Now that the new academic year is coming up fast, there have been a wealth of complaints about the sorry state of American legal education. These are not wild-eyed laments from individuals who think that their first duty is to bring down the legal establishment and all the corrupt practices it is said to stand for. Quite the opposite, most of the objections to the current situation come right out of the standard manuals of sustainable business models.
As a recent story by Lincoln Caplan in the New York Times notes, there are all too many recent graduates of American law schools who can not fund their debts on graduation out of their future earnings from the legal profession—or, for that matter, from anywhere else. The message in question ripples through the ranks of prospective law students, who come (quite sensibly) to the conclusion that they are well-advised to look elsewhere for a career. The shift of course is not all or nothing: many students will still think that they can do well in a legal career. But their numbers will be down, which will in turn put huge pressures on law schools to cut their enrollments and to whittle down the size and costs of their faculties. These results are reflected all-too-clearly in the rapid decline of the number of students taking the LSAT test—down by nearly 25 percent in the last two years. The decline in the number of applicants will closely track that number, and it is likely to infect all law schools, from top to bottom.
The causes of the current downturn are many, and they are not likely to be reversed any time soon. Part of the problem is that many legal jobs need no longer be done by lawyers, or at least by lawyers in the United States. Document searches can often be organized better by computers. For many tasks that do not require client communication, the work can be outsourced to India and other places with deep pools of legal talent possessing more than enough training to do these jobs at cut-rate prices. That trend will never be reversed. It will only intensify over time.
Then there is the long-term decline in the overall economy. The “good” news for lawyers is that the relentless increase in compliance work necessarily creates more work for them. But that increase is not nearly enough to offset the decrease in deal flow and litigation that stems from the overall slowing of the economy, which in turn reduces the number of large and complex transactions that require strong legal skills to execute. Nor does it stop the constant business pressure to take many of these premium jobs in-house, which allows firms to escape the expensive per-hour billing cycle that still dominates most forms of legal work done by the upscale legal firms.
So the question is what, if anything, should be done about this trend, both by the law schools and the law firms. My view is that these organizations will prove themselves adaptable to the challenge. But wherein will their expertise lie? My own guess is that it will lie in beating an orderly contraction in the face of a set of external forces that cannot be overcome. There will be a group of not-so-clever suggestions to make law an undergraduate education, to reduce law school to two-years, to require more hands-on instruction and clinical work. All of these are largely beside the point. American law schools have already taken some steps in these directions, but it is unlikely that there is much more that can be done.
The important social point is that there should be no government rescue squad to save the legal profession. There is no need to subsidize large numbers of makeweight jobs that are supposed to supply the poor with legal services, most of which they don’t want to begin with. And most of all, there should be no new round of regulation that requires pro bono work of recent graduates, or imposes other kinds of licensing restrictions. Indeed, the one constructive reform would be to eliminate any role whatsoever that the American Bar Association has in the accreditation of law schools so that market forces could exert a more rapid and certain influence over the pattern of legal education.
So how will this shake out? My guess is that the legal profession will see this strong bifurcation: For those standard type legal services, prices will continue to fall, and non-lawyers will (and should) move quickly into the space so created. But at the top of the distribution, where huge amounts of discretion are required in major business transactions and complex litigation, lawyers will still prove indispensable. Here it is likely that salaries, under the pressure of new entrants, will fall more slowly than they do at the opposite end of the profession, which in turn means that the separation from top to bottom—between the elite institutions and their standardized competitors—is likely to become more pronounced than before.
No one should, however, lament these changes. They are brought on by profound social forces that should be accommodated, and not resisted. Even—perhaps especially—lawyers should be subject to the discipline supplied by market competition
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