Friday, July 22, 2011

Summarizing the Law School Scam--a comment I posted at the ABA Journal in response to an article.

Here is a comment that I posted at the ABA Journal in response to the article itself and to another poster's comment.

Zack, ABA Respond to Grassley Inquiry: Schools Aren't Misleading Scholarship Students

In response to Marcia's post, it's very possible that far fewer than 50% of all new law school graduates are able to find jobs in the legal profession. In fact, using the ABA's statistics for the number of new JDs minted every year and summing up the number produced over the past 40 year period and comparing that to the Bureau of Labor Statistics's number of people employed as lawyers, I have calculated that fewer than 54% of all JDs produced over the past 40 years work in the legal profession (at jobs of unknown quality, many of which may not provide compensation and actual after-tax wages commensurate with 7 years of college education and the costs of attending law school--solo practice, document review, "shitlaw", etc.). See:

Statistics suggest that only 53.8% of all lawyers are employed in the legal profession

I have also constructed a model and made some back-of-the-envelop calculations to show that the percentage of recent graduates who were able to find work in the legal profession may even be less than 30%. See:

Statistics may suggest that less than 30% of all new JDs were able to find work in the legal profession over the past 10 years.

The general public is unaware that a serious humanitarian crisis is occurring in the legal profession. Tens if not hundreds of thousands of recent law school graduates have been unable to find work in the legal profession while being burdened with often over $100,000 and in some cases even over $150,000 of law school loan debt (tuition + living expenses) without even considering undergraduate student loan debt. This debt cannot be discharged in bankruptcy. Because the general public believes that all lawyers are rich, unemployed and underemployed-involuntarily-out-of-field lawyers look like huge losers to non-legal employers, and as a result they often have difficulty securing non-legal white collar employment because they are perceived as being overqualified, as being losers who couldn't make it in a profession where everyone is guaranteed to rake in gobs of money (as the general public believes), or as being a job flight risk (leaving as soon as one of those abundant $160,000/year entry-level jobs comes along).

In short, many new JDs' lives have been almost completely destroyed by JD overproduction. In my opinion, this sort of economic devastation--unemployment, underemployment, and the poverty brought on by non-dischargeable student loan debt amongst otherwise hard-working, ambitious, well-meaning, often highly intelligent young people is a national tragedy and humanitarian crisis. It is very probable that some of these poor souls, drowning a deep sea of despair, even commit suicide.

JD overproduction appears to have began in the 1970’s and has continued unabated through present times. See:

40 Years of Lawyer Overproduction, a Data Table, and 2 Charts

The ABA and the Federal Government need to address this crisis. I propose reducing the number of law schools or law school seats in this country by 75% until 95% of JD-holders can obtain work in the legal profession that provides remunerative compensation commensurate with the investment of time and money in becoming a JD.

The recent must-read New York Times article by David Segal (Law School Economics: Ka-Ching!) said that 49,700 law students matriculated according to the Law School Admission Council:

Law School Economics: Ka-Ching!

At that rate of production, we would have almost 2 MILLION (!!!) JDs who would be of working age in 40 years. If we cannot employ (as working lawyers) the (about) 1,467,000 JDs who graduated over the past 40 years, how the heck are we supposed to employ 2 million JDs? In fact if the amount of new JDs produced each year continues to increase as new law schools (university cash cows) continue to open, we may reach the 2 million mark sooner rather than later:

2 million attorneys?

2 million attorneys?  Not as far-fetched as it might seem

Hopefully Congress and the ABA will act to end this humanitarian crisis before more bright ambitious young people (who have been heavily and continuously indoctrinated with the propaganda that higher education and advanced degrees are a guarantor of economic and vocational success since early childhood and arguably confused by what may be misleading JD employment statistics published by the law schools) become unwitting victims of the "Law School Scam".

However, I truly doubt that it will happen absent federal government pressure. Reducing the number of law schools and law school seats would probably need to be done over law school stakeholders' dead bodies. That is to say, the "Law School Scam" is very lucrative and beneficial for the people who work in the law school industry ( at the expense of the poor law students and hundreds of thousands of preexisting JDs (who suffer from an influx of new JDs).

Those of us who are compassionate, conscientious people need to organize and unite so that we can compel Congress and the ABA to end this worsening humanitarian crisis by dramatically reducing the number of law schools and law school seats. Employment markets may be tight in all fields, but it is better to not have a law degree and law school debt and no legal job than it is to have a law degree and law school debt and no legal job.


Anonymous said...

Love your stuff, but isn't Sudan/Darfur more on the humanitarian side of issues, the Law School Scam looks like three card Monty compared to the horrible issues going on elsewhere.

Injustice is still injustice where ever you go.

That being said, continue your blog letting people know that law school is certainly not for everyone, it's an important message.

Quách Đại ka said...

Love your stuff, but isn't Sudan/Darfur more on the humanitarian side of issues, the Law School Scam looks like three card Monty compared to the horrible issues going on elsewhere. lottery ukmmtangkas

Anonymous said...

The problem isn't "overproduction." The problem is that lawyers have an inflated view of themselves and it's isn't all that hard to become one. Instead of blaming law schools, which are simply responding to a market, blame the entity which allows law schools to expand - the government itself.

The federal government will loan an enormous amount of money to anyone who wants to go to law school. New law students think it's the ticket to a good life, with no regard or possibly no understanding of how that debt load will affect them. There is no market mechanism. It's another ponzi/bubble scheme that is only now coming to light. It's a severely distorted market with no real economic feedback for prices or demand.

The solution isn't to use federal agents to kick down law school doors and shut them down, the solution is killing government loan programs and allowing the market to dictate whether money should be loaned to those who wish to enter the profession.

On top of that, lawyers need to face reality and understand that being a lawyer isn't some pie in the sky, awesome achievement which makes you better than everyone else. If there are so many unemployed lawyers, then the market of lawyers is saying that legal services are overpriced... and that overpriced reality is because new lawyers have to charge so much to pay off student loans.

The law isn't rocket science and it certainly isn't brain surgery. Stop acting like it is.

Anonymous said...

There have been structural changes in the legal profession that allow people to spend less on legal services, not the least of which is increased supply of lawyers. Real estate law, which is often an important source of income for a lawyer in solo practice, has dried up in many markets.

Legal services are getting to be like life insurance: something that is sold rather than bought.

Harry Whitaker said...

Very interesting blog; makes me wonder if something similar is applicable to business schools.

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Frank the Underemployed Professional said...

Thank yoou for the kind words, Steroids. For some reason I seem to have lost my motivation to post. Part of the problem is that I don't have anything particularly new or insightful to say about the higher education scam. I do, however, have a large number of articles that I wish to comment on bookmarked, so maybe I'll start it up again.

Anonymous said...

I don't think raising law school tuition would prevent people from going into law. This has already happened, and it hasn't worked. Most people would still choose attend law school even if the tuition was double, or triple what it is now. Like so many other students, they just take out loans and keep going. I also don't think shutting down lower tier law schools is realistic; that won't happen. I think the only thing to do is force these schools to quit reporting ANY statistics for employment of their graduates. Since all statistics can be manipulated and fudged in some manner, just tell them to quit reporting statistics. A legal education may still have some value for those who want it for its own sake, regardless of whether they can get hired in that field. This unemployment problem is not exclusive to the legal profession. We have a very highly educated workforce now, with few opportunities. Many Americans graduate from college with technical degrees, and find out that people with H1-B visas have taken over these technical jobs. Also, a lot of work (including legal work) is now being outsourced to other countries.

Frank the Underemployed Professional said...

I won't be at all surprised if part of the fallout from the law school lawsuits is the cessation of law schools reporting employment statistics. They'll just rely on the general public's perception that becoming a lawyer almost guarantees someone a successful career and social status, courtesy of Hollywood and TV.

I wholeheartedly agree that our nation has an oversupply of college graduates in almost all fields and that we need to significantly reduce the number of people who are going to college (in order to reduce the huge amount of economic waste and inefficiency that our society suffers from investing too many resources on college education that does not have real world economic utility). The Law School Scam is most definitely not the only game in town when it comes to problems with college graduate overproduction.

Anonymous said...

I think if the Student Loan Forgiveness Act becomes a reality, we will see a huge upsurge in people applying to law school. More law schools will arise, to meet this new demand of consumers who want law degrees. So, in other words, it will get far worse.

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