Justice Scalia throws red meat to law school critics

Relying heavily on some of the more data challenged members of the law school critics’ camp (see here and here) and ignoring the only serious study of the long term economic value add of a JD, conservative Justice Antonin Scalia made headlines this week for a relatively moderate law school commencement speech. Frankly, it came across as closing the barn door after the horses had escaped.

One of the two main themes of the speech was his view that a two year JD does not make sense. Quite sensibly he points out that the three years is critical to preparing young people for a lifelong profession. While reasonable minds can differ on his view that the curriculum has become too diverse, he is certainly on to something when he suggests that we think carefully about sacrificing “legal learning” for other reforms driven by short term market considerations. As someone who teaches bread and butter corporate law courses like securities regulation and corporate finance, I certainly wonder how these can be taught if students must use up their only time in law school to take bar tested courses.

In other words, it is a mistake to think narrowly about complex economic considerations. That means, of course, that universities have an obligation to step up and defend the place of law schools as part of their institutions when they are under economic pressure. As it is only sensible to conclude that the current downturn is cyclical not structural that view also happens, happily, to coincide with the economic rationale of law schools.

That important point is lost on the critics of course, and, unfortunately, seems to have eluded the Justice as well who makes the high cost of law school the second theme of his remarks. The critics do not seem to realize that it is expensive to create an effective modern law school. The actual cost of doing it right is vastly underestimated. At HYS for example sticker tuition is now north of 50K per year but that is, as far as I can tell from publicly available information, about one third of the actual cost spent per student each year. Other lower ranked schools have to try to get the job done with far less, of course, and most are effective in doing so. But it is no surprise, is it, that the schools with the most resources continue to dominate in the rankings?

This cold economic reality has not stopped the critics from seizing on the few morsels the good Justice threw out to the parents who have already spent significant sums on their childrens’ educations. He suggests that cost cutting may have to lead to lower salaries for law faculty. There is little in depth analysis here, however. And that may be because even critics acknowledge that cutting faculty salaries would have little more than symbolic impact on the cost picture.

Far more important in the cost structure has been the riskier bureaucratic trend found across academia of beefing up the hiring of all sorts of “academic staff” who help lower faculty-student ratios and boost per capita student spending but may be doing very little to improve educational outcomes. At the same time these efforts dilute heavily the academic and policy impact of traditional tenure track faculty. This is great for deans and provosts and presidents who like to have chess pieces they can move around – something of a challenge when it comes to tenure track faculty. But the value to the profession of law is very much more in doubt.

Scalia ignores as well the logic of the faculty labor market. Critics love to claim that faculty salaries can be lowered because current faculty are not as mobile as is sometimes thought. But that focuses on the wrong issue. Indeed as any experienced faculty member can tell you (and as some of the law school critics no doubt know themselves) the only leverage you have with a dean or provost is the threat to leave for a competing school. When I was engaged in negotiations to become the CEO of a large non-profit some years ago (at a salary more than 3x my faculty salary) I certainly was not operating under the illusion my University would try to match it.

What will keep current faculty salaries relatively stable and motivate movement in the direction of other cost cutting measures to deal with the downturn – and in fact already has at many schools – is that universities have longer term concerns. They may not have to be too anxious about keeping current faculty unless a competitor comes calling, but they do have to think about future recruitment. At some tipping point it will be more attractive for top tier faculty candidates to stay in the private sector. The fall off in top tier law school applicants noticed recently suggests this may already be an operative factor.

A second consideration for universities is that once the current cycle is complete, as has happened several times in the last thirty years (recall the prior cycles associated with the real estate crisis of the early 90s and the dot com crash in 2000-01), law schools will once again generate significant net earnings for their campuses. That comes both in the form of current tuition flows as well as future donations. The per capita dollar value of a member of a professional school will always be far higher than that of the English department (of course, it must be granted that indirectly that is not a completely fair view as it is helpful if students come to law school knowing how to read and write). That is one reason why even while they are an expensive investment it remains rational for universities to have professional schools.

It is also worth noting that Justice Scalia, a captive perhaps of the beltway, ignores the structure of one of the country’s largest legal markets – California. We already have here a multi-tier legal education market with faculty salaries that match. And, in fact, aspiring lawyers are free in this state to not attend law school at all, thus not helping pay any faculty salaries. They can – and some do – apprentice and then sit for the bar exam. And we allow JDs who do not attend ABA accredited schools to also sit for the bar. The interesting result of this experiment is that most of those students with the highest test scores and grades still flock to the highest ranked schools with – wait for it – the highest faculty salaries!

Certainly that suggests that one lesson of this tempest in a teacup that we have called the law school crisis debate is that aspiring JD’s are far more thoughtful about what choices they are making than we give them credit for. Getting caught in a 100 year economic storm was not something they had counted on, of course. That is why it would have been a far better expenditure of the critics’ time to agitate for debt relief and innovative training programs to bridge the gap between the graduation dates of recent JDs and an economic recovery.

Given all of this, I do wish Justice Scalia had cast his intellectual net a bit wider than friends of the Cato Institute when crafting his recent remarks. Well, at least he kept it short.