‘Law Mart’

The for-profit college sector and the Obama administration's response to its rapid post-recession growth have been topics of intense debate in higher education. Legal education has played a niche role in the sector. But anthropologist Riaz Tejani, an assistant professor of legal studies at the University of Illinois at Springfield, argues that for-profit law schools took advantage of the deregulation of higher ed to turn the issue of access on its head -- opening up a new market for outside investors while creating a bifurcated legal education system, with the for-profit sector serving many nonwhite, low-income students who were not earning spots in traditional law schools.

Tejani taught for three years at a for-profit law school, an experience he incorporated into his just-published study of legal education, Law Mart: Justice, Access and For-Profit Law Schools (Stanford University Press).

While at the law school, which he refers to with the pseudonym New Delta School of Law in his book, Tejani says he began to observe "curious mutations" in the delivery of higher education to students. He began the active research -- mainly interviews -- for his study after leaving the school.

Q: What are the outcomes for students like at these law schools?

A: The outcomes are not good. They aren't universally bad -- there are just enough graduates getting public-sector and small-firm jobs to say these are possible. But the global outcome metrics are some of the lowest in the ABA-[accredited] schools -- low bar passage and low grad income rates. As I said, this could be factored into tuition pricing (discounting for risk) or federal loan availability. But they so far haven't been. The [percentage of] people getting top corporate firm salaries that would justify full tuition [is] very small to negligible. This is true across the board, but especially acute in a start-up law school aiming to remedy the "justice gap." There is in effect a risk premium being charged for professional access.

Importantly, outcomes at the school I observed were actually pretty high initially, prior to a wave of extreme growth just before the enrollment bubble burst. At that time some senior professors were saying "pump the brakes," but they were ignored or dismissed. Almost exactly three years later, bar outcomes crashed. The drop was something like 90 to 30 percent.

Q: You acknowledge in the book that for-profit law schools are a small subset of legal education and for-profit higher education. But you also say they’re kind of a bellwether for for-profit education and higher ed more broadly. Why is that?

A: A lot of it has to do with timing. They came into emergence just before, No. 1, the big skepticism about higher education generally, especially public financing of it. And, two, before a huge wave of innovation, particularly technical innovation, was brought in to try to address the first problem. They came in early on and started studying new techniques for delivering education in general and professional education in particular.

Because they come at it with a huge financial resource pool, they have the capacity to study what’s coming up on the horizon and what new techniques are available. So the timing is such that they’re early adopters of high-technology delivery as well as other teaching best practices that are intended to streamline legal education. They’re able to adopt and implement a lot of those techniques, and then you have the onset of the Great Recession.

You have the financial bubble from a global perspective, and then you have the fallout within the legal services industry and the law school industry. It's at that point that other law schools start to emulate [for-profits] either directly by looking at how for-profits are able to sustain themselves independent from state subsidies, for example, and other kinds of things or independent of a larger state university system. Or, indirectly, they see these techniques taking over across the sector and adopt that. There comes about a wave of new best practices in delivering higher ed and professional education for which these for-profit law schools are on the leading edge in adopting.

Q: You say for-profit law has opened access to students from socioeconomic backgrounds or academic backgrounds who haven’t traditionally been able to pursue legal education at prestigious programs. But that's also meant that diversity is concentrated among lower-ranking programs. What does that say about the promises of market-based access that you say has replaced more traditional access programs, like affirmative action?

A: The key thing to understand about neoliberal access is that you still have the promise of mainstream inclusion and upward mobility -- all the things you traditionally think of when you think about access -- socioeconomic and educational access. Those promises are still there. In fact, they’re a big part of what sells the project either internally to investors or externally to students. And so, it’s this dual marketing of access. It’s neoliberal in the sense that it places a significant limit on the degree of inclusion, the amount of inclusion and mobility, that groups taking part in it are actually able to achieve.

It essentially further bifurcates the profession and the educational sector into high and low tiers. Now, that bifurcation has already been there. And my senior colleagues studying the sociology of the legal profession have pointed this out for a long time. But what's new here is, first of all, a greater realization of that duality, and secondly this financialization of it -- this project to make it financially profitable to outside investors, to render access in this way.

So it’s this combination of three or four things all going on at the same time that makes this different from previous efforts to grant access. The important thing to remember here -- other writers and experts on this, of which there are not many, but the few people who have written on this have called this the “law school scam” pretty explicitly. The problem is it's not a scam, specifically. It's just taking the broader logic of the system that we’ve created to a further extension or to its next logical point, which is to turn access into a for-profit venture.

Q: When you say the further logic of the system, do you mean the legal education system as a market?

A: I mean both legal education and higher education. Let’s walk backwards through history. Once upon a time, ethnoracial, socioeconomic minorities had little to no access to higher education and certainly not just law but other learned professions in the West. And then you have the opening up of access through what become affirmative action programs. And you have resentment about that, backlash to that throughout the ’80s and ’90s, and a rollback of meaningful affirmative action.

So what’s left, essentially? On the one hand, there is a need for “diversity” and access, but on the other hand there’s not really public state-sponsored support for that. So what’s left is a private industry, private market approach to rendering access. It’s at that point that you see the kinds of practices and kinds of abuses I think that this case study represents.

Q: You found for-profit law schools advertise themselves as meeting this demand for legal services in underserved areas or communities. But some of the students you spoke with reported that perceptions of their programs appeared to hurt their career prospects. How does prestige in the legal market undermine their hopes of meeting unmet needs in their communities or for just furthering their own careers?

A: The overlay of rigid status hierarchy and prestige hierarchies have for a long time limited the prospects of students coming out of some schools versus others. It’s just [been] a latent part of the legal profession for a long time. The problem is that -- among many other problems -- is that schools in the so-called fourth tier, or “unranked tier” -- now people talk about a fifth tier at the very bottom -- really try to downplay the significance of that hierarchy.

So, just within this for-profit that I studied, you have overt marketing and internal policy attempts to downplay or minimize the importance of what the hierarchy is going to look like on the outside. In other words, the effort of the school is focused solely on getting students in and probably getting them graduated and potentially getting them past the bar. Those three things are their bread and butter, because they affect all their metrics, which affect accreditation. But what’s ignored is the realities of practice on the outside.

What's striking to me is the lengths to which a school like this will say, “Hierarchy and prestige don’t matter -- it's whatever you want to be.” So suddenly, the students are somehow themselves set free, unleashed, to be whatever they want to be and their destinies are unfettered by sociology, when, in fact, it’s just not true.

It’s nice and it’s aspirational but the reality if you're being perfectly honest with students is that they will face obstacles on the way out. And students do succeed. There’s a fraction that make it into assistant attorney general positions, public defender positions. But the problem is the notion that you have unlimited upward mobility just by having the J.D. in your hand, rather than understanding and recognizing the social and cultural implications of where you got that from and the long-term effects of that.

The downplaying of the significance of those things allows the institution to charge premium tuition. Because, if you were going to truly value and assess your degree based on what benefits it will bring in the long term, then you have to discount the price of what the J.D. should cost students coming out of a school like that. If you want to create from scratch new law schools to improve access to justice and to get marginalized communities into the legal profession, we have to recognize that (a) they're going to be probably held back by the novelty of the school itself, the lack of prestige and (b) the tuition should account for that. The value of the degree over the long term should be priced into the tuition, and that’s why making it for-profit is somehow inimical to the access-to-justice mission.

Q: You observe that legal education programs are priced roughly the same no matter what their ranking is or what kind of success their graduates find. There's at least one credit-rating agency that’s based ratings of programs on a gainful-employment basis. But you say that uncritically evaluating legal education on a market basis misses a moral component of the role that legal education plays. How should that inform the work of policy makers and regulators who oversee these programs?

A: In an earlier version of the book, I had a section laying out several different policy solutions, but we rolled those back -- partly because the sector is changing so quickly and things are moving as we speak. So that some of the things I was initially suggesting are coming to be or at least are on the table.

You could implement a policy that the Department of Education set up a system of three or four tiers of schools based on creditworthiness and then cap the maximum amount of funds that it will disburse to students attending those schools based on creditworthiness. That seems like the most logical way to, on the one hand, keep public finance flowing so that students can attend wherever they want to. That was the original purpose of this -- to give full autonomy to students in these decisions.

But, on the other hand, there’s a massive information asymmetry where schools know the value of the degree they're generating but the students don’t ahead of time. So, whatever funding regulator is there -- in this case, the Department of Education -- it could set down what it’s willing to pay or loan, let’s say, what it’s willing to lend out in the present. Just as a matter of protecting the students over the long haul, because they’re the ones paying it back. Or the taxpayers who would be liable if there’s a default.

Q: Do you see this study as a call for more active regulation of this market?

A: Yes, I’d say unequivocally. Although, like I just said a moment ago, it holds back on being too explicit with policy suggestions, partly because methodologically what it's meant to be is a descriptive account, a case study of what can go wrong in the absence of robust oversight. So it wants to do that job well and it doesn't want to overstep too much. It's teasing out this long debate between free marketeers and social protectionism.

This goes way back -- and the key economic anthropologist on this is Karl Polanyi -- but there's this long historical debate between, should the market decide and should we just unfetter the market so that it can sanitize the sector, eliminate underperforming actors -- basically shining sunlight onto a disease. Or, do we need state intervention of a kind of that laypeople would think of as social democracy or socialist type of intervention -- basically controlling the market in a way that drastically limits what transactions institutions can enter into with their students but always with social protectionism in mind, with the idea that there is an asymmetry in the power relationship between, let's say, a student who is fresh out of college and needs to borrow $200,000 over the next three years, and is promised a certain upward mobility for doing that, or on the part of an institution that can really better assess whether that's true or not and, in most cases, knows that it's not.

Q: The Department of Education indicated recently that it might restore access to Title IV funds to Charlotte School of Law, a for-profit in North Carolina, after it was cut off by the Obama administration for admitting too many students unlikely to succeed and pass the bar. (Subsequently, the law school closed its doors.) Should the Trump administration's handling of this case be seen as indicative of its commitment to regulating the sector?

A: Absolutely, yeah, I think that’s a red flag right there, in part because if you contextualize it a little bit, you see that the secretary of education has a number of loose entanglements with that for-profit corporation that owns several of the law schools. So, I believe her consultant who assisted in her bid for the education secretary position was subsequently hired by, if not this for-profit legal ed company, then one of its partners in, I believe, in Florida. That's one thing.

The second thing you can point to is the partnership of one of these for-profit subsidiary schools with a historically black college and university in Florida and then the subsequent commencement address by the secretary of education to that historically black college.

Those two superficial connections are indicative of a deeper interplay between public and private interests. In a major way, that’s a subtext of what my book is talking about. But this has been going on for a couple of decades, and it's just the most recent and high-profile example of this back-and-forth between the private entity that we’re worried about and the so-called watchdogs in the government, in the regulatory community, who are supposed to be at the wheel.

Q: From your observations, how did for-profit law schools find creative ways to come into compliance with regulations when the pool of applicants for legal education tightened up?

A: I’ll give you just one quick example, which is fairly widespread now. This may be one of our examples where back to your earlier question about how is this a bellwether and in what sense was it on the leading edge. Law schools began hiring their own graduates to work as tutors or some other function within the school and could call that academic employment. This started about eight to 10 years ago, I believe.

The ABA then developed new reporting requirements for employment. They require schools to report data on outcomes. They changed the reporting requirements for employment outcomes to capture that distinction between true external employment and this internal kind of fluffing up of employment statistics. The school I studied very much took up that practice and subsequently did have to report on that. And then just most recently it's become so widespread that I guess some of these schools must have lobbied the ABA to relax the reporting requirement once again.

Just in the last few weeks, there's been a big debate among legal education policy folks, people at the ABA, to unravel and go back to this earlier lax reporting requirement. And then the transparency movement, all these activists working on this, reacted badly to that and said no, no, this is an important requirement. So that was one of the practices, one of the things I would point to.