In Tight Job Market, Some Want Bar Association to Toughen Law-School Accreditation Standards

As the American Bar Association prepares for its annual meeting in Toronto this week, it finds itself under increasing pressure to tighten the spigot on the steady flow of law schools it has been accrediting.

Federal regulators and disillusioned law-school graduates have questioned whether the association’s standards are rigorous enough at a time when record numbers of law-school graduates are competing for a shrinking number of legal jobs.

Much of the critics’ focus has been on misleading statistics many schools report to the association about their graduates’ job prospects. But the critiques also raise a broader question about how—and even whether—the association should be protecting prospective students from taking on more debt than they’ll realistically be able to pay off.

Over the last decade the number of ABA-accredited law schools grew from 182 to 200, with enrollment in juris-doctorate programs increasing by 17 percent, to 154,549 last fall. A record 44,004 new lawyers flooded the market last year.

And even as the number of applications to law schools dropped 11 percent this year, after two years of increases, the number of law schools is poised to continue to grow. At least a half-dozen new law schools are in the pipeline, with several more planned but on hold because of state budget cuts and dwindling contributions from donors.

Despite the saturated market, many universities are tempted to open law schools because of the prestige they offer. And because they require no labs or costly equipment, and typically can run large introductory classes, law schools also are widely viewed as cash cows that can subsidize other money-losing parts of universities.

Many educators question the need for more law schools at a time when only 64 percent of 2010 graduates reported having full-time jobs that require a law degree within nine months of graduation, according to the National Association for Law Placement. Many graduates are working as paralegals, while some are trying to whittle away at their debt by waiting tables or working as store clerks.

For those landing full-time jobs, the median starting salary fell by nearly 13 percent for 2010 graduates versus 2009 graduates, to $63,000.

“Given the questions being raised by the increase of the number of law schools, the increase in graduate debt, and the decrease in graduate job prospects, this raises concerns regarding the ABA’s internal controls,” U.S. Sen. Charles E. Grassley of Iowa, the top Republican on the Senate Judiciary Committee, wrote in a letter to the bar association in July. The letter included 31 questions that raised concerns about accreditation standards, loan defaults, and whether law schools were using a “bait and switch” approach by offering merit scholarships that many students would later become ineligible to receive.

The ABA responded, in a letter to Senator Grassley, that it has no way to track loan default rates for 181 of the 200 schools because the U.S. Department of Education doesn’t break out such rates for schools that are part of larger universities. The ABA says the highest default rate among the remaining schools is 7.4 percent.

The association said it shares the concern over default rates. But “we have to be careful not to overreact to the current economic situation and deny people access to legal education just because of what’s happening in the job market right now,” Hulett H. (Bucky) Askew, the ABA’s consultant on legal education, said in an interview last week.

“Would people be comfortable if we said, ‘There are 200 accredited law schools, and that’s all we’re going to have. We’ll accredit the best, and we’ll only accredit another if we knock one off the list’?” Neither, he says, is it the proper role of an accreditor to set a cap on the number of students a school can graduate.

“I’m not an antitrust expert, but there are legitimate questions about whether an attempt to set a cap or control access to the profession wouldn’t raise issues of compliance with various antitrust laws,” Mr. Askew says.

Tightening the Reins

The ABA is, however, taking steps to tighten its controls. It is revamping the annual law-school questionnaire to elicit more-detailed information from administrators, such as whether the jobs graduates fill are full time and whether they require a law degree.

It is also considering raising, from 75 to 80 percent, the minimum threshold for first-time bar passage that law schools must achieve to remain accredited.

In June, a federal panel that reviews accreditation agencies voted to continue the ABA’s accrediting authority but found it to be out of compliance with 17 standards required of accrediting agencies, including the need to consider student-loan-default rates in assessing programs. Senator Grassley cited that analysis in his letter that, among other things, asked the ABA how many law schools it had placed on probation.

In its response, the ABA said four schools have been put on probation since 1990, and, in each case, full accreditation was later restored. Only two schools had their accreditation revoked; the most recent, in June, was the University of LaVerne College of Law. The decision was based largely on the school’s first-time bar-passage rate, which was 53 percent in 2010, up from only 34 percent the previous year. from 34 percent to 53 percent.

Passing a state bar exam is only the first hurdle for graduates. Economic Modeling Specialists Inc., a company that crunches employment and economic data, found that nearly every state has a surplus of lawyers. Nationally, it found, 53,508 people passed the bar in 2009, more than twice the number of openings for lawyers, which was 26,239 that year.

Jimmy Strebler, a 46-year-old building contractor, is looking forward to starting law school at the University of Toledo this fall but has no illusions about what the job market will be like when he graduates.

“If I were doing it to get a job, I wouldn’t go to law school,” he says. “But I’m at a position in my life where I can hang out a shingle and start my own practice.” As someone whose business revenue shrank by half during the recession, he figures there’s a good future in bankruptcy law, one of three areas he is considering specializing in.

Victor J. Gold, dean of Loyola Law School, says his school is grappling with how to respond to the current job market in ways that don’t hurt the school over the long term.

“I’ve been in legal education for 30 years, and this is the worst job market I’ve seen,” he says.

While a few schools have reduced enrollment this year, most, like Loyola, rely on tuition to cover faculty salaries and other costs. Reducing the class size—currently about 400 per year—isn’t a realistic option for Loyola, Mr. Gold says.

Diminishing Draw

While law schools, like other professional schools, were an appealing option for students during the early years of the recession, the luster may be wearing off.

“For the first few years, a lot of kids got out of college, had no jobs, and were looking for somewhere to park themselves and ended up in law school,” says Mr. Gold. But over the past year, law schools have taken a lashing in the press and on so-called law-school-scam blogs with names like Subprime JD and Third Tier Reality, in which angry former students take on schools they feel duped them into enrolling.

While much of the job angst has focused on cuts at big law firms, Loyola’s graduates are hurt more by a near hiring freeze in many state and local government jobs, Mr. Gold says.

“Ultimately, those jobs will come back,” he says, but by then there will be years’ worth of frustrated job-seekers lining up to compete for them.

If applications continue to drop, more schools may be forced to accept smaller classes, and some lower-tier law schools may ultimately go out of business, many legal educators predict. But in the meantime, critics charge, the schools seem to be impervious to the laws of supply and demand, continuing to increase enrollment even when applications and job prospects are down.

Lloyd A. Semple, dean of the University of Detroit Mercy School of Law, says he offers a bit of consumer protection to prospective students. “I advise people to make this investment only after a very careful analysis of your options, the potential for return, and what you want to do with your life,” he says. “You may get out with $100,000 in debt, and I can’t make any promises about what the market will be like. There will be risks, but we’ll do our part to give you the best education we can.”

He says admissions counselors won’t accept applicants who would probably flunk the bar exam. “It’s immoral to take $35,000 from students who have very little chance of making it through the first year.”

Detroit Mercy, where applications were down 15 percent this year from last year, encounters tough competition from Thomas M. Cooley Law School, which has four campuses across Michigan. With 4,001 students, Cooley boasts the largest enrollment of any law school in the United States.

Cooley, which accepts three entering classes a year, is engaged in a bitter legal dispute with critics who accuse it of misleading students about job-placement and default rates.

Cooley officials sued two lawyers and a group of online bloggers, accusing them of defaming the school by spreading lies about the institution.

In addition to the 200 schools that are fully approved by the ABA, the association recently granted provisional accreditation to the law schools at the University of California at Irvine and Drexel University and to the Charleston School of Law, which is freestanding.

More than a dozen institutions have been testing the legal-education waters in recent years. Several, like the University of North Texas, decided they weren’t ready to take the plunge. But others, including Lincoln Memorial University, in Knoxville, Tenn.; Belmont University, in Nashville; and Louisiana College, in Shreveport, La., are jumping in, each with the conviction that the niche they have carved out will persuade students to take a chance on an unaccredited school.

Belmont, whose specialties will include entertainment law, will open its doors this fall as the third law school in Nashville and the sixth in Tennessee. Officials say there is still a demand for another school that will focus on graduating practice-ready attorneys with high ethical standards.

Meanwhile, Husson University, in Bangor, Me., dropped its plans for a law school, as did the University of Delaware. A feasibility study at Delaware concluded that a law school would lose money for its first decade of operation, with a cumulative operating deficit of $250-million if the cost of a new building is factored in.

That, says the ABA’s Mr. Askew, should give pause to anyone who thinks that opening a law school is cheap and easy.