A combination of rising law school tuition, underemployment and the work done by policy organization Law School Transparency, authors and educators Paul Campos and Brian Tamanaha and many others -- coupled with a marked decline in law school applications -- is slowly forcing legal education to change.
While only time will reveal how significant and deep these reforms will be, it is interesting to note the analysis and recommendations of those in the legal community. In this light, the recently released final report and recommendations of the Illinois State Bar Association's Special Committee on the Impact of Law School Debt on the Delivery of Legal Services is worth reading.
The report's review of the legal system's systemic problems caused by the burden of law school debt, often combined with undergraduate debt, is comprehensive. And, because the special committee held five public hearings in Illinois and heard testimony from 53 individuals, it's occasionally even moving.
The report doesn't simply state that the number of law school graduates starting their own practices doubled between 2007 and 2011, it also includes testimony from solo practitioners. That testimony, which includes one graduate who netted only $20,000-30,000 by her fourth year of solo practice and another who told the special committee she was "unable to earn a single penny," shows solo practice has not been a panacea for graduates unable to find other sustainable legal jobs.
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The report identifies other problems, including the lack of affordable legal services for poor and middle class families as young lawyers, especially those in rural areas, forgo small firms and public service for larger firms and heavily populated areas where they can earn higher salaries. The report also posits (based on anecdotal evidence) that lawyers with heavy debt loads may be unable to take on pro bono cases.
The report also notes that African-Americans and Hispanics -- who receive a higher percentage of financial support from student loans and less support from family resources -- are more likely to graduate from law school with heavier debt burdens than their white counterparts.
As the report notes, if this trend discourages a disproportionate number of minorities from attending law school, the profession will become increasingly homogenous, minority clients may be less likely to trust it and the quality of legal services will be reduced.
The special committee recommends significant changes to legal education. The report concludes that law schools are not doing a good job preparing students to practice law and recommends schools focus on practice-oriented courses and fewer "exotic courses," teach law office management, provide bar review courses at no extra cost and transition second- and third-year students to apprenticeships and teaching assistantships.
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On the financial side, the special committee wants to limit federal loan eligibility to law schools that meet repayment and employment measures akin to the gainful employment regulations that govern vocational programs. Schools that failed to meet these standards and lost their eligibility for federal loans would probably be forced to close. In the Student Loan Ranger's opinion, the trick here is creating and enforcing a regulatory standard that is not so weak as to be virtually useless.
The report also proposes limiting the amount of loans law students can borrow while reinstating the ability to discharge private student loans in bankruptcy. The special committee believes this will constrain tuition by limiting it to what students can actually borrow in federal loans plus whatever private lenders will provide after carefully scrutinizing the ability of the student to repay based on the school they attend.
The Student Loan Ranger has doubts about those market constraints and expects that a significant number of borrowers will regret taking out private loans that lack the important borrower protections of federal loans. We are also not as sanguine as the special committee that this would not disproportionately reduce the number of poor and minority law students.
The Student Loan Ranger is more skeptical about the special committee's proposal to not allow attorneys above a certain income level to enroll in Income-Based Repayment. Eligibility for IBR is based on having a disproportionate debt-to-income level. The difficulty in repaying loans is the same regardless of an absolute income level. A reform like this would save little money overall and impose new administrative costs in means testing while imposing an unfair hardship on certain attorneys.
The Student Loan Ranger prefers solutions that directly focus on reducing the cost of law school, but we're sure these and other proposals will continue to be focuses of debate until the law school crisis abates.
Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works's educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.