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Marketplace

Downsizing hits legal education

Mitchell Hartman Feb 21, 2019
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Damien Meyer/AFP/Getty Images

For nearly a century and a half, Valparaiso University in northwestern Indiana has been training Midwestern lawyers. As recently as five years ago, the law school was aggressively recruiting incoming students with a promotional video on its website saying: “Since 1879 we’ve been generating lawyers to leadership and to service. Here, we teach law both as a science and as an art.”

But soon the school won’t be teaching law to anyone. Dial up the admissions office and a recording plays: “Valparaiso University Law School is no longer accepting applicants. This number is no longer accepting voicemail.”

Citing declining enrollment and financial difficulties, as well as the failure to broker a transfer of the law school to another university, Valparaiso University announced in October that it was shutting down its law school. Current second- and third-year laws students — about 100 of them — will be allowed to complete their degrees over the next two years. Valparaiso declined to comment for this story.

It isn’t the only law school to have taken down its shingle in recent years. Two for-profit law schools owned by InfiLaw have also closed — Arizona Summit Law School in Phoenix in 2018 and Charlotte School of Law in North Carolina in 2017. (Former Charlotte students sued InfiLaw over the closure and recently received a $2.7 million settlement. A related lawsuit against Sterling Partners, a Chicago-based hedge fund that has invested in InfiLaw, is still pending.) 

Meanwhile, other law schools are struggling in an environment of declining enrollments and tuition income. Students at Western State College of Law at Argosy University in Irvine, California, are in limbo after the school’s parent company, Dream Center Education Holdings, which operates campuses around the country, went into receivership in January. Neither Western State nor DCEH responded to inquiries from Marketplace.

Back in the late 2000s, recent college graduates flocked to law school as they sought refuge from the souring job market.

“Law school seemed like a great place to hide out, a place to get your second liberal arts bachelor’s degree” and improve job prospects, said Jeff Thomas, director of admission programs for Kaplan Test Prep.

In 2010, first-year law school enrollment hit an all-time record — 52,400.

Some schools took advantage of students’ desperation for a lucrative career in law, said Jerry Anderson, dean of the Drake University Law School in Des Moines, Iowa. To attract students, they lowered admission standards and let students borrow well into the six figures to pay ever-rising tuition bills. Meanwhile, bar exam failure rates were rising.

“Not everyone should go to law school,” Anderson said. “Admitting students that are not really prepared for the rigors of a legal education or for the rigors of a legal practice, that’s a bad thing.”

Since 2010, first-year enrollment has declined by about one-third to less than 40,000 — a level not seen since the late 1970s. 

Kaplan’s Thomas said that what many people in the legal education field now see is “a little right-sizing of legal education. If we have all these schools and not enough demand to satisfy them, perhaps it would be better off in the longer run if some of the law schools — particularly in the lower tier — did indeed choose to close.”

Meanwhile, law school tuition has been soaring. According to data compiled by the advocacy group Law School Transparency, since 1985, tuition at private law schools has risen 270 percent, while tuition at public schools has risen 580 percent after accounting for inflation. Average tuition now stands at $47,000 at private schools, $27,000 for public in-state students and $40,000 for public out-of-state students. 

Student borrowing has soared, too. Kyle McEntee, a 2011 graduate of Vanderbilt Law School and co-founder Law School Transparency, said the average law graduate who borrows now comes out with $116,000 in student debt.

That could saddle graduates with monthly payments well in excess of $1,000 for decades.

“For the graduates who are making $190,000 a year at a New York City big firm, that’s going to be manageable,” McEntee said. “But for the majority of people who are making $65,000 or less — and oftentimes in the $40,000 to $50,000 range — it’s all but not manageable.”

McEntee advocates for comprehensive reporting of bar exam passage rates and legal employment outcomes by law schools, so that would-be law students have a more realistic idea of how much they are likely to owe and earn after graduation.

“People have long viewed a legal education as a ticket to financial security,” McEntee sais. “And that just wasn’t the case. Not only did a substantial number of graduates not actually become lawyers, but then once you do become a lawyer, not all the salaries are commensurate with what you might expect if you get your information from the news or TV or movies.”

McEntee pointed out that fewer than 70 percent of today’s law school graduates land jobs that require a J.D. and passing the bar exam — the legal jobs that tend to pay the highest salaries. Several decades ago, the proportion was above 80 percent.

And entry-level law salaries haven’t even kept up with inflation in recent years.

Iowa attorney Kyle Fry is active in an American Bar Association young lawyers’ group that advocates for law school reform. He said new DIY legal apps and technology-driven services are undermining employer demand for fully qualified lawyers and sapping legal professionals of their earning power.

“Arming young attorneys with six figures in debt and introducing them into a market where they have to now compete based solely on price with alternative legal service providers is a bit of a failure on the law schools’ part,” Fry said.

Fry thinks law schools should adopt new instructional methods — like online education — to try to moderate tuition costs and student debt burdens.

“Distance education is a really big thing everywhere except in law schools,” Fry said. “Law schools tend to be in locations where the cost of living is high, and that tends to also lead to higher borrowing for students.”

Failing law schools, meanwhile, leave financial and career troubles in their wake for students and alumni. Some government-subsidized loans can be forgiven when a school closes and a student’s education is aborted, but the process is complicated. And graduates may be left without the support and reputation of their former law school.

“I feel sad, disappointed and frustrated,” said Phoenix real estate attorney Melissa Breeden of her alma mater, Valparaiso University Law School. Breeden served on the school’s alumni council until last year.

“A law school that has been around for 130 years, that really served a need, is shutting down,” she said.

Breeden said fellow alumni are sharing memories and concerns for the future: “You know, here I’ve got my degree from this law school that doesn’t exist anymore,” she said.

Correction (Feb. 27, 2019): In a previous version of this story, Marketplace mischaracterized the ownership of Arizona Summit Law School in Phoenix. The school, which announced in late 2018 that it was closing, is owned by InfiLaw Systems and has been owned by InfiLaw Systems since its founding. The text has been corrected.

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