November 13, 2013
Autoadmit Redux: Cyber-misogyny and racism...
...are (alas) alive and well. (This catalogue of abuse even features as one of the perpetrators one of the notorious Campos trolls.)
November 09, 2013
Michigan's Undergraduate Career Services Center compiles a useful list of testimonials by students happy to have gone to law school......and who went to a wide variety of law schools. Good to have a little reality-check on the insane cyber-ranting by individuals, many of whom are no doubt victims of circumstances and genuinely aggrieved, but who seem tragically confused about the causes of their suffering.
November 07, 2013
Trends in LSAT-taker, applications to law schools, and enrollments over 45 years
This is illuminating. Of crucial significance about the recent drop (on all three fronts) is that there are more ABA-approved law schools now than there were just a dozen years ago.
UPDATE: Here's a list of ABA-approved law schools by year of approval--we've seen an increase of roughly 10% in the total number of law schools in just the last dozen years.
November 04, 2013
Ideology and Supreme Court Clerkships
My colleague Geoffrey Stone comments on the ideological clerkship hiring patterns of the conservative Justices. My anecodtal impression is that Justices Alito and Thomas, in particular, do not hire anyone without Federalist Society credentials, though I am happy to be corrected by someone with more information.
UPDATE: A colleage North Carolina writes: "Dana Remus clerked for Sam Alito a few years back, and she
is neither a Federalist Society member nor someone who identifies as a political conservative."
A different take on the alleged "crisis" in legal educationFrom Professors Konfesky (Buffalo) and Sullivan (Loyola/Chicago). (To be clear, there was an economic crisis which exacerbated an employment crisis for newly-minted lawyers, and there is a budgetary crisis at many law schools due to the steep decline in applications [as the first crisis has become well-known], and there is a student debt crisis for law students, but not only them; but none of these have been crises about legal education or one produced by the content of legal education, despite the endless confused cyber-ranting to the contrary. My own views about some needed reforms in law schools are here, and some of those speak to actual crises and actual issues.)
October 31, 2013
Another 10%+ decline in LSAT takers compared to last year
Blog Emperor Caron has links to the latest news. (He also includes links to a chart about which majors do best on the LSAT--because they lump Philosophy with Theology, I'm sure that depresses the result for Philosophy majors, since those two majors are VERY different.) [UPDATE: Professor Filler's post and mine crossed paths in cyber-time!]
A couple of thoughts on this:
1. People who don't get a JD still have to do something professionally. What are they doing instead? Getting an MBA? Just entering the workforce in some other capacity? Entering PhD programs? We don't really know yet, and given the Simkovic & McIntyre research, it is likely that at least some of those not going to law school are making serious mistakes economically (if not professionally or personally).
2. The likelihood that the 10%+ decline in LSAT takers will translate in to 10% fewer applicants is, of course, very high. One things that means for those thinking about law teaching is that next year on the law teaching market will be as tight as this year, and this year is very tight indeed. An uptick in applicants this year would have increased the likelihood of law schools waivering on whether to hire to jump into the market, but this newest development probably means that schools uncertain about tuition revenue and their budgets will err on the side of not hiring.
3. While some schools are undergoing major contractions (e.g., the recent New England story), the reality is that lots of teaching positions for which schools have genuine needs are going unfilled currently due to budgetary uncertainties (schools are relying on adjuncts, short-term visitors, existing faculty teaching overloads or teaching outside their areas, etc.). When the situation stabilizes in the next year or two (barring another economic collapse, of course), I expect we will see a dramatic uptick in academic hiring as schools try to meet the unfilled needs.
UPDATE: I can not vouch that this comment is an accurate summary of Dean (soon-to-be President) Syverud's remarks, but the analysis sounds credible, and more-or-less consistent with what I've heard (though I can not vouch for the 175 number, below):
LSAC provided a graph showing that we have had similar cycles since the mid-1960s. This one is a bit more dramatic because we came off all-time highs in hiring and applicants in 2007.
The Dean of Wash U Law School, Kent Syverud, gave a very compelling speech. He says 175 of 202 law schools are operating at a substantial deficit, and the pain is being felt across the board, not just at so-called "marginal" law schools. Applicant numbers, by LSAT score, support that comment.
He also says law schools will cut costs in the following ways (any errors in this summary or mine):
- Private universities may shut down associated law schools, as they did dental schools in an earlier era;
- Schools have let hiring of new faculty grind to a halt [BL COMMENT: there were about 70 law schools at this year's hiring convention, less than half the number from two years ago; not all which attended will necessarily hire];
- Schools will not replace, with a tenure-track faculty member, any faculty member who successfully moves laterally or retires;
- Schools will cut tenured faculty via buy-outs, etc., and use instead much more affordable adjuncts; Skills teachers could be especially hard-hit even at a time when the ABA and the profession are emphasizing skill development;
- Schools will cut staff;
- Schools will consolidate law libraries into main campus libraries;
- Schools will merge (like Texas Wesleyan); or
- Schools will sell out (like Charleston.
October 30, 2013
Present Value and Cash Flows
Several critics of the Economic Value of a Law Degree have made mathematical errors or misunderstood the contents of the study. One example relates to a fundamental financial concept, net present value. The net present value is the value today of cash flows or payments that will be given or received in the future.
The psychological and financial costs to the recipient of delay in payment are already incorporated into present value—present value is the equivalent of an immediate lump sum payment with no delay.
The difference between present value and nominal future value can be large. For example, the value of a single $1,000,000 payment forty years from now is just over $97,200 today (assuming a 6 percent nominal discount rate). In other words, receiving $1,000,000 in forty years is financially and psychologically the same as receiving $97,200 today.
In The Economic Value of a Law Degree, Frank McIntyre and I describe the law degree earnings premium—the difference in earnings between law degree holders and similar bachelor’s degree holders—on both an annual basis and, for the lifetime value, in present value terms. In other words, we show what a lifetime of higher earnings is worth immediately, as of the start of law school, not spread out over the course of a lifetime.
The pre-tax, pre-tuition present value of a lifetime of higher earnings is approximately $1,000,000 at the mean and $600,000 at the median. This includes the opportunity costs of lower earnings while in school, and the cost of interest payments on student loans.
The law graduate will not get to keep the full present value. Approximately 30 percent will go to the government as income and payroll tax revenue, and some of the remainder will go to the law school to pay for the cost of the legal education.
One critic, Steven Harper, took an estimate of the after-tax, after tuition net present value at the median ($330,000) and erroneously claimed that this amount of money would be spread out over a 40-year career. Dividing by 40 years and again by 12 months, Harper claimed that the law graduate would receive “at most a lifetime average of $687 a month.” (Or $8,175 per year).
In other words, Harper conflated present value with future values and miscalculated the private return on a legal education. If cash flows were level during the 40 years after law school, it would take more than $25,000 per year in after tax, after debt-service payment, nominal dollars to equal a present value of $330,000 as of the start of law school. In 2012 inflation-adjusted dollars, it would require about $16,000 per year. Harper is off by a factor of about 2 or 3.
In practice, cash flows will not be level—they will be lower in the initial years and rise through middle age. The present value calculation already incorporates the cost of lower cash flows in the initial years. To the extent that cash flows in the initial yeasrs are a concern, some students may use debt repayment options with lower payments in the initial years. The costs of these programs are already incorporated into our present value calculations.
October 29, 2013
The Economic Value of a Law Degree: Means, Medians, Modes (Michael Simkovic)
The three averages—means, medians, and modes—are basic mathematical concepts. Nevertheless, they seem to have generated an inordinate amount of confusion among some critics of the Economic Value of a Law Degree (see here, here, and here).
Some of the critics have emphasized modes and medians while downplaying the importance of means. Steven Harper, for example, has claimed that the mean is a “meaningless” statistic and we should instead focus on the medians and modes while ignoring the mean.
To understand his error, imagine two lecture halls, each with 100 seats. Underneath each of those seats is a suitcase full of cash. The individuals sitting in those seats will get to keep whatever cash they find when they open the suitcase.
In Lecture Hall A, every suitcase contains $600,000. $600,000 is the mean, median, and mode value.
In Lecture Hall B, 60 of the suitcases contain $600,000, but the remaining 40 suitcases each contain $1,600,000. The median and mode is exactly the same as in Lecture Hall A--$600,000. But the mean is much higher in Lecture Hall B—it is $1,000,000 instead of $600,000.
If you didn’t know how much money would be in your suitcase, but you could choose between sitting in Lecture Hall A and Lecture Hall B, which room would you choose?
You would be wise to choose Lecture Hall B. But the only reason to choose Lecture Hall B is because the mean (average) is higher in Lecture Hall B. The median and mode in both lecture halls is identical.
Now imagine a slightly different fact pattern. In Lecture Hall A there are three suitcases each containing $1.6 million, while the remaining 97 suitcases contain amounts that are close to $600,000 (i.e., a range from $599,950 to $600,050), with none of these 97 suitcases containing the exact same dollar value. The mode value in Lecture Hall A is $1.6 million, while the median is $600,000 and the mean is $630,000.
Lecture Hall B is the same as in the previous fact pattern—60 suitcases contain $600,000 while 40 suitcases contain $1.6 million. The mode value in Lecture Hall B is $600,000, while the mean is $1,000,000.
In other words, the mode is higher in Lecture Hall A, but the mean is higher in Lecture Hall B. The medians are identical.
Which room would you choose to sit in?
Once again, you would be wise to choose Lecture Hall B. This suggests that you believe that means (averages) are more important than modes.
The money at the top (or the bottom) matters. Means provide useful information that is not available from medians alone, and that is not reflected in modes. That’s why we provide both means and medians, as well as 75th percentile and 25th percentile values in Economic Value of a Law Degree.
(Posted by Michael Simkovic)