(7:00 p.m.) 1

2

DINNER & PROGRAM 3

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IS THERE A CRISIS IN LEGAL EDUCATION? 5

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DEAN DAVID N. YELLEN - School of Law 7

Loyola University, Chicago 8

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PROFESSOR WILLIAM D. HENDERSON - Director, Center on 10

the Global Legal 11

Profession, 12

Mauer School of Law 13

Indiana University 14

Bloomington 15

16

MR. REVELEY: Friends, nothing stands 17

between us and good food and fellowship. And 18

after dinner, Bill Rakes will materialize and 19

introduce our speakers, and I think it's 20

going to be quite frisky, in the Brooks and 21

Shields tradition. 22

So, I think we have a treat in store 23

for us after dinner. 24

25

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(Dinner) 1

2

MR. RAKES: Let's get started. Please 3

continue with your dessert, but not your 4

conversation. 5

So we can get started, it's my pleasure 6

to introduce our two guest speakers this 7

evening. I called Bucky Askew back last fall 8

and said I'm looking for an after-dinner 9

speaker and I want someone that has some 10

familiarity with the practice of law, someone 11

who is not strictly academic, because the 12

theme of our conclave is going to be the 13

changes in the profession and the changes in 14

legal education, and whether legal education 15

is responding to the changes in the 16

profession, and that sort of thing. 17

And he said, well, I've got the program 18

for you. And he said it's not one person for 19

you, it's two. He said he had just attended 20

a meeting, I don't remember the exact name of 21

it, but it's a bar group in Chicago, and 22

these two gentlemen had done sort of a give, 23

take debate sort of thing, and he described 24

it to me, and he said it was outstanding. I 25

26

said, okay -- I'm a great delegator -- I said 1

how about calling them up and lining them up 2

to come to Virginia and do this. And he did 3

exactly that. 4

On the far side is David Yellen, who is 5

the Dean of Loyola Law School in Chicago. 6

And he is very active working with the 7

council and the Section of Legal Education, 8

he is on the Standards Review Committee, and 9

is the principal author of a new standard 10

that has been put out for comment having to 11

do with disclosures that law schools are 12

required to make to prospective law students 13

and so forth. 14

I would guess that comes in response to 15

some of the lawsuits that have been filed 16

against law schools by students who haven't 17

been able to get jobs or whatever. 18

But, David has been in the academy, he 19

has been dean of a couple of law schools, and 20

is well known and admired by those people who 21

work in legal education at the ABA. 22

Bill Henderson is from the University 23

of Indiana. And the thing to me that's 24

attractive about Bill Henderson, not having 25

26

heard him, but having read a number of his 1

articles, is his area of scholarship is the 2

profession. He is one of those few 3

academics, although there are a lot more now 4

than there were 20 years ago, who are looking 5

at the legal profession and writing and 6

studying and doing analysis of the legal 7

profession. 8

Since Bill had agreed to come, I have 9

read articles that he has written in the 10

American Bar Journal, I've seen him quoted in 11

the National Law Journal, and he is sort of 12

all over the place dealing with problems and 13

issues confronting the legal profession. 14

I am told that they are great friends, 15

but they don't agree on a lot of things. So, 16

that seems to me to be a good combination, 17

and I am sure we will enjoy their remarks 18

DEAN YELLEN: Thank you, Bill. 19

20

(Applause) 21

22

DEAN YELLEN: I hope we don't 23

disappoint. 24

Unfortunately, the more Bill and I have 25

26

spoken over the past couple of years, the 1

more we agree. So, we will struggle a little 2

to find some things to disagree about. 3

PROFESSOR HENDERSON: Maybe the 4

audience will disagree with us. 5

DEAN YELLEN: That's almost certainly 6

true. 7

I want to thank Bill very much for the 8

invitation. It was a lovely award he got 9

earlier, and I just want to tell you for 10

those of you who may not know, Bill's work 11

with the Section on Legal Education as chair 12

of the section was so important some of the 13

work he set in motion during his year as 14

chair is still rippling through the section 15

today. I have been on the Standards Review 16

Committee for six years now, and the last 17

three we have been doing this comprehensive 18

review of the standards, and a number of the 19

major things we are grappling with are things 20

that Bill set the table on back in his year 21

as chair. 22

The other preliminary things that I 23

want to say is being in a room of lawyers, 24

and judges, and deans, and professors, I have 25

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to say, please be kind to your local dean. 1

It's not the easiest time in the world to be 2

a law school dean. I have been doing it for 3

10 years, so if they get rid of me tomorrow, 4

that's okay. But, you have some wonderful 5

deans here in the state, including some new 6

ones. You know, Wendy is in her first year, 7

Dave is, what, second year, third year. 8

Third year. My good friend Nora Demleitner 9

is moving to the state soon to be dean of 10

Washington & Lee. Dan Polsby taught me 11

criminal law 30 years ago, so I feel very at 12

home with this group. 13

We know it's late, it's been a long 14

day, we want to be interactive with each 15

other and with you. We are going to address 16

four questions about this, obviously, a 17

leading question, "Is there a crisis in legal 18

education?" 19

If we came up here and said no, there 20

isn't, you would probably throw what is left 21

of your desserts at us. There is crisis, 22

this is a time unlike any other in legal 23

education, with the lawsuits, 15 schools have 24

been sued, and the lawyers who filed those 25

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suits are threatening to sue every law school 1

in the country. The New York Times devoted 2

an unbelievable amount of space to some 3

pretty vicious attacks on legal education. 4

There are blogs by students, and even a 5

couple of professors, attacking legal 6

education right and left. 7

There's been some bad behavior in legal 8

education. Villanova Law School and the 9

University of Illinois Law School both 10

honest, new deans, came in, discovered that 11

their schools had been lying about the LSAT 12

credentials of their students to prop them up 13

in the rankings, and disclosed those facts, 14

and have suffered some consequences from 15

that. 16

It's very challenging times. We are 17

going to get at this by addressing four 18

questions. And the way we are going to do it 19

is I will open up on each of the questions 20

and Bill will follow. We will get through 21

all four fairly quickly, and then we will 22

open it up to discussion with the group. 23

The four questions are -- I'm sorry, 24

one last thing. We are going to move quickly 25

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through some of these because the great 1

earlier panel addressed some of the topics 2

that we plan on talking about. So, we will 3

try and elaborate a little bit, maybe 4

disagree with a few things that were said 5

earlier, and hopefully expand the dialogue 6

just a little bit 7

First, are there too many law schools 8

and law students? And really the question 9

there is what is the job market like for 10

students in the coming decade. So, that's 11

Question One. 12

Question two, why are we so expensive? 13

Question three, how good a job are we 14

doing in educating our students for what they 15

need in the practice of law? 16

And, the reverse that we will talk 17

about a little bit is are lawyers doing a 18

good enough job communicating with law 19

schools about what they want from our 20

students, and rewarding those schools that 21

are doing a good job of training law 22

students? 23

And then, fourth, are there dramatic 24

changes coming to legal education and, if so, 25

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what might that look like? 1

So, that's our agenda, and we will get 2

started. 3

Anything you want to say before we 4

Start/ 5

PROFESSOR HENDERSON: No. That's it. 6

Just I'm thrilled to be here. 7

DEAN YELLEN: Okay. One, are there too 8

many law schools and law students? 9

Maybe do you have that slide. 10

PROFESSOR HENDERSON: Yeah. 11

DEAN YELLEN: There was a little data 12

discussed earlier today, but just to repeat 13

or put it in a little different way, there 14

are roughly 200 ABA accredited law schools 15

now. I know there are 8 here in Virginia, 16

that's up, and I didn't know that until 17

earlier today, from the first conclave to 18

now, you went from 6 to 8 schools. Well, 2 19

doesn't sound like a lot, except it's 20

33 percent compared to where you were. And 21

that's fairly consistent with the national 22

trends. In the last 20 years there have been 23

about 25 new law schools. 24

PROFESSOR HENDERSON: We will get to 25

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this good stuff here in a second. 1

DEAN YELLEN: So, since 1976, a 2

23 percent increase in the number of law 3

schools, a 35 percent increase in the number 4

of law students, and there are new schools 5

still being founded, despite the economy. A 6

new one just recently received provisional or 7

acquiescence to get started in Savannah. And 8

there are at least five more seeking 9

accreditation approval right now. 10

So, is that too many law schools and 11

law students? 12

As I said, that really depends on 13

whether there are jobs for these young people 14

that were graduating. And you would have to 15

say the answer right now is yeah, that's way 16

too many law students based on the available 17

information. We graduate around 50,000 18

students a year. 45, 50,000 -- 19

PROFESSOR HENDERSON: Yeah. 20

DEAN YELLEN: -- students a year. And 21

if you look at the projections from the 22

Bureau of Labor Statistics for the next 23

decade, there are going to be about no more 24

than, their estimate, 10,000 jobs a year, new 25

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jobs created. 1

PROFESSOR HENDERSON: Yeah. 2

DEAN YELLEN: When you factor in 3

attrition, retirement, all of that, maybe you 4

get up to 30, 35,000 jobs a year. 5

PROFESSOR HENDERSON: Maybe. 6

DEAN YELLEN: Maybe. So, if the Bureau 7

of Labor Statistics projections turn out to 8

be correct, 10 to 20,000 of our graduates a 9

year, in the next decade, at current size, do 10

not have law jobs awaiting them. 11

Now, we all know that many lawyers, 12

many people with law degrees have great 13

careers not practicing law. But, at least in 14

my experience, the vast majority of people 15

who come to law school want to and plan to 16

practice law at least initially. 17

So, I think it's pretty much an 18

accepted, you know, fact these days that 19

there is currently a mismatch between the 20

number of law students and the available 21

jobs. What is to be done about that is a 22

very challenging question, as you heard 23

earlier today. Some people argue the ABA 24

ought to act, you know, to tighten up the 25

26

spigot, both in terms of its institutional 1

self image and probably antitrust laws. 2

That's not the way they operate. Law 3

schools, some law schools are getting 4

smaller, against their will, particularly the 5

least selective law schools. Last year many 6

of them just have not been able to fill up 7

their classes with students of the 8

appropriate caliber, and that's filtering its 9

way through legal education. 10

So, I think we are going to see, even 11

with these new schools on the horizon, we are 12

seeing the beginnings of a shrinkage in the 13

number of lawyers, law students. But, it 14

looks like for the next decade, we are still 15

in the mode of quite a bit of overproduction. 16

PROFESSOR HENDERSON: Yeah. I'm 17

absolutely delighted to be here in front of a 18

distinguished group of judges and 19

practitioners and law professors, and I can't 20

believe that all six law schools are 21

represented here flying the flag. You have 22

got some great leadership in this state, and 23

I am humbled to be before you. 24

I'm going to go back to a few slides 25

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here. I'm the data guy. So, I like to look 1

at data. We are going to put these things in 2

perspective. This looks pretty scary, so we 3

will get back to it in a second here. 4

So, let's go back to the beginning of 5

Post War period, and we know that the 6

profession is changing. Well, it has always 7

been changing. And I think when he see how 8

much it has changed, it changed before you 9

entered the practice of law, and how it has 10

continued to change up until the present 11

moment, the future won't look so daunting for 12

us. 13

So, if you go to the beginning of what 14

I call the modern period of practice of law, 15

when you graduated from law school, there 16

were no jobs. You were expected to become a 17

solo practitioner. If you were in a law 18

firm, there were no associates. There was 19

one associate for every six partners. 20

And, by the way, you made more money if 21

you were a government lawyer than if you were 22

a lawyer in private practice. That 23

eventually changed, but it was better to be a 24

new deal lawyer, lawyer working for the 25

26

government, than it was to be in private 1

practice. 2

The private practice bar wasn't that 3

big. It looks like it escalated, maybe the 4

escalator was going up. 5

You didn't need to go to college to go 6

to law school. You didn't necessarily need 7

to complete law school to sit for the bar. 8

So, the credentials model hadn't completely 9

set in yet. Now, that varied jurisdiction by 10

jurisdiction. 11

The average firm didn't even have two 12

lawyers in it. So, that just showed you how 13

small or how generalist the profession was. 14

And only two percent of the bar was in big 15

law firms. And big law firms, big law was 16

nine lawyers or more. And those folks made a 17

lot of money compared to the solo 18

practitioners, they made about five times as 19

much. So, you might have made $4,200 a year 20

as a solo practitioner in 1948. You made 21

about 20,000 if you worked for a big firm, if 22

you were a partner in a big firm, which was a 23

lot of money in 1948. 24

Now, the reason they were able to do 25

26

that was because they began a movement 1

towards specialization, and specialization 2

was in fairly short supply. And the country 3

was booming, and they needed, basically, 4

specialized lawyers to solve a host of novel 5

problems we had never seen before. 6

And I've got news for you, David and I 7

are in the legal education business, but if 8

you are in a law firm, you are in the legal 9

education business, too. And for a long 10

period of time, the specialists weren't 11

created in law schools, they were created in 12

law firms. Up until we heard some of this 13

talk earlier today regarding, well, the 14

clients won't pay for it anymore, so we are 15

kind of shutting down the education dimension 16

of private law firms. 17

Well, for a long period of time there 18

was a huge imbalance between specialists, the 19

need for specialists and specialists, and law 20

firms produced them and the clients paid for 21

it, and it was a wonderful way to do it. 22

But, that's not -- it wasn't the state of 23

nature, it was historical circumstance. 24

So, if we go forward, we can go, say, 25

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to the end of the Reagan era, and I just 1

picked the end of the Reagan era because 2

that's where the data starts. So, 1978, and 3

just look, think about how we measure growth 4

and vitality. It's typically head counts. 5

Are there more people here, are we growing? 6

That's a sense of vitality if more people are 7

joining the profession, joining our legal 8

service organization. 9

So, we will take 1987 as a benchmark, 10

and we are in this line that is trending 11

upwards, and eventually starts to move 12

sideways. And just looking at the baseline 13

of 1978, seeing are we adding head count in 14

the legal services industry, and you see we 15

were enjoying an upward trajectory for 16

failure steady. It was not a dramatic upward 17

trajectory, there was a little bit of 18

volatility there. 19

But, I want to give you a statistic, 20

and I want you to keep this in mind. In 21

1978, .4 percent of the country's GDP was 22

allocated to legal service. By 2003, 25 23

years later, it was almost at 2 percent. So, 24

if you practiced law in the period between 25

26

'78 and 2003, you kind of lived through a 1

golden era, because you were getting a bigger 2

slice of the bigger pie. And you could 3

assume that that was normal, but it wasn't 4

normal, it was extraordinary. It was a 5

function of the imbalance between supply and 6

demand. 7

And some people say law is a mature 8

industry. I don't think that that's true at 9

all. I think that law is a critical element 10

of a civil society and a rule of law, and we 11

are exporting it to all corners of the globe. 12

Just we can't do it on a time and materials 13

model. It's just too important and the 14

problems are too complex, that we are going 15

to have to, basically, figure out a way to do 16

more with less, to get more, higher quality 17

law more cost effectively. 18

And that's, really, if there's a 19

crisis, at least from a consumer point of 20

view, it's that we like law, we just don't 21

like how much it costs. 22

So, you see it trending forward. I'm 23

going to compare it to some other industries 24

to kind of put it into perspective here. So, 25

26

thank God we are not textile workers. 1

There's the Great Recession, so that's what 2

the crisis is about here. That diminution 3

between 2006 and 2004, but a 10 percent drop 4

in head counts in the industry. Thank God we 5

are not textile workers. 6

We went to college, we still wear 7

clothes, but their clothes are made abroad, 8

they are outsourced, and the domestic head 9

count has gone dramatically down. Four out 10

of five jobs are gone, so we don't think 11

that's a vital industry. 12

We can compare it to, say, the aircraft 13

industry. We all have gotten on planes to go 14

to our various different places. Aircrafts 15

are just as important now as they were in 16

1978. The Europeans got involved and we had 17

the airbus and socialism, and that kind of 18

took down Lockheed Martin, so maybe that's an 19

anomaly here. But, they are doing more with 20

less, even though the industry is important. 21

And then you can look at power plants. 22

You know, power plants, I mean, the 23

government is involved here, and even they 24

are doing more with less. So, it's trending 25

26

downward over a period of time. 1

So, we need to look for an industry 2

that we are yin and yang with. You can't 3

have, say, an insurance company without 4

hiring lawyers. Well, what about the 5

insurance industry? 6

You can see the insurance industry is 7

moving sideways in terms of their head count, 8

and so insurance is very vital to our 9

economy, it's no less vital now than it was 10

in 1987, and one of your biggest customers is 11

beginning to be under competitive pressure 12

and they can't add head counted. They are 13

going to turn to one of their principle 14

suppliers or to one of the people that 15

they -- organizations that they look to to 16

help solve their problems, and say can you 17

share some pain with us, can you help us 18

innovate and deal with these more competitive 19

circumstances. 20

So, because lawyers are interlocked 21

with these various different industries, it's 22

high time that some of that risk is going to 23

be shifted to the legal services industry. 24

So, there's one industry that looks 25

26

almost exactly like law. Does somebody want 1

to take a guess at what it is? Just shout it 2

out. 3

PARTICIPANT COMMENT: Medicine. 4

PROFESSOR HENDERSON: Medicine has done 5

a little bit better because we are getting 6

older. So, they are doing a little bit more 7

auspicious. 8

What else? You have got to think 9

broadly. Think broadly when you think about 10

an industry here, like really broadly. 11

PARTICIPANT COMMENT: Funeral homes. 12

PROFESSOR HENDERSON: I didn't have 13

that in the data set here. Polsby would 14

probably be able to get that if I thought 15

about it long enough. 16

It's government. Now look at 17

government. Look at how government and 18

legal -- remember how I said that, basically, 19

in the new deal period, lawyers made more in 20

government than they did in private practice. 21

Eventually that has shifted. And basically 22

what we have lived through is a period where 23

we had government stability and high pay. 24

And who wouldn't be sad at the demise of that 25

26

situation. 1

So, just to kind of draw things in 2

perspective here, I didn't make this data up. 3

I mean, literally it just fused like that. 4

And every once in a while when times get 5

tough, we don't hire some associates. That 6

is all. 7

Then until 2007, 2006, you begin to see 8

that spread, and you wonder what it's going 9

to look like in 2011 when that data comes 10

out. 11

So, David had remarked on this chart, 12

and I want to point out that basically at the 13

same time that we may be heading into a 14

structural shift in terms of the number of 15

law jobs, we have still been ramping up, so 16

the lines are moving in tension with one 17

another. We are pushing out more law school 18

graduates. It is still good from a 19

university's point of view to continue to run 20

this, because the government is willing to 21

finance it. That's part of the problem why 22

it's so expensive, the government is writing 23

the checks. 24

But, by the same token the jobs that 25

26

those young people are supposed to get to 1

repay those government advanced loans, are 2

probably going in the opposite direction. 3

This is very bad because we are 4

supposed to be lawyers, we are supposed to be 5

public citizens, we shouldn't be presiding 6

over lines that are moving in opposite 7

directions. 8

So, I want to show you one more piece 9

of data, and I drew that line there because 10

2004 is a very special period. And see what 11

has happened just since 2004, we have been 12

increasing production of lawyers. So, I want 13

to show you this last slide. I've got some 14

other ones here, but we will go back to David 15

and the questions here. I just want to show 16

you this one key slide here, because this is 17

very clear evidence to my mind of structural 18

change. 19

This comes from a data site called 20

County Business Patterns, and those of you at 21

law firms, you do your W-2s every year, 22

anybody who gets a FICA, anybody you pay FICA 23

taxes on ends up in this dataset. Your 24

paralegals, your legal secretaries, your 25

26

lawyers, possibly it could be your contract 1

partners, could end up in this dataset. And 2

you can see in 2004, the line started going 3

sideways. Actually, it's going down. We 4

actually lost 25,000 jobs in this sector 5

since 2004. But, it's not -- it doesn't look 6

like very dramatic because it's a 1.1 job 7

sector. 8

But, we've never seen this before. Law 9

always seems to grow organically as society 10

becomes more complex. And the number of 11

private law office jobs has also been on the 12

flat and decline. And this is 2004, four 13

years before Lehman Brothers. So, this is 14

new. 15

DEAN YELLEN: Okay. So, with that, 16

with that grave news -- and we will actually 17

come back to part of -- 18

PROFESSOR HENDERSON: This is why you 19

have tenure, so that you can -- this is 20

giving you rough news. 21

DEAN YELLEN: We will come back at the 22

end to what may make things change even more. 23

And remember this slide because we will come 24

back to some points there. 25

26

So, second, why are we, legal 1

education, so expensive? And there was some 2

real good discussion about this earlier 3

today, so I can be brief, although I do want 4

to disagree with one are two things that were 5

said earlier today. 6

For two decades tuition has gone up 7

much more than the rate of inflation. When 8

you discount for inflation, private law 9

school tuition has doubled. So, the real 10

rate of tuition has doubled in 20 years. 11

That is a little bit -- that overstates it a 12

little bit, because as I think maybe Jeff 13

said earlier today, scholarship spending has 14

been going up even faster, not for altruistic 15

reasons. One of the big problems with the 16

market as it exists now is so much 17

scholarship aid has shifted to quote/unquote 18

merit aid to pursue students with higher 19

LSATs for ranking purposes. 20

But, when you look at what all students 21

altogether are paying, it isn't double, but 22

it's close to double. And the average 23

student then graduates, from a private law 24

school at least, with around $100,000 in 25

26

debt. So, to show you what that means, that 1

works out to a little bit over $1,000 a month 2

payment on a 10-year repayment. So, if you 3

are earning 50 or $60,000, not a bad job 4

after law school. Not the heights of what 5

the Wall Street people make. But, if you are 6

making 50 or $60,000 a year, having to pay 12 7

to 15,000 of that back in loan repayment, 8

that's a really serious chunk. 9

Now, there have been some changes, 10

federal loans, there's now an income-based 11

repayment plan. Bill, you might -- 12

PROFESSOR HENDERSON: We will talk 13

about that. 14

DEAN YELLEN: Which changes the 15

dynamic, at least for now. 16

So, law schools have gotten a lot more 17

expensive. Why? Where has that money gone? 18

Well, one thing that hasn't happened, and it 19

hasn't been that salaries for us in legal 20

education has been skyrocketing. They have 21

gone up. For some segments they have gone up 22

more than others. But, there was just some 23

research recently that showed that it isn't 24

salary increases that have principally driven 25

26

up the cost, it's that we have so many more 1

people working at our law schools. The 2

student faculty ratio at many schools has 3

been close to halved in the last 25 years. 4

And the student to administrator ratio has 5

been shrunk by even more. 6

When most of us went to law school, 7

maybe there was a Dean of Students, and a 8

career services person, and maybe somebody in 9

alumni relation. Now each of those offices 10

and many others have multiple people 11

providing really good and valuable services 12

to our students, but it's a lot of expense in 13

personnel. 14

On the faculty side, as I said, we have 15

halved the student-faculty ratio. At the 16

same time we have cut teaching loads for the 17

doctrinal or traditional, or whatever you 18

want to call it, faculty to pursue more 19

aggressive scholarly agenda. And we did all 20

of these things because the market pushed us 21

in this direction, and because the 22

availability of federal student loans enabled 23

us to raise tuition and have it be absorbed 24

in a time of a robust job market quite 25

26

easily. 1

In terms of the market, I know in a 2

crowded place like Chicago, if I weren't 3

renovating our building and hiring more 4

administrators to do more things, and have 5

more academic programs, the prospective 6

students aren't going to say isn't that nice 7

of you, Loyola, to be worried about us. No 8

thanks. I'm going to go down the street to 9

Chicago, DePaul, or Indiana, where I can get 10

more, which will prepare me better for the 11

marketplace. 12

So, in the last 20 years, driven partly 13

by US News, not so much by the accreditation 14

standards. I'm a big critic of a lot of 15

things about the accreditation standards, but 16

they haven't really been a big cost driver. 17

Because we have all been competing for 18

students, for rankings, for faculty, we have 19

tried to do more and more and more, and we 20

have had our students pay for it. 21

Now, one thing I did want to slightly 22

disagree with from earlier today, in terms of 23

the role of faculty in the last 20 years, I 24

think someone said, you know, the typical 25

26

faculty member spends half their time on 1

scholarship. Another colleague, a former 2

colleague of mine from Hofstra wrote an 3

article where he put the cost at the typical 4

Law Review article at $100,000, which he got 5

at by saying, basically, if a law professor 6

makes 150,000, plus benefits, and writes one 7

article a year, you know, that works out to 8

$100,000 an article. That's really 9

misleading. 10

And let me tell you about my school 11

very briefly to give you a sense of that. We 12

have about 35 tenure-track faculty members, 13

tenure or tenure-track faculty members. They 14

do teach three or four courses a year, much 15

less than a generation ago, and do spend a 16

lot of time, maybe half, it varies from 17

person to person, on scholarly pursuits. 18

But, those 35 faculty members are just 19

over half of the people actually teaching our 20

students. We also have 10 permanent clinical 21

faculty; some in legal writing, some in live 22

client clinics, and they are teaching many 23

more hours, and are really hands-on 24

educators, they are fully integrated into our 25

26

faculty life, they participate in governance 1

and on hiring decisions and curriculum 2

decisions. 3

So, there's 10 of them. And then 4

depending on the year, there's about 5 or 6 5

short-term faculty, mostly people from 6

practice, like the State's Attorney in 7

Chicago when he retired, the chief prosecutor 8

in the city, in the county, we hired him to 9

come teach a variety of criminal law courses, 10

and we have several other people like him. 11

So, the mix between types of faculty is 12

really quite vibrant right now. There are -- 13

as Taylor mentioned earlier, there are a lot 14

of potential problems down the road as 15

universities and law schools shift to more 16

contingent, part-time faculty. It's not 17

without great problems. 18

But, the driver has not simply been 19

more time devoted to, you know, unusual 20

meaningless scholarship. There are a lot of 21

scholars doing work like Bill, work that 22

really is examining the profession and 23

looking to the future on things that really 24

do matter. 25

26

But, as I said, it is true that we are 1

charging a lot more, and we haven't been able 2

to take advantage of a lot of the 3

efficiencies that some of the industries that 4

Bill is talking about have, because we are 5

mostly a people business. Computers are 6

great, but it really doesn't cut down on the 7

amount of professors that you need. We 8

haven't made a lot of use of the distance 9

education. We may come back and talk about 10

that a little bit later on. 11

So, we are very expensive now. Way too 12

expensive given current circumstances. As 13

again, somebody, it might have been Jeff 14

mentioned, although there isn't data on this 15

yet, I agree with him completely that the 16

real cost the last couple of years has been 17

going down, as schools have held the line on 18

tuition increases, at least private schools. 19

The publics, with diminution of public 20

support, are in a different ballgame. But, 21

our tuition hasn't been going up even at the 22

rate of inflation the last several years, and 23

your scholarship spending has been going up 24

much faster than the rate of inflation. 25

26

But, in a well-balanced market our 1

costs are going to go down a lot probably in 2

the next 10 years. The lowest schools in 3

terms of selectivity are having trouble 4

filling their classes. That's going to 5

filter throughout the legal academy, and the 6

whole cost structure is under tremendous, 7

tremendous stress right now. 8

Bill. 9

PROFESSOR HENDERSON: So, I think I may 10

have a little bit of a different view than 11

David on this one. I think that a really big 12

problem that we have with the cost is we are 13

trying to replicate one model. And it's the 14

model where the people who went to law school 15

that are the professor are trying to recreate 16

the law school they went to, which is 17

basically, you know, an elite law school 18

where scholarship is the primary focus. 19

Wouldn't it be great if we could turn our 20

school that's not a national law school into 21

the law school that I went to. 22

And I think that that's -- there's a 23

thing in the Carnegie Report that is 24

educating lawyers, where they talked a couple 25

26

pages about this, where they say that we are 1

basically trying to -- the professor is 2

trying to replicate itself, and they are very 3

resistant to a different view of legal 4

education except for the one that they 5

received. 6

So, we are trying to replicate our 7

Harvard, Yale, Chicago, Columbia experience, 8

and we are trying to build that model at our 9

non-prestigious school. And I think that 10

there's a fundamental tension for this. If 11

you ask faculty regarding how you become 12

valuable, you have got to write more 13

articles, we have got to be more productive. 14

So, we are busy spending a lot of time 15

writing those articles. And I think that 16

that's -- I think that's the reality. Now, I 17

can give you some data on this one. Law 18

schools, their reputation doesn't move very 19

much over time. So, if you look at their 20

reputation in the US News, World Report in 21

1992, then you look at them in 2011, the most 22

a school has ever moved up is like 15 spots, 23

and it was like Dan Polsby's school, George 24

Mason. Why did he do that? Because he was 25

26

the only one that would hire conservative 1

academics. They were undervalued. And that 2

still wasn't enough to basically get a 3

miracle in reputational profile. The way you 4

move up in the rankings is LSAT and direct 5

spending. 6

Academic reputation tends to not move 7

very much. Really what moves is that if you 8

are a productive scholar, you move to another 9

law school and you get a higher pay raise and 10

a lighter teaching load. Or, alternatively, 11

you go to the dean and you threaten to leave, 12

and so I can't lose such a productive 13

scholar, it will be a disaster for our 14

reputation. Although, it wouldn't, in my 15

opinion. So, we beat it up and we get 16

another few hundred, tens of thousands of 17

dollars out of it. 18

There's some really big problems with 19

the structural issue here. Just two things 20

on the cost. One of them is in the US News 21

and World Report, there is a thing called 22

direct expenses. And that really is what 23

drives the high rankings. And I can give you 24

all sorts of statistics, talk about standard 25

26

deviations, and this and that, but I will 1

spare that to you. But, the bottom line is 2

this, at Yale Law School the average student 3

expenditure is about $105,000, which is about 4

5 standard deviations from the mean, which is 5

why it drives the whole ranking. 6

And then, you know, Stanford and 7

Harvard won't catch up because they only 8

spend 85,000 or 90,000 a student here. 9

Well, my school and your school, we 10

spend a lot of money, it might be 40, 43,000 11

a year, but we will never be in that league 12

unless somebody writes us a check. I can get 13

Indiana into the top 10 if somebody gives me 14

a billion dollars tonight. 15

And then you know how it becomes a 16

better school, it doubles my salary and it 17

let's me teach less classes. That's the 18

reality of it. 19

There was an article in the New York 20

Times about two years ago, and I think that 21

David is going to disagree with me on this 22

one. This is just -- again, I have tenure, 23

this is how I see it. 24

DEAN YELLEN: That's not at my school 25

26

anyway. 1

PROFESSOR HENDERSON: It's not your 2

school. But, this is how insidious it is, is 3

that at a New York Law School, it was either 4

Columbia or NYU, they got a professor there 5

and they put him in -- instead of taking the 6

$5 million, they bought a condo on Central 7

Park, and they put a professor in there, and 8

they let them participate in the 9

appreciation, so that they lived in it as if 10

it was their house. That could have funded a 11

few scholarships. But, actually, it was 12

prudent from a rankings point of view to 13

basically put a professor in that condo and 14

have students go deeper into debt. Because 15

that drove up the direct expenditure stuff. 16

And so, instead of given scholarships out, 17

you can go from number 6 to number 5, and 18

then everybody is up in arms. 19

The last thing is, and we will get into 20

later. But, the government writes the checks 21

for all of this stuff, and the private sector 22

no longer is involved in the direct student 23

loan business. It's all the government, 24

basically, borrowing money to replenish the 25

26

stock of loans, and the students are going 1

150, $200,000 in debt. At some point or 2

another the federal government is going to 3

pull the plug on this, because a lot of our 4

students are going to end up on income-based 5

repayment, which is basically government 6

insurance in case your high income doesn't 7

show up. 8

And so, this is why -- you know, David 9

has been involved with the ABA in this 10

transparency effort. And they have done a 11

heroic job. I mean, history is going to look 12

fondly upon what the ABA did in terms of 13

transparency. Our house is completely and 14

totally in order. But, that transparency is 15

going to lead to eventually some big changes 16

in terms of it's going to put some law 17

schools out of business or it's going to 18

incent the federal government to curtail our 19

spending. 20

DEAN YELLEN: Just two quick things in 21

reaction to that, Bill. You know, we are a 22

hierarchical species. 23

PROFESSOR HENDERSON: Yeah. 24

DEAN YELLEN: And a hierarchical 25

26

profession. And I think that's accounted for 1

why it's been so hard for schools to really 2

pursue a different mission. It's well 3

accepted, you know, that we all say things 4

like we shouldn't all try and be -- normally, 5

you know, I would say Ritz Carlton. But, 6

let's say we shouldn't all try to be Boar's 7

Head Resorts. You know, there's room for, in 8

legal education, some Hampton Inns and some 9

other options like that. 10

PROFESSOR HENDERSON: Can you use the 11

word Greenbrier? 12

DEAN YELLEN: And there are examples of 13

schools that have very distinct missions that 14

they remain true to. Here in Virginia, you 15

know, I would say Appalachian is a good 16

example of that. But, we have seen numerous 17

examples of schools that got started to be 18

the local law school, the community law 19

school, the public service law school. And 20

five years in they hire a new dean whose 21

platform is I know how to move you up in the 22

rankings and get better professors and get 23

better students. 24

It's very pernicious, but it is very 25

26

hard to solve. 1

Also, in terms of this homogeneity, the 2

ABA standards do deserve some fault. Just as 3

one example, there's a requirement in the 4

standards that every school have a scholarly 5

mission. Now, to my knowledge no school has 6

ever been called on the carpet for not having 7

a scholarly mission, but I think it sends the 8

wrong message to say that that even is a 9

requirement. If there's a school that wants 10

to organize itself differently, to be totally 11

focused on teaching, and any scholarship that 12

faculty members want to do is just going to 13

be on their spare time, I think they ought to 14

be able to operate if they can produce a high 15

quality legal education program. 16

So, yeah, Bill. 17

MR. RAKES: It says every school should 18

have a scholarly mission, but it doesn't say 19

every professor should engage in that 20

scholarly mission. Am I correct? 21

DEAN YELLEN: That's right. But, all 22

of us faculty members use that as leverage to 23

argue why teaching loads have to go down for 24

most people, and why there need to be some 25

26

research grants. All things that, you know, 1

I have been a willing participant in, both as 2

a faculty member and as a dean. 3

I'm just saying that I don't see -- you 4

know, the goal of accreditation is to ensure 5

that the quality of the educational program 6

is producing people ready to practice law. 7

And anything about scholarship, which is an 8

appropriate purview for something like the 9

ALS, the Association of American Law Schools, 10

I think is much less appropriate for the ABA 11

as the accreditor of all law schools. 12

So, let's segue now to the question of 13

how good a job are we or are we not doing in 14

educating our students? 15

And this topic was covered at some 16

length this morning, so I'm going to be very 17

brief on this. All I'm going to say is that 18

I agree with the speakers who indicated that 19

legal education is better today in the 20

quality of the training we give our students 21

than ever before. 22

When I was in law school, like most of 23

you, there was very little in the way of 24

clinical legal education or simulation-based 25

26

learning, or rigorous externship programs. 1

Every law school that I know of now has a 2

vibrant program in all of those areas. 3

Now, it's ironic, we have gotten better 4

and better at those kind of educational 5

enterprises. At the same time, we have cut 6

teaching loads and we have produced more 7

scholarship that is often less connected with 8

the practice of law, but that ties back into 9

our second topic. 10

We have been able to do both of these 11

things because we have been spending more and 12

more money. We have been able to pursue two 13

very distinct directions because this has 14

been a time of great growth in our budgets. 15

The question is now, with more and more calls 16

for legal education to be increasingly 17

relevant to the practice of law, at the same 18

time none of us are going to see increasing 19

budgets. In fact, it's likely to be in the 20

other direction. What are we going to give 21

up on and where are we going to find ways to 22

do more with less when educating our students 23

is, frankly, not our only -- it should be our 24

principal, but it is not our only concern. 25

26

We are also institutions devoted to 1

scholarship. 2

Bill. 3

PROFESSOR HENDERSON: I'm very 4

confident that legal education has gotten a 5

lot better. Can it be even better? Oh, 6

absolutely, it can be a lot better. But, it 7

is definitely better, and it has gotten 8

progressively better over time. And part of 9

it is you can be a better teacher when you 10

have less classes to teach. You can spend 11

more time planning things out, you can build 12

more complicated -- you can build simulation 13

problems, which I've done in my business 14

planning class, I teach project management. 15

That was a big start-up cost to do that. 16

It's team based, I had to educate myself on 17

stuff like that. But, I could do it. 18

We have a program at Indiana on the 19

legal profession where it's integrated with 20

the career services office, where we 21

interview practicing lawyers. We have got a 22

career speakers series. It costs a lot of 23

money to do that. An alumnus wrote us a 24

check for a quarter of a million dollars to 25

26

bankroll it. And he thought he got value 1

from that program. 2

I know in my school we are doing a much 3

better job and we have plans to do an even 4

better job. We heard about Jim Moliterno's 5

program at Washington & Lee. The one thing I 6

was going to say is there's been a theme here 7

where we are going to say, oh, I can say 8

things because I have job security, now I'm 9

going to say something that maybe will offend 10

the audience. 11

So, you know, I heard a lot today 12

about, well, law students can't write. And 13

in elite schools they don't care very much 14

about it. Well, jeez, why do you hire them? 15

Why are you hiring them? If you don't hire 16

them, if you draw the line and say, look, I'm 17

going to screen people for writing, I'm going 18

to screen people for these things, and if you 19

don't, I won't hire your graduates. Cut a 20

deal with Washington & Lee that actually 21

delivers on these things and they get 22

preferred hiring. That changes everything, 23

folks. 24

And we are going to -- you know, 25

26

there's no working market for quality 1

education. And, you know, a lot of firms 2

think that they can't run anything if they 3

don't hire people from Virginia. I mean, God 4

forbid they hire somebody from, I don't know, 5

George Mason. Well, actually, that's not a 6

good example, but further down the pecking 7

order. 8

You know, it cost $150,000 and it takes 9

three years to do. Let's do a blind taste 10

test, you know. That's what I think. 11

DEAN YELLEN: There was recently -- 12

Bill recently published, he crunched some 13

numbers, and it must have just been 14

coincidental that you used University of 15

Chicago and Loyola as the example, but what 16

it indicated was that at the 250 largest law 17

firms in the country, many more University of 18

Chicago graduates are hired than Loyola 19

graduates. They will interview in the top 15 20

or 20 percent of our class and the top 50 or 21

70 percent at University of Chicago. But, 22

among those folks who were hired, our 23

graduates made partner at a rate, I think it 24

was 8 times. 25

26

PROFESSOR HENDERSON: Yeah. 1

DEAN YELLEN: The University of Chicago 2

graduates. 3

Now, obviously I'm promoting that and 4

not talking about the reason part, some of 5

the reasons are less that we are so great and 6

had to do with the data and all, but it does 7

reflect a reality that there is enormous 8

talent in law school among law school 9

students throughout the country. And the 10

legal profession remains pretty stodgy in 11

wanting the impeccable credentials, rather 12

than investing the time to look for the 13

diamond in the rough, or look for the student 14

who is going to outperform where they went to 15

law school. And if you do that, that will 16

affect what we do. 17

PROFESSOR HENDERSON: I'm a liberal 18

democrat. I'm telling you the solution is to 19

get a working market for quality. That's the 20

solution. 21

DEAN YELLEN: So, let's go on to the 22

last topic for about five minutes and then we 23

will have plenty of time, as long as you 24

remain awake and interested, for questions. 25

26

And that is, what big changes may be 1

coming? And, again, you heard some of that 2

earlier. I want to throw out two things, and 3

I know Bill will talk about them and a couple 4

others. One is this whole edifice of legal 5

education the way it is today is built on 6

federal student loans. You know, without -- 7

it's interesting to do a thought experiment 8

about what higher education, legal education 9

would cost today if there were no federally 10

guaranteed student loans. 11

And, it's entirely possible that that's 12

not going to continue the way it is today. 13

Right now anybody going to law school can 14

take out about as much in loans as they want. 15

And 40,000 a year, plus 15,000 in living 16

expenses, so that's 55,000 a year, some 17

people are taking out that much even if they 18

are getting scholarship aid. You know, the 19

New York Times in those stories highlighted a 20

grad who had over 200,000 in debt. But, he 21

had bought a car, traveled the world. And 22

most students aren't doing those kind of 23

things. But, we got lazy and sloppy as 24

schools in terms of what we could charge 25

26

because we knew that our students could 1

easily get the credit to pay for that. 2

I think one way or the other that's 3

likely to change in the next 10 years, and 4

it's going to tighten up and it's going to 5

add some additional fiscal discipline to us. 6

Second, there was a discussion earlier 7

today about whether there might be two-year 8

law programs. Two years' worth of credits, 9

not the current what is allowed currently, 10

which is three years of credits can be 11

condensed into two years. But, could law 12

school be two years? 13

Well, I don't know if that would be 14

right or not. I'm pretty confident, based on 15

my time with the ABA, that that's not going 16

to be approved any time in the reasonably 17

near future. The ABA, the Section on Legal 18

Education, is a fairly conservative, 19

culturally conservative group. I made a 20

proposal -- there's a requirement in the 21

standards that every faculty member have an 22

individual office. And I proposed that in 23

this day in age, where so many major 24

companies use other work environments, that 25

26

we delete that requirement. Now, I'm not 1

looking to take away any of the offices of my 2

faculty, but I thought it was a little bit 3

restrictive in this day and age. And a 4

gentleman who I'm sure is a good friend to 5

many of you, Tom Edmonds, who is on the 6

committee with me, he thought I was the most 7

crazy radical, you know, deregulator because 8

of that proposal. And I was voted down 9

overwhelmingly by the committee. 10

And that's, I think, an example of the 11

very incremental changes that we are likely 12

to get out of this standards review process. 13

So, I don't think we will see two year 14

programs. 15

But, coming from the other direction, 16

why won't we in the next 10 years see some 17

state or a number of states license 18

paralegals to do some of the things that 19

lawyers now do? 20

Look at what has happened in medicine, 21

where physician's assistants can do a lot -- 22

a number of things that you used to need a 23

medical license to do. If it can work in 24

medicine, why can't it work in law? 25

26

If I were on a State Supreme Court, I 1

would be thinking real seriously about that 2

as a way to increase access to legal 3

services, whether you are talking about 4

simple closing on a home, or an uncontested 5

divorce, or some debtor/creditor act, 6

landlord/tenant. And if that happens, if 7

people can do things that now you need a law 8

license for, that will shake the foundations 9

of legal education more than anything I think 10

that we have talked about today. 11

So, there are those possibilities, and 12

then there are probably a dozen others that 13

I'm not smart enough to think of. But, I'm 14

glad I'm closer to the end of my time as a 15

dean than at the beginning of my time as a 16

dean, because legal education is going to be 17

under tremendous stress and strain, and it is 18

going to change in some pretty fundamental 19

ways in the next 10 years. 20

PROFESSOR HENDERSON: I hope you are 21

getting your annual physical, because we need 22

at least another 15, 20 years out of you. 23

So, just a few more points of data here 24

that I want to show you. So, we are going to 25

26

start with up upside down hockey stick and I 1

want to move to the next segment of it. So, 2

this data is collected by the Census Bureau, 3

and what it is trying to do is try to make 4

sense of the national economy. And one 5

sector is the legal services economy. 6

Well, the way the government does this 7

is that they put labels on things, but the 8

economy kind of changes over time. So, 9

everything is like a Polaroid snapshot. They 10

take it the next year, it's a little bit 11

different, a little bit different, and then 12

eventually the title doesn't work anymore. 13

So, there's a category in law offices 14

called all other legal services. It was kind 15

of like, imagine the horse and buggy business 16

circuit 1900, and all the sudden there's 17

these contraptions that roll without a horse. 18

And, you know, we put those into a special 19

bin, and eventually it becomes the automotive 20

industry, and then we realize we are in the 21

transportation business and not the horse and 22

buggy business. And horse and buggies are 23

going to go the way of the horse and buggies. 24

So, here is the upside down hockey 25

26

stick, that's the blue line at the bottom. 1

And that line at the top is what is called 2

all other legal service. Now that's growing 3

very rapidly. Now, it's being compared 4

against their own baseline. So, one segment 5

is a 1.1 million sector part of the economy, 6

the other is started with 10,000 jobs. As of 7

2009, it was up to 20 some thousand jobs. 8

One is growing much faster than the other. 9

In 2004, we lost 26,000 jobs in the 10

blue line, we gained 5,700 jobs in the top 11

line. And remember, that's the domestic 12

workforce. This is an international supply 13

chain. So, that's the domestic payroll. And 14

these jobs generally pay less than the blue 15

line jobs. 16

Now, this data lags by about 17

two-and-a-half years. Now, when I saw this 18

data for the first time, I said who is in 19

that top line? I don't know. I have no idea 20

who is in that top line. Why is there 21

business doing so well in terms of growth? 22

So, I started poking around and I 23

started asking people who is in this top 24

line. And in the last couple of years, I 25

26

can't tell you how many introductions I have 1

gotten to legal process outsourcers, these 2

special kind of vendors that do publishing 3

and forms and documents, and this and that, 4

that are probably in that top line. 5

So, here are some brand names that -- 6

without going into detail here, here is one 7

thing you need to know. They are all 8

financed by non-lawyer money, and they are 9

either in the legal products or the legal 10

input business. So, they are not raising 11

issues of unauthorized practices of law, they 12

are not raising issues of 5.4 fee splitting. 13

And, you know, the ABA Commission on Ethics 14

2020 basically threw in the towel on 15

non-lawyer investment. 16

I've got to tell you folks, having 17

studied this issue and talked to the 18

principals of these businesses, that got 19

ethics opinions saying you are on firm 20

ground, we can win these cases, they will 21

never be brought, you are working for 22

sophisticated clients for the most part. 23

That lawyers sit around and just say, oh, 24

should we literalize these things. Well, you 25

26

know, the 5.4's offense is basically, is it 1

keeping non-lawyers out or lawyers in? I 2

think it's the latter. And I think that 3

there's a whole city solving legal problems 4

by capitalists that see this tremendous 5

opportunity that lawyers were basically 6

oblivious to. 7

So, this is not something that we can 8

decide in a room like this, the capitalists 9

are betting with their money, and they are 10

doing everything up to the courthouse door. 11

And these are very interesting business 12

models, I mean, that are leveraging 13

technology to basically bring a lot of 14

efficiency. And there's some standards 15

setting plays going on. And we know what 16

happens with standard setting, somebody sits 17

there and they preside over the standard, and 18

they make a ton of money. 19

So, that's the road that we are going 20

down, and I think that I want my students to 21

be aware that they are part of a legal 22

service industry. 23

By the way, this may be bad news for 24

lawyers, it's wonderful news for society. I 25

26

mean, this is just -- society likes this. 1

Society is -- we are being pulled in the 2

direction where society wants to go. Law is 3

important, they want better, cheaper, faster 4

law. 5

So, has anybody heard of this book 6

called, The End of Lawyers?, by Richard 7

Susskind? Just raise your hand if you've 8

heard of it. Oh, my God, this is the most I 9

have ever seen in a room. For those of you 10

that are interested, send me an e-mail, I 11

will send you a book review of it, a PDF book 12

review, it's three pages long. My students, 13

it's a part of their final exam this year, 14

because I taught this. 15

Well, Richard has a continuum, and this 16

is a continuum that Richard claims we are 17

going down. He is a technologist and a law 18

professor in England, and he says we are 19

moving from bespoke, which is artisan, down 20

to commodity. Well, it's scary to move down 21

that continuum, because bespoke is kind of 22

tailor made, it's kind of expensive, it kind 23

of follows the kind of barrister model. And 24

we move down that continuum and it's free 25

26

over the internet. 1

And so, the usual impulse is to 2

basically want to double down on the bespoke. 3

And a lot of the fancier law firms have just 4

said we are just going to do sophisticated 5

stuff. When 100,000 lawyers commit to just 6

doing the sophisticated stuff, it's going to 7

be crowded. 8

So, what Richard said is that here is 9

the sweet spot here between systemized and 10

packaged, and here is the challenge for legal 11

education. Here is the human capital needed. 12

Just these problems are very . . . of a higher 13

order of magnitude, but they are socially 14

valuable, like an iPhone. Our kids like 15

iPhones, we like iPhones, you know, but they 16

are very complicated to create. 17

And I'm not saying that the law is 18

going to have to teach information 19

technology, or systems engineering, or 20

finance, but we need to talk across these 21

domains. We need to be able to learn how to 22

speak to people and collaborate in these 23

environments. This is going to be really 24

key. 25

26

So, in other words, we really have to 1

up our game in law schools. Because the 2

world is coming in to what lawyers used to 3

do, and they are using tools that are 4

completely foreign to what we have done 5

before, and we ought to be in this game here, 6

if for no other reason than lawyers have a 7

very good track record of being public 8

citizens. We help societies get through 9

really rough patches when we deal with 10

political winds. 11

And this is too big a transformation 12

for us to basically just be left with very 13

little and leave it to the capitalists. 14

There really has to be a professional ethos 15

to tame this or interact in this space. And 16

this is a huge challenge for law schools and 17

for the profession. 18

DEAN YELLEN: Well, we would love to 19

take questions on anything we have talked 20

about, or if you want to bring up something 21

from earlier in the day, we will try and 22

react to that. 23

Yes, Professor, Dean Polsby. 24

DEAN POLSBY: Sir, this is just very 25

26

brief. Could I hear you say, or could I hear 1

Bill say, or could I hear both of you say 2

that there is a connection between 3

scholarship and teaching? 4

DEAN YELLEN: Oh, absolutely. 5

THE VIDEOGRAPHER: Can you repeat that 6

question. 7

PROFESSOR HENDERSON: Is there a 8

connection between scholarship and teaching? 9

I will 100 percent sign off on that 10

proposition. There is actually, I think, one 11

way to -- I think that -- I think that 12

there's a lot of not good scholarship that's 13

being done, but I can't imagine running a law 14

school that's not informed by the freshest, 15

best scholarship out there. And so -- but, I 16

do think that every faculty member should 17

give a talk of what they are working on with 18

a group of practicing lawyers, and we ought 19

to at least be able to communicate with one 20

another. Because I do think that we are 21

pretty far off the reservation on some of the 22

stuff we do. 23

DEAN YELLEN: Legal scholarship gets 24

often a very unfair wrap. And the worst 25

26

example of unfair wrap was in the New York 1

Times, one of those three nasty articles, the 2

author cited, I don't know, an article about 3

Satra all of this stuff. Well, 4

the reporting was so sloppy that he was 5

citing an article by a philosophy professor, 6

not a law professor, that had been published 7

in a philosophy journal, not a law journal. 8

Look at Bill's scholarship, helping 9

really understand the way the market works, 10

the legal market. My field of criminal law, 11

there's been so much influential policy work 12

done by scholars. Even in some of the more 13

esoteric things, one of my younger colleagues 14

does writing on the field of happiness 15

research and its possible implications for 16

law. This kind of scholarship, even if it 17

doesn't result in something tomorrow, is 18

extremely valuable. 19

So, yeah, we agree with that 20

completely, Dan. 21

Bill. 22

MR. RAKES: Why do you suppose people 23

like the Chief Justice of the United States 24

says, “I never read Law Review articles and I 25

26

don't cite Law Review articles, they are not 1

relevant to what I do”? 2

I remember the day when Law Review 3

articles used to be cited in judicial 4

opinion. Now it seems that Law Review 5

articles are only written for other law 6

professors. 7

DEAN YELLEN: I think that only 8

describes -- 9

PARTICIPANT COMMENT: Can you repeat. 10

DEAN YELLEN: Yeah. The Chief Justice 11

of the US recently said that he doesn't read 12

Law Review articles, and I guess there are 13

statistics indicating that the rate at which 14

Law Review articles are cited in judicial 15

decisions has gone down. And Bill's question 16

is why do we think that has happened. 17

I don't know about the citation by 18

judges. And there's certainly a fair amount 19

of quiet esoteric scholarship, particularly 20

at the most elite schools there has been a 21

tendency to only hire as entry-level faculty 22

members people who also have Ph.D.s. And not 23

that there's anything wrong with that, but 24

when it comes at the expense of people who 25

26

have a connection with the practice, that can 1

be problematic. 2

But, I think -- just respectfully, I 3

think the Chief Justice is wrong. I think 4

that there is -- there are probably more 5

articles today of relevance than there were 6

30 years ago, it's just there's been such an 7

explosion in the number of journals and the 8

number of faculty, and the number of 9

articles, that it's easy to identify the 20 10

that don't help you in a given month as a 11

judge. 12

I don't know, what do you think, Bill? 13

PROFESSOR HENDERSON: I think that -- 14

my frame is a little off on this one, because 15

in the last three years I just said I don't 16

want to talk to practicing laws, if what I'm 17

doing doesn't matter to them, then I don't 18

know if I really want to do it. 19

So, I have been heavily influenced by 20

practicing lawyers. I'm interested in what 21

they have to say so. A lot of times, you 22

know, I'm listening to what lawyers have to 23

say. And they contradict one another, but 24

I'm trying to understand the bigger picture, 25

26

trying to listen to all of these folks. 1

I think that if there's a perception 2

that we are doing something that is 3

worthless, it's a perception that the burden 4

is on us to correct. I think it's 5

counterproductive to basically say, well, you 6

know, you are wrong and what we are doing is 7

important. We should sit down and talk to 8

lawyers and at least understand what you guys 9

are going through, and try and do something 10

that I think is where we can communicate, 11

that we can agree that we are doing something 12

of value, and with the idea that occasionally 13

the scholars are going to have to say, you 14

know what, I'm going to go in my own 15

direction here, and have to have some 16

critical detachment. But, I can't justify 17

all scholarship as being basically critically 18

detached, in a good sense. Sometimes, yeah. 19

DEAN YELLEN: And there's a little bit 20

of elitism in the Chief Justice's comment, 21

too, because he is picking up Harvard Law 22

Review and Yale Law Journal. And the things 23

that get published there are not typical of 24

scholarship across the board. 25

26

As there was a good discussion of this 1

earlier today, law schools are an incredibly 2

diverse group right now; large, small, urban, 3

rural, and with different missions. And the 4

same is true of the scholarship that people 5

do. 6

Yes, Justice Lacy. 7

JUSTICE LACY: I have two questions and 8

a comment. 9

First of all, I really agree with your 10

comments, Bill, with regard to this slide 11

that's up here. And the issue of the 12

competition and what other countries are 13

doing in terms of non-legal capital is 14

incredible. And somehow England, Australia, 15

Canada are not falling -- the Commonwealth 16

countries are not falling apart. And it's 17

becoming much more difficult to not be aware 18

of this and how that is going to play out. 19

But, the two questions I have is, you 20

talked about the number of new law schools. 21

To what extent do you think many of those new 22

law schools are for-profit law schools? Do 23

you think that has -- what impact does that 24

have in terms of our prior law schools that 25

26

were all nonprofits? 1

And the second question I have is, we 2

are talking about the cost of law schools 3

based on the scholarship issue. But, it was 4

my impression for many years, at least many 5

law schools fought the expansion of skilled 6

courses, because they said that's where the 7

major increase in cost is. 8

Is that not true, or is that just not 9

true anymore? 10

DEAN YELLEN: I want to start with -- 11

I'm sorry, repeat the question. 12

Well, let's take one question at a 13

time. So -- 14

JUSTICE LACY: The first question is 15

what is the impact of nonprofit law schools? 16

DEAN YELLEN: What are is the impact of 17

for-profit law schools -- 18

JUSTICE LACY: For-profit law schools. 19

DEAN YELLEN: -- on legal education. 20

There has been a significant growth in that 21

sector, the proprietary or for-profit law 22

schools. There are, I want to say between 12 23

and 15 of them right now, out of 200 law 24

schools. And among the schools started in 25

26

the last 10 years, they represent a bigger 1

proportion than that. So, there has been a 2

move in that direction. 3

You know, some economists have 4

applauded that, you know, as a way to help 5

drive down costs and the like. You know, I'm 6

concerned about it. I believe in higher 7

education as serving a public purpose, and 8

there's at least some tension between that 9

purpose and a profit motive. 10

On the other hand, a lot of the 11

for-profit schools seem to be doing quite a 12

good job of educating their students, and 13

they are creating -- we need some 14

competition. So, it's unclear -- it's sort 15

of too new an experiment, I think, to really 16

have a real clear idea of what the overall 17

impact is going to be. 18

PROFESSOR HENDERSON: Yeah. I agree 19

with David regarding the statistics. 20

I actually spent a day with one of the 21

consortiums of one of these for-profits and I 22

have to tell you I was just really impressed, 23

because their idea would be what happens if 24

we put the students first and we really focus 25

26

on high-quality education, and we looked at 1

metrics and, you know, and we hired faculty 2

based upon track records of success, they do 3

behavioral interviews to hire faculty 4

members, which is just astonishing to my 5

mind. And it's a value-based culture there. 6

And you go around there, and the literature 7

that they read is pretty highbrow, you know, 8

business literature that is value based. 9

So, I'm grateful for the competition. 10

I wouldn't sell them short. But, you know, 11

they don't have elite reputations, but they 12

are doing something completely different than 13

what the nonprofits are doing. 14

DEAN YELLEN: And the second question 15

was about the cost of skills-based education. 16

And it is absolutely true that most forms of 17

experiential learning are more expensive than 18

a large classroom. In a live client clinical 19

setting, most classes are no larger than a 20

dozen students per faculty member. 21

Now, I think it's an open question 22

whether they could be a little larger than 23

that, but it wouldn't be dramatically large. 24

And so, 12 or 15 to 1 ratio, as opposed to 25

26

50, 60, 70 to 1 in a large class. So, that's 1

why clinical education is a lot more 2

expensive. 3

Externships are a lot less expensive, 4

and can be very a valuable component of 5

education. But, it has to be well 6

supervised, because an extern can be doing 7

anything from just shuffling papers to really 8

having a tremendous lawyering experience. 9

And then the third form of experiential 10

learning is simulation-based learning. And 11

that's kind of in between in terms of both 12

cost and the supervision. The classic one, 13

of course, is trial techniques sort of 14

program. But, most of our law schools now 15

have other nonlitigation based simulation 16

classes, where students will simulate a 17

negotiation, or they will negotiate the terms 18

of a business deal under simulated 19

conditions. 20

And then an increasing number of 21

traditional professors are incorporating 22

simulation exercises into their classes. So, 23

if you teach criminal procedure, you might 24

have students brief and argue a suppression 25

26

motion, not just talk about cases. 1

So, there's really been a lot of 2

positive direction in that way. 3

One of the proposals that our Standards 4

Review Committee has tentatively adopted to 5

recommend to the council is a requirement 6

that every law school require of every law 7

student at least one of those three kinds of 8

experiences; either a live client clinic, a 9

simulation, a real full-based simulation, or 10

an externship. 11

My school has had a requirement like 12

that for about four years, and we have been 13

able to manage it without any tremendous cost 14

problems. 15

The clinical professors around the 16

country, as a group, believe very strongly in 17

clinical legal education. They would like to 18

see us move towards requiring a live client 19

clinical experience for each and every 20

student. Although, philosophically I agree 21

with that, I don't think it's possible, cost 22

wise at least, in this day and age to impose 23

that on law schools. 24

PROFESSOR HENDERSON: Just briefly, 25

26

what should be our charge -- to teach stuff 1

like this or effective client interaction, 2

you need simulation, you need some sort of 3

experiential education, whether it's 4

clinicals or simulations. And our charge 5

should be how do you get the best 6

experiential education, how do you scale it, 7

turn it into a module, make it really, really 8

good, really, really replicable, not 9

over-the-top labor intensive. 10

And I think that the for-profits, 11

that's exactly what they are thinking about. 12

How can we turn this into a module, make it 13

really, really good, make sure is works, find 14

the best, cheapest combination, and that's 15

what they are focused on. I think that's 16

exactly what every law school should be 17

looking at, because that is how you expand 18

skills and do more with less. 19

DEAN YELLEN: You know, and the cliche 20

about the two sides of a Chinese character, 21

one is crisis, the other is opportunity. Or 22

Rahm Emanuel's famous line about not letting 23

any good crisis go to waste. There's a lot 24

of discussion about all of these topics in 25

26

law schools. I know a lot of schools that 1

are having faculty retreats or inviting 2

people like Bill in as outside speakers. 3

Even the most pointy headed detached 4

doctrinal faculty members are beginning to 5

recognize that the world is changing and we 6

need to adapt if we are not going to be 7

really left behind. We may be left behind 8

anyway, but... 9

Yes. There's another question there. 10

JUDGE CRIGLER: I want to return to 11

what Bill Rakes said, because I have the 12

luxury of functioning at the bottom end of 13

the appellate food chain. And most of the 14

time we are concerned more about what the 15

courts in authority over us are saying rather 16

than what some law professor may be positing 17

in a Law Review article. 18

So, and I don't know how many of us 19

here function at the trial level, but we are 20

more concerned with what the Courts of Appeal 21

are doing. And, of course, the Chief Justice 22

and his buddies up there on the Supremes, 23

they are writing the laws that you all are 24

commenting on. 25

26

So, you know, I don't find the Law 1

Review articles very useful in day-to-day 2

work at the trial level of the court, because 3

what informs us about the law are what the 4

Appellate Courts in our jurisdiction are 5

saying. 6

So, you know, help me out here, because 7

I really think it's important from a 8

practical level to see what all this 9

scholarly publication is actually working out 10

as it percolates down the appellate chain, 11

and whether it has an impact or it doesn't, 12

or whether it is really for the academy as 13

opposed to the practice. 14

DEAN YELLEN: Let me give you one 15

question. 16

The question is for us to get back to 17

Bill's point about the disconnect between 18

scholarship and the practice of law, and 19

particularly judicial decision-making at the 20

trial level and even at the appellate level. 21

Let me give you one example from my 22

field that I think tells a really nice story 23

about scholarship. I'm a criminal law person 24

by background. And just in the last, you 25

26

know, 10 years, the Supreme Court has 1

outlawed capital punishment for juveniles, it 2

has outlawed life without parole for 3

juveniles who did not commit homicide, and 4

now they are considering, and it's probably 5

going to be another five/four decision about 6

whether to outlaw life without parole for 7

non-homicide cases. 8

Well, I don't know how many articles 9

were cited in those decisions, but I can 10

guaranty you that those cases only got to the 11

Supreme Court because of interdisciplinary 12

scholarship that was being done. 13

Brain science has shown how the 14

intuition that we have all had that young 15

people aren't as mature in their 16

decision-making as adults. Brain mapping. 17

And that crossed over into legal scholarship 18

and there's been tremendous work done about 19

why psychology and biology ought to have an 20

impact on how we view legal doctrine. 21

So, whether or not the cases cited any 22

of those articles, scholarship in that area 23

had a tremendous impact in moving the law. 24

And I think that pattern is duplicated 25

26

throughout law. So, there may be less 1

citations, but I just really don't think 2

there's less impact. 3

PROFESSOR HENDERSON: I agree with 4

that. Yes. 5

PARTICIPANT COMMENT: First, I would 6

like to say that I'm stunned that Penn State 7

is not making a profit off from me right now. 8

But, I want to go back, we are sitting 9

back here saying, you know, we think we are 10

pretty clever here, and Liz is obviously way 11

ahead of us in this, I didn't get the whole 12

Clearspire, Axiom, and yet it struck me, as 13

member of the Virginia Supreme Court, that 14

that seemed like a really important point. 15

PROFESSOR HENDERSON: You want me to 16

explain it? You want me to tell you what 17

these things are about? 18

PARTICIPANT COMMENT: Yeah. 19

DEAN YELLEN: Repeat the question. 20

PROFESSOR HENDERSON: Okay. I think 21

that our colleague wants to know -- back 22

here, I think. There we go. Wants us to 23

flesh out a little bit about what we are 24

talking about in terms of these non-lawyer, 25

26

this new generation of entrepreneur; is that 1

right? 2

PARTICIPANT COMMENT: Yes. 3

PROFESSOR HENDERSON: Okay. So, I will 4

give you an example of -- you know, these are 5

very interesting models. Axiom is basically 6

a brokerage service, and if you visit their 7

website, I encourage you to do it, it looks 8

like a very hip, you know, type law firm. 9

But, it's actually a brokerage service and 10

it's comprised of big law refugees, so that 11

they leave a big firm and they have been well 12

trained and they have expertise, but they 13

want to basically have more control over 14

their lives. 15

So, they get parachuted into a legal 16

department, and Axiom takes their cut of it 17

for securing the work, and you basically cut 18

out all the class A overhead, all the 19

training costs. 20

And so, Axiom has non-lawyer investors. 21

You know, Axiom got a legal opinion approved 22

in California to basically do that. And, you 23

know, Axiom has, I think that the word on the 24

street is, you know, a nine-figure income. 25

26

You know, it's serious income. 1

Is that right? Here, wait a second. 2

Let me make sure I get my -- yeah, it's a 3

nine-figure income. And it looks and 4

operates just like a law firm, and they are 5

getting the legal process outsources, 6

et cetera, like that. 7

Clearspire is basically some tech guys 8

that built a great knowledge management 9

platform that allows lawyers to innovate and 10

project manage, and figure out, to build 11

templates, for say, fairly decent and 12

sophisticated corporate law work. 13

So, Clearspire LLC is a -- basically 14

they do business getting and they do 15

knowledge management. It's eminently 16

scalable and has non-lawyers investors. 17

And then Clearspire LLP is basically a 18

service partnership, where you basically 19

don't have to go and get the work, the work 20

is fed to them. And then they get profit and 21

incentivized by using this knowledge of the 22

management platform to basically do this work 23

at a more sophisticated level. 24

So, it's a partnership with 25

26

sophisticated business … and knowledge 1

management platforms that allow service 2

partners to do really cost effective, 3

innovative work, where they basically get 4

more expertse. 5

DEAN YELLEN: Let me interrupt, because 6

I see Bill, we are just about at 9:00. We 7

are happy to stick around and keep talking 8

with anyone who wants to, but we don't want 9

to keep people past our time. 10

Just another quick example, you know, a 11

lot of firms have begun to outsource document 12

review in big pieces of litigation. Some of 13

that work is going to India and places like 14

that. Some of that work is being done by 15

computers now, so that instead of an 16

associate looking through thousands of pages, 17

they scan them all, and type keywords and all 18

of that. And then some firms are now 19

outsourcing even within the United States. 20

So, I think it's Orrick Herrington 21

opened up a facility in, I believe, 22

West Virginia, where there are lawyers 23

working there, but instead of the 150,000 24

that the associates in San Francisco and 25

26

New York make, they are making $60,000 to 1

work in a warehouse reviewing documents. 2

So, it isn't all just the high tech 3

stuff -- 4

PROFESSOR HENDERSON: Yeah. 5

DEAN YELLEN: -- like this. But, in 6

all kinds of way entities are finding ways to 7

do legal work for a lot less money than they 8

did before. 9

PROFESSOR HENDERSON: Leveraging 10

technology. 11

DEAN YELLEN: Should we stop with that, 12

Bill, or Taylor? 13

MR. RAKES: Taylor. 14

DEAN YELLEN: We are happy to keep 15

talking and answering questions. 16

MR. REVELEY: Why don't we do this. 17

You guys sit here, if you want to come pursue 18

it, by all means do so. 19

But, first let me say this has truly 20

been frisky, but substantively frisky. 21

Really good. I think we have all thoroughly 22

enjoyed it. 23

24

(Applause) 25

26

MR. REVELEY: I'm sure that people 1

would like to keep talking, but some people 2

might even want to go to bed. 3

So, we are adjourned until 4

9:00 tomorrow, but there will be breakfast 5

from 8:00 to 9:00 of some sort. 6

ELIZABETH KELLER: Continental. 7

MR. REVELEY: And we are starting at 8

9:00. So, we are officially adjourned until 9

9:00 tomorrow. 10

11

(Whereupon, the Conclave was recessed 12

at 9:02 p.m., to be reconvened at 9:00 a.m., 13

April 23, 2012) 14

15

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17