The Price of Law School Cost Transparency, Part II: An Interview with Law School Transparency

posted by Dave Hoffman

A little while back, I argued that recent efforts to encourage law school “transparency” to benefit prospective students must fairly account for the costs that disclosure imposes on current students.  In light of the recent traction that disclosure regulation has gotten, I’m pleased that Kyle McEntee and Patrick J. Lynch, of Law School Transparency, agreed to respond to some questions about their project.

As an introduction, I think about transparency (and consumer decisions) as a problem of optimal and efficient disclosure.  Obviously, what schools disclose must be, at least, true.  But with notable exceptions, commentators don’t allege that law schools are literally lying about their statistics.  But they do point out – with some force – that omissions may make what’s disclosed literally accurate but misleading.  This is a very common problem in various areas of legal study — securities law, food and drug law, products liability, common law fraud, etc.  In some regimes, regulators have ordered particular items of disclosure; others are governed by ex post tort remedies; and still others are governed by the market alone.  Ordinarily, the choice between these disclosure regimes is guided by empirical data about what consumers want and how they behave.   Not so here.

Paul Campos says that law faculty should sign a petition that calls upon our regulator to “require all schools it has accredited to release clear, accurate, and reasonably comprehensive information regarding graduate employment.”  That is, he wants a highly specified, regulator-driven, disclosure policy.  What could possibly be wrong with that?  Well, for one, we know that Guilds generally act in the interests of incumbents – and the Bar is no exception – making it unlikely that any Bar-led regulatory solution will ultimately accrue to the benefit of students. As I’ve previously expressed, I believe in less, not more, ABA regulation. I think that asking the Bar to impose regulations – even “benign” ones on disclosure – is a dangerous game.

I am concerned as well that the petition makes no mention of cost to current students – opportunity and otherwise.  It should be obvious that disclosure will cost current students something — if only the time of the person collecting the statistics, which could have been spent in career services, or on the lights, or in buying pizza for student groups.  Now, the petition alludes to an LST white paper, which does talk about costs – but in a relatively cursory way at 30-31 -where it suggests, for instance, that disclosure’s costs could be funded out the ABA’s budget.

Because I don’t fully appreciate how well LST’s proposal will be implemented by schools, how much it will cost and who would bear those costs, and because I would like to have a better understanding of the problem before endorsing one solution, I won’t sign LST’s petition. But I’m sympathetic to the project.  I’d like law schools to provide more information about their graduates’ employment, in a way that could be easily compared across schools. I’ve talked with Temple’s office of career services about these kinds of concerns – and I think they’ve been tremendously receptive.

The interview reflecting on these topics follows, after the jump.  I thank Kyle and Patrick for their cooperation.  My questions and subsequent comments are in bold.  Everything else is their text: I didn’t edit their responses at all.

1. What’s the mission of LST? What are its main projects?

2. Do you regret going to law school? Why or why not?

3. Have you thought about the cost of the kind of transparency you think ought to be the norm?

4. Do law schools owe a different duty to potential students than do business schools, medical schools, dental schools, engineering schools, or plain vanilla PhD programs? If so, why? If not, have you looked at those entity’s data practices?

5. We often tell our students that a JD is a credential that strengthens marketability even for those students who don’t become lawyers. How can we best account for within-job career advancement in our statistics? For non-lawyer jobs that are satisfying? That is: not all non-law jobs are awful! How should we describe them?

6. Why haven’t your proposals been adopted by law schools? Why haven’t consumers actually demanded the kind of disclosures you’d like to see?

7. What is the most & least transparent law school with respect to job-outcome data? With respect to cost-tuition data?

8. Have you thought at all about how tuition and lawyer salaries might be affected by more openness about prices and outcomes?

9. What is one easy thing that law schools could do that would make the world better?

10. What is one hard thing that law schools could do that would make the world better?

11. Do you have any closing thoughts?

1. What’s the mission of LST? What are its main projects?

Law School Transparency is a Tennessee non-profit dedicated to encouraging and facilitating the transparent flow of consumer information. We are aiming to do more than just eliminate the provision of misleading information. We want prospectives to have the opportunity to make an informed decision to attend law school. Each project we’ve undertaken centers on this premise. Specifically, this means improving consumer information, increasing access to that information, and especially helping prospectives understand and use the available consumer information during their decision process.

The main problems with the current employment information can basically be boiled down to the current reporting standards, which count any job as employed. This is not inherently misleading and is to be expected when the common view is that a law degree opens up many doors. At the same time, tuition has risen and salaries and job opportunities at the top end have overshadowed the realities of what practicing law is like. Advertising materials put out by the law schools overemphasize these “top” jobs while declining to share information about the rest of a graduating class. What we have seen is really a combination of two distorted beliefs: the traditional belief that lawyering is a lucrative profession and the reasonable belief that jobs achieved post-law school are legal jobs. Law schools are also aware of these distortions, lending to an information asymmetry which schools have very few incentives to correct. In short, we have a recipe for trouble.

To draw attention to the information asymmetry, we first wrote and publicized a white paper outlining the problems with employment information, which also included our first proposal for what information schools should disclose. Shortly thereafter, we asked law schools to voluntarily provide LST employment data according to that proposal. We also began engaging the key ABA Section of Legal Education leaders, recognizing that the Section was the most efficient route for reform. The Section has since prioritized law school transparency, and the first changes to disclosure practices are around the corner. Unfortunately, these changes are severely lacking and it’s starting to look like the Section’s prioritization is merely a front. Our top project right now is making sure that real reforms move legal education in the right direction.

For the most part, the Section’s focus has been on not misleading prospective students. While a good start, we believe it is focusing on the wrong thing. The focus should be on enabling and facilitating informed decisions Schools and the Section owe it to both students and to the profession to do this, particularly as the decision to attend law school becomes more like a traditional investment. It’s terribly odd and disconcerting that somebody has more information available about $5 stocks than a $200,000+ education – more if we include opportunity costs. Information asymmetries are traditionally guarded against because consumers are often unsophisticated and lack substantial bargaining power. We have the same thing going on here with the law schools. The culturally embedded attitudes about the legal profession and legal education only exacerbate the need for regulation.

So the clear jumping off point is to start forcing law schools to share how many graduates obtained legal jobs, how many graduates are working full time, and how many graduates are receiving funding from their law schools to volunteer at various organizations. Even this small feat has proved to be a challenge despite the fact that it would require no changes to law schools’ collection procedures. Despite NALP’s honing of these definitions over the years, the Section of Legal Education recently decided that the definitions for FT/PT and various job credential categories (e.g. bar-passage required and J.D. preferred) are too imperfect to use this year. As such, the Section has determined that it will not collect these data for the Class of 2010. It plans to collect them for the Class of 2011, next year, but of course we are skeptical at this point that the collection will ever happen. After countless conversations with Section representatives and hundreds of hours invested by the Section, you’d think something as simple as requiring that law schools share what percentage of its graduates are actually lawyers would have come out of 18 months of press.

To be clear, the Section has not yet collected data for the Class of 2010, thus has ample opportunity to collect data about FT/PT jobs and job credentials. In our opinion there is no valid justification for the Section’s decision not to collect these data. The schools already have high quality data for these job characteristics, so it’s not placing an additional burden on their collection efforts. And it’s also not something that has previously been in dispute: a lot of different actors have been calling for this type of disclosure. Not requiring schools to report this data will allow them to continue propagating fundamentally misleading information. It shows that the Section is not taking its job seriously enough. This does not even begin to get into whether the Section is doing its job to help prospective students become informed consumers. We need to make sure the Section does not fall asleep at the wheel.

Our other main project is the data clearinghouse, which among other goals aims to expose some of the gaps in the reported data and provide more context to certain statistics, notably the median private sector salary information. This consumer guide has been growing and will continue to grow over the next year. One of the prelaw discussion boards where we first started discussing our ideas, www.top-law-schools.com, now sees a number of discussions where applicants utilize the data clearinghouse to explain the available employment information and caution other applicants against believing the employment information advertised by law schools. Our goal is to make the current data and information that’s being reported more accessible and better understood. This includes explaining the underlying substance of various information shared by the schools. We want to equip prospectives with the tools they need to adequately analyze information from any source, and at a more basic level to give them enough information so that they recognize the very large gaps in information that exist.

2. Do you regret going to law school? Why or why not?

No. To be clear, LST was not founded because we are disgruntled with our legal education or Vanderbilt’s career services. In fact, Vanderbilt’s transparent disclosure policy was the impetus behind our asking why other schools were not so open with their consumers. That said, as recent graduates, it‘s difficult to guess what we might believe in the future as we get further into our careers. Importantly, nobody involved in LST regrets going to law school right now. We aren’t opposed to working with people who hold that viewpoint (and we think a lot of people do), but it’s not our motivation. We are motivated by a massive problem affecting hundreds of thousands of people. Fortunately, most everybody has recognized the gravity of the problem, so now it’s just a matter of honing in on the real issues at play.

3. Have you thought about the cost of the kind of transparency you think ought to be the norm?

Certainly. There are many plausible costs to removing the information asymmetry that law schools currently enjoy. On a basic level, additional expenditures may be too expensive. This was the focus of our first white paper. We had this idea of improving transparency and we wanted to see whether it was feasible and how much additional time it would take. We began by having extensive talks with our own career services office, and since then have been engaging career services deans all over the country, especially at some of the smaller programs where budgets are tighter and you might have just one or two staffers trying to assist, track, and report about the entire graduating class. What we came up with originally, dubbed the LST Standard, was a new standard that would not require any additional collection efforts on the part of law schools in terms of tracking down graduates and getting the graduates to report data. Our latest proposal, the LST Proposal, has similar features.

However, there are other important costs to consider in pushing for greater disclosure. For one, maybe some law schools will shut down as a result of increased transparency because they cannot recruit enough qualified students. At the macro level this might limit how easily people can obtain legal services and achieve the successful administration of justice. It could also lead to perverse results where people need to travel further and accrue additional costs just to get the legal education required to sit for the bar exam in their home state. Another result may be that law schools will need to become more efficient and reduce costs to continue getting people to attend. As with schools shutting down, this means law school staff (including faculty members) may lose their jobs or see their job requirements shift to include less scholarship and more teaching, or less of both. Ideally, improved transparency would coincide with improving legal education to jive more with what the profession needs. Realistically this is going to be a slow process; more information is just the first step.
To answer the question more directly, these are all things we’ve been considering from the beginning. We struggled with the decision to start this project because we take our role very, very seriously. We have aimed to engage with people, rather than operate alone in Vanderbilt law library’s basement.

[I will interject that paying attention to smaller schools, or those with only one or two staffers assigned in career services to data collection, seems like a terrific idea.  The purpose of the career services office is to get student jobs, and time spent tracking down students (who often neglect to respond to emails) is time not spent performing that key function.  LST argued in their White Paper that tracking and finding are overlapping jobs: I agree, but I think LST downplays the degree to which tracking takes time.  So I'd urge LST to consider opportunity costs with more care.  Having talked with my own career services office, another very serious concern is the imposition of multiple, inconsistent, standards - which is the case with the ABA and NALP at the moment.  While the differences may be slight, the result is a duplication of effort.]

4. Do law schools owe a different duty to potential students than do business schools, medical schools, dental schools, engineering schools, or plain vanilla PhD programs? If so, why? If not, have you looked at those entity’s data practices?

All schools have the same duty to present information used to advertise their programs fairly and accurately. That part should be uncontroversial. The legal profession, however, faces a specific problem that other programs do not often face. The market for law degrees has been distorted by easy financing and a societal misperception of the legal profession. Every school understands that it can get away with raising tuition because the school-set “cost of attendance” becomes the upper limit on the federal loans a student at that school can receive each year. However, educational inflation, while worse at law schools than almost every other degree program, is not unique to law schools.

The differentiating culprit, so to speak, is the culturally embedded view that law school is a “magic ticket” to financial security. From television and fiction novels, to proud parents and encouraging friends, U.S. culture has conditioned a widespread belief that law school is a solid decision. This belief persists even as the legal market sinks and law school graduates are vocal about their struggle to find jobs and fulfill loan obligations. These distortions undermine reasoned analysis by prospective law students, and all solutions aiming to improve decision-making need to take these distortions into consideration.

In keeping with the mission of our nonprofit we only look at the accreditation requirements for people wishing to enter the legal profession, but we are aware of problems facing other professions. Masters in financial engineering programs are a good example of an area where improving accreditation methods might help protect applicants to those programs (and movement is afoot there).

5. We often tell our students that a JD is a credential that strengthens marketability even for those students who don’t become lawyers. How can we best account for within-job career advancement in our statistics? For non-lawyer jobs that are satisfying? That is: not all non-law jobs are awful! How should we describe them?

Schools certainly do a good job at portraying the benefits of their degree programs; all we’re asking is that they portray the outcomes without first screening out what they consider to be undesirable outcomes. The best option (albeit costly) would be to actually monitor graduates who pursue nontraditional career paths. Conduct and report (in a responsible manner) satisfaction surveys; have graduates tell their story and explain why attending the law school was the best thing they’ve ever done. Provide prospective students with narratives of every graduate, not just the ones ending up at top law firms or government agencies. Some law schools track graduates five and ten years out to monitor career satisfaction, something that absolutely can’t be shown when you look only at what people are doing for work nine months after graduation.

The concern is that schools will use this to justify poor outcomes right after graduation. This could become the next method of misleading prospectives. Promises of glory down the road, after paying your debts to the profession (and creditors) are likely an easy sell. But will it be representative?

6. Why haven’t your proposals been adopted by law schools? Why haven’t consumers actually demanded the kind of disclosures you’d like to see?

First, most admissions officers can tell you that consumers haven’t historically demanded these disclosures because they believe the information in front of them. There are applicants who genuinely believe that U.S. News is a proxy for employment outcomes, and that a higher U.S. News rank translates into better opportunities. So it’s no surprise given what we know about applicants that they haven’t been adamant about demanding better information. Many wouldn’t even know what questions to ask.

Prior to establishing LST and inserting our arguments into the discussion at the regulatory level, we worked with individual applicants on prelaw discussion boards. We encouraged accepted students deciding between two law schools to utilize any leverage they had to obtain better information. We recommended that people contact the schools that accepted them and ask the schools to release a list of all employers, similar to what Vanderbilt releases. But the applicants who actually did contact schools were mostly unsuccessful in getting responses. We feel that the individual requests have not been successful because there is no collective bargaining power. Prospectives also don’t believe they have bargaining power. Still, some law schools have improved information on their websites over the past year. This has been a welcomed change to us and, more importantly, prospective law students.

(One particular success story involves the University of New Hampshire (formerly Franklin Pierce), where an applicant contacted the incoming career services dean this past cycle and received a very comprehensive list of employers, as well as a separate list of all the reported salaries. The applicant then made it publicly available for other prospectives. So far this is an anomaly.)

LST has tried to be the voice prospectives need, but as you’ve seen we have not had the success with law schools. Our initial request to report under the LST standard was largely met with silence from the schools. Many administrators were communicating with each other about our request, but it appears that the general consensus was that it was better to ignore us than to engage in discussion. Keep in mind we weren’t actually expecting schools to sign on to the new standard; our goals were modest in that we wanted to spark discussion at law schools and in the profession.

Ultimately, we didn’t offer schools a strong enough incentive to participate. We later discovered that numerous administrators wanted to respond but were unwilling to put their school in the spotlight (classic first-mover problem). A few schools did respond, allowing us to document some of the justifications for refusing to disclose information. Those justifications have since been used to strengthen the case for more regulatory oversight, so in that respect the initial request was a success.

[For what it is worth, I believe this paragraph to a bit incomplete.  I think perhaps there were some other factors at work, including the way that the requests were presented to administrators.]

7. What is the most & least transparent law school with respect to job-outcome data? With respect to cost-tuition data?

While we have documented the data available on the websites of every ABA-approved law school, we can’t say with certainty which schools are the absolute most and least transparent. No school has come out and reported data in a manner that truly informs applicants. That said, Vanderbilt has been extremely good about continuing to release employer lists over the last few years. What’s remarkable is they’ve continued disclosing the employer lists even as the entry-level hiring market has greatly worsened.

This year, we’ve documented many instances where schools have improved their disclosure practices in response to public pressure. U.C. Hastings is a good example. For the Class of 2009, Hastings released an employer list similar in structure to Vanderbilt’s lists, although it still left out almost half of all employers. (The school has yet to release a 2010 list from what we’ve seen.) Its disclosure is a great step in the right direction, although it does exemplify why the ABA’s Ugly Table Fetish can be burdensome on the reader.

8. Have you thought at all about how tuition and lawyer salaries might be affected by more openness about prices and outcomes?

We covered tuition above. As for lawyer salaries, we doubt it will have much effect, if any at all, unless specific salaries of individuals at particular employers become public record that were not already public. We expect that competitor firms already know what their peers pay.

[But, of course, the ABA got into serious trouble years ago when it collected and publicized faculty salary information for this precise reason.  And it's not just salary - it's offer timing, type of work, length of job. It might be useful, as I wrote above, to look at comparison industries and see what effect publicizing salary data had on employment.]

9. What is one easy thing that law schools could do that would make the world better?

Disclose the employment data that they already diligently collect every year.

10.What is one hard thing that law schools could do that would make the world better?

Reimagine legal education.

11. Do you have any closing thoughts?

Overall, there’s a lot of talk, but things may actually be heading in the wrong direction. Now more than ever it’s important for faculty to consider the problems surrounding employment data and actively engage in forcing law schools to break the information asymmetry that, in our opinion, is holding the profession back. One way to do this is to sign the “Law School Transparency Petition” circulated by Professor Paul Campos. We have signed this petition and hope your readers will too. You can read about this petition from LST’s perspective here.

[I wonder what LST means by "heading in the wrong direction."  Also, I think that LST might want to reflect a bit more on the assumption that "law schools" can be treated in an aggregate way - both between and within institutions. Regardless, thanks to them for taking the time to respond in such a thoughtful and complete way.]

 September 20, 2011 at 12:56 pm   Posted in: Law School    Print This Post

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