The Law of Supply and Demand Strikes the Law Business

Actually, it struck a while ago. But now it is affecting law schools in ways that have become embarrassingly transparent:

One day next month every student at Loyola Law School Los Angeles will awake to a higher grade point average.
But it’s not because they are all working harder.
The school is retroactively inflating its grades, tacking on 0.333 to every grade recorded in the last few years. The goal is to make its students look more attractive in a competitive job market.
In the last two years, at least 10 law schools have deliberately changed their grading systems to make them more lenient. These include law schools like New York University and Georgetown, as well as Golden Gate University and Tulane University, which just announced the change this month.

The relationship between students and schools has always been interesting. Students (their parents, usually) paid the bills, but the schools more or less terrorized the students. How did that happen? It was possible only as long as the demand for graduates was strong. Now that demand has weakened, in law as in other industries, the relationship is changing in ways that are not too subtle.
Glenn Reynolds has written about the “education bubble,” perhaps the next to burst. The “costs” of education have risen exponentially over the years, while the real costs of running a school–lumber, natural gas, telecom services, whatever–have risen more modestly. The bubble, seemingly, has now burst. Glenn wrote a day or two ago that he wouldn’t recommend that a college graduate go in debt to attend any law school other than an elite few–Harvard, Yale and Stanford.
Law schools that are worried about their economic viability have only a small number of options available. Grade inflation, which has been implemented by countless undergraduate institutions that felt the squeeze some years ago, is one of them. Will law firms and other employers be fooled? One wouldn’t think so, but in an environment of grade inflation, students at an institution that failed to go with the flow might indeed be penalized, for a while at least.
The reality is that any society–even ours–has a limited need for lawyers. I’m reminded of a cartoon in the New Yorker from several decades ago. Two people are talking at a cocktail party; one of them says to the other: “How did I know you’re a lawyer? Simple: everyone is a lawyer.” That was how things seemed to be going during the 1970s, but like all trends, this one couldn’t continue forever.

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