On January 30, The New York Times reported on this year’s dramatic decline in law school applications. The following day, a Wall Street Journal article described the many new law schools in the works. While economists might call that “market disequilibrium,” more appropriate concepts might be incentivized idiocy and subsidized stupidity—with the U.S. News rankings incentivizing the idiocy and taxpayer dollars subsidizing the stupidity.

The Journal article suggested that some university administrators began acting on plans to add law schools “before the current drop [in applicants] became apparent.” But the two schools featured in the article, University of North Texas–Dallas College of Law and Indiana Tech, don’t have that excuse.

Indiana Tech didn’t complete a feasibility study related to its proposed new law school until May 2011. In Texas, meanwhile, state lawmakers authorized the creation of the UNT–Dallas College of Law in 2009, as the Great Recession was deepening. The state’s 2011–12 state budget earmarked $5 million in funding. Classes are set to begin in 2014.

As for other new schools, what exactly was it that wasn’t apparent when they came to life? Only obvious things that those responsible for creating the schools didn’t want to see.

Follow Four Numbers

The first statistic that planners could have considered is that from 2003 to 2008, the number of law school applicants dropped steadily—from 100,000 a year to 83,000. Then came the onset of the Great Recession, which apparently made law school an attractive place to wait out a dismal economy. The total number of law school applicants rose to 88,000 in 2010, before resuming its downward trajectory, perhaps, some predict, to as few as 54,000 people applying to enter law school in fall 2013.

The second relevant point is that in the face of an applicant pool that began shrinking 10 years ago, first-year enrollment held steady at 49,000 from 2003 to 2009. Refugees from the Great Recession pushed that figure above 51,000 in 2009 and 2010, before it settled back to 48,700 in 2011.

Third, when these 40,000-plus students graduate, there will be full-time legal jobs waiting for only about half of them. That’s not a new development, only a newly disclosed one. To game the U.S. News rankings, law schools have been fudging their employment numbers for years, and they know it.

Finally, at the end of 2003, there were 187 accredited law schools in the United States. Today, there are 201. Attempting to convey the magnitude of the current crisis, University of Chicago Law Professor Brian Leiter told the Times he expects “as many as 10 schools to close over the next decade.” But over the past 10 years alone, the ABA has accredited 14.

What Are The Lessons?

First, a decline in applications alone doesn’t assure any change in the profession’s errant direction. The real-life experiment conducted from 2003 to 2008 proves that as long as the number of applicants exceeds the number of available places in law school, academic leaders who think they can make money on law students will continue to build schools.

Second, in an effort to reverse the downward trend in applications, some deans beat the bushes for additional students, even as the job market for graduates shrinks. Case Western Reserve Law School dean Lawrence Mitchell’s much-discussed Times op-ed proves the point. So does “ Law School Is Still A Good Investment for African Americans," an article written by Professor Carla Pratt, associate dean of academic affairs at Penn State’s Dickinson School of Law, and published last fall by The National Law Journal.

The creation of the UNT–Dallas College of Law further reinforces the point. According to the January 31 Journal article, professor and associate dean for academic affairs Ellen S. Pryor acknowledges that law school applications have plummeted, but says, “the fact that the nationwide numbers are down doesn’t dishearten us from thinking we’ll get really good students and fulfill our mission.”

What might that mission be? According to the Journal, UNT–Dallas hopes to draw a different pool of applicants than other north Texas law schools. In other words, even undergraduates who never before gave serious thought to law school should prepare themselves for an onslaught of sales pitches.

Limited Accountability

One explanation for the profound disconnect at work here is that administrators and deans maintain an unhealthy distance from the economic hardships that their worst decisions inflict on graduates. That’s because federally guaranteed student loans fuel a system that relieves law schools of financial accountability.

Imagine how the world might change if the government as guarantor could pursue reimbursement from a student’s law school for that graduate’s subsequent loan default. Unfortunately, in the absence of such a market solution, educational debt collection has become a growth industry as law schools avoid the messes they’ve made.

Steven J. Harper is an adjunct professor at Northwestern University and author of the forthcoming
The Lawyer Bubble: A Profession in Crisis, which will be published by Basic Books in April and available at Amazon.com and other outlets. He recently retired as a partner at Kirkland & Ellis, after 30 years in private practice. His blog about the legal profession, The Belly of the Beast, can be found at http://thebellyofthebeast.wordpress.com/. A version of the column above was first published on The Belly of the Beast.