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How to Fight the ABA’s Anticompetitive and Discriminatory Practices

In American History, Economics, History, Law, Legal Education & Pedagogy, Scholarship on September 13, 2017 at 6:45 am

This piece was originally published here by the James G. Martin Center for Higher Education.

Recently I urged top law schools to stand up to the excesses and abuses occasioned by the ministrations of the American Bar Association (ABA). These schools could band together and follow the lead of the journalism schools at Northwestern and Berkeley, which dropped their accreditor, the Accrediting Council on Education in Journalism and Mass Communication, earlier this year because accreditation standards were outmoded and not worth the cost of compliance.

But states can also fight the ABA and are arguably in a better position to do so.

The ABA is a nonprofit organization incorporated in Illinois that operates like a trade union for lawyers. Founded in 1878 by a small group of prominent East Coast lawyers, it has accredited law schools under the authority of the U.S. Department of Education (DOE) since 1952.

Why, exactly, would states want to push back against the ABA? There are two reasons, the first involving economics and the second involving racial diversity in the legal profession. In other words, both the Right and the Left have a standing interest in diminishing the ABA’s power.

The Economic Reason

The ABA remains the sole accreditor for legal education in the United States. Its onerous and in many cases outmoded regulations drive up the price of law school, forcing schools to reallocate resources away from students and education and towards regulatory compliance.

The high costs of legal education resulting from ABA regulations are passed off to ordinary consumers over time.

As one example, ABA Standard 701 states, “A law school shall have facilities, equipment, technology, and technology support that enable it to operate in compliance with [ABA] Standards and carry out its program of legal education.” To address this standard, law schools have furnished computer labs with fancy equipment to give the appearance of technological sophistication. But the labs and equipment often go unused.

The legal profession is notoriously behind the times on the technology front, and it takes advantage of anticompetitive restrictions regarding the unauthorized practice of law to push out innovative companies like LegalZoom that offer creative and inexpensive services. If the ABA were serious about technological innovation in law schools, it wouldn’t burden online and distance education the way it does in Standard 306. It bears noting, as well, that the ABA’s official interpretation of Standard 306 includes the “Internet,” “video cassettes,” “DVDs,” and “CD-ROMs” as examples of “technology.” Not exactly inspiring or pioneering. No wonder some analysts predict that computers and artificial intelligence will replace lawyers.

The high costs of legal education resulting from ABA regulations are passed off to ordinary consumers over time. They also prevent people with low to modest incomes from attending law school. According to Law School Transparency, the cost of legal education at private schools has risen from an average annual tuition of $7,526 in 1985 to $41,985 in 2013. The average cost of legal education for in-state students at public schools rose from $2,006 in 1985 to $23,879 in 2013 (for non-residents, tuition increased from $4,724 in 1985 to $36,859 in 2013).

These figures suggest that disadvantaged students do not have the financial means to delay or suspend a career to pay for legal education, or to take out student loans with an interest rate that exceeds that of the housing market. Thus, the ABA not only inadvertently drives up legal costs for all consumers, but also prevents many consumers of certain income levels from entering the legal industry to reform it from the inside.

The Diversity Reason

The ABA has an ugly history of targeting ethnic minorities who aspired to become attorneys. For most of the 20th century, it openly discriminated against African Americans, officially excluding them from membership for 66 years.

In 1912, the ABA ousted three African Americans from membership and issued a resolution proclaiming, “it has never been contemplated that members of the colored race should become members of this association.” Recent decades have seen the ABA attempt to make up for its racist past by instituting committees and programs aimed at racial diversity and championing what are widely considered to be leftist social causes.

These efforts, however, seem insincere—just another PR tactic—because the very purpose of the ABA’s accrediting arm (the Council of the Section of Legal Education and Admissions to the Bar) is to exclude people from legal education. To this day, the exclusionary policies and practices of the ABA disproportionately impact African Americans and other racial minorities. In other words, the ABA still does precisely what it was designed to do: keep African Americans, other minorities, and poor people out of the practice of law.

Law schools that are not ABA-accredited often offer inexpensive, part-time evening or night programs that enable students to work during their studies. Students who cannot afford to take off years of work to pursue legal education can complete these programs in four to five years. This affordable option provides needed access to legal education for low-income students who wish to become lawyers.

The ABA was formed, in part, to segregate the legal profession from ethnic minorities. It can’t be used now to the fix problems it caused and exacerbated.

Under present conditions, however, a graduate from one of these unaccredited schools can sit for a bar exam only in the state in which the school is located—and only if the state allows that. Unaccredited law schools also carry a stigma.

For these reasons, among others, ethnic minorities and disadvantaged students who are able learners with competitive test scores and academic records typically forego affordability and choose to attend ABA-accredited schools with a higher sticker price. These students thus take out massive loans and dig themselves deeper into a financial hole from which it’s difficult to emerge, even with good jobs coming out of law school.

Critics of unaccredited law schools point to high attrition rates and low success on bar exams to rationalize increased restrictions and stricter standards. But if the ABA no longer accredited law schools, capable students would begin to populate what are now unaccredited law schools, if for no other reason than affordability. Expensive law schools that are currently ABA-accredited would be forced to find cost-cutting measures to remain competitive in the market and attract new students.

The prevailing justification for ABA accrediting authority is that such superintendence is necessary to protect consumers. But protect consumers from what? From a more diverse legal community? From black people? From poor people? That is the message the ABA is sending.

The ABA would never defend itself in these terms, nor purposefully discriminate with the goal of ensuring that the profession remain predominately white. Yet it can’t deny the realities that flow from its very purpose for existing. The ABA was formed, in part, to segregate the legal profession from ethnic minorities. It can’t be used now to the fix problems it caused and exacerbated. It simply lacks the institutional incentives and infrastructure to realize the objectives of diversity or inclusion.

Revising Standard 316

To make matters worse, the ABA is considering revising its Standard 316 to require law schools to maintain a 75 percent bar passage rate among its graduates in at least three of the last five years. Law schools failing to meet this standard face potential consequences for non-compliance, including loss of accreditation. The ABA House of Delegates rejected this measure in February, but the ABA has issued a questionnaire to law schools pending the possible reconsideration of this revised standard in 2018.

The ABA Council for Racial and Ethnic Diversity opposes the revised standard, which was proposed to address concerns that greedy law schools, faced with declining enrollments, were admitting unqualified students to generate tuition revenue. Although this criticism has merit, the revised standard is the wrong remedy. It will disproportionately impact schools in states like California, where bar passage rates historically have been low. Moreover, it could limit educational options for minorities who aspire to practice law by punishing schools with high minority enrollment.

You might be asking, “Why is the author advocating reform that would lower standards? Don’t we want better attorneys? And don’t we have enough attorneys already?” If the bar exam measured the ability to practice law, it might be a reliable indicator of a person’s legal skills. But it has little to do with actual practice; therefore, passing or failing it doesn’t measure one’s legal skills. It also delays what has already been delayed during three years of law school: the practical experience necessary to make a good lawyer.

If there were no law schools, no bar exams, and no barriers to entry, we could still figure out how to weed out the good lawyers from the bad. In fact, we might even see exciting new advances in the field of online reputation markets that could rank and assess lawyers, giving a feedback mechanism to consumers.

If there were no law schools, no bar exams, and no barriers to entry, we could still figure out how to weed out the good lawyers from the bad.

And sure, there are a lot of attorneys. But having a lot of attorneys is not necessarily a bad thing. If we were to roll back all the anticompetitive practices perpetuated by the ABA, state bar associations, and their lobbyists, which work together to solidify lawyers’ monopoly on the practice of law, the costs of legal services could be drastically reduced. An overabundance of lawyers would simply mean that hiring lawyers would be cheap. It’s unlikely, at any rate, that we’d ever see an overabundance of lawyers in such a competitive market because intelligent people would choose to enter a different profession where salaries are higher.

The ABA discusses the bar exam in several standards: Standard 315 (the official interpretation), Standard 316, Standard 504, and Standard 505. The unintended consequence of this emphasis is to unreasonably encumber students and schools with red-tape administrative measures that have no proven effect on the quality of legal services.

Conclusion

The economic function of the ABA is, as I’ve said, to serve as a barrier to entry. Milton Friedman once declared that “[t]he overthrow of the medieval guild system was an indispensable early step in the rise of freedom in the Western World,” adding that it was also “a sign of the triumph of liberal ideals.” Recently, though, there’s been what he called a “regression,” and the ABA is a case in point.

Combating the ABA isn’t easy. This organization is equipped with powerful lobbyists and enjoys longstanding relationships with influential politicians. Still the states, through their supreme courts and bar associations, remain in control over the admission of candidates into the legal profession in their jurisdiction.

State bar associations are typically corporations to which state legislatures have granted monopoly powers over the legal profession, subject to the oversight of state supreme courts. They are not affiliates or adjuncts of the ABA. If several state supreme courts and state bar associations allowed all graduates of non-ABA accredited law schools to sit for the state bar exam in their state, they could curtail the ABA’s authority and diminish the ABA’s credibility. To this end, they could also enter into reciprocity agreements with other states to allow graduates of non-ABA accredited schools in those states to sit for the bar exam.

State supreme court justices—or justices sitting on the highest court in their state—are elected in a majority of states. And of course judicial appointments are always political to some degree. Thus, these justices are likely attentive to the demands of an informed public. Citizens should press their state supreme courts about the ABA, especially during campaign season when seats are up for grabs. Moreover, citizens should urge their legislators to interrogate state bar associations about the ABA. After all, state legislators can undo legislation empowering state bar associations.

Citizens should press their state supreme courts about the ABA, especially during campaign season when seats are up for grabs.

Of course, the Obama administration contemplated another alternative that would likely appeal to both President Trump and Secretary of Education Betsy DeVos: the DOE could strip the ABA of its accreditation authority altogether, in effect getting the federal government out of legal education. (Obama was motivated by animus against for-profit colleges, as reflected in his Education Department’s gainful employment rule, whereas Trump’s interest would be in scaling back federal meddling.) This solution would leave matters of accreditation and bar eligibility to the respective states. Stripping the ABA of accrediting powers, however, raises other concerns, given that, at present, a law school’s eligibility to receive federal funds is tied to accreditation.

In this period of political rancor, reining in the ABA should appeal to both the Left and the Right, the former on grounds of racial diversity and fundamental fairness and the latter on grounds of decentralization and economic freedom. Despite the vitriolic and malicious rhetoric emanating from our politicians and media pundits, I believe most Americans want to get along and facilitate constructive dialogue about pressing issues. Why not refocus our attention on matters about which there is critical consensus? Why not work together, as a start, to curtail or revoke the ABA’s ability to accredit law schools?

This move could reduce the costs of legal education and, hence, of legal services. It could go a long way towards restoring confidence in the legal profession and freeing up law schools to work more closely with state supreme courts and state bar associations to meet the needs of local markets, adapt to new industry technologies, and satisfy the changing demands of consumers.

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The Challenge Facing Law Schools

In Academia, Law, Law School, Legal Education & Pedagogy on May 10, 2017 at 6:45 am

This piece originally appeared in the February issue of The Addendum, a publication of the Alabama State Bar.

Many law school administrators have begun the new year anxious about the future. Since the financial crisis of 2008, the number of law-school applications and LSAT takers has plummeted, while tuition costs have continued to rise. Faced with the probability of heavy student-loan debt, a saturated legal market, and stagnant starting salaries for attorneys, some aspiring attorneys have decided that law school is simply too risky an investment and are looking elsewhere to begin their careers.

The decrease in applications for admission and low matriculation rates have hit lower-ranked law schools particularly hard. These schools have struggled to compete for applicants and have decreased the size of their classes to maintain competitive admissions data. Even Ivy League schools have been forced to find creative solutions to contracting enrollment. Harvard Law School, for instance, has accepted more transfer students—whose entering LSAT scores do not have to be reported to publications that rank law schools—presumably to make up for shrinking tuition revenues.

Law schools face a dual threat: the American Bar Association (ABA) and the Department of Education (DOE).  The DOE is cracking down on law schools for allegedly deceptive enrollment practices just years after a string of lawsuits across the country claimed that certain law schools misrepresented employment statistics for their recent graduates.

Last year, the DOE recommended that the ABA lose its accreditation powers for one year. Under pressure from the DOE, the ABA has grown more aggressive, demanding that law schools come into compliance with ABA admission standards or suffer potential reprimands, sanctions, probation, or worse. The ABA imposed a remedial plan on Ave Maria School of Law to improve the school’s admissions practices and bar-passage rates. Then, in November of 2016, the ABA publically censured Valparaiso University School of Law and placed Charlotte School of Law on probation.

Despite the fact that Charlotte School of Law remains accredited by the ABA, the DOE announced in December 2016 that it was terminating that school’s access to federal student aid. In response, students there have filed a federal class-action lawsuit alleging, among other things, that the school and InfiLaw—its parent company—misled them and misrepresented the scope and degree of the school’s problems.

The blogosphere abounds with rumors about law-school closings. Indiana Tech Law School is, in fact, shutting down this June, and in 2015 the William Mitchell College of Law merged with Hamline University School of Law to offset costs and avoid shutting their doors.

In light of the foregoing, law schools should be transparent about the condition they are in and the difficulties they face, lest they find themselves the target of lawsuits like the one filed against Charlotte School of Law. The future of law schools and the legal profession remains uncertain. We are in a transitional—and perhaps unprecedented—moment. How legal administrators deal with it may test not only their patience, courage, and leadership, but also the long-term viability of legal education as we know it today.

 

Why law schools should be transparent about their problems and prospective law students should exercise due diligence before they matriculate at law schools

In Academia, Law, Law School, Legal Education & Pedagogy on February 22, 2017 at 6:45 am

Allen Mendenhall

When I was in college, the common assumption was that students who couldn’t decide what to do after graduation enrolled in law school. The law was a fallback profession, the legal academy a repository for good but dithering students looking to find their way.

Things have changed. The blogosphere abounds with news about the crisis in legal education. The global financial recession brought about a decrease in law-school applications and LSAT takers while tuition rates continued rising. Undergraduates increasingly determined that law school was not worth the time or student-loan debt, in part because starting salaries for lawyers remained stagnant while the job market for legal positions remained saturated.

Law schools with struggling reputations (say, those which fall into the fourth tier of the U.S. News and World Report rankings) have experienced a decrease in applications and reduced matriculation rates. Forced to shrink the size of their classes to remain statistically competitive and satisfy American Bar Association (ABA) admissions standards, these schools have taken creative measures such as accepting more transfer students and developing non-J.D. courses and programming to counteract reduced tuition revenue.

Elite institutions are not immune from trouble. One study has shown that applications to Harvard Law School are down 18%. Applications to the University of Minnesota Law School are down 50%, forcing that school to scramble to save money. It reportedly has not only bought out faculty but also cut coffee in the faculty lounge. Dorothy Brown, a professor of tax law at Emory University School of Law, predicts the imminent closure of a top law school. Meanwhile, as these financial woes grow and spread, LSAT scores and bar passage rates continue to worsen at lower-ranked institutions.

The ABA and the Department of Education (DOE) are cracking down on law schools, the former in response to pressure from the latter.  The DOE, in 2016, proposed a one-year revocation of the ABA’s accreditation powers. Consequently, the ABA has more aggressively enforced compliance with its admissions standards, threatening law schools with, among other things, reprimands, probation, and sanctions. For example, the ABA instituted a remedial plan to reverse the negative trends of Ave Maria School of Law’s bar-passage rates and admissions data. Around three months ago, the ABA censured Valparaiso University School of Law and placed Charlotte School of Law on probation.

The ABA has not revoked Charlotte School of Law’s accreditation, but the DOE has nevertheless terminated this school’s access to federal student aid. Law students there have filed a federal class-action lawsuit alleging that Charlotte School of Law and its parent company, InfiLaw, misrepresented the extent of the problems they were confronting, thereby misleading students about the health of the institution in which they were enrolled. Speculation now circulates about whether the closure of Charlotte Law School is inevitable.

Indiana Tech Law School, known for its experimental pedagogical approaches, has announced that it is shutting down. Other law schools have turned to institutional consolidation to remain financially viable. The William Mitchell College of Law, for instance, merged with Hamline University School of Law in 2015. Thomas M. Cooley Law School affiliated with Western Michigan University in 2014, changing its name to Western Michigan University Cooley Law School. It closed its Ann Arbor campus that same year.

The good news for worried law school administrators is that the ABA House of Delegates has voted down proposed Resolution 110B, which would have required 75% of graduates from any law school to pass the bar exam within two years, a figure that would have resulted in the non-compliance of several schools with ABA standards.

In this climate of institutional contraction and uncertainty, law school administrators must remain transparent, lest they invite litigation of the kind facing Charlotte School of Law. On the other hand, prospective law students must complete their due diligence before enrolling in law school. Although the doctrine of caveat emptor has faded away, some residual form of it could benefit the wider culture. Absent any evidence of fraudulent misrepresentation or deceptive practices, law schools should not be liable for the poor matriculation decisions of starry-eyed students.

Prospective law students have a personal responsibility to make informed choices about their graduate education. They should examine closely a law school’s admissions data, including GPA and LSAT scores, and stay sober about their own qualifications and preparedness for law school. They should account for a law school’s employment records and bar-passage rates. And they should research the state of the legal job market in the geographical area surrounding different law schools, paying close attention to the hiring patterns of local firms and organizations.

Not everyone goes to law school for the same reason. Some wish to study at an institution with a religious affiliation; others attend schools that consistently secure for their graduates judicial clerkships or opportunities to work at prestigious law firms. It’s important that prospective law students know exactly what they want from law school—and that they refuse to “settle” on a law school that isn’t a good fit for them.

During this transitional period for legal education, law schools with a long history of recognized stability may not satisfy consumer demands as they once did. Law schools need students, and they’re recruiting them vigorously with mixed results. The days when law school was a prudent option for students who waffled about their profession or career are long gone. While law schools should be scrutinized for their marketing strategies and admissions and employment data, students, too, should be responsible for their poor decisions.

Accountability runs both ways. Law schools and prospective law students alike must equip themselves with knowledge of the legal job market—in addition to the costs and demands of legal education—and adjust their plans accordingly. Otherwise their future could be bleak.

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