Wednesday, May 29, 2019

Why tiny law schools cannot survive—and what that means for many an über-toilet

A law school needs a certain minimum level of enrollment. One study of the feasibility of a law school in Alaska (kudos to Law School Truth Center for the reference) cited an estimate of 75 students per year, which was more than twice as many as any law school in Alaska would attract.

Indeed, 75 is probably close to the minimum for any law school pursuing or maintaining ABA accreditation. A law school of that size might bring in $6M or $7M per year and would probably spend that much or more. Without a hefty subsidy (possible for a public law school), large donations (unlikely), or an unusual source of income (bake sale, anyone?), it could not operate for long with substantially lower enrollment.

Quite a few law schools enrolled fewer than 75 new students last year:

Appalachian, 50
Ohio Northern, 51
Concordia, 59
Faulkner, 59
Thomas Jefferson, 59
Florida Coastal, 60
North Dakota, 62
District of Columbia, 64
South Dakota, 71
Liberty, 72

(In addition, Penn State Dickinson and Southern Illinois each enrolled 76.)

Of the ten law schools listed above, all are toilets: nine are in Tier 6, by Old Guy's standard, and the other (Liberty) is in Tier 5. Seven of them have seen enrollment plummet from more than 100 new students per year earlier in the decade. Just a few years ago, therefore, all of them should have been financially viable; a few were even big profit centers, such as Florida Coastal, with 808 students in 2010, and Thomas Jefferson, with 422. Today, however, they are all marginal at best, and some of them are known to dip deep into the red ink.

The three law schools that have not suffered sharp declines from manageably high levels of enrollment all have special circumstances. North Dakota and South Dakota receive subsidies from their respective states. Concordia was established only in 2012 and never has had more than 75 students. Its parent university expected much higher enrollment. Perhaps the governments of the Dakotas will continue to waste money on their respective über-toilet law schools, but Concordia University cannot afford to sustain its über-toilet at a loss for many more years.

To consider the viability of these tiny law schools, let's look at an example. At Appalachian in 2017, total revenue was only $3.5M, with 128 students. Tuition that year brought in $2.3M; the rest came from gifts, grants, contracts, and investments. Expenditures, however, stood at $5.4M, which is more than half again as much as income. That spells bad news, particularly in light of Appalachian's endowment, which was only $4.23M at the end of fiscal 2015 (down 7.55% from the previous year).

How can Appalachian make up an annual shortfall that two years ago came to $1.9M? Consider that the average tuition paid was only $18k per student, although the nominal rate was over $30k. It would thus take well over 100 additional students, or some 35 per class, to save Appalachian. That represents a sudden 70% increase in enrollment. Even with that dramatic and unrealistic increase, Appalachian would not be in the black for three years to come.

Appalachian could instead increase tuition by 70%—to more than $60k, a level surpassed by only a dozen law schools of the Harvard, Columbia, Michigan, and Cornell variety. That strategy too seems unrealistic, although Cooley, charging $53k per year (and most students pay full fare), seems to be getting away with it.

How about borrowing the money? No creditor would lend it when Appalachian obviously could not pay it back.

Can Appalachian sell assets, such as its campus? After all, it does have a pretty brick building, complete with billiard tables in the basement. I haven't bothered to investigate the title to that land, but anyway I find it hard to see who would buy it. What, after all, could be done with it? It's located in tiny Grundy, Virginia, four hours' drive from even a small city such as Asheville, North Carolina. And if a buyer were found, the law school would need new quarters, which would also cost money—and entail a costly an inconvenient move, almost certainly out of the area.

Is there any other way to come up with $1.9M? Selling souvenirs at the bookstore can hardly bring in that much. Appalachian might pray for a donation, but its relatively unaccomplished alumni might not have much money and in any event might be disinclined to give much to their dying über-toilet law school. Might the state give privately held Appalachian a grant? I doubt it. Appalachian appears to be controlled largely by the McGlothlin family, one of whose members is the dean. It would be a poor, and suspicious, recipient of public funding.

Would any institution take Appalachian over? Appalachian has made overtures to various obscure colleges. But why should they want a failed law school that loses a couple of million dollars a year?

I conclude that Appalachian has one foot in the grave. Only a miracle could save it. I doubt whether it can last even two more years.

And much the same is true of most of the other schools on that list. Florida Coastal and Thomas Jefferson have shown signs of imminent shuttering, and some of the others must not be far behind. Liberty, with 72 1Ls last year, may appear to be an outlier on this list; however, it actually brings in very little money: 12% of the students get free tuition (some are even paid to attend!), 74% get discounts of 50% or more, and most of the rest also get a discount. Even by very generous estimates (using discounts of 50% and 10%, respectively, and ignoring the payments made to some students), revenue from tuition cannot exceed $1.3M per year for the entering class, or about $3.9M for all students. That does not cover payroll and benefits for a dean, 23 other full-time professors, 9 adjuncts, and the rest of the staff, never mind Liberty's other expenses.

North Dakota and South Dakota can last indefinitely, if their respective state governments are willing to sustain them at a loss. Better would be to admit that neither of those two large, sparsely populated states needs a law school of its own. Merge them and call them Dakota Law School. Build the school to straddle the border if necessary, perhaps between Ellendale, North Dakota, and Frederick, South Dakota; then each state can lay claim to it. Better yet, close both law schools down and cut a deal with the government of Minnesota so that students from the Dakotas can get their tuition their subsidized by their respective states. The law school at the U of Minnesota also depends on subsidies that the state is tired of paying, so this sort of deal might benefit all three states.

Saturday, May 25, 2019

Here's Your Feasibility Study, Shreveport

To make up for posting to the wrong blog yesterday, I'm now going to rip on the idea of a law school in a third-tier metro area, which is somehow an idea people are still discussing in 2019.

As Old Guy mentioned earlier this month, Shreveport, Louisiana, is actively exploring getting a new law school, or maybe a branch of Southern, whatever, who cares.  Earlier this week, the Louisiana House voted - 98-0 - for the Board of Regents to study the viability of a law school in Shreveport.

In other words, for now at least, they're seeking a feasibility study. Well, why can't we do that here and simply save the legislature some money?

As we know from the Indiana Tech experience, feasibility studies can be rigged by white collar salespeople desperate for a law school, leading well-meaning idiots down a path of disastrous idiocy.  Okay ideas go 50-48.  Atrocious ones, 98-0.

In contrast, consider this well-reasoned feasibility study for a potential law school in Alaska from 2004, which found that the entire state would only produce about 56 qualified law school applicants each year, not all of whom would necessarily want to attend law school in Alaska since Harvard is still in Massachusetts and people still want to go to places like USC.

Rounding up for convenience, Alaska has approximately 740,000 people.  At the 2000 census, it had 630,000, so it is gaining about 6k a year and the estimated population in 2004 would be around 654,000.  Using crude math, that means one qualified applicant for every 11,500 residents or so.  Nationwide, incidentally, there's currently about one admitted law student for every 8,000 or so people in the general population.  As we all know, however, there's too many darn people going to law school, so that number is probably high.

In any event, using the 75-student minimum number cited by the Alaska report, to support a law school, there would need to be an untapped population of 600,000 at an absolute minimum (this is approximately Wyoming's population, and it barely supports a law school dedicated to one single state) and more like 850,000 to a million.

Do we have that in Shreveport?  Nope.  The metro population for Shreveport, Louisiana, is around 450,000.  To get into the range of even minimum law school demand, you have to expand the population radius to include places like Longview, Texas (65 mi., 45k) or Texarkana (70 mi, 40k).

But neither of those places will really feed directly into a new 5th-tier school in Shreveport.  Longview residents can get in-state tuition at Texas public schools and Dallas (a two-hour drive away) fills most law school demand by itself with Southern Methodist, Texas A&M, and - now - UNT-Dallas (which was built in 2009, in part, to serve this area!). Texarkana is similar but on the Arkansas side it is just two hours to a state school that is more established and in a better location.

No one is moving from a nicer city to attend law school in freaking Shreveport and no one is fretting about driving two hours to law school instead of one.  It's not keeping a single person from going to law school currently, so building a law school in Shreveport would suck demand from schools like UNT-Dallas, UA-Little Rock, Southern U., Loyola-New Orleans, Mississippi COL, and similar places.

It's particularly egregious when you look at the in-state competition's admission scores.  In 2018, LSU's hypothetical 25th percentile student is at a 150 LSAT/3.16 GPA. Loyola's is at 148/2.89.  Southern's is at an offensive 142/2.55.  If there's anyone in Shreveport (or Monroe or Alexandria) with the chops for law school, they can currently get more than enough in scholarship money to make attending one of these places worthwhile and that's before we consider the Texas schools.  At a minimum, these paltry scores tell us there's no qualified in-state candidates being rejected or anything; that teat is milked..
 "If you look at points south between Baton Rouge and Shreveport and west between Dallas and Shreveport and north between Little Rock and Shreveport and east between Jackson and Shreveport we have one of the largest geographic regions in the country without a law school," Glover said.
Good God. Alaska (663 sq. mi.) has no law school.  There's no law school anywhere in eastern Montana or northern Wyoming.  There's no law school in northern Michigan, Wisconsin, or Minnesota.  There's no law school in Nevada outside of the very southern tip. A large swath of the Dakotas, Nebraska, and Kansas is completely devoid of any law school.  Western Texas has no law schoolat all.

Yet El Paso survives, same as Reno/Carson City, Mobile/Pensacola,  and - yes - Shreveport.  Colorado and Wisconsin - these are sizable states with more than 5 million people each, okay? - do just fine with two law schools. Arizona, at 7 million, should have only two.  Louisiana doesn't even have five million and it's already got four law schools, two of which objectively suck and a two of which are weak sisters to their southern peers.

Shreveport?  Shritttttt.  The city's not really growing and if it's made it this long 2019 is not the time to build.  If you come up with a feasibility study that says otherwise as to organic law school demand, the countdown to an Indiana Tech-like fate is on, because you're boarding a cruise speeding towards an iceberg even faster than the one boarded by the sophisticated consumers enrolling at Loyola or Southern with a 145 LSAT.

So I'm looking forward to this feasibility report and its exorbitant price tag, because it's either going to take 30 pages to repeat the above or be an incredibly, stupendously expensive lie.  And you know, that's sorta fun either way.

Friday, May 17, 2019

ABA trivially raises standard for accreditation; toilet law schools wage war against bar exams

Overriding strident opposition from its scamster-dominated House of Delegates, the ABA has finally forced through a namby-pamby amendment to its Standard 316. The former standard provided various means by which a law school could retain accreditation, notoriously among them "having at least 70% of its graduates pass the bar at a rate within 15 percentage points of the average first-time bar pass rate for ABA-approved law school graduates in the same jurisdiction for three out of the five most recently completed calendar years". Under the revised standard, at least 75% of those of a law school's graduates who take a bar exam must pass within two years. A law school that fails this standard has two years in which to come into compliance.

The new standard takes effect immediately.

This weak change may perhaps drive a few schools to stop scraping the bottom of the barrel for students. But it has already sparked reactionary struggle. Yesterday, presumably in anticipation of today's revision of Standard 316, various high officials from the following 13 ABA-accredited law schools wrote to ask the ABA to "convene a task force to work toward an appropriate outcome standard to determine fitness for the practice of law" and to offer to serve on the task force themselves:

District of Columbia
North Carolina Central
Northern Kentucky
South Dakota
Southern University Law Center
Texas Southern University
Thomas Jefferson
Western New England

The list reads like a veritable Who's Who of toilets and über-toilets. What do these exalted scamsters propose? They assure us that they "express no consensus view on an appropriate standard or outcome". Yet they add the following:

The precipitous decline in bar pass rates of graduates of ABA-accredited law schools in almost every state in the last ten years signals that the exams, themselves, may be faulty, that scoring may be improperly designed, or that other methods of determining fitness for the practice of law should be studied. We think an examination of how best to determine fitness for the practice of law will be fittingly complemented by the work of the NCBE Testing Task Force that is looking at the bar exam itself to determine whether it is “keeping pace with the changing legal profession.” While decline in bar pass rates might be addressed through a modified bar exam, additional solutions can be identified through an ABA task force studying the broader issue of an appropriate standard to determine fitness for the practice of law.

And there we have it. They blame the bar exams themselves for that "precipitous decline", and they propose to identify "an appropriate standard"—apparently the modification or outright replacement of the bar exams. Never do they suggest that the law schools could be responsible for any part of the decline. Well, the bar exams haven't changed much over the past decade, but the quality of the students at many an über-toilet has indeed declined precipitously. Consider the following illustrative data, which show for each year the LSAT scores (at the 25th, 50th, and 75th percentiles) and the rate of success on the state's bar exam for those graduates who took it in the year in question:

2010: 144/146/151; 84.5%
2017: 139/142/146; 58.8%

2010: 153/155/159; 79.3%
2017: 145/148/150; 46.9%

Thomas Jefferson
2010: 149/151/153; 55.9%
2017: 142/144/147; 26.5%

On the other extreme, we have the following very different results:

2010: 170/172/175; 97.7%
2017: 169/171/173; 97.7%

2010: 171/173/176; 98.0%
2017: 170/173/175; 100.0%

2010: 171/173/176; 97.1% (New York, not Connecticut)
2017: 170/173/175; 98.3%

These data, admittedly not exhaustive, suggest a correlation over time between a school's LSAT scores and its rates of success on the relevant bar exam. If it be objected that the two groups of schools represent different states and therefore different bar exams, I can happily substitute the U of Michigan (same state as Cooley), Duke (same state as Elon), and Stanford (same state as Thomas Jefferson): the results are similar. And they offer no support for the groundless allegation of "faulty" bar exams or "improperly designed" scoring.

Now, it is true that correlation does not imply causation. But the data above give at least grounds for suspicion. Any serious investigation would look at the cohorts themselves and ask whether the well-established decline in the quality of the students at many lousy law schools had anything to do with the plummeting of those cohorts' rates of success on the bar exams. Common sense suggests that it did, and the data back that up. But of course the scamsters who live large off toilet law schools won't do anything that might jeopardize their fancily paid sinecures. Instead, they want to abolish the exams that expose their schools' utter lousiness—all while purporting to act in the public interest.

Appointing a "task force" packed with a baker's dozen of toilet law schools would be tantamount to setting foxes to guard the henhouse. With at most three exceptions, those schools are utter disasters. Why the hell should they get to decide on "an appropriate standard"? They have no meaningful standards! They certainly should not be able to springboard themselves into compliance with Standard 316 by supplanting the bar exams with some low threshold that even their sub-marginal cohorts might be able to cross.

While they scheme to neutralize requirements for maintaining accreditation, the über-toilets have almost three years to bring their graduates' rates of passing up to the 75% mark. Some of them might succeed by imposing a minimum LSAT score of 150 or more. That, however, would entail reducing enrollment to a small fraction of the current level, and many über-toilets could not survive so drastic a reduction. I therefore anticipate open warfare against bar exams, the LSAT, and other objective standards that lay bare the irremediable shittiness of many dozens of toilet law schools.

Thursday, May 9, 2019

Louisiana and Texas may each be getting another unneeded über-toilet law school

During the past three years, eight law schools have announced their closure: Indiana Tech, Whittier, Charlotte, a campus of Cooley, Savannah, Hamline, Arizona Summit, and Valpo. Three more closures appear to be imminent: those of Western State (no longer receiving money from student loans; embroiled in trouble over the disappearance of millions of dollars in federal funds; barely escaped sudden closure in the middle of the semester that just ended), Thomas Jefferson (only 59 first-year students enrolled last year; did not admit students this spring; big financial problems; operating in reportedly non-functional office space), and Florida Coastal (only 60 first-year students; out of its building; the last of the InfiLaw chain of über-toilets). Many others, from Appalachian to Concordia, may be standing on the brink of the grave.

The states of Louisiana and Texas are not deterred. Just this week they announced plans to consider a new branch of Southern University Law Center to be built in Shreveport and a law school for the Río Grande Valley.

Louisiana already has four law schools, none of them worthy of the name. Southern University Law Center, located in Baton Rouge, is one of the foulest über-toilets, second only to Cooley in the department of low LSAT scores (though admittedly Appalachian, Texas Southern, and others are not far behind). If another law school were needed in Louisiana, Southern University Law Center would be totally unfit to operate it.

The proposed law school for the Río Grande Valley is supposedly justified because the region "has been neglected for decades when it comes to educational opportunities", according to Rep. Armando Martínez, who appears to be the project's chief proponent. The state would require a "feasibility study". Perhaps the scamsters behind this dumb proposal should dust off the one for Indiana Tech and recycle it mutatis mutandis. In the meantime, they have already estimated a few of the costs of opening their über-toilet, including more than $50 million for a building and $800k for a dean and three support workers in the first year. All that for a school that, in their pie-in-the-sky dreams, would attract a hundred students in its first year. Indiana Tech too thought that it would get that many, but only about thirty enrolled.

At least the state of Tennessee had the sense to reject a proposal to let Middle Tennessee State University acquire Valpo: even the price tag of $0 was correctly deemed too high. Let's hope that similar sanity will nip in the bud the patently foolish proposals to create law schools in Louisiana and Texas.

Tuesday, May 7, 2019

Analysis of 2018 Bar Passage Rates

H/t to David Frakt:

While there is a tendency to assume that law schools with bad bar pass rates are "bad law schools" in the sense of having bad teachers, or having an insufficiently rigorous curriculum, or having inadequate academic support and bar preparation programs, this is not necessarily the case.  Rather, the primary factor is the school's admissions policies, not the quality of legal education offered by the school.  As you can see on the table, with the exception of four California law schools, University of San Francisco, Southwestern, McGeorge and Cal Western, every law school on the bottom 25 list had very high risk admissions policies in place for their fall entering class of 2015 (when most of the 2018 first-time bar takers matriculated into law school).  By very high risk, I mean that at least 25% of the students that matriculated were at very high risk of failure, and at least 50% were at high risk of failure, based on the LSAT Risk Bands table I first published in 2014, and which has been repeatedly validates since.  I have argued that admitting any significant percentage of extremely high and very high risk students is unethical, irresponsible and violates ABA Standard 501.  At the very least, it is a recipe for disastrous bar passage rates.  Perhaps not surprisingly, as the chart also depicts, many of the schools on the list have either gone out of business, been placed on probation, or been sanctioned or had some form of remedial measures imposed upon them by the ABA at some point since 2015 (although some schools were later found back in compliance).  

This pretty much says it all, although there is a nice summary chart below the fold.  Is it any wonder that Whitter, Valpo, and Arizona Summit are closed/closing?  That Appalachian, Golden Gate, Cooley (sorry, Western Michigan) and Texas Southern have been sanctioned?