MATASAR RESPONDS TO TIMES SMEAR

Law School Cost, Educational Outcomes, and a Reformer's Agenda

Richard A. Matasar

Sunday's New York Times story on law school economics would have the reader believe that no matter the good intentions of reformers of legal education, the economic model for law schools forces schools to charge students too much, take too many students, and have too few graduates who can earn a living as lawyers. The article is misleading because it fails to acknowledge that:

1. Costs are outside of the control of any one school.
2. A legal education provides lifelong value.
3. Students can and do make informed decisions.
4. NYLS provides one of the most student-centric and innovative programs in the country.

First, the cost of education is an intractable problem not because schools do not want to lower costs, but because lowering already incurred costs is often outside the control of any single school. Law school is a regulated business which must comply with requirements for costly libraries, physical plants, residential programs, mandated teacher to student ratios, and so on. School labor costs are fixed by mandatory systems of tenure and job security for faculty members. Law schools can offer only a fraction of their courses online, etc.

Second, the article seems to suggest that the only value of a legal education is in the jobs that graduates may obtain immediately upon graduation. This is unfair and misleading. Legal education provides lifelong skills that give graduates the ability to represent others and help with their problems over a 40-50 year career--one which gives graduates autonomy and freedom to learn and continue to grow throughout their professional lives.

Third, the article seems to imply that students behave like sheep who do not know that we live in challenging economic times. Untrue; many of them read The New York Times and receive advice from friends, family, and others who point out the riskiness of taking on debt and the uncertainty of a bad job market. Further, most law schools to which they apply--like mine, New York Law School--provide realistic advice. I tell every student that going to law school is among the most important financial decisions they will ever make, that the job market for students outside the top 10 percent of their graduating class is tough, and that 90 percent of them are guaranteed NOT to be in the top 10 percent of their class.

Finally, the article is utterly misleading when it describes New York Law School and my leadership over the last 11 years. Reform begins with what a school controls: its teaching and its treatment of its students. On that score, the law school has been transformed into one of the most student-centric programs in the country. These are a handful of the significant improvements in New York Law School's education:

• We went from a 58 percent first time bar pass rate in 1999 to bar pass rates consistently in the mid-80 percent range and as high as the low 90 percent range.
• Our bottom quartile LSAT student today would have been in the top quartile of our class at the turn of the 2000s.
• Our new facility is among the finest in the country, not just for its beauty, but because it gives students the technological tools they need and provides them a comfortable, welcoming place for study and collaboration.
• We have an innovative program in virtually every area of the curriculum, the most intensive integrated first-year skills program offered anywhere, and research centers working at the cutting edge of their fields.
• We have flat tuition rates that guarantee every student a price that will not rise while she or he is in school.
• We are a leader in pushing for a change in the future direction of legal education through our partnership with Harvard Law School and have created multiple new ways to deliver education--some of which cannot be implemented without regulatory change.
• We went from raising $1,000,000 a year to raising $10,000,000 a year from our alumni and friends--an important measure of their assessment of the quality of our program and our students. And we moved our endowment and reserves from $30,000,000 to nearly $250,000,000--which is being spent to reduce our reliance on tuition as the only means to pay for the education of our students.

Turning to some of the more misleading assertions in the story, I provide the written answers that we gave to the reporter so that readers can see the context in which the quotes were taken--the sole reason that I would not answer any of his questions without a written record of what he asked and what I answered:

1. In response to questions about the increased enrollment in the class of 2009, we provided the following information: New York Law School's enrollment has varied widely over many years. For example, in the 16 years between 1982 and 1998, it varied between a high of 1506 and a low of 1142 students. In my first year (2000), enrollment was 1374. It grew to 1551 in 2003. I cannot speak to the wide variations in prior decades, but the enrollment variations after 2000 reflect significant national events. In the dotcom downturn in the early 2000s, our school, like most, experienced increased enrollment, which usually happens to graduate schools when it is difficult for undergraduates to find work. Moreover, post-9/11, we saw a major influx of students choosing to come to New York.

From 2003-08 our enrollment remained steadily between the high 1400s to the mid-to-high 1500s. Then, following the economic downturn in 2008, our enrollment significantly increased again. In this instance, the influx of new students came as a result of record high yields of students from those we accepted. Ultimately student body size is reflected in how many students decide to enroll--the yield rate. As shown above, enrollment management can be very unpredictable.

The 2009 incoming class resulted from the following dynamic: For the prior 3 years our yield rate--the percentage of students who received offers, who accepted those offers, and enrolled--had been relatively steady. From 2008 to 2009, however, the yield rate increased by 10 percent, meaning that even though we accepted fewer students than the prior year (approximately 150 fewer), 170 more students enrolled. While we can't say with certainty why this happened, we can look to the economic downturn, the opening of the new building which was receiving rave reviews, and the fact that we were coming off of a record high bar pass rate of 93.6 percent as reasons why more applicants chose to come. Again, enrollment can be very unpredictable. For 2011, we have accepted more applicants and, like many schools, are seeing fewer enroll, perhaps pointing to graduate school looking less appealing in a prolonged economic downturn.

2. In response to questions asserting that New York Law School had to increase class enrollment to satisfy our bond raters, we replied with the following information mostly omitted from the story: The bond issuance requires that NYLS be sound financially. Therefore, we project income over a several-year period and annually share our audited financial statements with those who rate our bonds so that they can assess our financial health. Measured against actual performance, NYLS annually demonstrates that it has sufficient funds to run the school. Meeting enrollment targets is an important measure of financial health. However, NYLS never promised (nor needed to promise) anyone that it would increase enrollment to meet debt service obligations. We have always promised to maintain a stable enrollment at about the level of 2008 (the year prior to the larger class enrollment). This was a reasonable and conservative estimate of likely demand for our education. Given the size of our endowment, no tuition funds are needed to pay our debt service.

I did not tell the reporter the following, but will emphasize it here: Our endowment and reserves are sufficient to pay off the debt in its entirety without any student enrollment; the interest we pay is significantly less than the earnings on the endowment; and we are one of only a handful of schools of our size and structure with an A rating--a tribute to our management of the funds, but more importantly, a way to preserve more resources for our students. Every percentage point of interest we save amounts to another $1,350,000 in earnings available to serve our students' educational needs.

3. In response to the reporter's incredulous disbelief of our employment statistics, we stated the following: The story does not make clear that two different data sets were being compared. The employment statistics on our Web site are for the class of 2010. The median referred to by US News was based on the class of 2009. I am not surprised that readers may be confused because the way US News requests and reports its numbers guarantees that its information is always out of date. There is almost a 2-year lag between when US News publishes numbers about graduate employment (April 2011) and the graduation date of the students whose employment is being reported (May 2009).

Readers should be aware that students graduating in 2009, 2008, and 2007 received their job offers during very strong employment years--many of them received offers the summer after their second years, respectively 2008, 2007, and 2006--all prior to the downturn, during boom employment years. US News requests the median, or salary of the person in the middle position of all of the graduates who reported their salaries--which was $160,000 in 2009 at the middle of the 61 reported salaries.

I want to emphasize two critical factors: First, the information we report to US News reflects exactly the information that they request. Second, we do not believe the questions US News asks provide useful information on which students can rely because of many factors: the lag time between the submission date and the publication date, the small number of graduates who report their salaries, and the likelihood that those with the highest salaries disproportionately provide salary information. This is why we provide much more detail on our Web site, which permits students to see where our graduates are most likely to work, the whole number of those reporting salaries, the range, etc. Indeed in these materials and in our conversations with students and applicants, we explicitly tell them that most graduates find work in small to medium firms at starting salaries between $35,000 and $75,000. Our career counselors also work with students to prepare them for what can be a lengthy job search in difficult economic conditions.

4. In response to questions about our tuition: Much was made of NYLS charging what Harvard charges. Law school is expensive. There is no debate there. We told the reporter: We are running a law school in one of the most expensive locations in the world. Therefore, we compare ourselves to New York City law schools. We are ranked 6th from the top in tuition among the 9 private schools in the city. We are the only school where tuition does not go up each year for current students. We increased tuition just 3.46 percent for incoming students last year and 3 percent for the incoming year. The 3.46 tuition increase was smaller than all but one private law school in the NYC area.

The Times article suggests that it is impossible to reform legal education from within. That is simply untrue. First, I have always said that until our regulatory regime relents, fundamental changes in the cost structure cannot take place. Second, I have always said that our first responsibility is to control those things we can control--the quality of what we give our students. This is not a trivial matter; we are remaking education at New York Law School--through a focused curriculum that allows students to find a substantive area of specialization; through research centers that give students a chance to work closely with each other and a faculty supervisor; through extensive externships throughout both private and public sectors; through new programs in financial services law, intellectual property law, real estate finance, and human rights and civil liberties; through our new Legal Practice program that brings real-world lawyering problems into the first year; through the 16 new full-time faculty members we have added to teach Legal Practice; through faculty supervised law review and moot court experiences; through a specialized curriculum that takes our struggling students and turns them into high achievers who outperform students at higher ranked schools; through the countless, close, personal interactive educational experiences that virtually every student can have with our faculty--all of which were achieved by charging students no more than most of our New York peer schools. Education is valuable, students are smart and capable of making choices, and the legitimacy of what a school does with the money it receives from students is hard to challenge when the dollars are spent to give the students lifelong skills that will allow them to contribute to society, spread the rule of law, and help to make society more just.

A school is best measured by the education it provides to its students. New York Law School's faculty provides a terrific education to our hardworking students powered by continued dedication to our core values: embracing innovation, fostering integrity and professionalism, and advancing justice for a diverse society. I am proud to serve at New York Law School. I am confident that the New York Law School community will continue to press to improve the Law School, to have graduates who will take action on behalf of their clients, and to accomplish all that we are capable of accomplishing.