A Deeper Look at the "Law School Crisis"

Professor Brian Leiter 

Takes on the Scambloggers

Professor Brian Leiter, a well-known blogger, is now writing for the Huffington Post. In American Law Schools: The New Reality, he describes the many factors that have contributed to the down turn in applicants to law school including:

• Competition among law school for US News rankings, which forced them to compete based on expensive services instead of affordable tuition;
• Rising student debt;
• Poorer employment outcomes for graduates in a recessionary economy;
• Congressional overhaul of bankruptcy laws as they relate to student loans; and
• Lax oversight by the ABA regulators.

I've blogged about all these topics this past year.  And, it is nice to have this summary for easy reference.

In his second article, American Law Schools and the Psychology of Cyber-Hysteria, Professor Leiter looks at the "toxic" environment law schools face while trying to respond to the market downturn in responsible ways.  He starts the article by saying:

Previously, I wrote about how the steep decline in applications to law schools was an unsurprising "consumer" response to the downturn in the legal sector in the wake of the financial crisis and the recognition that student debt was no longer dischargeable in bankruptcy. What was surprising, however, was the new "meme" that took hold in cyberspace: this economic catastrophe was the fault of law schools and law professors. The psychology of this "meme" is our topic here.

* * *  

The cyber-hysteria about law schools is not only tediously repetitive, it is immune to facts or evidence.

He concludes:

If, as The National Jurist predicts, we are only a couple of years away from an equilibrium in the market between jobs and new law school graduates, then the irrational cyber-hysteria about law schools will soon be a thing of the past. The suffering that has brought it on, however, remains real, and soon Congress will need to take up debt relief for a generation of students caught in the vise of an economic catastrophe.

I want to thank Professor Leiter for using this national forum for enriching the conversation about law schools, the value of a legal education, the job market, student debt, and the role U.S. News and the ABA have played in creating the current situation.  Perhaps with a more measured analysis, we can limit and avoid suffering by all the interested stakeholders.  

Smallest Entering Law School Class (Average Per School) Since the 60's

Big Drop in Law School 

Enrollees

So the big story this week is the significant drop in enrollees in law school. In other postings here and here, I've tracked the drop in applicants and applications.

The ABA has finally released a report showing the drop in the number of applicants who actually enrolled in law school for the year beginning in Fall 2013.  The ABA explains that:  "The last time enrollment was so low was in 1975, when 39,038 students were enrolled. And, at the time, there were only 163 ABA-accredited schools."

By one blogger's calculation, enrollment (average per law school) has not been this low since the late 1960s.

And, with applications to law school expected to drop this year compared to last, we could expect further erosion of the number of law school enrollees for Fall 2014.

This new data allows us to better predict job equilibrium, which I have discussed here, here, and here.  It is good news for graduates and students who are looking for a job.

The chart, 1L Growth Rate, for the period 1948 to 2013, shows four periods in which law schools showed negative growth in law school enrollees:  about 1949 to 1952; about 1982 to 1986; about 1995 to 1997; and this last one beginning in 2011.  I say "about" because the chart is a little difficult to read when trying to pinpoint specific years.

I'm sure an economist could correlate these dips to changes in the economy.

I notice this.  The magnitude of the negative growth dip for the first and last periods is substantially greater than for the two intervening dips.  The graph suggests that unlike the second and third dips in enrollment, the most recent dip is deeper and potentially longer lasting.

Dec. 27, 2013 Update:  One blogger, Matt Leichter, of the Law School Tuition Bubble blog,  has continued to work with the numbers and published a story in the AmLaw Daily here.

Dec. 28, 2013 Update:  The National Jurist covered the story here.

Oct. 26, 2014 Update:  Analogy to dental school experience in the 1980s  Ongoing decline in applicants expected.

Oct. 26, 2014 Update:  Fewer LSAT takers for Sept/Oct. 2014 test probably means fewer applicants to law school.

Nov. 1, Update:  More on the dental school analogy.

MAPLA Conference: LSAC Applicant/Applications Data by Geographic Region

LSAC Applicant/Applications Data by Geographic Region

--Fall 2012 to Fall 2013 --

As I mentioned in my last posting, Joan Van Tol, General Counsel for the Law School Admission Council (LSAC), gave a presentation at the conference of the Midwest Association of Pre-law Advisors (MAPLA) about trends in law school applications.  I described the LSAC data on the historic cycles in applications here.

I discussed the conference generally here.

Today, I'll describe the LSAC data presented on two maps of the U.S. divided into ten regions:

• Where are ABA Law School Applicants Coming From?  YTD Change Fall 2012 to Fall 2013; and,
• Where are ABA Law School Applications Going To?  Percent Change Fall 2012 to Fall 2013.

LSAC Geographic Regions for Reporting:

The ten LSAC regions are:

• New England (Maine, Vermont, New Hampshire, Massachusetts, Connecticut, and Rhode Island);
• Northeast (New York, New Jersey, and Pennsylvania);
• Midsouth (Maryland, West Virginia, Virginia, Kentucky, Tennessee, and North Carolina);
• Southeast (South Carolina, Georgia, Alabama, Mississippi, and Florida);
• Great Lakes (Minnesota, Michigan, Wisconsin, Illinois, Indiana, and Ohio);
• Midwest (North Dakota, South Dakota, Nebraska, Iowa, Kansas, and Missouri);
• South Central (Oklahoma, Arkansas, Louisiana, and Texas);
• Mountain West (Montana, Idaho, Wyoming, Colorado, Utah, New Mexico, and Arizona);
• Far West (Nevada and California); and
• Northwest (Alaska, Washington, and Oregon).

National Averages

Next, the national averages for each map:

• Where are ABA Law School Applicants Coming From?
• YTD Change Fall 2012 to Fall 2013:
• National Volume:  56,631
• Percent change: -12.6 percent from the prior admissions year

• Where are ABA Law School Applications Going To?
• Percent Change Fall 2012 to Fall 2013:
• Total Volume:  385,358 applications
• Percent change: -17.9 percent from the prior admissions year

The drop of 17.9 percent in the national volume of applications in 2012-13 comes on top of two consecutive drops of -10.9 percent in 2010-11 and of -12.5 percent in 2011-12, for a total drop in applications over three admission cycles of 41.3 percent.

By volume:

2009-10:  602,300 applications

2010-11:  536,500 applications

2011-12:  469,500 applications

2012-13:  385,400 applications

LSAC calls these numbers "preliminary End-of-Year values measured through 08/08/13."

The trend in first-year enrollments for the same time period is:

2009-10:  52,500 enrollees

2010-11:  48,700 enrollees; -7.2%

2011-12:  44,500 enrolless; -8.7%

2012-13:  not provided

Thus, first-year enrollments fell 15.9 percent from 2009-10.

In his presentation to the MAPLA conference attendees, Washington University School of Law Dean, Kent Syverud, identified a 25 percent drop in enrollment (he must have data for the 2012-13 admissions year). The size of that decline suggests that one-quarter of, or 50, ABA-approved schools would need to close to get the supply-demand balance back to pre-recession levels.  But, unlike what many scambloggers have been saying, the pain is not felt only by so-called "marginal schools" (which we call access schools).  Instead, schools at all levels of the rankings are feeling the pinch (if not the punch).  Dean Syverud said that even top schools were seeing steep declines in applications.

For example, during a MAPLA-sponsored tour of the new $30 million law school building now housing the St. Louis University School of Law, the student guide mentioned that first-year enrollment at that school had dropped significantly.  If I recall the conversation correctly, the school wanted an entering class of about 295 and got 129 students.  (If I have misstated this data, I apologize in advance.)  

Dean Syverud said that 175 of 202 law schools (ABA-approved?) are operating at a deficit, with revenue declines of about 30 percent.    

Where are ABA Law School Applicants Coming From? 

The first LSAC map apparently indicates the change during the last admissions cycle of the source of law school applicants by geographic region.  The data comes in two forms: Number of applicants and percent decline from last year  -- and every region saw a decline.

• New England:  2,780 applicants; -11.9%
• Northeast: 9,130 applicants; -15.2%
• Midsouth:  7,199 applicants; -13.7%
• Southeast: 9,272 applicants, -8.5%
• Great Lakes: 7,665 applicants; -14.8%
• Midwest: 2,034 applicants; -10.3%
• South Central: 6,150 applicants; -12.0%
• Mountain West: 3,098 applicants; -13.1%
• Far West: 7,830 applicants; -10.7%
• Northwest.: 1,473 applicants; -19.8%

This map suggests that schools located in geographic regions seeing the biggest downturn in the number of applicants will begin recruiting further afield.

Where are ABA Law School Applications Going To? 

This map apparently reflects data on where, by geographic region, the 56,631 applicants submitted their 385,358 applications.  The data on this map comes in two forms: Number of applications and percent decline from last year  -- and every region saw a decline.

• New England:  31,378 applications; -15.0%
• Northeast: 64,939 applications; -20.8%
• Midsouth:  73,129 applications; -15.8%
• Southeast: 40,728 applications, -20.4%
• Great Lakes: 57,842 applications; -20.3%
• Midwest: 11,004 applications; -15.1%
• South Central: 27, 539 applications; -15.3%
• Mountain West: 11,812 applications; -20.0%
• Far West: 57,718 applications; -16.2%
• Northwest.: 9,269 applications; -14.9%

Can anyone suggest why applications dropped most in the Northeast, Southeast, Great Lakes, and Mountain West regions? The steep drop in BigLaw jobs would help explain the drop in applications in the Northeast.  Any other theories?

Nov. 18, 2013 Update:  In its online newsletter, the ABA reported that 80 to 85 percent of law schools were running at a deficit according to the research of one law scholar.  

MAPLA Conference: LSAC Admissions Data -- 1968 to 2013

LSAC Data on Trends in 

LSAT Tests Administered, 

ABA Applicants, and 

First-Year Law School Matriculants 

-- 1968 to 2013 -- 

At the conference of the Midwest Association of Pre-Law Advisors (MAPLA), which I first discussed here, LSAC General Counsel, Joan Van Tol, presented new data on applications to law school through August 2013.

I emailed her this morning asking her to provide a link to her slides, if possible.  She advises that they have not been posted, but should eventually appear on the PLANC website.

I plan to continue to blog on the extremely helpful data provided at this conference by several speakers.

Van Tol began with a slide showing a graph with three trend lines for the period of 1968 through the admissions year 2012-2013:

• for LSAT tests administered; 
• for ABA applicants; and 
• for first-year law students.   

Most strikingly, the graph shows that legal education has seen three large cycles in the volume of LSATs administered and ABA applicants to law school.

I have not tried to correlate the graph to other data available on tests administered. Other bloggers have assembled that data. So I rely on the graph alone, which makes identifying specific years for any of these changes difficult to pinpoint.

The first up-cycle in LSAT tests administered started about 1968, peaked in 1974, and then started a slow decline to the trough in 1986. The market recovered quickly to start a second up-cycle in 1987 or 1988. That cycle peaked in about 1991 and then took a steeper decline to the trough beginning in about 1996. This time the market recovered more slowly, apparently after about five years of flat numbers of LSAT takers.  It finally started to recover in 2001 or 2002, climbed quickly, then flattened out for a couple of years, dipped a bit in 2005, then shot up quickly to an all-time high in LSAT tests administered in 2008 or 2009. Just as quickly, it fell off nearly to the level of 2001 or 2002.  In other words, most of the gain in LSAT tests administered apparently vanished after the 2008 recession.

The number of LSAT tests administered ranged from about 59,000 in 1968 to a high of over 160,000 in about 2009.  During the second cycle, LSAT test administered reached a high of about 150,000 tests in 1991.

The trough in 1986 saw the number of LSAT tests administered drop to about 90,000. The trough in 1996 to 2001 saw the number of LSAT tests administered fall to about 110,000.

Update:  In a Nov. 4, 2013 on-line article, the ABA reported:

The number of people taking the Law School Admission Test continues to drop. 

Only 33,673 people took the LSAT in October, an 11 percent decline from the previous year, report the National Law Journal and the Wall Street Journal Law Blog (sub. req.). The new number is a 45 percent drop from the all-time high reached in October 2009. 

The October number is at its lowest point since 1998.

Predictably, the trend line for ABA applicants echos the trend line shown for LSAT tests administered.

The third trend line surprised me.  It represents first-year law students.  In 1968, about 30,000 applicants actually matriculated. The number rises to about 40,000 in 1974 (post-Watergate?), stays relatively flat until about 2001, rises to about 50,000 first-year students in 2001, and continues to rise to about 58,000 students in 2010, until it drops suddenly.

So, yes, we have seen cycles of high and very low volumes of applicants to law school for the last 45 years.  However, the troughs may be extending in length. Arguably we are in year 3 of the most recent trough.  But, will it last five years like the last one or be even longer?

The October LSAT 2013 test taking numbers suggest that we have at least another one or two years in the trough before we can hope to see any rise in interest in law school.  As noted above, the second historic cycle hit bottom in about 1996 and stayed static until 2001.

Also, this last downturn comes after all-time highs in LSAT tests administered and available law jobs.  So, it feels steeper and more threatening, especially because so many new law schools came on line during the period of growth of LSAT tests administered from 2002 to 2008-2010.

In my next blog, I'll discuss the LSAC data on changes in law school applicants for Fall 2012 to Fall 2013 by geographic region.  It raises more questions than it answers, but you will find it interesting.  

I expect to talk with some folks at LSAC today (Nov. 8) to ensure that my interpretation of the graph is correct.  So, I may need to revise some of the specific years mentioned, but the overall discussion will likely stay the same.

Dec. 14, 2013 Update:  LSAC has provided data for 2010 to 2014, with a projection of a little over 51,000 applicants for 2014.