There is no business like the law school business: Ka Ching

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taxguy
Posts: 307
Joined: Mon Jun 07, 2010 2:46 pm

There is no business like the law school business: Ka Ching

Postby taxguy » Mon Jul 18, 2011 7:55 pm

Here is a reference to a NYTimes article about law school economics and hiring. It is very sobering. Don't read it with a full stomach. http://www.nytimes.com/2011/07/17/busin ... ml?_r=1&hp

Here are some interesting quotes from the article:

It is one of the academy’s open secrets: law schools toss off so much cash they are sometimes required to hand over as much as 30 percent of their revenue to universities, to subsidize less profitable fields. N.Y.L.S. for example was — and is — in a very lucrative business. Like business schools and some high-profile athletic programs, law schools subsidize other fields in universities that can’t pay their own way

and..N.Y.L.S. is ranked in the bottom third of all law schools in the country, but with tuition and fees now set at $47,800 a year, it charges more than Harvard. It increased the size of the class that arrived in the fall of 2009 by an astounding 30 percent, even as hiring in the legal profession imploded. It reported in the most recent US News & World Report rankings that the median starting salary of its graduates was the same as for those of the best schools in the nation — even though most of its graduates, in fact, find work at less than half that amount.

N.Y.L.S. has participated in another national law school trend: the growth in the number of enrollees. Last year, law schools across the country matriculated 49,700 students, according to the Law School Admission Council, the largest number in history, and 7,000 more students than in 2001. N.Y.L.S. grew at an even faster clip. In 2000, the year Mr. Matasar took over, the school had a total of 1,326 full- and-part-time students. By 2009, the figure had risen to 1,596

Overall From 1989 to 2009, when college tuition rose by 71 percent, law school tuition shot up 317 percent

percent.

There are many reasons for this ever-climbing sticker price, but the most bizarre comes courtesy of the highly influential US News rankings. Part of the US News algorithm is a figure called expenditures per student, which is essentially the sum that a school spends on teacher salaries, libraries and other education expenses, divided by the number of students.

Though it accounts for just 9.75 percent of the algorithm, it gives law schools a strong incentive to keep prices high. Forget about looking for cost efficiencies. The more that law schools charge their students, and the more they spend to educate them, the better they fare in the US News rankings.

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Another article noted, law schools graduate 47,500 students per year yet the economy can only absorb about 25,000 of them. You do the math.

firemed
Posts: 1195
Joined: Wed Aug 11, 2010 7:36 pm

Re: There is no business like the law school business: Ka Ching

Postby firemed » Mon Jul 18, 2011 8:07 pm

This is interesting coming from you. But hey, nice to see taxguy around all the same.


ETA: this is a good article for the newbs, but contains no new information anyone who has been on TLS for more than a month would know.

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vanwinkle
Posts: 9740
Joined: Sun Dec 21, 2008 3:02 am

Re: There is no business like the law school business: Ka Ching

Postby vanwinkle » Mon Jul 18, 2011 8:10 pm

This has been posted already.




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