Evolving Models of Legal Practice and Legal Education in the United States: Challenges and Opportunities

Joan S. HowlandRoger F. Noreen Professor of Law and Associate Dean for Information & Technology, the University of Minnesota Law School, USAChair, American Bar Association Council on Legal Education and Admission to the Bar

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In 2014, there are 203 law schools in the United States accredited by the American Bar Association (ABA) and approximately 145,000 enrolled law students

◦ In 1970, there were 166 accredited law schools and approximately 110,000 enrolled law students

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From Fall 2010 to Fall 2013, first year enrollments at ABA accredited law schools fell from 52,488 to 39,675 students, a decline of 24%

Across the 203 ABA accredited law schools, the decline reflects a loss of revenue of over $325,000,000 for the 2013 – 2014 academic year

Over the course of next three years, this revenue decline reflects a combined loss of over $975,000,000 for the ABA accredited law schools

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• The majority of ABA accredited law schools experienced a decline in first year enrollments over the past two years.

• 81law schools have seen a decline in first year enrollments of over 10%

• 65 law schools have seen a drop in first year

enrollments of between 20% and 40%

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Several law schools in the United States enrolled over 200 students in their first year classes in 2010

In Fall 2013, these same law schools enrolled less than 90 students in their first year classes

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• Decline in applications – 12.3% decline in 2012 and a decline of another 12% in 2013

• Decline in number of students taking the LSAT exam – approximately 20% over the past two years.

• Perception of unstable legal employment market

• Expansion of graduate programs that attract students who otherwise would have enrolled in law school

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Average cost of annual law school tuition is $40,000 per year, exclusive of extra fees, living expenses, etc.

Tuition at most top 25 law schools, including public institutions, ranges from $46,000 to $55,000. This figure does not include living expenses.

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Examples of annual tuition at top tier law schools in Fall 2013 (does not include living expenses)

Cornell $55,000 Yale $53,000 Pennsylvania $53,000 Harvard $50,800 Georgetown $48,835 Minnesota $47,058 (non-resident) Notre Dame $45,980

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Examples of tuition at lower tier law schools in Fall 2013 (does not include living expenses)

New York Law School $49,335Calif. Western School $47,000Univ. of San Francisco $44,064Golden Gate University $42,000

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Harvard Law School Budget for a First Year Law Student Entering in Fall 2014

Tuition $54,850Housing, food, etc. $20,722Basic health insurance $ 992Added health insurance $ 2,366Books, etc. $ 1,250Incidental expenses $ 1, 720

Total: $ 81,900 per year

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In 2013, the average American law student graduates with an estimated debt load of over $125,000 (not including undergraduate debt)

Many law students graduate with over $200,000 in debt including undergraduate debt

Note: scholarships, provided by the law schools do assist in reducing debt

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• For the 46,478 students who received juris doctorate (JD) degrees in Spring 2013:– 56.2% are employed in long term/full time

positions that require a JD degree – Another 5.9% are employed in long term/full time

positions which prefer but do not require a JD degree

– 1.5% are enrolled in another graduate program– Approximately 36% are employed in positions

that do not require or prefer a law degree, or are unemployed

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Very difficult to calculate The premier law firms, which employ about

5% of all law school graduates and draw almost exclusively from the top tier law schools, pay as high as $160,000

The average salary for 2 – 25 attorney law firms is $67,000

Many graduates, especially those employed in government or public interest jobs, earn less than $50,000

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Law students are graduating with huge debt and entering a weak employment market

Law firms are restructuring their economic and service models in response to financial realities

Traditional law school educational models are not responsive to current knowledge and skills needed by law firms and clients in a global environment

Curricular change is expensive at a time when schools are attempting to cut costs to reduce tuition and student debt

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• Restructuring of Economic and Service Models

– Fewer partner track attorneys– More non-equity attorneys– More attorneys on short term contracts– Some outsourcing of legal work overseas– Merging of firms to create “mega-firms” of over 1000

lawyers– Different billing models– Evolving lawyer-client relationships– Some traditional “legal” work being siphoned off to

other professionals

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According to a recent survey by Citi Private Bank, law firm revenue grew by 2.5 % in 2013

Many large law firms, especially those with international practices, had as much as a 20% increase in revenue

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However, smaller firms and/or those that had not restructured to respond to evolving changes in the legal market experienced as much as 21% decline in revenues in 2013.

Firms that do not have private-equity clients, corporate practices, and international practices are particularly struggling.

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To remain economically healthy in an increasingly competitive legal practice environment, law firms are seeking:

◦ “Practice ready lawyers” – little training or mentoring needed

◦ Lawyers from diverse backgrounds to respond to the needs of diverse clienteles

◦ Lawyers with client-development skills who can generate business for the firm

◦ “Nimble” lawyers who are experts in a number of practice areas – “utility fielders”

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More pressure on law schools, who are competing for fewer applicants who will be eventually competing for fewer jobs, to design curriculums that respond to the needs of evolving legal practice

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• Curricular changes aimed at more effective and relevant professional skills training; more emphasis on clinical and experiential learning.

• Structural changes to traditional law school model of legal education; offering first year electives, smaller classes, etc.

• Curricular and program changes to respond to law firm and client pressures to “go global.”

• Focusing on recruiting more students from diverse ethnic and cultural backgrounds

• Attempting to prepare students to succeed in practice without intensive mentoring by senior lawyers

• These are all very expensive curricular innovations at a time when law schools are trying to keep both tuition and student debt load down.

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To fund these curricular innovations, all American law schools are looking at revenue-generating initiatives:Expansion of post-JD degree programsConsideration of non-JD licensing degreesCertificate programsOffering courses to targeted audiences, including those overseasLarger enrollment of international studentsCourses delivered online

To cut costs to fund new initiatives, many law schools are:

Reducing class sizes intentionally in an effort to

reduce overhead costs Encouraging senior tenured faculty to retire and

not filling their positions, or filling the positions with junior, less expensive programs

Hiring more contract, non-tenure track faculty Eliminating non-essential staff and other

expenditures

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Reducing breath of academic program and focusing on a few specialized areas

Increasing faculty teaching loads

Reducing number of law school sponsored conferences and other programs

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“Never let a good crisis go to waste”

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