The American Interest
Analysis by Walter Russell Mead & Staff
Are Law Schools Collapsing?

Justice

The statistics that open Richard Epstein’s WSJ review of Steven J. Harper’s The Lawyer Bubble paint a depressing picture of the state of the legal profession. Top firms are cutting back, wages are down, and tens of thousands of young law grads are looking for work in a competitive marketplace. As a result, law schools are feeling the pinch. Applications and enrollment are declining. Some schools may be forced to cut staff or close entirely.

Nevertheless Epstein defends the current system as essentially sound. Big firms may be coming under stress, but the savvier firms of the bunch are finding ways to adapt and thrive:

They do so, in part, by avoiding overstaffing, by cutting bad clients and by paying premium wages to young associates—many of whom, debts paid, happily bail out for less stressful work as in-house counsel for companies or in the government and nonprofit sectors. Over all, the model proves stable: With Congress passing monstrosities like Dodd-Frank and the Affordable Care Act, top-flight legal talent is needed more than ever to guide well-heeled clients through the growing regulatory maze.

Ironically, Mr. Harper misses the most significant recent dislocation in the practice of law, which is at the consumer end of the market: the rise of low-cost online law firms like LegalZoom and RocketLawyer that aid clients in drafting standard partnerships, wills, leases and the like. These firms pose a mortal threat to sole practitioners, not to Big Law.

Epstein may be right, but he doesn’t talk enough about the fact that part of the problem is that there are simply too many law school grads with too much debt for the current market to bear.

Law firms may survive by “avoiding overstaffing,” but this is clearly a problem for the glut of newly minted JDs looking for work. Over time, this problem will sort itself out, as prospective students abandon law for other opportunities, but this does nothing to help recent and soon-to-be-minted grads looking for work in a depressed marketplace. “Low-cost online firms” probably won’t pick up much slack, and it will be difficult for employees of these firms to pay off the six-figure student debt they racked up in law school.

Law firms may adapt to the new realities, but many law schools will have a harder time doing so—especially the ones that opened or expanded in recent decades in order to tap into the extra demand. In the future, law schools will need to be smaller, cheaper and fewer in number.

[Blind Justice Image courtesy of Shutterstock]

Published on May 6, 2013 12:31 pm
  • Anthony

    The biggest problem with law school is the very very high tuition. In the past, law school was quite a bit cheaper than it is now. In inflation adjusted dollars, Harvard Law School cost $12,000 per years in 1971. Now schools that offer much less in terms of prestige and job prospects are WAY more expensive than that.

    In the past, a student with an interest in the law could take a gamble that s/he would be successful. If they proved to be mediocre students and/or practitioners, they could just get out of the law and try another field. Today, an unsuccessful law grad will find it almost impossible to borrow enough money to enter another field, such as nursing or engineering, after completing law school because of a high outstanding level of debt. If law schools were to go down in price, more students might be comfortable rolling the dice and following their dreams.

  • http://www.facebook.com/people/John-Burke/507873299 John Burke

    Of course, law schools were smaller, fewer and cheaper not very long ago — 40 years or so. By my quick count, 77 law schools have been founded since 1970. Seventy-seven! And quite a few more were founded in the sixties. This doesn’t account for expansion of existing law schools during the same period.

  • TheCynical1

    Professor Epstein is very bright, but here, not as bright as our Professor.

  • Anthony

    Perhaps legal profession victim of disintermediation and graduates are affected; equally, law schools have graduated more aspiring lawyers than legal market can absorb – there is a real human cost as supply overtook demand.

  • http://www.facebook.com/corlyss.drinkard Corlyss Drinkard

    After law schools go to MOOCs, they should try to figure out some way to boost male enrollment and stop their dreadful trend to becoming the private domain of women. Nursing and teaching are but two of the professions that suffer from identification with women and a resulting denigration of their social contributions relative to their ability to command pay equivalent to their degree of education and training.

  • Daniel Nylen

    Law and the need for top-notch legal work is an ever-growing field. As mid-sized and large-sized companies had to economize during and after the financiual crisis, the growing legal bill was an obvious target. The problem, however, is that the law keeps increasing in complexity and penalty. Companies are assuming more risk to keep up profits by minimizing legal work. Law firms, run by senior partners are changing to keep the abnormally high profits flowing. How smart is the decision by companies to cut legal work versus cutting the fat –who knows. the same question for the top law firms –cut people to keep profits. There are many areas of law that require very smart people to apply themselves for years to gain the expertise necessary to adequately approach the problems. Many legal battles are won by brain power and expertise over the facts and precedent. This is becoming more common, not less.

  • Corlyss

    A contrary view of the collapse of the profession.
    http://www.hoover.org/news/daily-report/146386