The Viability of the Law Degree: Cost, Value, and Intrinsic Worth

AuthorRichard A. Matasar
PositionPresident, Dean, and Professor of Law, New York Law School. B.A. 1974, J.D. 1977, University of Pennsylvania
Pages1579-1628
1579
The Viability of the Law Degree:
Cost, Value, and Intrinsic Worth
Richard A. Matasar
[S]tudents must bear the brunt of financing the expansion of new
educational programs. The bad news is that students may not be as
willing to do so today as they have been over the last decade.
During that time, students have been able to finance their
increasing educational cost by gambling that a strong placement
market—with lots of jobs and firms that absorb increasing numbers
of new graduates at ever-higher salaries—will always exist.
Unfortunately for the gamblers, that era seems to be ending.1
* * *
For years the law school market has been protected from fears that
they are pricing their product out of the out of reach for most
students. . . .
. . . [T]his financial model has come under some stress. . . . Most
importantly, for many students, the legal employment market is too
soft to support debt. Some . . . have problems finding any legal job
within nine months of graduation. Those who fail the bar
examination are especially hard hit, but are joined by many other
colleagues who have not done well in school. Others may find jobs,
but at modest salaries. Even those making the highest salaries find
that the debt that they have accumulated while in school may tax
them for years . . . .
These financial pressures may soon challenge the capacity of law
schools to continue to raise their prices. If so, it may undermine
the current model for American legal education . . . . In essence,
we may be reaching the end of the golden era for law schools,
President, Dean, and Professor of Law, New York Law Sch ool. B.A. 1974, J.D. 1977,
University of Pennsylvania.
1. Richard A. Matasar, The MacCrate Report from the Dean’s Perspective, 1 CLINICAL L. REV.
457, 467 (1994) (discussing the economics of legal education in 1994).
1580 IOWA LAW REVIEW [Vol. 96:1579
beginning the period of decline, and putting many schools’ survival
at risk.2
* * *
In the light of this disturbing picture, one might expect that law
schools are facing an imminent market collapse—declining
applications, few students willing to take on financial risk, the need
for significant internal cost savings, price cutting, and other similar
measures. Surprise, surprise, surprise! The demand for legal
education has remained strong throughout the economic
downturn. Applications at many schools are at record levels.
Enrollment has been solid, with many schools recording
historically high yields of new students.3
After sixteen years of prognosticating—apparently with no ability to get
it right—the editors of the Iowa Law Review must have a real sense of
adventure to ask me to opine (once again) on the economic viability of the
Juris Doctor degree. But a broken clock is right twice a day, so, undaunted, I
will offer my views.
The simple answer is that the law degree will continue to be viable . . .
for some. Law schools with ancient and powerful reputations will prosper
over the short- to medium-term. The very few schools currently offering
inexpensive degrees should survive, joined by newer, innovative, less-costly
programs that will emerge. For the remaining, expensive mid-tier schools,
the degrees they offer will become less and less attractive, unless they seek to
create value for their graduates commensurate with their costs.
For the fortunate few individuals—those attending prestigious schools,
who receive decent grades; those with large scholarships; and those at the
top of their classes in schools outside the top tier—the law degree will
continue to pay for itself. For those seeking a quick return on their
investment, the law degree will not offer immediate returns and may never
satisfy their financial needs. And for a large group of wanna-be lawyers, the
degree will make sense only if they properly evaluate its cost, their expected
financial returns, and most importantly, the intrinsic value of becoming a
lawyer.
This Essay proceeds in three parts. First, it rehearses the now
conventional analysis about future haves and have-lesses in legal education,
concluding that inevitably, purely financial returns will be insufficient to
make the law degree “sensible” for many (most?) students. Second, it
suggests that there is intrinsic value in being a lawyer that will continue to
2. Richard A. Matasar, The Rise and Fall of American Legal Education, 49 N.Y.L. SCH. L. REV.
465, 474–75 (2004) (discussing the economics of legal education in 2004).
3. Richard A. Matasar, Does the Current Model of Legal Education Work for Law Schools, Law
Firms (or Anyone Else)?, N.Y. ST. B.J., Oct. 2010, at 20, 21 (discussing the economics of legal
education in 2010).
2011] THE VIABILITY OF THE LAW DEGREE 1581
make receiving a law degree attractive, and that unlocking that value is
dependent on schools producing desirable, intentioned outcomes that will
serve employers and the public. Third, it suggests that the cost of producing
such value exacerbates the economic dilemma that students face. It
concludes that law schools, law-school regulators, and the profession must
be willing to experiment and permit new models of legal education to arise
that can produce sufficient value at a reasonable cost in order to assure the
continued viability of the law degree.
I. ONCE MORE WITH FEELING
A Story of Decline?4 Legal education is a bad investment—so I have said,
the blogs recount, and the world now seems to treat as a fact. In sum, the
argument is simple: educational costs for most students have been rising at a
much faster rate than the salaries they can expect to earn; very few students
pay for their education and living expenses while in school without
borrowing large sums of money; the debt service on these loans is so high in
relation to the salaries earned that most students will have difficulty making
their loan payments and managing all of the other expenses they will face;
and the job market is terrible, with few openings in high-paid jobs, intense
and brutal competition for other jobs, and likely underemployment or
unemployment for many law-school graduates.
To this litany of woes, one might add the following: First, regardless of
their ultimate employment, students at all levels of their graduating classes
seem to borrow similar amounts. For most students, this means borrowing
all or substantially all of the cost of their education—tuition, fees, books,
and some or all living expenses. Second, students who avoid accumulating
large debt either come from families of means, have an alternative source of
funds like employment or savings to pay for school, or receive substantial
“merit” scholarships. If Robin Hood took from the rich and gave to the
poor, law school often does the reverse. It gives scholarships to top students,
who have employment opportunities at firms that pay top salaries, funded by
full-paying, lower-ranked students, whose employment will often be at
organizations paying more modest salaries. Third, the number of “big law”
jobs—those paying salaries sufficient to allow law graduates to manage their
debt—is inadequate to employ most law-school graduates. Fourth, initial
salary differentials often widen over time—assuring that the haves continue
to prosper while the have-lesses continue to suffer.
Of course, there are additional worries to face. Tuition charges at state-
supported law schools, traditionally the least expensive places to gain a law
degree, are rising at an even faster pace than that of private schools. Many
states are reducing their subsidy to law schools in favor of floating “market”
4. See generally supra notes 1–3 (discussing the economics of legal education in 1994,
2004, and 2010).

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