, and edited to improve the substance.)

New York Times coverage of the mid-year ABA meeting, and the report of its Task Force on the Future of Legal Education, here.

Bill Henderson has a post over at The Legal Whiteboard that has been getting a lot of attention in law school circles, praising W & L’s innovative curriculum, which focuses on practical lawyer skills, as both an educational success and as a hit with law school applicants.   Bill goes over some of W & L’s recent admissions data, and concludes:  ”A sizeable number of prospective students really do care about practical skills training and are voting with their feet.  W&L has therefore become a big winner in the race for applicants.”

Some caution is in order here.  My understanding is that W & L’s median LSAT score was in the top 20 of law schools when it announced its experiential curriculum in 2008, and that it’s gone down every year since, while its GPA rank has, after a plunge, more or less returned to where it was.  As Bill points out, W & L had a banner “yield” last year, with many more students accepting offers than places available, with a substantial percentage of students being asked to defer, and the first-year class still filled beyond capacity.  So we’ll have to see whether future statistics reflect strong gains in GPA and LSAT ranks, or whether W & L is attracting many students, but the “best” (most sought-after because of their LSATs and GPA, which are for the most part all law schools care about thanks to US News) students are still avoiding it.

Even if W & L does wind up with increasingly strong classes while everyone else is struggling, it wouldn’t be clear that its curriculum is the primary cause, or perhaps a cause at all.  Washington & Lee has a tuition “sticker price” of around $42,000,  but is known for being among the most generous law schools with regard to financial aid.  Indeed, once financial aid is taken into account W & L may well have the lowest effective tuition for out-state-applicants of any law school in the U.S. News top 40, save for BYU (which has limited appeal to most prospective applicants) and perhaps the University of Alabama.  W & L  is also located in a small town with an especially low cost of living.  To the extent that law school applicants have become significantly more cost-conscious and reluctant to take on debt because of the awful legal job market, W & L is clearly one of the law schools most likely to benefit.  The lesson may, in fact, be that the best way to recruit students is to offer legal education at a lower cost than is offered by your competitors.

I’m not saying, however, that I know that W & L is not, at this point, receiving some reputational benefit among applicants due to its curriculum. But I at least suspect that this benefit would only really start to manifest itself if there were some evidence that W & L applicants have brighter career prospects because of this curriculum, i.e., that employers are, on a relative basis, more inclined to recruit W & L grads because of this curriculum.  There may be such evidence, but if so Henderson doesn’t mention it.  (My own experiences in the legal world suggest that hiring partners tend to be of the opinion that since THEY managed to get where they are without x or y–clinics, law and economics, legal writing classes, whatever–they couldn’t possibly be important hiring criteria.)

None of this, by the way, goes to Henderson’s main point, which is that W & L’s curriculum is proving to be an educational success–that, perhaps, should be the subject of a separate post.  And I think such experiments are great, there is no reason that all law schools should follow the same path.   And while, as Henderson mentions, some academics are skeptical that the curriculum, which depends in part on adjuncts, could be pulled off in Lexington, it’s also the case that it may be more important to have such a curriculum in such places, where students have relatively few opportunities to gain practical experience by clerking for a law firm part time during the school year.

But all that said, I don’t think Henderson provides sufficient data to conclude that “a sizeable number of prospective students really do care about practical skills training,” at least not the extent that W & L’s curriculum has actually improved the “quality” of students relative to who would be matriculating there if the law school had retained a standard curriculum.

A few days ago I posted on WSJ and NYT articles talking about the opening of new law schools in the midst of a crash in law student applications.  Since then, a couple of other professors have posted comments on the topic, and I thought I’d flag them.  NYU law professor Robert Howse, writing at Prawfslawblog, argues that the gloom and doom is overwrought, and suggests that American law schools will be able to look to foreign students, not just to fill LLM slots, but JD classes as well:

Application for JD slots are down-we all know that. But even assuming that’s a longer-term trend rather than a reflection of th economic anxieties and difficulties of the last years, there is no reason for panic or despair.  The potential of America’s law schools is only starting to be realized.

The global market for US legal education was traditionally regarded as composed of a relatively small group of foreign-educated lawyers seek advanced degrees. But this changing. Increasingly, a US JD degree is an attractive option for foreign students. And you have probably noticed more non-US JDs in your classes. In most countries law is the subject of a first degree after high school. The market could be expanded of US law schools were to offer a combination undergraduate degree in another discipline and a law degree-what about a 5 or 6 year program that leads to a BA in economics or political science or philosophy and a JD?

The fact is that American law schools have a competitive advantage. To be sure there is excellent legal education in some other countries. But my considerable global experience suggests to me that those countries are few. In most places, legal education is dominated by old-fashioned rote learning and by professors who spend much if not most of their time in private practice. Innovation is rare and slow. Class sizes are often huge.

If we are not distracted by US News rankings, we will observe that in all kinds of law schools all across the US there are world class intellectuals and leading specialists on the faculty. Of course national law schools abroad have a captive audience of students who can’t study in English and/or whose first and immediate priority is to qualify for the local bar or who can’t afford foreign study (though we can reach out to the last group through distance education and foreign campuses).   But overall the number of students with global ambitions, and the prevalence of English as a global language of law, are growing, from what I can tell.

This post prompted some pushback by my Opinio Juris colleague Kevin Jon Heller, an American legal academic who has moved to Australia to be a law professor at Melbourne University:

It is nice to see someone dissenting from the conventional doom and gloom, and Rob [Howse] makes a number of valuable points. But I feel compelled to take issue with (1) his description of non-American legal education, and (2) his assessment of the potential for American law schools to attract large numbers of foreign students ...

I am also skeptical of Rob’s belief that foreign law students represent a vast and largely untapped market for American law schools.  His point about the greater value of a JD on the international market is well taken; my law school, Melbourne, recently shifted to a JD-only model precisely in order to maximize the international marketability of our law graduates. I also agree that a graduate law degree can be a significant draw for students in countries where law is an undergraduate subject; approximately 15% of our JD students come from outside Australia.

That said, I question whether American law schools are particularly well-situated to attracting foreign students who don’t intend to practice in the US. Most obviously, American legal education is absurdly insular — far more so than legal education anywhere else in the world. Outside of the elite American law schools, students receive almost no education in international law. Comparative law is almost non-existent. All, or nearly all, of the professors are American. Exchange options are limited — and many foreign law schools are off the table, no matter how elite, because they don’t offer graduate-level classes. How much do most non-elite American law students know about how law functions in the rest of the world when they graduate? I’d venture it is vastly less than law students who graduate from law schools almost anywhere else.

And then, of course, there is the expense of American legal education — something that Rob doesn’t even mention. Why would a large number of foreign students want to spend $200,000 on an American JD when they can get law degrees in their home countries for next to nothing (even at the most prestigious law schools) or can attend elite non-American law schools for half the price? (Melbourne falls into the latter category.) Rob suggests that universities create five or six year joint BA/JD programs to attract foreign students. Barring a radical transformation in financial-aid practices, however, attending such a program would simply mean more debt for a foreign student — perhaps more than $300,000. How many non-wealthy foreign students would want, or could handle, that expense?

To be sure, for students able to afford Yale, Stanford, or NYU, the additional expense of a JD may well be worth it — even taking into account that starting legal salaries tend to be much lower outside of the US. But lower-ranked schools? I don’t see it.

Professor Howse has responded at Opinio Juris:

[T]hese days the notion of American decline is it seems so widely held among pundits and professors that saying that America remains a leader in anything may start sounding atavistic and unappreciative of the genuine achievements of other societies.  My sense is that the demand for high quality legal education cannot be met in many countries by existing institutions in those countries as they now operate. That’s not based on some kind of personal arrogance but two decades of globetrotting as a legal academic. Mostly I am reporting the judgments of students and professors themselves in the countries in question.

I hope I did not say or imply that the foreign JD market is “vast”. Indeed, I mentioned one of the main limits of that market in my original post-law is a first degree in most countries and so we would need to rethink our own approach to address that extremely important factor.

Kevin makes a very important point about the expense of an American law degree compared to the cost of studying in one’s own country (or even an elite institution in a third country).  Some of my readers took me to be suggesting that I think students will pay that cost because they will have access to high-paying jobs at prestigious law firms as a result of the American degree.  That is far from certain, and we shouldn’t be marketing ourselves based on that premise.  I’ve talked to foreign students who have chosen JD study in the US, and not only in the so-called “elite” law schools.  The reasons they give for this choice are multiple, but usually involve both a perception of the relatively higher quality of US legal education to that which would be accessible to them at home and additional reasons for choosing the US over some of the great institutions in other countries that Kevin mentions.  Again, I emphasize that I am not talking about a “monopoly” by any means.  But rather that we have a degree of competitive advantage in a real market that we need to understand better, and better serve.

Volokh Conspiracy readers might also be interested in a new leader in the Economist this week, “Guilty as Charged: Cheaper legal education and more liberal rules would benefit America’s lawyers – and their clients.”  This editorial is not very persuasive, in my view, though phrased in the Economist’s house style of unshakeable self-confidence. One reason is that it runs very distinct things together.  It talks about the cost of legal education and asks whether the third year of law school is worth it, and also asks whether it would be better to make law a graduate, rather than undergraduate, degree.  Certainly these are ideas under discussion.  But it then turns to claim that a proximate cause for why the costs of legal education are so high is the guild rules that won’t allow law firms to have non-lawyer owners (save in the District of Columbia) or have public shareholders.

Does the capital financing of law firms really have much bearing on the cost of legal education?  Of course in some general way, restricted access to capital puts upward pressure on legal fees, but even so, wouldn’t things like the availability of student loans be more relevant to law school costs?  As a law professor, much as I would like to blame the massive costs of legal education on the financing of law firms, that hardly seems the direct or primary culprit.

As to the Economist’s outré idea, public shareholders for law firms, it is anything but obvious to me that law firms stand in need of that kind of capital or that it would produce very much besides mischief and unintended consequences. What is public shareholder capital required for, anyway?  Not to render legal advice; a chief reason would be to finance lawsuits, I suppose.  Given the general criticisms the Economist has made over the years of America’s lawsuit industry, making (more) capital available to finance lawsuits does not seem like such a brilliant idea.  Traditionally law firms were partnerships, in order to ensure attention to things like lawyer ethics (both through unlimited partner liability but also by not having shareholders and the conflicts of interest they present).  But it was also also because professional partnerships don’t require massive amounts of capital in order to provide professional advice; they are not engaged in industrial production.  (The Economist seems to think that the fact that an Australian law firm has gone public shows how unremarkable the idea is; as with so many of these facile cross-border comparisons, the below-decks dissimilarities greatly outweigh the above-decks similarities).

Far from undermining clients’ interests, allowing non-lawyers to own equity in law firms would reduce costs and improve services to customers by encouraging law firms, many of which are still knee-deep in paper, to use technology and to employ professional managers—the kind of people who tend to expect stock options as part of their package—to focus on improving firms’ efficiency. Anyone who thinks American lawyers do not already face pressure to make money could use the services of a different kind of professional.

Other countries have started liberalising their legal professions. Australia has the world’s first publicly listed law firm, in which anybody can buy shares. Britain has blessed “alternative business structures”: lawyers can now link up with other professionals, be bought by private-equity firms and even go public. America should follow.

Finally, several readers emailed me to comment on the reasons why high achievers on the LSAT – 170 or 175+ scores would be skipping law school, given some modest softening of the competition at the top schools.  One suggestion was that these LSAT takers could essentially “bank” the score and take up law school at a top school later; they retained the option to do so.  Could well be, though I don’t think LSAT scores remain valid forever and re-taking the LSAT years and years down the road does entail some risk.  I also query whether the next year or two might not mark a bottom on terms of competition among students applying to the very top schools, as students realize that competition is indeed less stiff at the very top, and they then apply and arbitrage it away.  I’m speculating, that’s all.

My general sense about the foreign student market is, first, that for a decade at least, high education in the US, including the law schools, have been anticipating that it would be its salvation as the baby boomlet tapers off in the US.  I think there are many problems with that scenario, both from the business model of the university and the educational and mission model as well.  That, for universities generally, another day.  But for law schools, it’s simpler, I think – speaking as someone who teaches many, many LLM students from around the world, at a mid-tier school with a very strong reputation worldwide among potential LLM students.  There aren’t that many potential LLM students to go around and certainly not enough at the rates US schools charge; I’ve had family members of LLM students from past years tell me that they just can’t afford a US LLM, much as they’d like to do one.  The JD of course even more so.  Attempts to brand a law school in China and capture value back to the home US school might conceivably work for a handful of schools – NYU, perhaps, or a few others, but that model is not going to save the bricks and mortar US law schools and their professors, I think.

So I don’t think foreign students will save the law school business model, and in any case, all these considerations point to a basic conclusion.  The fundamental problem is less quality than cost.

Note that the fraud here was on the firm, not on clients. From In re Siderits (Wis. Jan. 4, 2013):

In both 2007 and 2008, Attorney Siderits allegedly recorded in excess of 1,800 hours (1,803.3 hours in 2007 and 1806.3 hours in 2008). Because his recorded billable hours exceeded 1,800 hours, Attorney Siderits participated in the bonus system in 2007 and 2008, earning ... [a total of] $46,978.04.

After the Firm paid Attorney Siderits each of the bonuses, but before the Firm mailed his bills to his clients, Attorney Siderits reduced, or “wrote-down,” certain of his billable hours for the years for which the bonuses were paid. In early 2008 Attorney Siderits wrote-down 29.2 hours of time from his 2007 billings without notifying the Firm. These write-downs caused Attorney Siderits’ 2007 billables to drop about 25 hours below the 1,800 level. In early 2009 Attorney Siderits wrote-down 231.9 hours from his 2008 billings, again without notifying the Firm. These write-downs caused Attorney Siderits’ 2008 billables to drop below 1,600 hours....

The referee believed the most damning evidence of wrongdoing was Attorney Siderits’ time-recording for 2008. Focusing on Attorney Siderits’ billings for Matter “A,” the referee wrote:

[I]t is inconceivable to me that an experienced attorney could expect anyone to believe that he spent 140 hours on a relatively straightforward brief; especially since the matter had been fully briefed previously and the new brief was substantially based on the work of an associate. His protestations to the contrary are simply not credible. Furthermore, his time on that brief was entered late in the year, at times one would not normally expect an attorney to be working on the brief, in large quantities, and entered days and weeks after the work was allegedly performed. The same amounts were then routinely deleted following the end of the year, without following the normal procedure of deleting them on the paper pre-bills. Siderits entered the computer system himself, telling no one, and deleted all of the time that he entered. The time he ultimately billed the client was within the realm of reason, and consistent with what two other attorneys testified should be the time for such a brief. He never discussed with his partners any of the massive write downs that he did on Matter “A.”

... [T]his case does not turn on the bare fact that Attorney Siderits wrote-down his time; if Attorney Siderits had made occasional, modest write-downs which did not affect his eligibility for a bonus, this misconduct case would not exist. At issue here is whether Attorney Siderits was manipulating his billing records for the sole purpose of achieving a bonus. The answer to this question, according to the referee, is an unequivocal yes; the referee determined that Attorney Siderits’ arguments to the contrary were not credible — a determination which we will not disturb. It is obvious that with or without a written Firm policy, misappropriating Firm funds through billing sleight of hand is inimical to the best interests of the Firm, the public, and the profession, and, as such, constitutes misconduct....

We already have commented on the absolving effect of the absence of a formal Firm policy governing write-downs: none. Once again, this case does not turn on the bare fact that Attorney Siderits wrote-down his time; this case is about Attorney Siderits abusing his write-down discretion and lying to his law partners in order to collect almost $47,000 in bonuses to which he was not entitled. Attorney Siderits cannot seriously contend that firms must have a written policy forbidding stealing and lying before a misconduct charge for one of these actions can be sustained.

Back in 2008 or so, a VC reader told me that because of my blogging about the housing bubble in 2004-05, he put off buying a house and was very glad he did.  Now, he said, he was wondering when would be the best time to buy a house from a capital gains perspective.  I responded that the best time to buy real estate, or really any investment, is when “everyone” is saying it’s a terrible investment.  On Wall Street, when buyers have almost disappeared from a market, and prices seem in permanent free fall (as in March 2009), it’s referred to as “capitulation.” (Both then and in October 2008, I was busy buying closed-end mutual funds, which “capitulated” to an even greater degree than the market as a whole, and for which I had an objective measure of their relative undervaluation.)

If we’re not as this stage with regard to demand for law school, we are damn close, with applications running about half the level  of six years ago.  Law school certainly isn’t for everyone, and how worthwhile economically it might be for anyone in particular has to start with that individual’s opportunity cost and where he gets admitted–it’s a very different decision if you currently are thriving as a consultant than if you are currently advancing your barista skills at Starbucks, and very different if you get into Harvard than into a newly accredited school in a saturated legal market, and very different if you can keep your current job and get an automatic pay raise (as in some government jobs) for getting a law degree and if you will likely need to hang out a shingle but have poor social skills.

But there hasn’t been a better time to apply to law school in a long time, if ever.  Worried about going into debt?  Go to a law school school somewhat below where your credentials would allow, and they will shower you with aid–just for example, I heard from one VC reader who got into only Cardozo and Fordham last year, and Cardozo offered a free ride.  Always dreamed of going to a top 10 law school?  You may never have less competition than now.  Want to keep your current job and go part-time, but got rejected a few years from the only law school in town with a part-time program?  This year, they will probably take you.

I don’t want to get into a debate whether law school, in general, is “worth it,” because once again it’s a matter of both opportunity costs and opportunity.  How “worth it” is it nowadays to pursue an alternative like a Ph.D. in anthropology or history, a masters’ degree in journalism, an MPP, or to go back to school and get the proper credentials to become a public school teacher?  Young people are struggling in all sorts of fields, but young law grads seem to have much larger megaphone than unemployed teachers, journalists, and historians.  The result spells potential opportunity for prospective law students, if they look at the situation with eyes wide open to the costs and benefits..

Many commentators have praised Brian Tamanaha’s Failing Law Schools for its unflinching (and much needed) look at the state of legal education. Without question, Tamanaha was among the first to sound the alarm about legal education, and Failing Law Schools is an important book. But does Tamanaha go far enough? My former colleague Andrew Morriss does not think so. The book, Morriss concludes “raises more questions than it answers. Its greatest virtue is the concise, clear statement of the economic problem of legal education. Its greatest flaw is its failure to probe below the surface of the problem.”

There is an interesting op-ed in the Wall Street Journal today by the Brookings Institution’s Clifford Winston and Robert Crandall, authors of First Thing We Do, Let’s Deregulate All the Lawyers (the op-ed length version of which Jonathan blogged about here). The piece, cheerily entitled “The Law Firm Business Model is Dying,” uses the Dewey & LeBoeuf implosion as a jumping-off point to discuss how regulatory limitations on the legal market are undermining the law firm model.

Their basic thesis is this:

The problems these firms face today are twofold: Large clients are increasingly using in-house counsel to reduce costs, and the public is increasingly taking the do-it-yourself route given the growing access to a variety of legal services and documents on the Internet. The rational response would be for new, low-cost legal firms to start up, and for incumbents to reduce costs and attract new clients by providing innovative services.

But that is happening only to a limited extent because of state licensing requirements and American Bar Association (ABA) rules. Deregulation could open the market and transform the legal industry for the better.

The authors argue that the requirement that new lawyers have graduated from an ABA-accredited school and pass a bar examination “significantly limits the flow of new legal practitioners,” and requires that new attorneys recoup the cost of their education in the form of high salaries. That, the authors say, makes it difficult to control costs, and “[e]fforts to outsource some tasks have met with only limited success.” Furthermore, the authors say, ABA regulations prohibiting financial-services companies from having an ownership stake in law firms limit firms’ financing options and raise its capital costs in a way that the authors say hurt the highly leveraged Dewey.

The authors do not (by my lights) spend enough time discussing offshoring of legal jobs, but it is a timely, thought-provoking read.

The National Law Journal reports on the under-reporting of estimated cost-of-living expenses at many law schools. The story begins:

The news just keeps getting worse — at least as far as financing a legal education goes.

Law School Transparency has recalculated its estimates of the debt that law students stand to incur after discovering that a number of schools had low-balled the cost-of-living figures that they provided to U.S. News & World Report. On average, schools underreported those expenses — upon which the organization pegged its initial estimates — by $5,000, according to the Law School Transparency’s executive director, Kyle McEntee.

Additionally, the organization made several mistakes in its handling of the U.S. News data, which contributed to the problems, he said.

Here is the post that led to this story.

In an effort to educate potential law students about the real costs of attending law school, Law School Transparency has launched a “Data Clearinghouse”, a database of “consumer information” on law schools, including much information law schools have been reluctant to disclose.

The latest addition to the database are projections of the full cost of attending each law school in the nation. Based on Law School Transparency’s calculations, these costs can vary widely. As the NLJ reported:

As part of the comprehensive database of law school employment statistics it launched this week, the organization has projected the total cost of law school loans for students who will graduate in 2015 and 2016 — that is, the ones who will start law school this year or next. The former will owe an average of $195,265 and the latter will owe an average $200,595.

“My jaw dropped when I ran the numbers,” McEntee said.

He added a few caveats. The calculations are based on the assumption that students will borrow the full tuition amount in the form of federal loans, even though many students receive some scholarship money. They also assume that students at public law schools pay out-of state-tuition levels, which generally are higher than in-state rates. . . .

The City University of New York School of Law features the lowest projected debt for the class of 2015, at $96,242. The University of California, Berkeley School of Law had the highest, at $273,667, although that figure assumes graduates paid out-of-state tuition rates; most students from outside California qualify for in-state tuition after one year.

New York University School of Law had the next-highest projected debt at $266,462.

Some of the numbers are quite revealing — and some of the numbers are quite wrong. In a quick review of the numbers for a handful of schools, I’ve found substantial under-reporting of cost-of-living estimates. Lets start with the alleged cheapest school on the list, CUNY. According to the database, the estimated annual cost of living is only $7,425. Really? In New York City? (Yes, it’s Queens. But still.) But it turns out that $7,425 is not the estimated cost of living for CUNY. According to the law school’s website, the actual figure is more than double the reported amount, $17,943. That’s quite a difference.

CUNY is not the only school for which the numbers in the Law School Transparency database are inaccurate. The University of Louisville is another low-cost school according to the database, with a reported cost of living of only $10,490. Again, however, a quick check of the law school website reveals a much higher figure. Louisville estimates the cost of living for its prospective students at over $18,000 per year. Florida State’s reported number is $13,000, but their cost-of-living calculator estimates costs of over $17,000. Albany Law School’s reported number is $12,300, but their website reveals costs of $18,000. And so on.

I contacted the folks at Law School Transparency to ask about the problems with their data. They said they relied upon data provided to U.S. News, and pledged to do more research so that they could provide more accurate numbers (numbers which should be up shortly, perhaps later tonight). The faulty data, they argue, is further evidence of how law schools misreport to U.S. News and highlights the need for more standardized and complete reporting. Fair enough. Yet the whole point of their site, as I understand it, is to give law school “consumers” access to more complete and accurate information than they are getting from U.S. News and law schools themselves. Further, some of these numbers — such as the CUNY cost-of-living figure — should have been dead giveaways that something was wrong.

My own curiosity was piqued not just by the CUNY number, but also by the variation in living cost estimates for schools in particular cities. In Chicago, for instance, the estimated cost of living varies dramatically, from Loyola ($15K) to UChicago ($17K) to DePaul ($28K). This seems like a massive difference across a single city, and is the sort of thing that jumps out after even the most casual review of the numbers. It’s hard to see such figures and not suspect that something is wrong.

Closer to home, I noticed that the estimated cost of living for Cleveland-Marshall was approximately $4,000 less than that for my own institution, Case Western Reserve University, even though the two schools are only a few miles apart. This didn’t seem right — if anything, it’s cheaper to live near Case than it is to live downtown. And here again the reported data was wrong. The cost reported in the database was $16,000, and yet Cleveland-Marshall’s own website lists expenses of over $19,000. Case’s data, I’m proud to report, was accurately reported.

As noted above, the folks at Law School Transparency were quite responsive when I pointed out these errors. They pledged to double-check the numbers and post corrections as soon as possible. This is all to the good, but this is also work that should have been done before trumpeting the data to prospective law students and the press. Some numbers, such as CUNY’s $7,425 cost of living estimate or the $10K spread in living costs across schools in Chicago, should have been red flags that something was amiss. At the very least, it should have been obvious that the cost-of-living numbers they decided to post were not apples-to-apples comparisons. Law schools deserve criticism for their relative lack of transparency, as does U.S. News insofar as it publishes inaccurate information or presents a misleading picture of specific schools. But the self-appointed watchmen of law school transparency should be held to a high standard as well, and need to be more careful about presenting false or misleading information themselves, whatever the source.

UPDATE: The cost of living data has been updated on Law School Transparency’s website. Quite a few schools have moved around in these rankings quite a bit. LST’s Kyle McEntee also comments below.

SECOND UPDATE: NLJ reports on this story.

The number of prospective law students taking the LSAT has declined significantly in the past few years after peaking in 2009-10.  So what is the Law School Admission Council doing in response?  Increasing the test fees.  The fee increases include a substantial increase (in percentage terms) in the cost of sending LSAT scores to schools.  Yet if the LSAC is among those concerned about declining law school applications, making it more expensive to apply is hardly a sound way to respond.

UPDATE: Brian Tamanaha takes a closer look at the LSAC here.  As he notes, this is strange behavior for a non-profit organization that’s “sitting on nearly $200 million in assets” and is supposed to serve the nation’s law schools.