Citing the high cost of attending law school in the United States today, the American Bar Association has called on the federal government to suspend or forgive certain lawyers’ student loans, and is co‐sponsoring a “Student Debt Week of Action” this week to lobby Congress “for additional student loan debt relief.” Unmentioned in this advocacy, however, is that the ABA and its member associations in states across the country are at least partially responsible for the extreme tuition and debt levels that today’s law school graduates must incur.
It’s undoubtedly true that law school tuition and related student loan debt have increased in recent years. Since 1985, for example, inflation‐adjusted public law school tuition for in‐state students and out‐of‐state students has quintupled and more than tripled, respectively. Over the same period, tuition at private universities has more than doubled. (See Figure 1.)
Throw in additional costs for living expenses, which average roughly $20,000 at ABA‐accredited institutions, and three years of law school can be quite the financial burden – one that most students (including me) finance via federal and private student loans.
The ABA contributes to this situation in several ways, each of which affects the demand for and supply of a law school education. First, the ABA has long supported and lobbied for various federal student loan programs, which goose demand for higher education and, in turn, tuition. Recent research from New York Federal Reserve economists shows, for example, that federal student loans are a major driver of tuition increases: a one dollar increase in federal subsidized and unsubsidized loan maximums lead to an increase in tuition price of about 60 and 40 cents, respectively. Federal forgiveness of law school loan debts could encourage even more and riskier borrowing in the future (aka “moral hazard”).
Second, the ABA supports state restrictions on the supply of lawyers – restrictions that usually conform to model ABA regulations and boost the price of legal services (and thus lawyer salaries). Most notably, the ABA’s Unauthorized Practice of Law (UPL) rule and parallel state provisions prohibit non‐lawyers or lawyers licensed in other states from providing most legal services and products – even mundane tasks or ones involving friends or family. Thus, for example, many states would prohibit an experienced paralegal from handling her mom’s real estate closing without a licensed (and more expensive) lawyer present. States and bar associations have also used UPL restrictions to block digital legal advice or to fight filing platforms that could expand access to cheap or free legal services. It took more than a decade (and state legislation), for example, to resolve a UPL dispute that the North Carolina State Bar instigated against online legal document service LegalZoom back in 2003. ABA regulations further prohibit non‐lawyers and foreign lawyers from owning and operating law firms in the United States, and hamper innovation in the legal field.
Studies show that these ABA‐championed supply restrictions, especially when coupled with the ever‐increasing demand for legal services in the United States (caused in part by new government policies requiring legal expertise), raise the price of those services while providing minimal, if any, consumer protection. Lighter‐regulated jurisdictions – such as Arizona, the United Kingdom, and the European Union – have lower prices, not lower quality. Higher lawyer salaries in the United States can, in turn, attract more Americans to the field of law (though money surely isn’t the only motivation) and make it easier for prospective law students to justify paying exorbitant tuition prices.
But why do individuals interested in the law, for whatever reason, all turn to law school? Here again, the ABA plays a role: in particular, the organization successfully lobbied decades ago to be the sole accrediting agency for law schools in the United States, and all states but California require that potential lawyers graduate from an ABA‐accredited institution in order to sit for the state bar exam (passage of which all states require to practice law).
Yet while both demand for lawyers and law school tuition have soared over the past 35 years, the number of ABA‐accredited law schools has increased by just 13 percent (see Figure 2).
Meanwhile, already‐accredited law schools, particularly those with higher national rankings, are hesitant to increase class sizes or lower admissions standards. Thus, when the pandemic caused law school applications from top‐tier candidates to surge this year, many schools didn’t significantly expand their first‐year classes but instead chose to ask prospective students to defer attending (or even paid them to do so!). Others enforced strict deposit deadlines to discourage acceptances.
When artificially‐induced demand for a law school degree runs into restricted supply of law school education, higher tuition prices – and thus larger student loan debt – are the inevitable result. And the ABA supports and implements policies exacerbating both sides of this supply‐demand imbalance.
Reforming the policies fueling the long‐term rise in law school debt, not lobbying for American taxpayers to pick up young lawyers’ tabs, should thus be the priority of an organization purportedly dedicated to easing those burdens. Here, however, it’s the states – not the ABA – leading the way. Both Arizona and Utah, for example, have enacted reforms allowing for non‐lawyer investment in law firms and creating new programs for legal paraprofessionals to practice law. Other states such as California and New Mexico have established task forces exploring reforms. These welcome (but still relatively modest) changes should increase choice and competition in the legal field, reduce costs for everyday consumers, and limit the current systemic problems affecting the legal profession and ever‐rising cost of both legal services and law school tuition – problems that, unfortunately, the ABA is still helping to perpetuate.
