Twin Cities law schools are being forced to make difficult choices about where to cut as they confront what has become a nationwide pullback in enrollments.
Some have admitted fewer students and are cutting faculty or staff to make up for the loss in tuition revenue. Others are admitting bigger classes at the risk of a potential drop in national rankings.
Hamline University School of Law opted for the smaller class — 56 percent smaller than in 2010 — and turned to its biggest operating expense, faculty, to balance the budget. Since 2011, when the school began offering early retirement incentives, 10 faculty members have retired and four more have accepted agreements to retire in the next academic year.
"We are exploring whether or not we need to reduce it even by a few more," said Hamline law dean Don Lewis.
Like law schools across the country, Twin Cities law schools enjoyed a surge in applications in 2009 and 2010. Since then, here and nationally, numbers have been falling. Applications were down in all four of the metro area's schools for the third year in a row.
Law school is no longer the default decision it used to be for smart college graduates who aren't sure where to go next, said James Leipold, executive director of the National Association for Law Placement.
"There are times in our history and in our economy where that has served people well," Leipold said. "I think for those people, the message should be, 'You know, law school's probably not the fallback decision it used to be.' "
Same issue, new answers
While the problem is the same, responses are distinct.
"Surely the one thing that would signify failure is to do nothing, to not change," Leipold said. "I think every law school has to change."
Hamline's Lewis said he won't admit a larger class for money. Doing so "in this environment is not a good choice."
But after admitting a small class last year, the University of Minnesota Law School can't afford to do so again. It is aiming to enroll more students. Dean David Wippman recognizes this could mean a drop in the median LSAT and GPA scores used by U.S. News & World Report in its rankings.
"It's something that we have to pay a lot of attention to," Wippman said.
The change doesn't necessarily mean lower standards, he said, "it's just we'll have a slightly different mix."
The U's law school offered retirement incentives, but no faculty members accepted. Nine staff members left through a voluntary program.
University of St. Thomas School of Law is on track for its smallest class in more than 10 years after receiving 59 percent fewer applications this year than in 2010. Dean Rob Vischer said he decided to not renew a visiting professor's contract and to eliminate 2 ½ staff positions.
To get faculty and staff more in line with a smaller student body, William Mitchell College of Law Dean Eric Janus chose not to replace two faculty members who retired and a third who took another job. They've also reduced the staff size by 20 percent and cut operating costs elsewhere, such as replacing computers less often.
"There's no one magic money-saving technique that we've had, but we're just being a little more careful across the board," Janus said.
For law students, steady tuition increases and low entry-level salaries have changed the cost-benefit analysis.
Neal Busdicker, 29, graduated from Hamline Law this spring with about $100,000 in debt. Once he passes the bar exam, his job will be looking for a job. Even though law school has been worth it to him, he recommends that prospective students think long and hard about going.
"I would not suggest going to law school if anybody is ... on the fence," he said. "It is a significant financial burden to shoulder."
Law school tuition has increased roughly twice as fast as income since 1985, according to a research paper by Jerry Organ, professor of law at St. Thomas.
"Now [students have] to put more money on the table even though the likelihood of a job has shrunk and the income hasn't gone up as much as the money they're having to put on the table," Organ said.
Without financial aid, the cost of three years of law school in the Twin Cities at this year's tuition rates ranges from $108,198 to $135,936. Hamline, the U and William Mitchell increased tuition this year.
But fewer students are paying the sticker price, Lewis noted. He said now is the right time to go to law school.
Applicant pool shrinks
"Because of the declining applicant pool, law schools are going out of their way to attract students, and they're discounting their tuition," Lewis said.
Law schools are recruiting from a group of prospective students increasingly aware of the profession's job prospects.
The employment rate for law school graduates has fallen for five years in a row to 84.7 percent for the Class of 2012, according to NALP. While more 2012 graduates found jobs, a larger class size hurt the overall rate. Only 64.4 percent obtained a job that requires bar passage — the lowest percentage the National Association for Law Placement has ever measured.
All four Twin Cities law schools report higher overall job placement numbers, ranging from 85.5 to 93.5 percent, according to the American Bar Association.
The report had some bright sides. The median starting salary increased slightly to $61,245 from $60,000 the year before — still far below the $72,000 reported for the class of 2009. The percentage of part-time jobs is down to 9.8 percent compared to 11 percent for the previous class.
"I think it's fair to say it's still a tough job market," Leipold said. "So I think for potential law students they just have to do a better job than they've done in the past about cost-benefit analysis."
Although some have said the problem is too many lawyers, Leipold said that is not the case — plenty of people who need legal help don't get it.
The business model is broken, he said.
"It costs too much money to go to law school for law school graduates to be able to take jobs that would pay $40,000 a year or $50,000 a year to do law practice … where you could really help people who are above the poverty line but still can't afford to hire a lawyer," Leipold said.
William Mitchell's Janus is hopeful that things will start to look up for law schools.
"My own sense is that the numbers prerecession were probably inflated, but that the numbers right now are probably unnaturally low," he said.
There will be a recovery, Lewis said, but it will be slow.
St. Thomas' Vischer is operating under the idea that the conditions will persist.
"I don't have a crystal ball, but we are prepared for the long haul that this is the new normal," he said.
Whatever the future holds for law schools, Busdicker hopes his future holds a job.
"I'll do whatever I need to do so I can put food on the table and start lowering that debt that follows me everywhere."