November 19, 2011

BRIAN TAMANAHA: More Ominous Signs of the Coming Crunch for Law Schools.

In June I wrote a post about the coming crunch for law schools, which asserted that law schools should anticipate a significant decline in the number of applicants in coming years. This will be especially problematic because law schools have substantially increased the size of their faculties in the past decade, making it hard to trim expenses to meet a decline in revenues. As the number of applicants falls, a significant proportion of law schools will experience a drop in the quality of students or a fall in revenue, and many will suffer both simultaneously.

Three recent signs indicate that this will happen more quickly and to a greater degree than I suggested in the post. The first indication is the disclosure that every student in the 2011 entering class of Illinois law school, including students admitted off the wait list, received tuition discounts. When everyone gets a scholarship, that constitutes a de facto tuition reduction, an indication that a law school is having trouble filling its seats at the list price. Given that Illinois is an excellent law school, it is likely that other schools are in the same position.

The second sign is more serious. The October 2011 LSAT, which is the highest volume test for people considering law school, had 16.9% fewer takers than the previous year. It was the lowest number of people to sit for the October exam in a decade. And it was the fifth straight LSAT administered to show a substantial decline from the same test the year before.

Read the whole thing. Is legal education a leading indicator for the higher education bubble’s collapse?

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