INDIANA UNIVERSITY MAURER SCHOOL OF LAW Bloomington
The Hard Business Problems Facing U.S. Law Faculty* William D. Henderson Indiana University Maurer School of Law U.S. Legal Education is in the midst of a large, structural transformation. This structural shift is driven by a confluence of factors, which includes three significant trends: 1. The decline, or plateau, of the traditional time and materials legal services model 2. The politics of law school finance 3. A new generation of legal entrepenuers that are turning some aspects of law into process‐driven products and services. The trends above are going to require law schools to change. In what way? We can lower our cost structure, but that would only address some of the challenges. The only viable strategy is to retool. This entails rethinking what we teach and how we teach so that the value of the legal education‐‐for students, employers, alumni and the public at large‐‐is commensurate with our operating costs. Institutional change is extraordinarily difficult. But I think it is extra hard for law schools. Law faculty have little or no experience making high stakes business decisions, yet we control curriculum and appointments, which are the areas that need major rethinking. Talk is cheap‐‐and we specialize in talk. Like any other industry undergoing structural change, we need to objectively assess our situation and be prepared to take decisive action despite painful tradeoffs and imperfect information. For law faculty, our biggest risk factors are indecision and denial. As I write these words, I can practically hear the skeptical sighs of my fellow professors. I am describing the world as I find it, not as I wish it to be. This is about making sound business decisions, not winning a debate. Here are the basic facts and analysis that we ignore at our peril. 1. Decline of Traditional Legal Services Model For most of the twentieth century, there was a large imbalance between the demand for sophisticated, specialized lawyers and the available supply. Law firms benefitted from *
Originally published as part of the National Law Journal’s Law Review Forum (October 31, 2011), online at http://legaltimes.typepad.com/lawschoolreview/2011/10/the‐hard‐business‐problems‐facing‐ us‐law‐faculty.html. 211 S. Indiana Avenue
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this imbalance because their clients were willing to pay for the training of law school graduates—there was no other potential sourcing solution. By the early 2000s, the shortage of sophisticated legal technicians had become a surplus, arguably exacerbated (but not caused) by the reluctance or inability of lawyers to retire. This imbalance between supply and demand is now reducing the number entry level jobs for law school graduates. Further, clients are increasingly shifting the cost of training law graduates onto law firms—a financial burden the law firms are reluctant to assume. Government, public interest, contract attorney positions cannot compensate for the changes taking place in the law firm sectors. These systemic changes in supply and demand significantly cloud the short, medium, and long‐term employment prospect of law school graduates. 2. The Politics of Law School Finances The cost of legal education is going up at the same time that value of a generalist legal education is going down (point #1). This situation is exacerbated by all‐time high enrollment of law schools, which at many law schools has been driven by a short‐term need to replace endowment income. These trends are mobilizing student activists and inviting scrutiny from the mainstream and legal press. Because of law schools’ heavy dependence on federal student loans, which has been expedited by recent changes in federal laws, law school finances are now very vulnerable to political forces. Law students are going to be very unhappy with heavy debt loads in the face of a declining or flat job market—notwithstanding the supposed benefits/protections of the new federal income‐based repayment (IBR) plans, which ties payment obligations to income. This benefit could be viewed in the years to come as a burden. More significantly, if a substantial portion of law students end up on IBR, the Department of Education will be writing down a huge amount of law school debt. Further, it will lack the funds to issue loans to future students. In short, the whole system could easily run off the tracks. In the year 2011, should the heavily indebted federal government underwrite the record production of law school graduates? Law professors need to ask practicing lawyers and law students this question, not other law professors. A new policy is on its way. Yet, our poor collective behavior during the US News rankings era has undermined our credibility with students, the public and government officials and limited our influence. Now is the time for law schools to be frank, honest, and proactive. We posture and debate at our peril. 3. The Next Generation of Legal Entrepreneurs. If #1 and #2 are not challenging enough, the structural issues continue. Specifically, the artisan craft of lawyering is gradually giving ground to a new generation of legal entrepreneurs that use new technologies and businesses processes to improve quality and
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reduce costs of various legal products and services. The thrust of this movement is to standardize, offshore or automate many of the tasks formally performed by U.S.‐licensed lawyers. This tech‐driven approach will dramatically improve lawyer productivity; yet, it is also likely to reduce the demand for traditionally trained law school graduates. In the years to come, many of the most lucrative, challenging and innovative opportunities will lie at the intersection of law and other disciplines. Law schools are ill‐ equipped to teach many of these critical competencies, such as teamwork, collaboration, project management, finance, marketing, statistics, knowledge management and effective communication across knowledge domains. This retooling challenge entails both new substantive knowledge and unfamiliar teaching methods. Regarding the latter, most of these skills and competencies require experiential teaching—i.e., learning by doing. Here is the brutal truth: the resources to pay for this retooling are going to have to come at the expense of traditional scholarship. Time is our primary asset; this is a painful tradeoff because scholarship is the most enjoyable part of the job for many law professors. Further, unlike prolific scholarly writing, retooling curriculum does not enhance one's prospects of getting a lateral appointment, so many law professors will not come to this party willingly. Conclusion My post raises two questions for law faculty that need to be answer in order: 1. Is the evidence of structural change sufficiently compelling that we need to retool in order to survive? This is a business decision. It must be based on facts and probabilities. And it has to be answered first so the appropriate urgency and perspective is present to answer question #2. 2. If the answer to #1 is yes, how should our law school retool its curriculum and appointments process? Law professors are prone to focus on the difficulty/impossibility of the retooling process because‐‐let's face it‐‐we are worried about how the changes will affect us. Question #2 is the wrong place to start. Frankly, a substantial portion of traditional legal education is likely to survive any retooling (appropriately so), yet the necessary changes are certain to bring discomfort and conflict to every law school willing to confront the issues. That said, this is just as much as opportunity as it is a challenge. Twenty years from now, something will have replaced Langdell as the core feature of an effective legal education. That mantle is now up for graps.
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