Monday, January 10, 2011

Law School: Lottery or Tournament?

by Andrew Gillen

David Segal's piece on law school in the NY Times is deservedly getting lots of attention. The moral of his story is that the overproduction of lawyers is reducing salaries to such an extent that recent graduates have a very hard time paying back their student loans. The only ones that don’t struggle are those that win the lottery for the few high paying jobs available.

Kevin Carey thinks this is off; that it is not a lottery but a tournament:
there was nothing random about it… Everyone applying to law school takes the same standardized test. Classes are graded on a curve and class rank is relative to other students who took the same classes. It’s not perfect–nothing is–but law school is about as close to a fully-transparent pure meritocracy as you’ll find in American education.
It’s a valid point, but it misses something pretty fundamental about tournaments – the prizes are known in advance.

That is clearly not the case with law school. Many law schools report average salaries of $160k, leading many students to think they have a good shot at getting a job paying $160k after graduating. But they don't. Nor is $160k an accurate figure even for the best schools. As Felix Salmon explains,
Even at Harvard and Yale I’m suspicious of that $160,000 figure; for the non-top-tier colleges, it’s clearly fictional. No matter how many of your graduates go on to $160,000-a-year jobs, there’s always going to be a significant number who earn a lot less than that and there are going to be almost none who earn more. As a result, the mode might be $160,000, but the median will never be that high.
How do they report such high numbers? As Segal reports,
“Enron-type accounting standards have become the norm,” says William Henderson… “Every time I look at this data, I feel dirty.”…
Top students may get exactly what they expected. But many students just below them could reasonably expect, based on what law schools tell them, that "second place winners" get a prize too, only to discover at the end that there is no prize for second place.

Overall, I view the process of law school itself as a tournament, but going to law school as a lottery. I buy Carey’s argument that entrance and progression through law school can be thought of as a tournament. But Segal’s piece dealt with the end result, not the process leading up to it. And from the student’s perspective, there is a large random element in the end result relative to the reasonably expected result. This difference is primarily determined by the extent to which law school’s lie to their students. A tournament with uncertain winnings for most of the winners is basically a lottery.


Fat Man said...

Winning the law school game only gets you to the next round, winning the lawyer game.

Unfortunately, even if money is the metric by which that game is measured, it cannot be clear who will win once you have entered the game. There are so many ways to win the lawyer game, Barack Obama picked one, David Rubenstein picked another, Ron Motley picked a third. None of them went the Fancy law school, worked as an associate in the Big Law Firm, made partner route.

What the skyrocketing tuition has done is made the pain of losing the game very much worse for the student who has borrowed money to finance his education. The loser cannot be philosophical because not only has he wasted time, he is ensured a life of penury and harassment. When joining la legion etrangere looks like a rational response to your troubles, you have in fact made a horrible mistake.

Nando said...

The law schools do not care about their students' outcomes. The "professors" and administrators of these diploma mills get paid up in front, in full - via the federal student loan system. You, the student or graduate, are stuck with the NON-DISCHARGEABLE debt for the next 20-30 years.

Legal jobs are disappearing and they are not coming back. See ABA "Ethics" Opinion 08-451. On top of this, practice is ugly and cut-throat. It is not about "justice" - but winning.