Non-elite law schools in the 21st century: the business school model

I’ve had occasion to do a lot of thinking lately about the future of American law schools, particularly the vast majority of them that can’t be considered “elite” schools.

It’s old news that times have been tough in American legal education over the past six or seven years.  Almost every non-elite American law school is now tuition-driven, relying primarily on its own tuition revenues for its operating expenses.  And at most of these schools, the vast majority of tuition is generated by the JD program.  But this model is under heavy strain, thanks to a confluence of factors including heightened competition among law schools, declining JD enrollments, and increasing operating costs.  Some of these trends may ease somewhat over time, but none is likely to reverse course in the foreseeable future.

The most salient trend is declining demand for legal education.  Applications to U.S. law schools have plummeted since 2010 and are only now beginning to level off at less than two-thirds of the 2010 volume.  Most law schools have had to respond by reducing enrollment, admitting students with lower credentials, or both.  The former strategy has a severe impact on a law school’s budget, while the latter harms bar-passage and employment rates.

In light of these developments, how can American law schools thrive – indeed survive – over the next several decades?  Most of them, I believe, will have to pursue one or more of four strategies.

A few elite schools will prosper simply because they are elite and demand for their degrees therefore will remain high.  Clearly this path is not open to most of the more than 200 ABA-accredited institutions.

A handful of schools will cultivate a market niche that saliently distinguishes them from the competition.  But while schools can and should develop distinctive programs, there are relatively few specialty areas that are both prominent enough to attract large numbers of students and stable enough to withstand changing market conditions.

A few other law schools will respond by drastically lowering JD admissions standards, admitting most or all applicants who are willing to pay.  This path, however, is both ethically problematic and likely to be foreclosed by anticipated ABA or federal government regulations measuring outcomes such as bar-passage rates.

The large majority of non-elite American law schools, then, will have one basic strategy for success in the twenty-first century marketplace, the particulars of which will vary substantially from school to school.  I will call this strategy the “business school model.”  Compared to law schools, most U.S. business schools are more closely integrated with their parent universities; they are more innovative in the educational products they provide and in how they deliver them; and they are more diversified in the array of degrees and other academic products they offer.  Non-elite American law schools, I believe, will have to become more like business schools in these respects to thrive in the twenty-first century.

Integration.  To prosper in the coming decades, those few law schools that are not yet embedded within a university should seek to do so, and embedded law schools should look to enhance connections with their universities in creative ways.  Close integration with a parent institution is advantageous, financially and otherwise, particularly in perilous economic times.  Closely integrated law schools can cut costs by sharing administrative and instructional functions with their parent universities and by piggybacking on university marketing, technology, foreign programs, and other assets.  They can offer a broader spectrum of academic options to their students and take advantage of a built-in college-to-law-school pipeline.  And with the university’s resources as a backstop, they typically have greater leeway to adjust or retool in response to changing market conditions.

Innovation.  Law schools will need to embrace innovation in order to thrive in the years ahead.  On the revenue side, American law schools must develop new products to sell (more on this below) and must penetrate new markets for their products, particularly overseas.  On the cost side, law schools must readily take advantage of advancing technology to deliver their products more cheaply.  For example, within a decade or so it will be feasible to have a quality law-school classroom experience in an all-digital environment.  Adopting this technology when it arrives will allow law schools to substantially reduce a significant component of their costs (in the form of bricks-and-mortar classroom facilities) and to enroll students with only limited regard for geographic limitations.  Early adopters will have a substantial market advantage.

Diversification.  Increasingly, non-elite law schools will succeed by diversifying the array of educational products they offer.  While the cost-benefit analysis will differ from school to school and from program to program, it is likely that most law schools can enlarge their tuition revenues in a cost-effective way by offering alternatives to the expensive, all-or-nothing JD.  Law schools should look for opportunities to add nontraditional degree programs that are tailored to regional demand, that leverage existing expertise and capacity where possible, and that take full advantage of synergies with the parent university.  These might include undergraduate degree programs, joint degree programs, graduate programs in non-law fields with close affinities to law (such as public policy), and perhaps limited license legal technician programs like the one currently being piloted in Washington State.

As always, I welcome your thoughts.