Reality Check: Law School Closures Are Unlikely

Peter Nemerovski | Professor, University of Miami School of Law

For several years now, law professors and journalists who cover the legal profession have been predicting that multiple U.S. law schools will be forced to close in the very near future. In 2010, Bernard Burk and David McGowan wrote that “contraction in the number of schools seems probable.”

Brian Leiter predicted in 2012 that up to ten law schools would close “during the next decade.” In October of this year, Jerry Organ wrote that it is possible that as many as ten percent of law schools will be forced to close. Not to be outdone, David Barnhizer recently opined that eighty law schools are “at some degree of risk” of closure.

Earlier this week, Slate’s Jordan Weissmann got into the act with a piece headlined “Get Ready for Some Law Schools to Close.” Weissmann quickly followed up with another piece describing a bet he made with Professor Steven Davidoff Solomon of Berkeley Law that at least one ABA-accredited law school will close or merge by the end of 2018. While I applaud Weissmann for putting his money — two dollars of it, anyway  —where his mouth is, I’m afraid he’s going to lose his bet.

Unfortunately for Weissmann, the reality is that new law schools open all the time, and existing law schools almost never close. I had to go all the way back to 1955 to find the last ABA-accredited law school that closed for good. That’s when Lincoln University School of Law in St. Louis, Missouri, shut its doors. A couple schools closed in the 1980s, but those don’t really count. O.W. Coburn School of Law (closed in 1985) existed for only six years and never advanced beyond provisional ABA accreditation. Antioch School of Law (closed in 1986) essentially reopened a few years later as the University of the District of Columbia School of Law. (UDC explicitly adopted Antioch’s mission and programs, inherited its library, and hired eight former Antioch professors onto its ten-member founding faculty.)

Of course, just because something hasn’t happened, or hasn’t happened recently, doesn’t mean it won’t. Weissmann’s argument is that law schools have experienced an unprecedented decline in enrollment — 24 percent between 2010 and 2013 — and that the end result of that decline in demand for law degrees will be a decrease in the “supply” of schools offering them.

I have two responses to this. First, Weissmann is comparing 2013 enrollment to a year — 2010 — in which first-year enrollment reached an all-time high of 52,488. So 2013 enrollment was not 24 percent lower than normal; it was 24 percent lower than it was the year more people went to law school than ever before or since.

Wake me up when the decline hits 50 percent. Then you really might see some law schools closing. But if enrollment and tuition revenue are down 24 percent, then law schools will simply reduce spending and find alternative sources of revenue. This is already happening. Law schools also have the option of lowering their admissions standards to maintain enrollment levels, and this too is happening. If you owned a widget store and were literally turning away people who wanted to pay more than $100,000 for a widget, you probably wouldn’t be too worried about going out of business.

Of course, the 24 percent figure that Weissmann uses is a nationwide average, so surely some law schools are facing enrollment declines of 30 percent, 40 percent, or more. However, as Weissmann’s own reporting shows, even a school like Thomas Jefferson — by any measure one of the worst law schools in the United States — has no plans to close, even after defaulting on its bonds.

Which brings me to my own prediction: fewer than five ABA-accredited law schools will close by 2020, and the number will probably be zero.

To understand why U.S. law schools aren’t going anywhere (even lousy ones like Thomas Jefferson that probably should close), one must understand the powerful forces that sustain them. The first thing law schools have going for them is the perception that a law degree is a ticket to a fulfilling and lucrative career. This perception persists largely because it is true — for some people. If you go to a decent law school and do reasonably well there, you have a good chance at at least an upper-middle-class lifestyle and a relatively prestigious job. And despite all the recent publicity about the plight of the have-nots — deeply indebted law graduates who cannot find legal employment — very few prospective law students think they are going to end up in that category.

The second factor driving tens of thousands of young people to enroll in law school each year is the existence of the federal student loan program.  If you want to go to law school, the federal government will, through some combination of Stafford, Perkins, and Graduate PLUS loans, lend you enough money to cover the entire cost of attendance, regardless of the likelihood that you will be able to repay the loan. Professor Barnhizer describes law schools as “‘feed[ing] at the trough’ comprised of federally subsidized student loans.” As long as the federal student loan program continues, even law schools with relatively few students can count on millions of dollars in annual tuition revenue.

Are law schools nevertheless in crisis? No, though most schools are facing financial problems. Professor Paul Campos reported in November 2013 that 80 to 85 percent of ABA-accredited law schools were losing money. Frankly, I’m surprised the number isn’t higher. Egged on by a rankings system that encourages profligacy, law schools ratcheted up their spending between 2002 and 2011, a stretch during which first-year student enrollment averaged over 49,000. With a lot less food in the trough today, all but a few law schools must temporarily operate at a loss unless they drastically cut spending overnight. (Having worked at one for five years, I can tell you that law schools don’t do anything overnight.)

In the end, the challenge to U.S. law schools is fairly straightforward: figure out what the “new normal” is for J.D. enrollment, and cut spending until it is consistent with the tuition revenue the school will receive from that level of enrollment. My prediction — and this is where I’m admittedly out on a limb — is that the new normal for enrollment will not be so low at any ABA-accredited law school that the school simply cannot continue to operate. If, as I (and some others) suspect, we are at or near rock bottom in terms of the overall number of people going to law school, 100% of the ABA-accredited law schools can and will continue to operate. Most of them will have to operate much differently than they did in the recent past: faculty members will retire and won’t be replaced, certain programs within schools will be discontinued, and non-essential spending on perks for professors and students will be cut.

In the end, though, the enviable business model that has sustained U.S. law schools for decades will continue to work its magic. Tens of thousands of young people will ignore Professor Campos’s advice and enroll in law school next year, the year after that, and the year after that. Weissmann will lose his bet, and the long-forgotten Lincoln University will remain the most recently shuttered U.S. law school.

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