Thursday, December 31, 2015

Monopolies Don't Go On Forever

Kodak was one of the pre-eminent brands in the US from the 1890s until the 2000s. As late as 1976, Kodak sold 90% of film and 85% of cameras in the U.S. They kept innovating and improving their products through the years and stayed far ahead of other companies in the camera film industry.

Kodak believed its brand was so strong that they were impervious to competition. They turned down the opportunity to become an official sponsor at the 1984 Olympics in Los Angeles. This gave competitor Fujifilm, a company looking for a foothold in the American market, the chance they needed to increase their market share. This missed opportunity by Kodak gave Fujifilm the push it needed to sustain its U.S. business and to overtake Kodak. Other factors that took Kodak down was a failure to continue creating new products, a culture of complacency, and a belief that the good times would never end.

In 1981, a Kodak executive named Vince Barabba completed a study that pointed to digital as being a real threat to Kodak's existing business model. But, on the bright side, Barabba said that the company had 10 years until digital technologies would become a viable threat. So what did Kodak do? Not much. The company was actually a pioneer in the field of digital photography, producing a prototype digital camera in December of 1975. But Kodak's huge margins on photography supplies, which reached up to 70%, were too enticing. The company commissioned many products that were "digital props" for its core physical film business, such as the Advantix camera. As other companies like Canon overtook them, the complacency of Kodak's leadership caused the company to fall to where it is now: a bit player in a commoditized industry.

Accelerated JD programs are a way for students to make less of a time commitment. In theory, people who can't commit to being out of the workforce for three years may be able to justify two years in law school. Per the website for the University of Washington's Accelerated JD program, the types of students who this type program is attractive to include mid career professionals, foreign lawyers, students with a definite career plan for after law school [Ed. Note: Can you get any more nebulous?], and adults who seek to re-enter the workforce. The appeal for this type of program is especially acute for a foreign attorney. A foreign attorney already knows how to "think like a lawyer". Providing these individuals an avenue to get back into the legal profession in a compressed time frame is an attractive proposition. A year not spent in law school is one fewer year of lost opportunity cost for these people. These programs were the next big thing back in 2008.

There have been many famous figures, including President Obama, who have called for the elimination of the last year of law school. A recent New York Times article talks about the failure of the accelerated JD program concept.  Northwestern, the lone "elite" school to create a two year accelerated JD program, is shuttering their accelerated JD program due to lack of interest. Law school administrators say that the accelerated JD programs were set up to appeal to people who would not otherwise apply to law school.  Thus, it is surprising that the accelerated JD program at a place like Northwestern failed only 7 years after its introduction. Which begs the question: Were these programs given the chance to succeed?

The cost of these accelerated JD programs is usually the same as that of a three year degree. This makes little sense. Per the University of Vermont's Accelerated JD program web page, their dean says, "The AJD program is one of the most innovative actions that VLS is taking in response to concerns about the cost of legal education." But if the cost is the same as a three year program, then the only cost savings is room and board for that third year. In a large city, these costs total a significant amount of money. But at a place like South Royalton, VT, this savings is a pittance compared to what students are paying in tuition. The value proposition is not there.

Some law schools also introduce a greater level of difficulty for students in their accelerated JD programs. For example, before being allowed to enroll in Brooklyn Law School's program, "Students must undergo a formal interview, either in person or via Skype, to “make sure that students understand it is a vigorous program." This is an admirable step, and one that the law school may want to institute for all incoming students. Creighton will not allow students to be in a joint degree program if they are in the accelerated JD program. There may be logistical reasons for this rule, but it should be up to the students to decide whether or not they can handle it. These roadblocks do not make the accelerated JD programs attractive to students.

Like Kodak, law schools are having to come to grips with the aftermath of their complacency. How did the story end for Kodak? They filed for bankruptcy on January 19, 2012 and are a shadow of the company they once were. With the impending failure of schools like Thomas Jefferson, law schools' day of reckoning may be nigh as well. Law professors and administrators, like the executives at Kodak, are trying to implement half measures while they fight hard to protect their core business. All the while, costs keep going up and students keep graduating with unconscionable levels of debt. It has to end. The sooner the better.


  1. Talk about monopolies. More like dicatorships. Did you read this story? "Louisville Law Professor Objects to 'Chinese Mind Control' Diversity Training." They forced both professors and law students to stand up and admit they were gay while everyone clapped. Be glad you didn't go here.

    1. Why doesn't that "law professor" write a 194 page law review arTTTicle about that issue - and add 841 notes to the damn thing?

    2. Did everyone also have to admit that they went to University of Louisville (2016 ranking 94- tied with seven other law schools) because they couldn't get into University of Kentucky (2016 ranking 63- ranking shared with three other law schools)?

    3. Thirty points on those idiotic "rankings" really don't matter: every law school in Kentucky is a fourth-tier toilet. For that matter, so is every law school in the adjacent states other than Illinois, Virginia, and maybe Tennessee.

    4. This is the real tier list, which has been fairly consistent for a long time now:

      Tier 1: HYS

      Tier 2: Chicago, Columbia, UVA

      Tier 3: UTexas, NYU, maybe UCLA and BOALT

      Tier 4: Everything else. Yes that includes the rest of the T14, as they aren't good enough to place nationally and for the most part aren't even that great regionally. Schools like Georgetown get out-placed by HY in the DC region. Heck UVA places better than Georgetown in the DC region, hence why I listed it.

      Texas is strong because everything else, outside of Chicago, is pretty much on the coasts. There is some work, and so Texas does well. Chicago has very similar reasoning. Usually people that go to schools on the coast are not really interested in heading to the middle of the country either.

      There isn't much work in most of the country. CA and NY, and to a lesser extent the NE region are able to place a few more schools because there is, or rather was, a bit more work in those areas. But that dried up long ago.

      So now law is just a stupid idea. Even for HYS it's not a slam dunk great idea, it's just not horribly risky and downright stupid.

      Note in my ranking probably UTexas and Chicago should be the lone tier 2 schools, but I bumped Texas down because it lacks some "prestige" and some regional power. I may be overrating Columbia and UVA as well, they might be more a Tier 3.

      The USNWR will have some similarities to my ranking list, especially if you go by quality of employment metrics. But for the most part, USNWR is useless, and really should stop listing after roughly 20 schools at most, and just list the rest as "worthless crap that's all about the same." Have every other school tied for 21, what difference does it make. That would be bold but would show some actual morality by those journalists, if they have even a bone worth of integrity in their bodies.

    5. I do it this way:

      Tier 1: Harvard, Yale
      Tier 2: Chicago, Columbia, NYU, Penn, Stanford
      Tier 3: Berkeley, Cornell, Duke, Michigan, Northwestern, Virginia
      Tier 4: All other accredited law schools. (Unaccredited ones—yes, this includes you, Indiana Tech—are not classified at all.)

      My rationale is explained at . Only those 13 schools ( at which at least half of the graduating class finds a job at a large firm should qualify for the top three tiers. No other accredited law school deserves the dignity of being placed anywhere but in the Tier 4 cesspool.

      Georgetown may have been in Tier 3 a couple of years ago. The Univershitty of Texas comes close to Tier 3 by my objective standard but belongs in Tier 4 because of its recent history of admitting people with LSAT scores in the 120s.

      As 1:17 said, even the Tier 1 schools are questionable gambles for those who won't be paying the entire cost (including living expenses) with cash. Tier 2 at a discount, or Tier 3 at a huge discount, might deserve consideration. Forget about Tier 4, however, and don't even ask about unaccredited law schools.

    6. How about unaccredited law schools?

    7. If Ohio State is a fourth-tier toilet, then how did Adam Lamparello, an Ohio Sate law grad, manage to become a law professor? That's a prestigious and well-paying job.

    8. Lamparello was probably a top student, thus propelling him onto the BigLaw->Academia track. An option that is not open to the 80% of the class which does not get either a job at a large firm or a federal clerkship. Just because somebody sometimes wins at the casino does not make gambling at the casino a wise investment.

    9. Ohio State may not have been a fourth-tier institution when Lamparello graduated, but today it is. In any event, as Stonemason said, one graduate's good outcome does not redeem the entire law school.

    10. Stone and OG, I'm pretty sure 8:33's comment was sarcasm, given Lamparello's taught a few RWA classes before becoming a "law professor" at a "law school" that had trouble giving away more than 13 free seats for its incoming 13 matrics...

  2. When I think back
    On all the Crap I learned in Law School
    It’s a wonder I can think at all
    And though my costly education
    hasn’t helped me much
    I can read the writing on the wall.

    They gave some nice sweet numbers
    They told us we’d clerk in summers
    Made us think all the World’s a sunny day. Yeah, yeah.
    I got a two-three average
    My life is one sad photograph
    Oh mama don’t take my scholarship away

    If you took all the jobs there are
    in this profession
    And averaged them together out of spite
    I know they’d never match my school’s imagination
    “Bi-modal” means the same as Black and White

    1. Nicely done. And the first closure of a law skule in 2016 will be one hell of a Kodak moment.

      On that note, my best wishes to all for a happy and scam-free new year!

    2. Sadly, I do not think any will close. Maybe a few will merge, but that's about it.

  3. I don't see the analogy of Kodak to law schools or the profession. A better analogy is the Cadillac brand. Owning a Cadillac was once an aspiration. It told the world you "made it." It was class. Today, if one owns a Cadillac, you are perceived as either dumb, old, or see them in Walmart parking lots being driven around by toothless women with cigarettes dangling from their mouths. A Cadillac is either a 40K Hyundai or 80K Suburban with extra chrome. The brand was degraded by cheap rentals, cheap deals and inferior quality. Same thing happened to law schools. Attending law school circa >1989 was a prestigious and exclusive. One needed at least a 3.4 from a real college (even then you were wait listed), a good LSAT score, and a great essay. It was competitive and to get into almost all ABA accredited law schools, except Marshall that catered to non-traditional coppers and older adults who flunked out if you didn't bust your ass. Like Cadillacs, the ABA and law deans, cheapened the brand to attract more students. They lowered admission standards and increased enrollments. Now Cadillacs are not unique, just another Hyundai and lawyers are just another gig in a dime a dozen profession.

    1. Exclusivity implies smallness. Mass-marketed products by definition are not exclusive. That goes for Cadillacs and also for law schools.

      Since volume must needs be small, an exclusive product needs a high profit margin. That fact suggests a strategy—upholding a high standard of quality—that is difficult to justify for mass-market products.

      As 8:09 said, both the Cadillac and the JD have become laughing-stocks in their respective domains. That follows naturally from the approach of marketing them to one and all. Law school may still have been prestigious twenty-five years ago, but it had fallen far by 2009, when scam-dean Frank Wu published—in scam-publication You Ass News—an article entitled "Why Law School Is for Everyone". Well, we have to admit that he was right: law school nowadays is for everyone. And that's precisely the problem: everyone is admitted, and everyone gets to borrow as much as law schools want to charge. This wanton mass-market roll-out of the JD has devalued the degree, and indeed the legal profession.

    2. Cadillac style!

    3. Hey, at least Cadillac is attempting to get back on its game with a focus on driving dynamics that is quickly being abandoned by BMW. They recognize a problem and are devoting money, energy and resources to fixing it.

      I would say law school is more like pre-bailout GM/Cadillac.

    4. At least with a Caddy, you get something that does what it's supposed to do. It's a car, it gets you from point A to point B on wheels.

      What do you get for your law school degree? It would be like buying the Caddy but instead of having an engine you put a rope around your waist and drag the thing around. Utterly pointless and idiotic, a net negative and effort on your part. And that's what law school is.

  4. There have been many famous figures, including President Obama, who have called for the elimination of the last year of law school.

    I'll one-up 'em all. Get rid of any educational requirement for passing a bar exam. Crank up the testing standards to ensure that passing the exam guarantees solid literacy and a basic level of broad legal knowledge. Actually test people on their ability to negotiate the legal system ("Adam is your client. Bob is suing him. Bob has just sent a copy of Legal Form X to you. What, if anything, must you do in response?").

    Don't offer any more federal student loans, and make private student loans dischargeable in bankruptcy, say, 10 years after graduation. The only schools that should survive are those which are actually prestigious enough to motivate employers to hire a large majority of the class. The schools without that reputation, without the J.D.-requirement for bar passage, wouldn't be selling anything more than you could get out of spending a few grand on a bar review course. There is absolutely no business case for giving hundreds of thousands of dollars of loans to Sally Solo. Strip the schools of their ability to peddle "Access to the Law".

    And a Happy New Year to y'all.

    1. I am AnonymousJanuary 1, 2016 at 7:00 PM.

      Because I was so infuriated at this topic, I actually did not read any comments before posting mine. It's interesting how the 2 topics in yours are exactly the same 2 in mine.

  5. Just think, tenured parasites will have a claim worth exactly zero once their school goes bankrupt! Looking forward to a huge, messy law school bankruptcy in the New Year.

    Best Wishes to everyone in 2016 !!!

    1. With the 7 figures or so they've already bilked, it's not really much solace to the legions of financially ruined scam victims.

      This is why generally society has placed punishment for crimes. It doesn't apply to bankers, academics or politicians however. For those classes the message is clear: keep committing crimes and profiting, and if you get caught we'll just tell you to stop. It's no wonder they keep doing these things, there's never a punishment for it! The rewards are huge, there is no risk.

    2. Good point at 1:17. First post of the New Year!

      You'd think that law professors could figure a way to hold perpetrators responsible for massive financial fraud. If not, what good are they?

  6. I'm glad you mentioned the AJD. As a professional, it has been on my mind a long time how I could become an attorney.

    If digital film is the enemy for Kodak, then online law schools (and no guaranteed loans) are the enemy here. 100% online education has been continuously denied by the ABA.

    As a CPA (in an international tax group at a Big4 firm) who wants to do international tax structuring, I need a law school that is
    - 100% online
    - accredited (or allows you to take the state bar exam, which is the ultimate goal)
    - low tuition

    Currently, only accredited schools require the LSAT, which is an unnecessary hoop to jump thru. Yes, I could spend 2 years of my free time studying and getting a 176. But the cost of 3 years tuition is too high. Throw in my opportunity cost ($105,000 in NYC), it becomes just mathematically stupid and financially reckless.

    If I could get a masters degree in accounting online from an accredited school without GMAT/GRE (which I did not do, but hypothetically could) and then go take the uniform CPA exam, why can't it be the same for lawyers to take the bar exam?

    The bottom line is I am sitting on the sidelines here, building my tax knowledge, and the ABA is being greedy. Moreover, if these student loans are not guaranteed by the govt, then the ABA will possibly drop the LSAT requirement and the 3rd year of law school. I admire, somewhat, what St. Francis is doing, but I am not moving my career to California. If I want to get my tax LLM from NYU/GT/Florida, I can't get in without ABA-approved school transcript even if I become a lawyer in California.

    It's a whole clusterfuck and maddening to even think about this. Right now, it seems it will never been in my favor, and I've been slowly accepting this over the past 2 years as I watched the LS train derail.

    1. Be glad you waited. A JD does not further an accounting career. The only thing it will add to your resume is the ability to take a case into court. It doesn't help you structure deals.

    2. My advice don't, the law field is already as this blog continually points out glutted, you'll spend a large amount of money with very little if any sensible gain economic analysis just shows it's a bad deal. Heck that's why am taking my economics bachelors and getting a masters in accounting to become a CPA, the cost-benefit analysis shows it's a much better deal, and it's not the doc review hell. so I'd say use your CPA for your job, focus fully on that do the best you can and rise in the ranks, or lateral out whichever you prefer

    3. 7:00 PM, why do you (somewhat) admire what St. Francis is doing? Unaccredited (and accredited) law schools are a dime a dozen in California. Am I missing something?

  7. I don't get the analogy. Law schools get monopoly pricing power through the state and federal government; you need typically need an ABA-accredited school both to sit for the bar and be eligible for student loans. Kodak was just a successful brand.

    CSB: My previous employer used to spend several million dollars a year on film while converting to digital imaging as quickly as economically feasible. Our Kodak reps would occasionally enter our locations' storage areas without permission to make sure we weren't buying supplies from Kodak's competitors.

    1. I don't get it either. Kodak was fat, dumb and happy and felt no reason to change. Had they realized what was going to happen they'd have jumped on digital right away. Had the automakers known their lunch was going to get eaten they wouldn't have let quality slip and given the UAW whatever it asked for and then passed the costs on to the consumer on the theory of "who else is going to build cars?"

      The lawprofs and scam deans know full well what is coming. They are going to keep sucking up student loan money by whatever means necessary until they can get themselves to a comfortable retirement and then let it go down the toilet.

    2. Actually, the law professors and deans didn't know ether that Gub'mints would let go thousands of attorneys in massive budget cuts and then not rehire when the economy improved. It wasn't foreseeable that some Big Law firms would disappear overnight or partners and associates at others would loose their jobs. Unlike law deans, these companies cut capacity, dealerships, innovated, and renegotiated labor deals. Law Deans to the contrary have attempted to increase enrollment, lower admission standards and pumped out excess capacity while the market was emplodling. The ABA should be cutting capacity (law school failure factories) yet a couple more schools are going to be coming on line. Would the Chrysler build new factories for a giant Imperial if the industry plummeted to 8 million cars a year for the world?

  8. I also don't think the analogy is exact. Kodak lost its market share due to innovation spurring new competition, of which Kodak did not participate due to complacency. Barring a drastic policy change, law schools are legislatively insulated as the sole gatekeepers for entry in the legal profession. There is no possibility for innovation to create new competition. In most states, one can only become an attorney via passing a state bar examination, and one can only sit for said bar exam by graduating from an ABA accredited law school.

    What law schools did do, as others have said, is de-value their product by consistently producing a surplus of what the market demanded over many years. This de-valuing occurred while the schools simultaneously gouged the price of their product, the exact opposite of what should happen in a market economy. Law schools were able to flout this basic rule of economics by "massaging" their employment date to create an inflated perception of the value of their product.

    This went on for many years, but such mis-information could not go on forever in the information age. Through internet forums, the "scam-blog" movement formed to discuss the true value of the JD and put pressure on the ABA to demand more transparent employment figures from the law schools, which has happened. Now that consumers have a more accurate idea of the value of the law schools' product relative to the cost, many are simply longer purchasing it.

    Unlike, Kodak, it isn't lack of innovation that's killing law schools, it is basic economics, caused by the fact that information regarding the actual value of law schools' product is now readily available.

    1. The moral of the story is just lie and you can make a lot of money with zero punishment after you get caught. In the meantime deny things as much as possible.

      Of course this really only works if the government hands you a blank check with no strings attached, no oversight and zero pressure on you not to commit blatant fraud, while actively assisting in selling your worthless product with propaganda of their own.

      I have to ask who is the worse party here. The law school deans and profs that knowingly committed the fraud, or the government which should have known and enabled it all. In my eyes, the government is more at fault, as it demands a position of authority and power, so thereby it should have a fiduciary duty to the people. A business doesn't have that duty, and these schools have always been businesses, which the "sophisticated" government should have known.

    2. Actually, that fat pig of a law school "dean" at the University of Washington is arrogant enough to throw away her monopoly. She has advocated opening many legal roles to non-attorneys.

      And she still thinks she can charge exorbitant tuition and offer very little training to future attorneys.