Monday, May 07, 2018

Legal Education, Public Goods, and the Ratings Race

Once upon a time the public good rationale might have been  the basis for subsidizing legal education.  Personally, I never bought the rationale. Instead I figured that people with property and money -- the ones needing lawyers -- decided it would be great if everyone could be taxed to help produce lawyers so that legal fees might be lower.  After all, this is America.

You could think of it as income redistribution from the less well off to those better off.  One of the great examples of this, which many people hate to hear about, is the state subsidization of tax LLM. programs.  (Do you think Sally, the single mom down at the 7-11 needs a tax lawyer?) I actually do not know as a factual matter whether state operated tax LLM programs continue to be subsidized but, if so, let's hope we come to our senses.

But let's say I am wrong at least with respect to JD programs (even tax LLMs)  and that there once was a legitimate public good rationale and subsidization was based on that rationale. Or, more cynically, a public good rationale had nothing to do with it  but, as it turns out, there were unexpected positive externalities. Put differently, left to market forces, legal advice and assistance would be produced at inefficiently low levels. (If you know a thing or two about public goods you may be wondering who the free riders would be that would mean that demand for lawyers would be suppressed leading to too few lawyers. But let's say for now that 50 years ago the system made sense if only by accident.)

The fact that many people trained as lawyers cannot find jobs does not necessarily mean the public good rationale does not continue to exist. Maybe the problem is that people still cannot afford to or are unwilling to pay for legal services. Could the subsidization be too low? Perhaps all law school grads should get government stipends so poor people could afford their services or maybe the costs to  those who demand legal services should be reimbursed. All we know is that many people graduating from law school cannot earn a living selling their human capital and have to find other employment. Pumping out even more  publicly subsidized lawyers without determining the extent of a continuing public good rationale makes no sense. If  there remains inefficiently low levels of legal assistance being sold, other avenues of subsidization should be considered.

But let's suspend our disbelief if necessary and say there continues to be a public good rationale. Let's see how law schools are responding in the era of a rankings race (or law school mutually assured destruction). Law Schools cut the size of classes as a way to increase their entering class GPAs and LSAT scores. The compete for and recruit  students for the same reason almost as aggressively as college coaches. They attract students by paying them -- REGARDLESS OF NEED - and, unlike college athletes, there appears to be no limit to what can be offered. Yes, they pay students to attend a specific law school who would attend a law school somewhere without the payment.  Law schools operate  massive "development" offices that seek financial support for their addiction to the rankings racket.

How many of these practices are responsible reactions to a possibly imaginary rationale for public subsidization of legal education?  None. The benefits flow to very very few and certainly not to the public.

No comments: