Monday, October 22, 2012

The New Economics of Law School: Growth Is Dead.

Yesterday, I discussed a series of articles by Bruce McEwen on the new economics of law firms.  His thesis is that law firms went through an unprecedented rate of growth between 1980 and 2008, and that this economic basis ended with the economic crisis in September 2008.  In order to survive law firms must look to other industries whose economies have been based on the usual economic reality--economic growth based on population growth.  Such a model requires innovation and simplicity.

In reading his article, I was struck by the close resemblance between his analysis of law firms and the new economics of law schools.  Like law firms, law schools underwent unprecedented growth before the 2008 recession.  Now, law schools are facing fewer applications, a level of tuition that many students cannot afford, dissatisfaction from students and employers, and pressure to make innovations.  Many commentators believe that this trend will continue, and some have even predicated that a number of law schools will fail.

As McEwen proposed for law firms, law schools must simplify and innovate to survive.  As is well known, most law schools today continue to follow a modified version of the Langdellian model from over 100 years ago.  Most law schools want to be like Harvard and Yale, despite the fact that they will never achieve what Harvard and Yale have.

Law schools must be innovative in both their economic structure and their curriculum.  Law schools must find ways to reduce tuition and student debt.  Many of today's law school graduates are leaving law school with debts that will take many years to pay off.  Law schools must cut back on frills, such as shiny new buildings and large administrative staffs, and create innovative ways to reduce tuition and law school debt.

It is equally important that law students be equipped for today's law practice.  There has been a ton of articles written on innovation in legal education based on the latest research on teaching and learning.  How about this for a simple model.  First, all classes should teach both doctrine and application by having a significant problem-solving element in each class.  Second, all law schools should offer students the opportunity to take several legal skills, clinical, and experiential courses in their third year.  Of course, all law schools should not adopt the same model, but rather experiment in curriculum and teaching.

To sum up some of McEwen's suggestions:

1. Law schools must face the fact that growth is limited.  Growth for most businesses usually is the same as population growth.

2. Law schools need to take the long view.

3. The customer--students employers, clients--must be the focus of innovation.

4. Experimentation is the key.

5. Law schools need to simplify to innovate. 

6. The Dean has to be the “Chief External Officer” to manage external pressure and the “Chief Innovation Officer” to push the innovation agenda forward. [Neither of which roles comes naturally to most lawyers.]

In Part Six of his series, McEwen declares that he is not optimistic that law firms will embrace change, and I am afraid that the same applies to law schools.  McEwen notes that innovation involves risk and failure and that lawyers are afraid of risk and failure.  He argues, "Alone among the professions—I submit—we are statistically innumerate and implacable in our refusal to entertain probabilities, odds, reasoned judgments, and cost/benefit tradeoffs. . . . Other industries, and companies, learn through failure. We bury our failures. But this fault – and make no mistake, it’s a categorical fault – is in our nature as lawyers."

We have predicted several times on this blog that those law schools that refuse to innovate will die.  Therefore, law school faculties and administrations  must abandon this lawyer mindset against risk and failure, and, instead, adopt an entrepreneurial one.  Otherwise, the future is dim for legal education.

(Scott Fruehwald)

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