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Crack Down on Law Schools That Don't Pass the Bar

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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The American Bar Association is considering a plan that would endanger the accreditation of any law school where fewer than three-quarters of the students pass the bar within two years.

That is setting up a battle within the organization, pitting critics of two very different problems against each other. Those who are worried about the glut of law graduates who can’t get jobs want to crack down on law schools that have shored up their finances by admitting students who may not be able to pass the bar exam. But those who are worried about a lack of diversity in the profession fear that any crackdown on accreditation could disproportionately hurt schools that strive to bring more minorities into the field.

Law schools have been suffering in recent years. The once-lucrative financial industry that used to use a whole lot of legal services has gotten a lot less lucrative, limiting the ability of armies of law-school grads to charge vast sums for their services.

Meanwhile, computers and international outsourcing have begun to nibble away at a lot of the tedious but necessary work that used to consume the labor of thousands of young lawyers, like reviewing documents for discovery requests.

Companies like LegalZoom, meanwhile, are competing for the business that used to be the bread and butter of many law graduates: simple wills, leases and so forth.

And state-level tort and medical malpractice reforms have somewhat cramped the style of people like John Edwards who got rich off class-action and personal-injury lawsuits.

Thanks to the internet -- and a decision by the ABA to force schools to publish data on employment -- news of these difficulties spread quickly among prospective students. So while law school has traditionally been a refuge for young workers who were pummeled by a recession, that’s not what happened this time. Instead, the number of applicants plummeted.

This placed law schools in an uncomfortable bind. Schools are optimized to a certain size of class. They have the number of classrooms and tenured professors that they expect to need in order to teach those students. Those things are expensive, and cannot be easily shed. With applications falling, schools had to decide whether to maintain their admissions standards (reducing the size of the incoming class), or maintain their student target (by lowering admissions standards). Unsurprisingly, a whole lot of them chose the latter.

If you’re Yale Law School, that’s probably not much of a problem; you can dip down into that application pool pretty deep before you start running into people who will never make it as lawyers.  But if Yale lowers its standards a bit, that has effects throughout other programs. If Yale admits less-qualified applicants, then the schools where those students would have gone will have to dip deeper into their applicant pool. And so on down the line until the schools at the bottom end up with an unappetizing choice between admitting someone with an LSAT under 145, who has a low chance of ever becoming a lawyer -- or going out of business.

Unsurprisingly, most of those schools chose to stay in business. And if all they were taking from the students was three years of their time, well, most of the students are young and would recover from that questionable use of time.

But it’s worse than that. Students attending law schools, including those with dim chances of practicing law, are often taking out several hundred thousand dollars in debt. And since schools compete for better students -- who raise their statistics in law-school rankings -- by giving them scholarships, in effect, the lower-ranked schools ended up subsidizing their likelier students by admitting kids who had little chance of passing the bar and earning enough to attack those loans. This may be economically viable, but it’s morally abhorrent.

And since many of those students do not have any reasonable prospect of paying off their loans, ultimately American taxpayers are going to foot the bill for their federally subsidized loans, when those borrowers reach the end of their income-based-repayment plan and huge outstanding debts are forgiven.

From the perspective of anyone but an administrator or professor at a marginal law school, it seems obvious that the ABA should shut those avaricious schools down.

But it’s not quite that simple. Minorities tend to have lower scores on standardized tests. So schools that serve a high percentage of minorities are going to be hit hard if the ABA enacts this accreditation policy. These schools would include dodgy for-profit outfits, yes, but also some morally upright historically black colleges and universities. Meaning that some minorities will be denied a shot at becoming a lawyer.

It seems worth noting that while LSAT performance is strongly correlated with bar-passage, that correlation is not perfect. Some of the folks with low LSAT scores will be able to pass the bar and go on to successfully practice law.

Also, everyone who enrolls in law school is a consenting adult. Why should the ABA prevent people from taking a risk that they understand and accept? It’s true that the very same low-income and minority applicants who tend to score lower on the LSAT will also be most hurt if they are hit by high debt and poor job prospects.

There’s something uncomfortably paternalistic about saying that the elites of the ABA accreditation committee need to swoop in and save these applicants from themselves. But that paternalism is built into the LSAT, the accreditation process and the bar exam.

As long as the bar exam remains a significant barrier to practicing law, one of the obligations for schools that admit students with low LSAT scores is to prepare a large majority of them to pass the exam. Any school that fails to do so is not serving these students, but preying upon them. The American Bar Association would be right to revoke its accreditation.

  1. Like medicine, law has an examination system built into admissions. And there is a pretty strong correlation between your score on the LSAT before law school and your likelihood of passing the bar exam after law school.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net