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The Economics of It All (with some funny numbers)

Ok. So Michael’s gone to the heart of this business: what’s going to happen with the legal profession and how will that affect law schools? (I was going to write how will law schools respond, but I think that implies more agency on our part than we’ll have. The profession is going to dictate to us what we’ll do.) As the profession becomes more stratified and there is relaxation of rules about practice by non-lawyers, how will that affect the economics of legal education? Are those changes already upon us?

Michael quotes John Coates about the changes that are coming–like paralegals doing closings and writing wills. What’s strange to my ears is that Coates is talking about this as something we’ll see in the future. Hmm. The last residential real estate closing I attended was run by a paralegal. The only lawyer in the room was me and that’s because I was the buyer. A lot of my former students who practice in wills use paralegals to do initial interviews with clients and to draft the wills. And that doesn’t begin to get at the lay people who use Quicken Will Maker–heck, that’s what I use when someone asks me to write a simple will for them! Back in the day when I was at legal aid I used to dealt with a lot of clients in the wake of “do it yourself divorces” prepared by a “typing service.”

Hey man, the days of non-lawyers doing a lot of what we think of as practicing law are upon us.

What’s this mean for legal education? There are continual calls to make it cheaper. There are a lot of options out there in legal education already–what, 180 or so law schools. This market already has a lot of players–including some proprietary schools. So I’d think that some of those schools are doing the best the can to deliver a desirable product at an affordable price. In terms of ABA accredited schools, Jones School of Law, which I think about because they’re my neighbor here in Alabama, charges $12,000 per year; Massachusetts School of Law is just over $13,000 per year. State schools can be a real bargain. North Carolina Central charges something less than $5000 per year for North Carolina residents! And then there’s the on-line alternative. Concord Law School–an on-line school–charges $8900 per year in tuition. So there are some cheaper alternatives already out there.

That leads me to wonder, about the economics of this, though–because we keep hearing people say competition should drive down the cost of law school education. If you’re interested in a providing a serviceable education, just how cheaply could you run a law school? I’m going to pull some numbers together here–sort of fanciful and we can play with these a little. Let’s think about a school of 200 students/class (600 students overall). Those 600 students will take 30 hours each per year, in classes that are each 3 hours long (or 10 classes). Each of those 10 classes will have 60 students in it. So we’d need to 100 classes to teach those students. (Another way of thinking about this is 600 students per year will need 30 credit hours each, for a total of 18,000 credit hours, which would be provided in block of 3 credits each to 60 students.) We’re going to have a teaching, not a writing school, so faculty will teach three three credit classes each semester. (Each faculty member will teach 360 student credit hours per year.) That means we’d need a faculty of seventeen to offer those courses. Let’s think about getting faculty for a relatively small amount of money. Can we hire and retain faculty paying, on average, $80,000/ year? Plus benefits, let’s say each faculty member costs $120,000. Maybe some of this can be done with adjuncts, to keep costs down. That’s just over $2 million dollars for faculty. We still need to have an administration (a dean and associate dean, a registrar, an admissions office, a placement office–would be hard to run a school with fewer than 10 administrators and staff, I’d think) and something in terms of a library and, of course, a facility and all that needs to be maintained. Can we get serviceable facilities and a bare bones administration for $2 million. Can we do this all for a total of $4 million? Maybe–I admit these numbers are rough and maybe it’s possible to get serviceable facilities for less than I’m guessing. A lot depends on location, obviously. The numbers are now becoming a little fanciful. So $4 million divided by 600 students is about $6600 per year per student. That’s a bare-bones operation (no moot court or trial ad teams; no clinic; high student-faculty ratio; minimal library; no cafeteria service; no law review; not much in the way of photocopying; no conferences). But remember we’re trying to do this in a way that minimizes costs and still delivers a serviceable product.

And also remember that’s not a whole lot cheaper than some of our nation’s best (state) law schools charge their students in tuition. (Now the question whether state taxpayers should be subsidizing a law school is an entirely separate issue, on which I have substantial question. ) But right now the issue is: can we offer a serviceable product for much less than we do already? I’m not sure the answer’s yes.

At this point you may be thinking, “wow, this sounds a lot like Alexander Pope–‘whatever is, is right.'” I don’t mean to be too much a defender of the present system, but I think when we start thinking about alternatives we ought to try to bring some realism in terms of how difficult it would be to improve on the present system (at least in terms of cost).

Now, Michael suggested some other alternatives, like a two year program or perhaps allowing paralegals to write wills on their own, without supervision from lawyers. Let’s talk about this at some point.

And, just to make Belle’s life easier (because she’s summarizing all this stuff)–let me say a key point of this post is that amidst calls for more law schools, I question whether increased competition by adding schools will significantly decrease the costs of education.

2 thoughts on “The Economics of It All (with some funny numbers)”

  1. I think this post touches on the really critical issue that I haven’t seen discussed. When I think about how our current system of legal education, I’m most struck by the fact that we force students to study law at a time and place of our choosing, not theirs. But it seems really likely that students of the future will want to study at a time and place of THEIR choosing–meaning more online and distance education, which can be offered substantially more cheaply than an institution that has to maintain a physical plant. So it seems like most law schools are going to have to justify the added expense and burden of forcing students to study at a time and place of our choosing. Frankly, I’m not 100% convinced that we will be able to show that value. Eric.

  2. If Eric is right, then schools that already have strong distance learning in other areas will be at a distinct advantage in attracting such students – at least for the short run.

    Then again, if Eric is right, then law school really will become a trade school, and the whole way things are done would be thrown out the window.

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