December 22, 2011

What's Wrong with the Law Schools

By Frank J. Macchiarola and Michael C. Macchiarola

Lady Justice.jpgAs law schools have come under fire on many fronts, the growing cost of tuition has drawn the most attention.  This is not surprising, given the shrinking job market for lawyers and tuition increases that have far outpaced the general cost of living for more than two decades.  Put directly, one of us, a pre-law advisor (Frank), tells students that if they can't afford the cost of a legal education, without loans, they should think about other careers.  This is generally a painful conversation, but we strongly believe it is an honest one, particularly given the lower-middle-class economic status of most of our students.  Debt is choking too many recent law graduates, bringing anger and unhappiness into their lives.  Further, the monopolistic structure surrounding access to the legal profession, largely a result of the ABA's law school approval process, denies many the chance to become lawyers.  Within the last week, another law school was denied provisional accreditation, for reasons unspecified publicly, but probably due to the failure to meet standards that would have required greater financial investment (and hence higher tuition) in the enterprise.

For the other co-author (Michael), teaching Friedrich Hayek's "spontaneous order" each spring in a law school classroom is incredibly ironic. Today, the American law school itself is anything but the product of a free market, where orderly structure results from the aggregate action of individual consumers.  Instead, today's legal academies are increasingly the handiwork of overzealous regulators, compromised faculty and a confused federal government.

In a recent New York Times article, reporter David Segal explores the effects of the standards imposed on legal education by its "government-anointed regulator," the American Bar Association.  Segal sheds a good deal of light on the confusing and ill-conceived maze of regulations that the ABA requires of the schools it accredits.  Most notably, the article asks whether the ABA's insistence on a one-size-fits-all brand of legal education -- to the virtual exclusion of alternative forms -- has impeded true competition.  The only honest answer to this is "Yes."  When competition is stifled, the results are terrible.  ABA-accredited law schools are regulated right down to the number of minutes students must spend in the classroom.  As Michael observed in a recent article, "such uniform requirements leave substantially diminished room for price differentiation, effectively forcing all consumers to purchase the luxury model."

Aside from burdening law students with higher costs, this structure has proven particularly unfortunate for those who need a reasonably priced legal service.  While today's homogenized "luxury model" of law school includes lighter teaching loads, an unimaginative curriculum and cushy facilities, those "improvements" have all been bought and paid for by runaway tuitions.  To absorb the cost, the federal government has ensured free-flowing financing for the better part of two decades.  Government efforts to grant students "access" to a law school education are showing signs of strain.  And, there is evidence aplenty that, for too many law students, a debt-financed education represents a stifling encumbrance, instead of the great investment that society's common sense has long advanced.  More and more, newly minted attorneys simply cannot afford to provide reasonably-priced services if they plan to meet their incredible debt burden.

The ABA is certainly not the only culprit in the strange brew that defines the shape of today's schools.  In addition to the barriers created by the accreditation process, the law school's generally universal non-profit form and its governance structure have resulted in faculty capture, allowed schools to make non-economic decisions and discouraged behavior responsive to the needs of the school's students.  As we suggested in a piece here, law school debt has been abetted by destructive federal education financing policies that have "irresponsibly driven students into significant debt assumption."  Finally, in recent years, the proliferation of law-school rankings has only discouraged innovation and rewarded non-economic behaviors at the individual school level.

Like Segal, many have diagnosed a problem, but fewer have offered a prescription.  Undoubtedly, any serious reforms must bring with them the attributes of a free market.  Namely, reform must concentrate on delivering value to the student consumer.  And a certain amount of discomfort is likely to result for certain constituencies in the process.  Meaningful improvement can come in several flavors.  Below, we highlight four possibilities that deserve serious consideration.

(1)   1) A two year offering.  The third year of law school is not really necessary for lawyers.  In fact, since the admission process permits practice in all areas of law, a two-year program could be shaped to meet practice areas where lawyers might choose to specialize.  The "one size fits all" approach is costly and reform would be significant.  And since prospective attorneys must pass the required bar examination, many of the ABA-mandated protections aimed at ensuring proper training are unnecessarily duplicative.

(2)   2) Distance learning.  Distance learning offers many possibilities in terms of cost savings and curriculum expansion.  So far the ABA has been hesitant to embrace this innovation in any meaningful way.  Other professions are embracing approaches that save students time and money.  Law schools should do so too.  This is particularly so when schools in some parts of the country are far from student populations.

(3)   3) Getting back to apprenticeships.  In the 19th Century and into the 20th, many lawyers earned their place as members of the bar though a system of apprenticeship.  The reconsideration of such a system of outright apprenticeship (or at least some hybrid form) would be very critical in breaking down the virtually limitless capacity of law school professionals to define standards and ward off competition in the marketplace.  It might also make law practice available to those otherwise barred by tuition costs.

(4)   4)  A derivative solution.  While financial derivatives have proven a convenient boogeyman in our latest economic downturn, their application in the student-loan market could go a long way toward aligning incentives.  Financial derivatives could be employed to tie costs of law school to the projected outcome of the student.  In essence, the structure would allow students to gain forgiveness from a portion of their loans after a pre-set period of time if the student's earnings fail to exceed accepted benchmarks.  Because the school might ultimately be on the hook for repayment, costs would not routinely be passed along to the student unless they were likely to return commensurate value.

While by no means offering an exhaustive list, the point of this short piece is that there is no shortage of proposed solutions to what ails the law school.  These improvements have been discussed for quite a while.  Yet, progress has been too slow.  It is high time that the real experimentation begin in earnest.  For the legal academy, no goal is more important than ensuring that the ability to educate and train fine lawyers long endures.  In short, In the words of Felix Frankfurter, "The law is what the lawyers are.  And the law and the lawyers are what the law school makes them."

Frank J. Macchiarola, Chancellor of St. Francis College, is the former Dean of Benjamin N. Cardozo School of Law. Michael C. Macchiarola is a Distinguished Lecturer at the City University of New York.

Comments (1)

Jonathan Rodney:

Prospective lawyers in New York do not need to graduate from law school to take the bar exam. New York already has the hybrid apprenticeship system advocated in the article. A candidate can attend law school for one year and apprentice in a law firm for an additional three years before taking the bar exam. The perplexing thing is that the authors of this essay, who are both New York lawyers, do not seem to know this. They are not the first I have heard to advocate an apprenticeship system without realizing that we already have one.

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Published by the Manhattan Institute
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