The claim about “ordinary folk” is even stranger [than the one about big corporations], but it’s one that’s being made a lot these days by legal academics desperately searching for a raison d’ paycheck. The argument goes something like this:
(1) Many people in this country who could benefit from legal services aren’t getting those services because they’re too expensive.
(2) Those services are too expensive because law school costs too much.
(3) If future lawyers could go to law school without incurring so much debt, they could afford to offer legal services at a price that far more people could afford to pay.
(1) is certainly true. (2) and (3) are just wrong, and obviously so.
Big corporations have stopped paying for innocently incompetent and innocently but grossly overpriced junior associates because they’re finally behaving rationally. They have discovered a combination of things: That non-lawyers can do some of that work, that software can do some of that work, that some of that work needn’t be done in the first place, and that even if some of it is to be done by junior lawyers at BigLaw, they don’t have to pay anything close to what they used to pay. That’s the easy case. Please note: Nothing whatsoever in this analysis has anything to do with the price of law school. In fact, I challenge you to relate the price of law school to this analysis in any way. That’s market #1: BigCorps hiring BigLaw.
As for “ordinary folk[s],” Prof. Hadfield makes the same analytic error, inserting the price of law school into the argument in a superficially plausible way, but which dissolves on a moment’s thought.
Explain to me how what ordinary folks will pay a lawyer to handle their “mortgage or divorce” has anything to do with the sunk cost of tuition at that lawyer’s school? Nothing, is the answer.
The price for handling a residential mortgage or a divorce is, well, the price—set by the market, with all the attendant implications, such as its being less in Bentonville, Arkansas than in Manhattan. While the experience and relative specialization of the practitioner might be an element going into the price, the cost of that lawyer’s long-ago JD degree is as irrelevant as whether it’s spring or fall, rainy or sunny. That’s market #2: Folks needing SmallLaw.
This demonstrates a larger truth: Clients don’t care about your costs.
This brings us to market #3: Prospective students evaluating to-JD-or-not-to-JD, a/k/a the market for a law school education.
The vacuity of Hadfield’s argument, by the way, is no different in structure or concept from that of law school grads who might be tempted to think they “have to” earn $160,000/year to start because they have a boatload of student debt. I’m sorry (and I truly am heartbroken at the human toll), but that’s not the way the market works. I might as well tell my boss I need a raise because I bought a second home in the south of France. Income does not expand to match expenses, nor does the price the market will bear for your services conveniently match what it takes for you to meet your past costs.
Which is another way of underscoring the point that if law schools don’t realign their price with the value of what they deliver, the lines on that graph at the top of the article will continue downwards. Without regard to the implications for law schools’ making their budgets.
Sorry, but my theory about what BigLaw’s lawyer composition may look like must await another column.
I hope a good number of law schools go bankrupt. Law schools are a business that benefit few. Career services at most schools are deplorable and are filled with people who no little about securing that important first job. I feel for the kids who are graduating now, but it’s not too late for applicants to opt for another career. It’s better taking a year off making minimum wage at McDonalds than committing to law school and a lifetime of debt
I’m doubtless leaving out some of the costs, but suppose you wanted to operate a law school as a standalone, with 200 students in a class (600 total), and without expecting the faculty to publish. The freshman class has 2 sections of 100 (about 30 class-hours/week combined), the 2nd-years have four sections of 50 (60 class-hours/week), and the 3rd years each get to take 2 small-group seminars (20 students each, so 10 sections, or 30 class-hours/week) and 2 classes in groups of 50 (so 4 sections, or about 50 class-hours/week). Add on 30 class-hours/week for legal writing and that’s about 200 class-hours/week of teaching. 20 faculty teaching 10 hours each cover that: $120,000 each makes $2,400,000 for faculty salaries. Add $400,000 for library staff, $500,000 for administration including admissions, $150,000 for janitorial, $400,000 for other support services, and $250,000 for development/fundraising for a total staff cost of about $4,100,000/year. Estimate rent or occupancy cost at $500,000/year (corresponding to about a $6 million campus, no dormitories), and $250,000 for library publications and subscriptions, for a total budget approaching $5 million/year. Divided among 600 students yields a tuition of about $9000/year, not including room and board. Whatever I’m missing in figuring what it takes to run a law school that does nothing but teach law, it can’t be $40,000/student/year worth of expenses.
I believe if the recession continues and corporations remain committed to not return to business as usual, ie the billable hour and paying for associates, then many law schools will fail. Lawyers have an extreme aversion to changing how they operate and when they are under the gun to do so they still take too long in coming to a clear decision of how to do so. Much of their profession is based on defending the clients interests through oral argument, logical reasoning, and persuasive writing. Is it really hard to see why it would take them so long to come to a clear decision with many of them in the same room trying to make the decision together, its a constant battle and they fight bitterly for their own agenda’s.
I think we will see legal innovations taking much of the legal space away from the professionals. There are a few countries, England as the most recent, that liberalized the profession allowing non-lawyer investment and partnership. There will be great developments from this in England which I predict will spread Globally. Whether the ABA changes the rules or not, we will see a difference as to how the law is practiced, it just might be from our allies abroad then from our own US legal profession.