Law school is not a “scam” but you don’t want to end up like Liz Wurtzel

Introduction

The law school is a “scam” argument depends, in my view, on some tendentious ideas. A “scam” implies that law schools take people’s money and leave them with nothing. It is a serious charge. It is in my view unsustainable. It appears to depend on the idea that law schools bore some responsibility for the sudden and unpredictable collapse in the job market in post-08 period. But there is no disclosure language or data I am aware of that could have been provided to law students in, let’s say, 2006 that would have allowed students to plan for the waterfall towards which they were headed.

How did we get in to this situation? Some say it began with Washington University School of Law Professor Brian Tamanaha’s bracing call for change on the Balkinization blog in the summer of 2010. Let’s examine that and see if we can sort all this out.

The Tamanaha Manifesto and the Rule of Law Debate

220px-LuckyJimIn his manifesto for the reform movement, Failing Law Schools, Tamanaha described in absorbing detail many of the shortcomings of American law schools, without a great deal of attention to the important accomplishments of the institution unfortunately (including, it should be said, Tamanaha’s own work on the rule of law). He might even be our Kingsley Amis absent, sadly, the brilliant satire. But Tamanaha relies on very generalized data sets that do not provide persuasive evidence of misbehavior by any individual school, fails to test for counter-factual explanations, and draws conclusions that are only one among several possible explanations for the current situation.

In light of Tamanaha’s own conservative perspective on legal theory – one that I disagree with but view as articulate and informative – one consideration is that there is an ideological agenda at work here. A reshaping of American law schools along the lines suggested by his book would do a great service to American capital, which despises in many ways the legal profession and even the rule of law as it has evolved since the New Deal. Under tremendous economic pressure, capital is looking for ways to cut costs. A successful assault on what are viewed as costly and entrenched law schools would help tremendously in the battle against law firms and the courts as a whole.

Why might Tamanaha be willing to aid in this fight? It is not necessarily the case that he would do so with intent, though I do not rule that out. Among many other issues, Tamanaha’s work on the rule of law considers carefully the relationship between property rights and the state. That is a traditional concern of conservative figures like Hayek and Mises, whom Tamanaha clearly admires. But a problem with this approach is that those figures never dealt adequately with the impact of the transition by the 1930s from property to capital. The end of the Lochner era produced a traumatic ideological crisis within classical American liberal thought (what many now think of as conservatism).

Why, exactly? When property becomes capital, that is, when it employs labor to produce surplus value, two souls in the rule of law emerge. One guards narrow conceptions of property rights against intrusion from the state, what might be called the classical concept of the rule of law. The other soul that emerges, however, is a social concept of the rule of law that guards the human rights of labor against intrusion by capital and its allies in the deteriorating aristocratic classes – if we are talking of Europe and England – and its allies in the new managerial state if we are talking about the New Deal United States. An excellent introduction to one example of the social concept can be found in the work of Katherine Stone of UCLA here on industrial pluralism which represented the creation of a social rule of law in the workplace. I relied on similar arguments here.

But for today’s conservatives this second soul of the rule of law, one that guards social rights against the encroachments of both capital and the state is a form of legal pathology. Union busting that would return us to the world of Say’s Law is the order of the day. Tamanaha takes an axe to the world of law schools with an argument that echoes these most reactionary calls to smash organized labor. Hence, the strong interest in his work on the very conservative right.

[And thus it is not a surprise that soon after this piece was posted here, the "good cop" of the reform movement, Tamanaha, appeared on a panel with their "bad cop," Paul Campos, at the anti-union Koch Brothers' Cato Institute. The description of the Tamanaha/Campos duo as the "good cop/bad cop" element of the Law School truthers was made by the Cato Institute moderator and not contested by either individual.]

Tamanaha’s misstep in this setting is that he promotes a unitary view of the rule of law rather than explicating its two souls. This is most clear in his brief but admirable treatment in On The Rule of Law of the important statements about the rule of law by the late British marxist and historian E.P. Thompson. Tamanaha paints Thompson as an outlier on the left because of the hostile reception of his work by what Tamanaha calls the “far left.” By that he means Morton Horwitz, above all, who attacked Thompson in a famous book review. But Horwitz, of course, is hardly a representative figure of the left. He is representative of the CLS movement, of course, and they are, in turn, one offshoot of an authoritarian strand in New Left era thinking.

But as I have exhaustively explored on this blog and elsewhere no one should mistake the authoritarian left for the left as a whole. Thompson, on the other hand, was representative of, and played a leading role in, creating the anti-authoritarian left of the late 20th century. This left, not the caricature left of the CLS’ers, has played a critical role in the success of Polish Solidarity, the rise of a new labor movement in China and in less visible forms in the overthrow of Latin American dictatorships as well as South African apartheid. Thompson personally was a leader of the very important European Nuclear Disarmament Movement, END, in the 1980s which played a critical role in establishing relationships across the Iron Curtain against militarization of Europe.

In my view Thompson’s work – as a whole, not just his essay on the rule of law – can only be understood fully if situated within the context of this real world movement of democratic social power. This movement is one that can trace itself back to the era of the Black Act that set the stage for Thompson’s assessment of the rule of law but which takes on greater import in the era of capital. One of its goals is the emergence of a social (though not socialist) soul of the rule of law.

With only the traditional unitary theory of the rule of law to work with, of course, Tamanaha is less well equipped to deal with the complexities of the era of property as capital, of power that is defined by class conflict over the production of surplus value. It is possible then that this approach creates a kind of intellectual blind spot that may have allowed him to go down the path he has taken.

For the modern law school is in itself a microcosm of this same socio-economic problematic and to ignore the dualistic nature of the rule of law is to misunderstand the important contribution of the law school itself to the rule of law. As the Appellate Division of the New York Supreme Court reminded us very recently when dismissing charges of employment statistics fraud against New York Law School: “In the last analysis, the law is what the lawyers are. And the law and the lawyers are what the law schools make them.” (Letter from Felix Frankfurter, Professor, Harvard Law School, to Mr. Rosenwald 3 (May 13, 1927) (Felix Frankfurter papers, Harvard Law School library), quoted in Rand Jack, Dana C. Jack, Moral Vision and Professional Decisions: The Changing Values of Women and Men Lawyers 156 (1989)

What then does Tamanaha say caused our law schools to fail?

The Law Schools’ original sin?

To my mind, while the book covers a range of important issues, the heart of his argument can be found in a graph that makes up Figure 6.1 in the book. If a crime is to be found it would seem that this graph is Tamanaha’s smoking gun. The chart is derived by Tamanaha himself from data provided by the LSAC and the ABA. (I use here only LSAC data which varies slightly from the ABA numbers.) While Tamanaha claims that law schools “created a systemic mismatch” (emphasis added) between graduates and jobs, it is not clear to me that is true from the data that underlies his graphic depiction of the crime. And if Tamanaha cannot show this mismatch then a huge hole opens up in his claim that law schools are failing because the revenue based motivation for that failure dissipates. (I find the 1990s data he presents even weaker and certainly less germane so I am skipping over that here.)

I believe that it has been my emphasis in the recent blog war on the correlation between applicants and jobs, on the one hand, relative to the wider economic problem, on the other hand, that has created such a stir. It suggests a different explanation. It may or may not be right, although I think it is, but what the “scam” crowd fears the most, and what they have gone out of their way to prevent through mob behavior on the web, is even the suggestion of a credible alternative theory. (I should point out that Tamanaha himself has not engaged in such behavior.)

According to the LSAC, for example, Applications increased 9.5% in 2003 but Admits only went up 0.6%. No opportunistic yield management there. When Applications increased only 1.1% the following year Admits dropped 1.6%. While the next four years saw a steady drop each year in Applicants from from 95K in 2005 to 83.4K in 2008, Admits remained flat or slightly negative.

This might suggest opportunistic yield management in order to avoid cutbacks as Tamanaha concludes with alacrity. But consider why the number of applicants was dropping. Was it because the economy was weak and students were reluctant to take out large loans? In fact the economy was booming as what we now know as a credit bubble looked to everyone outside of a few sceptical hedge funds like a robust global economy. Any member of a board of trustees who heard a proposal from a law school dean in 2006 to reduce admissions likely would have asked for that dean’s resignation!

As reality set in, the actual numbers of applicants nationwide, counter-intuitively, increased in 2009 and 2010 as students looked to hide out in law school. The jobs that were available due to a real estate induced bubble in 2007 had gone up in smoke and there was no place to go but graduate school. After hitting a low of 83.4K in 2008 the Applicants hit a five year high of 87.9K in 2010.

In these two years, there does appear to be a disconnect between the increase in Applicants relative to the increase in Admits. But it is small. There is an absolute 1.3% surplus of Admits above Applicants in 2009 and 2.0% in 2010. The number of first year enrolled students increased in 2009 from the previous year by, wait for it, 2,200 students across 200 law schools nationwide, a staggering increase of eleven (11) per school. The next year the number jumps by fewer students, only 900, an additional 4.5 students. While Tamanaha claims a sinister motive of schools to bulk up when they can take advantage he misses the fact that they grow only slowly but cut back harshly. The next year, enrollment dropped by 3,800 students, or 19 per school.

There is no breakdown here of the data, among schools or discussion of the complexities of the yield management process. There is no indication of the impact of new law schools such as UC Irvine that have come on the scene recently. Because the numbers are small it is possible that completely appropriate individual decisions at a small number of schools explain the disconnect. It may have happened at large public schools facing budget crises. It may have happened at the newer for profit schools. Nor is there any comparative analysis here. What was happening, for example, at other professional schools during this same period?

Moby-Dick-3Or is our Ahab unreasonably committed only to finding the one white whale out there?

As for possible alternative explanations for generalized behavior across the law school environment, there would seem to be several possibilities. After many decades of feeling pressure to widen enrollment in order to meet labor market demand and help improve diversity in the profession it is a tough decision for an institution to block the school house door. After all we could very easily solve the so-called “oversupply” problem by returning to the days of The Paper Chase (“Loudly, Mr. Hart!”), where women, blacks and Hispanics were a “discrete and insular minority” among law students. Professor Campos of the University of Colorado, who maintains a website called Inside the Law School Scam, seemed to go so far as to endorse such an approach, at least with respect to women.

Two other factors were at play: an aggressive macroeconomic policy certainly well outside the control or influence of law school admissions officers which resulted in low interest loans and a sense that perhaps the crisis was not as bad as it seemed, or at least would not be as prolonged. Indeed two prior economic meltdowns, the dot com crash of 2000 and the real estate/LBO crash of the early 90s were less severe and turned around reasonably quickly.

Where is the counter-factual?

Only a thoughtful counter-factual analysis could help sort this out – what would have happened in the absence of the unprecedented volatility of the last five years?

I have been studying the capital markets, as well as the financialization and fictitious capital phenomenon, for over a decade. I was a founder and participant beginning in the late 90s of a group of academics and activists called “Meltdown” which studied the growing disconnect between financial instruments like mortgage loans and the underlying growth of the real economy. I gave a talk on the crisis in the fall of 2008 where I backed the Bush proposed infusion of cash into the banking system and suggested dire consequences if the state did not step in with unprecedented policy measures. Despite all that background and, dare I say it, perhaps a perverse desire to see what might happen if my research ideas about the problems of the capital markets played out in the real world, you could have knocked me over with a feather then if you told me the entire world would be threatened by the crisis with countries like Greece going up in flames.

OLYMPUS DIGITAL CAMERAIs the Law School is A “Scam” crowd really going to claim that admissions officers or law school deans (perhaps too few of whom have business law backgrounds) should have called a “top” in the world economy and cut law school class sizes by 15%? Did Campos or Tamanaha issue early warning calls? Just today Campos crows that the earliest warning his side in the debate gave was a blog post by Tamanaha in the summer of 2010. Wow, prescient. By then the shorts had all covered and retired to Ravello.

In any case, it was at that point that law schools started admitting far fewer students – was it Tamanaha or the law schools themselves that realized that the problems in the economy were not going away? Only careful survey research of faculty and university decision making can settle that causality question. Tamanaha chose not to do that work but to rely on broad brush statistical material and anecdotal information that in fact allows us to come to several possible explanations for the situation we face.

Beware hindsight bias  

One must be careful in other words, of the power of hindsight bias. It is similar to the problem of asking courts to assess the impact of corporate risk management programs after a crisis engulfs a company. It is challenging to ask what the world looked like at the time the decisions were made. This is not to excuse the possibility of fraud, which sadly has hit some law schools. But it cautions against painting with a broad brush. Careful econometric work with the data of individual law schools might show other possibilities, but my intuition says that that would lead to a non-result.

For example, ABA Applications also increased in 2009 and 2010 and at a higher rate than the number of applicants, admitted students or enrolled students. That is a reflection of law school applicants’ collective choice to apply to more law schools. It is not easy to see how individual admissions teams can be blamed for the effect that had on increased enrollment. That two year blip up is blamed by some on allegedly false or misleading jobs data on law school websites. But was the data any less misleading in 2005, 2006 and 2007 when the number of applications declined?

When applications dropped off in 2011, as they have again this year, so did admissions and enrollments. Schools responded to the rational decisions of college graduates to look to other career choices. I certainly know that at my law school there were several opportunities where the school could have increased class size substantially in response to banging on that door. Tamanaha’s charge of widespread yield management abuse across the law school world seems unpersuasive.

Read Liz, Listen to Felix

UnknownIn the Albany Law School case where the New York Supreme Court recently dismissed another disclosure action by a disappointed student they made the important point that students bear some responsibility for engaging in due diligence in order to determine whether law school is the right choice.  The writer Liz Wurtzel is likely not the only person to ever to law school on a lark but in a widely discussed essay she was brutally honest recently about the potential downside of that approach even if one casually enrolls in a top tier school.

My own view is that college graduates need to take a page out of The Social Network when considering an application to law school: as simplistic as it may sound, imagine you personally are a potential startup and you have a chance to invest a significant amount of time and money in adding to its human capital. Are you ready to drop everything and move to Palo Alto? There are risks and rewards. The law school, its faculty, and its alums may all be able to add useful information to your analysis. In the end, though, it is your decision. Will you be better off than you would be without a JD? In many cases, perhaps most, I think you will be. A JD is a powerful degree to have in our kind of society and despite the current mismatch in the job market a relatively rare one.

Nonetheless, even with a view that prospective students must become actively engaged in the decision, when the Appellate Division of the New York Supreme Court recently dismissed the claims of students that New York Law School had used misleading employment statistics it added an important gloss to the discussion. It issued a stern warning about the ethical responsibilities of lawyers and law schools:

“We are not unsympathetic to plaintiffs’ concerns. We recognize that students may be susceptible to misrepresentations by law school. As such, ‘[t]his Court does not necessarily agree [with Supreme Court] that [all] college graduates are particularly sophisticated in making career or business decisions’. [cite omitted] As a result, they sometimes make decisions to yoke themselves and their spouses and/or their children to a crushing burden because the schools have made misleading representations that give the impression that a full time job is easily obtainable when in fact it is not.

“Given this reality, it is important to remember that the practice of law is a noble profession that takes pride in its high ethical standards. Indeed, in order to join and continue to enjoy the privilege of being an active member of the legal profession, every prospective and active member of the profession is called upon to demonstrate candor and honesty. This requirement is not a trivial one. For the profession to continue to ensure that its members remain candid and honest public servants, all segments of the profession must work in concert to instill the importance of those values. ‘In the last analysis, the law is what the lawyers are. And the law and the lawyers are what the law schools make them.’…Defendant and its peers owe prospective students more than just barebones compliance with their legal obligations. Defendant and its peers are educational not-for-profit institutions. They should be dedicated to advancing the public welfare. In that vein, defendant and its peers have at least an ethical obligation of absolute candor to their prospective students.

[Emphasis in original!]

My guess is that absent actual fraud other courts in actions of this nature will follow the lead of this opinion. But law schools and law professors must absorb the import of those last two paragraphs in the opinion.

What was the alternative?

There was nothing I can think of that law schools could have done in 2006 to warn aspiring lawyers about the crash of 2008. An argument that law schools “should have known” the good times would not last forever reminds me of the old saying that a broken clock is right, twice a day. There is zero chance that a large complicated bureaucracy, which the modern university has become, can turn on a dime in response to vague fears of a future calamity.

But if law schools are worth their salt as academic institutions, and I believe their place in the university setting must remain secure, they should be able to learn about the nature of their profession and implement change as needed to respond to the demands of that profession.

The simplistic calls for a two tier, Big U/community college style system strike me as deeply problematic. Many law schools already rely heavily on adjunct teaching by local lawyers and judges that often brings valuable real world experience on to the campus but can also lead to concerns about teaching style and grading patterns. Despite what the academic critics say, there is an art to teaching well and it is not an art that all possess or can easily learn, particularly after a 60 hour week at the firm. There is certainly no way that most adjunct style teachers can engage in research or theoretical work which is the real value added, that should be added, by having tenure track faculty in the classroom.

That points as well to the pressure aimed at forcing law schools to substitute for early training by law firms. That requires expanded clinical and experiential learning programs. Most law schools have such programs and have indeed bulked those up in response to those pressures. But those programs are by their nature expensive and require very small faculty-student ratios, precisely the opposite direction that most reformers think schools ought to go. Thus, the law school becomes a horse with two heads.

A return to the rule of law

This points to a final problem with the approach of Tamanaha, one that returns us to the rule of law debate. In my view the secure place of the law school as an academic field is, to borrow now E.P. Thompson’s comment on the rule of law, an “unqualified human good.” The twin pillars of tenure and academic freedom secure that place for our field. This has a larger impact, as it provides a social good of the kind suggested by the New York Appellate Division in the New York Law School case. The relative autonomy that academic freedom and tenure establish for law school faculty signals the autonomy of the law itself. The value of this autonomy may be as simple an example as explaining to law students why they should rise to attention when a judge walks into her courtroom. Or it may be evident when a professor confronts a topic as sensitive as teaching Heller in the wake of Newtown.

And while that may seem to be a return to an outdated formalism, we all know how vital this cultural autonomy of the faculty is to the project itself. Yes, there is a danger of abuse of the privilege, but as Tamanaha admits there are sources of “leverage” that deans have to deal with those abuses. There is some evidence that Tamanaha has reminded deans of that leverage and that is likely a good thing.

What Tamanaha thinks is “differentiation” – to substitute for what he seems to think is a homogenously troubled environment today – is really an invitation to allow market forces to create a race to the bottom. This is because it is much harder to sustain that autonomy when one weakens or eliminates the protections of tenure and academic freedom. To do so is to let the pressures of the market intrude when, as the New York Law School court said, law schools are educational non-profit institutions and “they should be advancing the public welfare.”

Our thinking must be far more creative and nuanced. It is entirely possible to create structural solutions, to alter the curriculum, to increase diversity within the faculty (with respect to both ideology (something that gets too little attention) and with respect to identity), within a system that respects protection for faculty to pursue ideas in teaching and research freely.

Many schools are engaging in reform. Stanford recently shifted to a quarter system to allow easier collaboration with the rest of the university. This also opens up the possibility of shorter courses that can be targeted to particular needs. From my own experience in advising students in our JD/MBA program the potential advantages of that kind of shift are significant.

Law schools need to be closer to the profession as well, particularly in settings outside the traditional chats with hiring partners at major firms. Deans must bring back to the faculty their experiences in the field to help fuel the internal discussions about innovation. This requires more robust use of the system of shared governance that should steer colleges and universities.

There are two macro trends impacting law schools today that schools must confront. First is the one that I have focused on in the recent debate, the deep financial and economic crisis. A second longer term but less visible trend, however, is the technological and institutional change underway in legal practice. Firms seem finally to be getting smarter about hiring, after suffering traumatic downturns twice in the last decade. The era when BigLaw firms could generate huge leverage hiring lots of first year associates, most of whom would quickly be burned out or turned off by the drudgery of some aspects of corporate practice, may finally be over.

Wurtzel caught the reality of this drudgery quite well in her New York magazine essay:

“[M]ost people who think they are practicing law are actually making binders, and my guess is that most people who think they are doing whatever important thing they are doing are making binders. The binders from law firms go to a locker in a warehouse in a parking lot in an office park off an exit of a turnpike off a highway off an interstate in New Jersey, never to be looked at again. No one ever read them in the first place. But some client was billed for the hourly work.”

(It should be said, however, that Wurtzel says she loved being in law school, but then again she didn’t really go to law school, she went to Yale. And although she had a terrible 2012, her essay ends on a positive note.)

How can law schools respond?

Tamanaha complains about walking through the hallways of his first law school only to find no one at home. Perhaps they were, in fact, malingering. But he should try finding a business school faculty member in their office. And I can assure him that they are not malingering. If they are not in the classroom or at scheduled office hours they are meeting with business leaders conducting research. A similar situation can be found in the sciences. Faculty may not be in their offices outside of office hours but they are not malingering either, they are in their labs.

That suggests to me two other ways to think about the problems we face: both business schools and the sciences offer some interesting alternatives. The business schools do a very good job of staying in touch with their major external constituencies and not just at the Administration level. Faculty are involved in a variety of projects with those groups on a regular basis. While there have been some important critiques of this revolving door it has important advantages, too.

Business schools also seem to be able to make the kinds of revisions to internal structure that are needed in their field. Because business itself must be nimble to survive so too must the business schools. But it is not enough for law schools to blame their sluggishness on the stodgy behavior of law firms. And certainly today no one thinks that law firms can remain content with the old way of doing business.

The sciences offer another model: research groups.  A senior scientist has a lab made up of his graduate students and a number of permanent academic staff. The students get real exposure on a regular basis to ongoing research projects. This is a vital supplement to what is going on in the classroom. Some law schools have already taken this approach on board. It is easier to do at major research universities, of course, where specialists in IP or bio-ethics can join hard science teams. While at top tier schools joint authorship of research papers with students is occasionally found and research assistants exist at many levels within the law school world, a lab or research group approach would be more collaborative and impart important skills to students.

Our Social Contract

Neither of these approaches in the sciences or the business school environment is inconsistent with tenure and academic freedom. In fact, I would argue that those rights lay the groundwork for the success of these models. They provide the fundamental barrier required between the academy and the pressures of the wider world. While the academy must be responsive to that external environment, it must not lose its autonomy. Only that independence insures that genuine freedom of thought can develop because the university retains some distance from the pressures that face businesses, courts, agencies, non-profits and other organizations.

The university has entered into a social contract of sorts with society as a whole: academics accept lower salaries than can typically be found in the private sector in return for a commitment to train the next generation of our society while attempting, as well, to generate ideas about, and solutions to, important and even not so important problems.

It is true that this endeavor, at least the attempt to find useful ideas and solutions, is a hit and miss affair. It is true that only a handful of academics will ever produce work that secures a MacArthur fellowship or a Nobel prize. But there is a reason that American universities are the envy of the world. And there is a reason American law schools have assumed a leading role in spreading concepts like democracy, human rights and the rule of law in the post Cold War era.

While there are certain aspects of Tamanaha’s critique of this effort that ring true (see his “Dark Side” article, for example), it is also the case that the United States has long protected and nurtured, in ways that other countries deeply envy, what we call “intellectual capital.” Our universities are a vital part of an ecosystem that allows thousands of smart creative people the time and space to come up with new ideas, new solutions, and new problems. The legal culture as well as academic culture is a vital source of support for this effort.

Thus, when I hear the kinds of reactions among law students that I have heard in the last few days as I entered into discussion and debate about the law school environment, I become concerned that a new form of “anti-intellectualism” is taking hold.

I can understand the anger and anxiety induced by the ongoing economic meltdown but it is precisely at this point that we must resist the pressure to sacrifice the place of the university in our culture and as well the place of the law school in the university.