Over the summer, the American Bar Assocation announced that it would stop collecting data on law school expenditures. Ignoring law school expenditures is (counterintuitively perhaps) an important legal education reform. Law schools should be spending, and charging, as little as possible. The fact that a law school spends a lot of money on its professors really doesn’t seem to have a great effect on the quality of legal education, especially if that quality is at all measured by job placement rates.

Of course, getting the ABA on board is only part of the battle. In June, we noted that the real prize is for U.S. News to stop rewarding law schools for spending as much as possible. A law school shouldn’t be able to improve its ranking by tricking out its library or giving its faculty fat raises in a market where law school tuition is far too high.

I had expected U.S. News to follow the ABA’s lead. Law schools might not be the most transparent institutions, but they generally try to avoid lying to the ABA (at least some of them do). But without an ABA check, there’s nothing to prevent schools from lying to U.S. News to inflate their expenditure figures in an attempt to game the rankings. Reasonable people can disagree about what factors should be important in a set of law school rankings, but I had assumed U.S. News would at least want their data to be tied to reality, instead of made-up statistics offered up by law schools without any independent auditing or fact-checking.

It turns out, I was wrong…

U.S. News is continuing to ask law schools to report their expenditures as it does data collection for its next set of law school rankings. Now, I suppose U.S. News could ask for this information without using it. But it seems silly and wastefully to ask law schools to pull together (or invent out of thin air) financial data that you don’t intend to utilize.

Tax Prof Blog Paul Caron explains why the expenditures section is the one that is easiest for law schools to game:

Expenditures Per Student (9.75%) and Financial Aid Per Student (1.5%) are significant components of the U.S. News rankings methodology. Because these are the only data not disclosed by U.S. News, Tom Bell, Ted Seto, and others have long argued that this is where the bulk of law school chicanery occurs. With the recent tightening of placement data reporting (18% in the U.S. News methodology), most observers suspected that even more manipulation would occur in the expenditures black box. The ABA Task Force on the Future of Legal Education’s September 20 Draft Report calls for U.S. News to stop using expenditures in its rankings. It is perverse to give schools a rankings boost for maximizing expenditures at a time of soaring tuition and student debt levels.

This is the time when I’m forced to point out that the ATL Law School Rankings go out of their way to ignore factors that can be easily manipulated by law schools. They’re not perfect, obviously, but I guess I just don’t understand why U.S. News would invite law schools to engage in creative accounting designed to game their own list.

I also don’t rightly understand why prospective students put so much stock in a list where 10 percent of the methodology is devoted to explaining how effective law schools are at price-gouging them. Are they so stupid as to think that “expenditures per student” means the amount of money law schools spend on student spa days and bottle service?

Couldn’t U.S. News at least change the name of the factor from “expenditures per student” to “largesse towards faculty” or “profligate spending”? If they’re not going to demand transparency from law schools, they could at least be honest about it.

U.S. News Rankings to Continue Using Law School Expenditures, Despite ABA’s Decision to Stop Collecting Data [Tax Prof Blog]

Earlier: The ABA Does Something Right! Will U.S. News Follow And End One Perverse Incentive For Law Schools?


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