Monday, January 7, 2013
Santa Clara Professor Stephen Diamond's story is instructive, as he was pilloried for trying to reason with the crazies. He writes of the "scam" bloggers:
[T]hey seem to feel that the credit crisis that engulfed the global economy beginning more than four years ago was somehow hidden from aspiring law students.They have set out to set the record straight to make sure that naive college graduates do not fall for the law school “scam” as they put it.The last paragraph encapsulates the juvenile irrationality of these folks quite well, and it is the theory that has underlay the lawsuits against law schools, which have been uniformly dismissed by the courts outside California. With the legal strategy apparently having failed, "Law School Transparency," which made common cause with the plaintiffs' lawyers in those cases, has now switched gears to filing frivolous complaints against law schools with the ABA. Since LST is to be commended for providing lots of useful information to prospective students, one hopes they will rethink what seems to be their current course of action.
The actual facts, of course, about the impact of the economic downturn on the legal industry are readily available to anyone with an internet connection. Even without considering actual legal employment it would be readily obvious from newspaper headlines that taking the time and spending the money to earn an advanced degree would not automatically earn you a job down the road.
It turns out that recent college graduates did not waste much time figuring that out and indeed law school applications have fallen off. This is entirely consistent with the pattern in the wake of previous downturns, including the real estate crash of the early 90s and the collapse of the dotcom bubble in 2000. Law school applications tend to increase soon after the economy improves and continue to grow as the economy plateaus. As the economy declines – which by the way capitalism has done in a series of up and down cycles that reach back to the 19th century – students often continue to go to law school as a way to add a degree with the view that the economy will improve by the time they graduate. Relatively low cost debt and generous government backed loan repayment programs have made this approach to graduate education more affordable.
The challenge in this current downturn, of course, is that it was more severe and more prolonged than in prior cycles. That gave rise to an unexpected drying up of the job market in a pattern that was very familiar to many of the clients of law firms but that law firms themselves had not often experienced. Even very top tier law school graduates faced an unprecedented situation. However, there are signs that a bottom has been reached. Housing prices appear to have stabilized and are even rising in certain markets. Employment generally has improved and there is good anecdotal information that law firms are hiring more robustly.
That has not stopped the “law school is a scam” crowd, however, who claim that this was all the fault of the law schools who somehow bamboozled tens of thousands of college graduates into going to law school. The problem with their analysis is that they ignore the role of the macroeconomy and rely on irrelevant figures in their attempt to build their case.