Almost at the same time no one was asking why the WSJ was publishing excerpts from Amy Chua's, How To Make A College Student, no one was also asking why the NYT was interested in whether law schools weren't a scam.  I respect that this is an unwieldy first sentence, but it's late and I'm drunk.  That's how I start my essays.

I.

The New York Times asks, Is Law School A Losing Game? 

The piece has two main points.  The second one is that students incur a huge amount of debt with little ability to pay it back, and, if the law jobs don't materialize, won't ever pay it back.  This second point is presented first, indeed, in the first sentence:

If there is ever a class in how to remain calm while trapped beneath $250,000 in loans, Michael Wallerstein ought to teach it....

Mr. Wallerstein, who can't afford to pay down interest and thus watches the outstanding loan balance grow, is in roughly the same financial hell as people who bought more home than they could afford during the real estate boom. But creditors can't foreclose on him because he didn't spend the money on a house.

He spent it on a law degree. And from every angle, this now looks like a catastrophic investment.

Which brings us to the first point, the main point: law schools are lying.  Despite the fact that "JDs face the grimmest job market in decades" the schools are somehow reporting to prosepctive applicants that, e.g., "93% of grads are working" and "the median starting salary of graduates in the private sector is $160,000."

How do they do this?  "Enron-type accounting standards..."says a law professor.  "Every time I look at this data, I feel dirty."

A law grad, for instance, counts as "employed after nine months" even if he or she has a job that doesn't require a law degree. Waiting tables at Applebee's? You're employed.

 

The schools do this because the schools are extremely profitable businesses: high cost, low margin.

"If you're a law school and you add 25 kids to your class, that's a million dollars, and you don't even have to hire another teacher," [said an ABA commissioner.]

II.

Why do law schools bother to fake this data?  If it was "80% employed" vs. "90% employed," who would notice?

They fake it because that pointless data gets handed over to the illusionists at US News along with other pointless data (expenditure per student, library facilities, max bench press) to generate a single overall ranking, which is just the kind of simplistic, pseudoscience objectivity that students, parents, and schools demand.

A quick word on the US News rankings.  25% of the ranking comes from a "peer quality assessment" in which schools rate each other.  So, say you are Clemson Law School.  What should you do?  "Rate all other programs below average."  And, of course, do what University of Wisconsin did: give the highest score only to itself and one other school that you're not really competing against.  You can also bring up that "alumni donations" factor by calling alumni and asking them to donate $5, and whoever doesn't donate label as deceased.

A ranking, like the "percent employed", is an example of information bias.  You think you know something, but you don't.   If Fordham is #21, is that different than saying it is #29?  Or saying it is in the second decile?  It's a deliberately obfuscated precision that you can't act on.  That level of "certainty" does not inform your decisions.

By the way, the ranking doesn't have to be inaccurate for it to be information bias.  A ranking can be deadly accurate and still be ridiculous.  Back in college and yesterday, me and my boys used to rate women to the tenth decimal place, "yo, yo, yo, check this out, I just got maced by this 8.9!" and while our scale had confirmed 100% inter-rater reliability, what were we going to do with this information?   Was our audition going to be any different with a 8.4 vs. a 9.7?  "Hi, I'm here for the part of sketchy boyfriend, here's my headshot, references... Light my head on fire?  No problem." 




See?  Grade inflation.  We already know about the problem of grade inflation in colleges; the LSAT was supposed to help offset this by offering a standardization.  Now the ABA wants to do away with the LSAT  requirement.  Fine.  But the result of all this is you can't really be sure how you compare to other applicants, so instead you demand objectivity in the schools' rankings as a proxy to guess where you might belong.  "I think I belong in a top tier school..."  How do you know?   The analogy is you have no idea what kind of a man you are and thus what kind of a woman would be right for you, so you just harass the girls that other people think are the best.  Then if you don't get her you're angry at the girl ("these bitches just want jocks and legacy applicants"); and if you get her you're surprised to find that three years with her has left you unfulfilled.

And once they're in law school, there is more grade inflation and even retroactive adding of .333 to everybody's GPA.    And now law school graduates are surprised to find they're unemployed.  Law students had no real measure of their status as an applicant; no reliable descriptor of what kind of a school they went to (short of branding); and no reliable measure of their performance there.  "What do you mean I can't get hired?"  They think to themselves,  "amn't I bright? Hard working? Fluent in legal theory?"  And the employers respond, "how the hell would we know that?"


III.




That's Mr. Wallerstein, I assume clutching a yellow legal pad. 

The structure of the NYT article is to offer a profile of an unemployed graduate and use it to explore the law school system.  In the vein of its analysis of the unemployed college grad, it exposes him as intelligent but entitled douchebag. 

Here's an example.  Though his massive debt is in the first sentence, it isn't until page 4 that you learn why he's in debt:

WHEN Mr. Wallerstein started at Thomas Jefferson, he was in no mood for austerity. He borrowed so much that before the start of his first semester he nearly put a down payment on a $350,000 two-bedroom, two-bath condo, figuring that the investment would earn a profit by the time he graduated. ...Mr. Wallerstein rented a spacious apartment. He also spent a month studying in the South of France and a month in Prague -- all on borrowed money. There were cost-of-living loans, and tuition of about $33,000 a year. Later came a $15,000 loan to cover months of studying for the bar.

 

He lives with his fiancee who is "unperturbed by his dizzying collection of i.o.u.'s."  She doesn't want him to get a corporate law job because (take a sip first): "we like hanging out together."  Carly, another unemployed law graduate explains, "I guess I kind of assumed that someone would hook me up with something."  I'm sure she felt she deserved it.

Do you hate law grads yet?  Hold on, here's how the article ends:

MR. WALLERSTEIN, for his part, is not complaining. Once you throw in the intangibles of having a J.D., he says, he is one of law schools' satisfied customers.

"It's a prestige thing," he says. "I'm an attorney. All of my friends see me as a person they look up to. They understand I'm in a lot of debt, but I've done something they feel they could never do and the respect and admiration is important." [my edit: he isn't actually practicing law.]

...And he's a quarter-million dollars in the hole.

Unless, somehow, the debt just goes away. Another of Mr. Wallerstein's techniques for remaining cool in a serious financial pickle: believe that the pickle might somehow disappear.

"Bank bailouts, company bailouts -- I don't know, we're the generation of bailouts," he says in a hallway during a break from his Peak Discovery job. "And like, this debt of mine is just sort of, it's a little illusory. I feel like at some point, I'll negotiate it away, or they won't collect it."

He gives a slight shrug and a smile as he heads back to work. "It could be worse," he says. "It's not like they can put me jail."

Haters: this guy is asking for it. 

IV.

Let's take all this at face value.  Is he entitled?  Delusional? 

I don't doubt for a moment he sincerely believes he is a lawyer, because lawyer for him isn't a profession or even a job, it's a label, a code word for a kind of intellectualism he wants for himself.  As long as "all of my friends see me as..." it was well worth the cost.  He didn't study to become an attorney, he bought a back-up identity.

It's worth asking why Wallerstein chose a JD as a back-up identity, and not an MD or a PhD.  Can we agree it was easier?  Why not an MBA?  Because an MBA is for something else; a law degree is a brand in itself.  You can get an MBA and still be nothing unless you find a job.  Get a law degree, you're always a lawyer.

It's probably the same reason he didn't try some other hail mary like, say, borrow $200k and just open up a coffeeshop or become a daytrader.  You could fail at those.  Graduate from law school-- and everybody does-- and you can't possibly fail. (Surprise.)

I go through this to show you that law school, while it attracts people wanting to practice law,  also attracts college kids who are bright but emotionally adrift.  They don't know what they want-- besides a mental image of a lifestyle-- and they don't know who they are-- besides a mental image of an identity.  A three year law program is a great way to postpone reality and still have something to show for yourself. 

This is as good a place as any to point out that a huge portion of this failure to mature is the fault of the undergraduate college that gave him up for adoption.  If four years of mandatory  intellectual exploration not to mention electives in acid and penetration can't guide you to self-awareness then you probably paid too much for the experience.   Smart students will always tell you that most of what they learned in college they learned on their own, which is true but opposite to the purpose of college.  Demand a refund. 

Law schools are magnet for those kinds of people, because to people not in law school it sounds like it's three years of elevated debate, philosophy, history, thought, with a feudal ka-ching at the end for joining the club; in other words, it sounds like what college should have been.  

In actuality, law school is utterly useless. The only thing that was useful was the writing class, which basically taught you how to argue thoroughly but efficiently on paper. Law school is also the first place that many people are confronted with someone who tells them their conclusions are stupid, so I suppose there's benefit in that.

IV.

Please remember that as I quote the Times' description of Mr. Wallerstein, I have no idea if it's true, I only know that the NYT wants me to believe it's true, which makes me more suspicious than 6 clear vesicles on both labia.  The one thing I know for sure is that the New York Times-- throw in The New Yorker and The Atlantic, too-- hates its readers.  It wants them, of course, but see them only as organ donors.  The Times is accused of being a leftist/socialist paper, but that's not true, their collectivist perspective comes from assuming all of you people are free range cattle.  It thus feels it has an ethical obligation to construct stories that will get you to believe their message, even if the facts of those stories have nothing to do with the message they're interested in.  If you follow this, you then discover that Mr Wallerstein is an unemployed law grad--let alone an entitled douchebag-- but a straw man.

While it looks like this is a story about law schools, it is in fact a story about debt-- and who's to blame.  By debt I'm talking American style debt, the kind that Greece and Iceland scooped up like a Komatsu front loader only to discover they couldn't print money like we can.

So now we have a rewrite:  You're promised the American dream.  You borrowed against that dream, but now the dream is gone and the debt remains.  Someone's to blame.  That's the story of housing in Florida.

Put that way, of course it's the law schools'/mortgage brokers' fault. How could a kid-- or a hispanic-- be smart enough to ever consider that they were too much in debt when the people in charge were saying it was okay to leverage because it would all work out?  Predatory lending.

Now, no one would dare propose taking that money away-- we want everyone in big homes-- but something has to be done, right?  What would be an effective solution to the high cost of law school?

Steven Greenberger of DePaul recommends a mandatory warning -- a bit like the labels on cigarette packs -- that every student taking the LSAT, the prelaw standardized test, must read.  "Something like 'Law school tuition is expensive and here is what the actual cost will be, the job market is uncertain and you should carefully consider whether you want to pursue this degree,' " he says. "And it should be made absolutely clear to students, that if they sign up for X amount of debt, their monthly nut will be X in three years."

That is exactly the kind of solution I'd expect from a lawyer: completely ineffectual and CYA.

Solving the J.D. overabundance problem, according to Professor Henderson, will have to involve one very drastic measure: a bunch of lower-tier law schools will need to close. But nobody inside of the legal establishment, he predicts, has the stomach for that. "Ultimately," he says, "some public authority will have to step in because law schools and lawyers are incapable of policing themselves."

And again, the lawyer answer: we need more regulation.

If you want one single sentence that summarizes precisely what is wrong with the interpretation of what is wrong with law schools, it's this one:

Today, American law schools are like factories that no force has the power to slow down -- not even the timeless dictates of supply and demand.

 

If something is immune to the laws of supply and demand, it's usually because someone deliberately set it up to circumvent those rules.

Supply and demand should have caused these lower tier schools to lower their costs to entice students away from the better but more expensive schools.  But they don't need to, because all law schools are free.  Read it again.  All law schools are free.

Not after you graduate, of course, but right now.  Law schools can charge anything they want because everyone has enough money to pay for it- today.  As long as there are guaranteed government loans available for this, there is no economic incentive to lower the costs.  And as long as the price is zero, demand will always be infinity.

If it was true supply and demand, #1 ranked Harvard and #100 ranked Hofstra wouldn't have the same tuition.  But they do, the same as stupid Washington University, which is so stupid it's in Missouri.  "It's underrated."  Bite me.  Are we saying that Hofstra's worth the same money as Harvard?  That people would pay anything to go to Hofstra?  No, they don't have to pay anything to go to Hofstra.  That's the point. 

You cannot, on the one hand, say you want to lower the number of students while on the other hand incentivizing them to go.  But you're not incentivizing the students, are you?  It's a wealth transfer to universities.  That's why you want to directly limit the number of schools  while keeping the payments to the rest of them intact.  More for you.  And if you have to throw Mr. Wallerstein under the bus to hide this truth, well, sacrifices have to be made.



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