DRAFT. The Feasibility of Establishing a Public Law School in Texas, Including the Texas-Mexico Border Region A Report to the 81st Legislature

Transcription

1 Ag Agenda Item IV-J The Feasibility of Establishing a Public Law School in Texas, Including the Texas-Mexico Border Region A Report to the 81st Legislature DRAFT October 2010 Texas Higher Education Coordinating Board

2 Texas Higher Education Coordinating Board Fred W. Heldenfels IV, CHAIR Elaine Mendoza, VICE CHAIR Joe B. Hinton, SECRETARY Durga D. Argawal Dennis D. Golden Harold W. Hahn Wallace Hall Lyn Bracewell Phillips A.W. Whit Riter, III Eric Rohne, STUDENT REPRESENTATIVE Austin San Antonio Crawford Houston Carthage El Paso Dallas Bastrop Tyler Corpus Christi Raymund A. Paredes, COMMISSIONER OF HIGHER EDUCATION Mission of the Coordinating Board The Texas Higher Education Coordinating Board s mission is to work with the Legislature, Governor, governing boards, higher education institutions and other entities to help Texas meet the goals of the state s higher education plan, Closing the Gaps by 2015, and thereby provide the people of Texas the widest access to higher education of the highest quality in the most efficient manner. Philosophy of the Coordinating Board The Texas Higher Education Coordinating Board will promote access to quality higher education across the state with the conviction that access without quality is mediocrity and that quality without access is unacceptable. The Board will be open, ethical, responsive, and committed to public service. The Board will approach its work with a sense of purpose and responsibility to the people of Texas and is committed to the best use of public monies. The Coordinating Board will engage in actions that add value to Texas and to higher education. The agency will avoid efforts that do not add value or that are duplicated by other entities. The Texas Higher Education Coordinating Board does not discriminate on the basis of race, color, national origin, gender, religion, age, or disability in employment or the provision of services.

3 TABLE OF CONTENTS Executive Summary... 1 Purpose... 5 Introduction... 5 Workforce Need... 6 Texas Law Schools... 9 Opportunity Special Issues Hiring Trends Under-represented Groups in the Legal Workforce The Development and Cost of New Law Schools South Texas Brownsville Laredo (Webb County) Upper Rio Grande El Paso Resources Needed to Start a New School Alternatives to Starting a New School Conclusions Key Findings Workforce Need Student Opportunity Recommendations... 33

4 Works Cited Appendix A Estimated Five Year Costs of a New Law School Appendix B Estimated Building Costs for a New Law School Appendix C Ammorization Schedule for a New Law School... 40

5 LIST OF ILLUSTRATIONS Figure Page 1. Texas Public and Independent Law School Locations Projected Annual Openings for Lawyers, Lawyers per 100,000 Population by Texas Region (2010) Applications (Duplicated) to Texas Public and Independent Law Schools Application Trends in Texas Public and Independent Law Schools First-Year Entering Enrollment Trends in Texas Public and Independent Law Schools Pass Rates of the Texas Bar Exam (2009) Educational Pipeline to Obtaining a Law Degree in Texas ( ) Entering Law School Seats per 1,000 Baccalaureate Degrees Texas Baccalaureate Degrees, Law School Applications, and First-Year Entering Enrollments Average Tuition at Texas Public and Independent Law Schools Texas Lawyers in Relation to Texas Population ( ) Associates at Texas Firms (2009) Partners at Texas Firms (2009) Comparison of Texas Population and Texas Law School Graduates by Ethnicity Texas Law Students per 100,000 by Texas Region of Origin (2009) Comparison of the Regional Population and of the Law Student Population Law Student County of Origin (2009)... 24

6 EXECUTIVE SUMMARY To fulfill the requirements of Senate Bill 956, 81st Texas Legislature, staff of the Texas Higher Education Coordinating Board (Coordinating Board) conducted a study to examine the need and feasibility of establishing a public law school in areas of the state where a law school is not located, including the Texas-Mexico border region using the same criteria used for determining the need for and feasibility of establishing the University of North Texas at Dallas College of Law. 1 This study includes an evaluation of the workforce need for lawyers in Texas, potential student demand for legal education, the capacity of current Texas public and independent law schools, and regional need for another public law school. This study draws upon a variety of national, state, and institutional sources for data. Assessments of the viability of new law schools draw upon data and analysis by Coordinating Board staff. The entire report has been reviewed by independent consultants who are professionals in the field. KEY FINDINGS Workforce Need The supply of Texas law school graduates and lawyers imported from other states appears to be more than sufficient to meet the current demand for new lawyers in Texas. There were 1,837 attorneys who passed the Texas Bar exam in 2009, and the Texas Workforce Commission projects 1,660 new lawyers will be hired per year through Texas has fewer lawyers per 100,000 population (303) than the median of the 10 most populous states (328), although the major urban areas of Houston, Dallas/Fort Worth, and Austin exceed this median. Student Opportunity The number of duplicated applications to Texas law schools declined 11 percent since First-year entering enrollments in public law schools have risen 6 percent since The demographics within this enrollment have shifted over the last 10 years, however, as the number of African American, Hispanic, and Asian/Other graduates has increased. Hispanic students are the most dramatically under-represented group in the state s public and independent law schools. When the number of law school students is compared to the total population of a given region, the Gulf Coast region has the highest ratios and the South Texas region has the lowest. 2 1 Texas Education Code, Subchapter, C, Section (a). 2 Self-reported county of origin data were used for this analysis. Students were instructed to report the county in which their permanent address resided at the time of application to law school. It is possible that students reported the county in which they attended college rather than their home county. The Coordinating Board will be conducting a second study in which the identification numbers of law school students will be matched with high school records in

7 The number of baccalaureate degrees awarded in Texas is growing steadily every year. Unless more law school seats are added, there will be progressively more competition among Texas students holding a baccalaureate degree to attend a public law school. There are advantages and disadvantages to placing a new school in Brownsville, Laredo, or El Paso, and these must be weighed carefully with particular attention to increasing student opportunity for under-represented groups, cost to the state, and limited job opportunities for graduates. CONCLUSIONS While there is no standard for an ideal ratio of lawyers to population, in 2009 the Texas average of 303 lawyers per 100,000 population was lower than the average of the 10 most populous states (328). However, there is no conclusive evidence to suggest that Texas as a whole is in immediate need of more lawyers now or in the near future, although there are certainly rural areas of Texas that are underserved. Over the next five years, the number of lawyers is projected to grow at a faster rate than the increase in population. 3 Since the number of law school graduates exceeds the number of projected annual job openings, this expanding workforce need is likely to be met even though the number of law school graduates in Texas is not keeping pace with population growth. Based upon the self-reported county of origin data, there are stark regional disparities in Texas in terms of how many students from each region pursue law school. The large South and Upper Rio Grande regions combined sent fewer students to Texas law schools than the Gulf Coast region alone. However, the Texas Tech Law School in Lubbock has not resulted in a high number of students from that region attending law school. There are also regional disparities in the distribution of practicing lawyers across the state. Distribution of lawyers is highly uneven, but this probably reflects the attraction that large urban areas, with their greater economic and political activity, have for lawyers. Notably, 95 percent of Texas Bar members who live in Texas practice in a metropolitan county. The placement of law schools throughout the state has had little demonstrable impact on the regional distribution of practicing lawyers. The High Plains region represents a case in point. Despite the presence of Texas Tech s law school, not only is the projected need for lawyers in this region small, but the number of practicing attorneys is also significantly lower than several other Texas regions. Women, Hispanic, and African American lawyers are under-represented in Texas. While census projections have Hispanics at 37 percent of the population, only 16 percent of law school graduates and 7 percent of the Texas State Bar s membership is Hispanic. African Americans are 12 percent of the 2008 Texas population, and they make up 12 percent of the law school graduates and 4 percent of the Texas State Bar s membership. Women account for 32 percent of the Texas State Bar s membership, yet they comprise 49.9 percent of the Texas population and 41.2 percent of Texas law school graduates. order to determine the county in which they attended high school. This may produce a somewhat different picture of region of origin than the data that were available for this study. 3 The Texas Workforce Commission projects an increase of 16.5 percent for lawyers in Texas while the State Demographer s office projects a population increase (assuming a.5 growth scenario) of 7.5 percent. 2

8 There are distinct advantages and disadvantages to placing a new public law school in El Paso or the Rio Grande Valley. According to the Texas Comptroller of Public Accounts, both areas are expected to have slightly higher employment indices than the projections for the entire state, thus suggesting that additional employment growth might trigger a need for more lawyers. 4 What about Loredo? Both an El Paso and a Brownsville location would increase the opportunity for under-represented students to attend law school. The only law school in the South, West, or the Upper Rio Grande regions is in San Antonio (St. Mary s University, which is independent). However, the primary public universities in both regions may not be best suited for the development of a law school as it could draw resources away from their current undergraduate and graduate programs. Stand-alone public law schools are possible, but they are rare, and they face demanding issues for Southern Association of Colleges and Schools (SACS) and American Bar Association accreditation without the financial and academic support structures of a host institution. Costs for establishing a new law school are substantial. Increased opportunities for Texas students, particularly students from under-represented groups, may be most effectively achieved by increasing class sizes at existing institutions, starting evening and part-time programs at existing institutions, and providing financial support for grants and preparatory undergraduate programs. RECOMMENDATIONS The Coordinating Board does not recommend the creation of a new law school at this time. Existing public law schools have the capacity to expand enrollments and provide greater opportunities for students from all regions of the state and across all demographic groups. Additional resources and incentives should be made available to existing public institutions to expand their class sizes before a new law school is established. The amount of increased funding should start with the baseline of the Coordinating Board s recommended level of formula funding. Currently, the state provides public law schools formula funding at the rate of $ per semester credit hour, and the Coordinating Board recommendation for the Biennium is $ per credit hour. 5 Increasing the number of graduates from under-represented groups should be the top priority. Means to achieve this goal include better recruitment and preparation of those students within the K-16 pipeline. New loan repayment programs also may help address current shortages in the workforce without the greater expense of building a new school. 4 According to projections made by the Comptroller s office in 2008, there is a projected 3.7 percent employment growth for the Brownsville-Harlingen Metropolitan Statistical Area (MSA), a projected 4.3 percent employment growth for the El Paso MSA, and a projected 4.2 percent employment growth for the state. Texas Comptroller of Public Accounts, Texas in Focus: South Texas, Window on State Government, April 2008, (accessed August 13, 2010). Texas Comptroller for Public Accounts, Texas in Focus: Upper Rio Grande, Window on State Government, June 2009, (accessed August 13, 2010). 5 Recommended formula funding is calculated based upon 62.5% attempted hours and 37.5% completed hours. 3

9 However, if a new law school is to be established, the potential location should be considered with careful attention to the following: How the site would increase opportunities for under-represented students, particularly Hispanic students, the demographic that is most dramatically under-represented in the lawyer workforce. Where there is the most student demand. Where there is current and projected professional demand for new lawyers. If there is to be a new school, no matter the location, the Coordinating Board recommends that it incorporate evening and part-time programs to increase the likelihood that it will serve the needs of under-represented populations, and increase the likelihood that they will remain to practice near the target area. 4

10 PURPOSE To fulfill the requirements of Senate Bill 956, 81st Texas Legislature, staff of the Texas Higher Education Coordinating Board Coordinating Board) conducted a study to examine the need and feasibility of establishing a public law school in areas of the state where a law school is not located, including the Texas-Mexico border region using the same criteria used for determining the need for and feasibility of establishing the University of North Texas at Dallas College of Law. 6 This study includes an evaluation of the workforce need for lawyers in Texas, student demand for legal education, the capacity of current Texas public and independent law schools, and regional need for another public law school. INTRODUCTION The need for additional public legal education options in Texas was the focus of several pieces of proposed legislation during the 81st Texas Legislature. Senate Bill 956, passed during this session, created the College of Law at the University of North Texas at Dallas. Proposed legislation was also introduced to create schools of law at The University of Texas at Brownsville, The University of Texas at El Paso, and the Rio Grande Valley. 7 Legal education has a long history in the United States. Although many lawyers in America were originally trained through an apprenticeship position that involved working with a lawyer and engaging in an intense and aggressive reading of the law, organized schools of law did not become the most dominant form of legal education until the late nineteenth century. The first law school in Texas was founded in 1855 as a part of Austin College but was disbanded the next year. Baylor University subsequently added a school of law in 1857 that lasted until The state s first public school of law was added to The University of Texas in Baylor University reestablished its law school in 1919, South Texas College of Law was founded in 1923, Southern Methodist University s law school began in 1925, St. Mary s University s law school began in 1934, the University of Houston s was established in 1947, Texas Southern University s in 1947, Texas Tech University s in 1964, and Texas Wesleyan University s law school in Much like the rest of higher education, enrollment in the state s law schools increased after World War II with an influx of veterans. 8 There are currently nine law schools accredited by the American Bar Association in Texas. Five of these schools are independent institutions (Baylor University, South Texas College of Law, Southern Methodist University, St. Mary s University, and Texas Wesleyan University), and four are public institutions (The University of Texas at Austin, University of Houston, Texas Southern University, and Texas Tech University); an additional public law school at the University of North Texas at Dallas has been legislative approved but is not expected to begin operation until fall 2012 at the earliest. As of fall 2009, these schools had a combined enrollment of 7,728 and had graduated 2,340 students during the academic year. 6 Texas Education Code, Subchapter, C, Section (a). 7 House Bill 66, House Bill 91, House Bill 4528, 81st Texas Legislature. 8 Joseph W. McKnight, Law Schools, Handbook of Texas (online), Texas State Historical Association (1999), (accessed July 10, 2010). 5

11 Figure 1: Texas Public and Independent Law School Locations High Plains Metroplex Northwest Upper East Texas Upper Rio Grande West Texas Central Texas Southeast Texas Gulf Coast South Texas Law Schools In determining the need for further public schools of law in Texas, several considerations must be taken into account, including national, state, and regional workforce needs for lawyers; a need for the diversification of Texas legal profession; the current enrollment and capacity for larger enrollments at Texas law schools; and the opportunity for Texas students to attend law school in the state. WORKFORCE NEED Like many other professions, the legal profession has changed drastically in the last several years. It, too, is a casualty of the recession. Many large firms have lain off associates and even partners, while many others have delayed making offers to newly minted lawyers. As Thomas Morgan puts it in his 2010 The Vanishing American Lawyer, (M)any lawyers now have doubts about their economic future Over 4,000 lawyers some of them experienced partners have lost their positions at major American firms in Job offers to many 2009 law graduates have been deferred to a later, unspecified date. Law firm partners have tried to keep their own earnings steady, but as the chair of one firm put it, We can t beat the donkeys any harder. In short says another writer wryly, a law degree isn t necessarily a license to print money these days. These gloomy anecdotal accounts are borne out by the United States Department of Labor s Bureau of Labor Statistics. The Bureau of Labor Statistics currently projects that although there 6

12 will be a 13 percent growth in the number of jobs for lawyers between 2008 and 2018, Competition for job openings should continue to be keen because of the large number of students graduating from law school each year. 9 At the same time the number of students increases, demand is likely to decline for discretionary legal services such as planning estates, drafting wills, and handling real estate transactions due to do it yourself websites and publications that walk consumers through the steps to complete these basic legal services. Corporations are also less likely to litigate cases when declining sales and profits restrict their budgets, and growth in demand for lawyers will be constrained as businesses increasingly use large accounting firms and paralegals to perform some of the same functions that lawyers do. 10 As a result, much of the projected job growth will be concentrated in salaried jobs as businesses and all levels of government employ a growing number of staff attorneys. Fewer lucrative positions as associates or partners will be open, and more graduates will be forced to take lower-paying salaried positions at organizations other than legal firms and the public sector or even lower-paying contract positions. The Bureau of Labor Statistics also notes that the number of self-employed lawyers is expected to grow slowly, reflecting the difficulty of establishing a profitable new practice in the face of competition from larger, established law firms. And, although more lawyers may become involved in offering services as contract employees, the profitability of these services is small compared to the earnings that attorneys in independent practice or the corporate setting might make. The silver lining of this economy for the legal profession, however, is that during recessions, for example, individuals and corporations face other legal problems, such as bankruptcies, foreclosures, and divorces all requiring legal action. 11 The Bureau of Labor Statistics concludes with this projection: Graduates with superior academic records from highly regarded law schools will have the best job opportunities. Perhaps as a result of competition for attorney positions, lawyers are increasingly finding work in less traditional areas for which legal trainings is an asset, but not normally a requirement. As in the past, some graduates may have to accept positions outside of their field of interest or for which they feel overqualified. Some recent law school graduates who have been unable to find permanent positions are turning to the growing number of temporary staffing firms that place attorneys in short-term jobs. 12 The situation in Texas mirrors the national projections. The Texas Workforce Commission projects that there will be 54,400 lawyers employed in Texas by 2016, with annual estimated openings of 1,660. This reflects a 16.6 percent increase in the number of lawyers projected between 2006 and The State Bar of Texas reports that in 2007 there were 71,569 lawyers practicing in Texas while in 2010 there were 77,494, representing an increase of 5,925 attorneys (or a 12 percent increase), which is a slightly lower growth rate than Texas Workforce 9 Bureau of Labor Statistics, Lawyers, Occupational Outlook Handbook, , (accessed July 21, 2010). 10 Ibid. 11 Ibid. 12 Ibid. Because of the keen competition for jobs, a law graduate s geographic mobility and work experience are assuming greater importance. Willingness to relocate may be an advantage in getting a job, but to be licensed in another state, a lawyer may have to take an additional State Bar examination. In addition, employers increasingly are seeking graduates who have advanced law degrees and experience in a specialty such as tax, patent, or admiralty law. 7

13 Commission projections. 13 While this may appear to be healthy job growth, it is important to note that the population growth and resulting need for new lawyers across the state is not uniform. As Figure 2 shows, the projected need for lawyers varies greatly across the state, and the presence of a law school does not always correspond with a strong projected need for lawyers. 14 For example, in the case of the High Plains region which includes Texas Tech University s law school, the projected need for lawyers is relatively small, only 40 annual openings projected by the Texas Workforce Commission. Figure 2: Projected Annual Openings for Lawyers, Source: Texas Workforce Commission. Figure 3 shows the current number of lawyers per 100,000 Texans in the various regions of the state. These data show that the regions with the highest proportion of lawyers in Texas are larger urban areas, corresponding with the Texas Workforce Commission s projections that the regions that will have the highest population growth and, therefore, the greatest need for 13 The difference in Texas Workforce Commission numbers of lawyers and State Bar of Texas members is due to the fact State Bar membership includes everyone licensed to practice law in Texas, including out-of-state attorneys, judges, clerks, and other individuals who may have retained their license but are not currently practicing law. Texas Workforce Commission projections are only for those individuals projected to actively practice law. 14 Texas Workforce Commission, Future Job Growth by Occupation (Projections), Texas Labor Market Information: Tracer, (accessed on July 10, 2010). 8

14 lawyers in the immediate future are the large urban areas of the state where law schools already exist. Figure 3: Lawyers per 100,000 Population by Texas Region (2010) Without Bexar County: Sources: Lawyers: State Bar of Texas. Regional Population: Texas State Demographer. Texas Law Schools Texas ranks fourth among the 10 most populous states in terms of the number of law schools, with nine law schools compared to California s 20, New York s 15, and Florida s As Figure 1 shows, there are currently four public schools of law and five independent schools of law in Texas located in six cities. The establishment of a 10 th college of law to be located at the University of North Texas at Dallas was approved in 2009 by the 81st Texas Legislature. That school is not scheduled to accept students until the fall of 2012 at the earliest. There are large regions of Texas in which there is no law school. In fact, five of the state s 10 regions do not have a law school, including the Upper Rio Grande, West Texas, Upper East Texas, Southeast Texas, and Northwest Texas. Furthermore, the only law school in the South Texas region is a independent law school, St. Mary s University, located in San Antonio. Accessibility to a legal education can also be impacted by cost of attendance and available financial aid. Although the average tuition at Texas public law schools compares somewhat 15 American Bar Association 9

15 favorably to that of other states, it is still a significant expense at $19,159 per year. 16 Additionally, there is a significant difference in the average tuition charged at Texas public law schools and that charged at Texas independent law schools. The average tuition at Texas public law schools is $19,159 per year, whereas the average tuition at Texas independent law schools is $31,286 per year. 17 It is certainly possible for law students to offset some of the tuition costs through financial aid in the form of loans and grants, but grant aid may cover only a portion of the annual tuition costs. In 2009 the average grant award at public Texas law schools was $5,830, while at Texas independent law schools the average grant award was lower (despite the much higher tuition) at $5, Despite rising tuition costs, applications to law schools nationally still continue to rise and reached a high of 564,000 during the fall 2009 semester, representing 856,600 individual applicants. 19 Texas applications also remain high and greatly exceed the number of available seats for entering law school students, although duplicated Texas applications have dropped since 2004 (see Figure 4) ,000 25,000 Figure 4: Applications (Duplicated) to Texas Public and Independent Law Schools ,437 28,103 27,126 25,724 24,539 24,886 20,000 20,599 15,000 15,102 15,931 10,000 5, Source: Law School Admission Council (LSAC). 16 Law School Admission Council, 2011 Official Guide to ABA-Approved Law Schools, 2010, (accessed July 8, 2010). Average of tuition listed in each Texas law school s information sheet indexed on the site. 17 Ibid. 18 Ibid. 19 Law School Admissions Council, Data: LSAC Volume Summary, 2009, (accessed July 8, 2010). 20 Ibid. LSAC Duplicated applications refers to the total number of applications made to Texas law schools. Some applicants may very well have submitted applications to multiple law schools. Duplicated applications should not be confused with the number of actual applicants. 10

16 , ,774 1,768 2,019 2,131 2,003 1,892 1, ,170 2,091 1,948 1,977 2,357 2,377 2,396 2,275 3,057 2,999 3,374 3,652 4, ,788 3,659 4,029 4,879 5,275 6,095 The applicant growth at Texas institutions is not uniform, however; between 2000 and 2009 all nine Texas law schools experienced significant growth in the number of applications, ranging from 36 percent growth at The University of Texas at Austin to 127 percent growth at Texas Southern University. However, when application trends are looked at for the last two years worth of available data, , a very different trend emerges. During this period, four of the nine Texas law schools actually experienced decreases in applications while the remaining schools experienced only slight increases (see Figure 5). 21 This indicates a strong possibility that fewer students are currently interested in attending law school in Texas Figure 5: Application Trends in Texas Public and Independent Law Schools TSU TTU UH UT-Austin Baylor St. Mary's South TX SMU TX Wesleyan Source: Law School Admission Council (LSAC) Despite such large increases in applications between 2000 and 2009, the size of the first year entering class at Texas law schools has actually decreased at five of Texas nine law schools (see Figure 6). The largest decrease in entering class size occurred at Texas Tech University where in 2000 the first year law class was 269, but in 2009 it was only 186, a 31 percent decrease. There were also decreases in entering class size at Texas Southern University, The University of Texas at Austin, South Texas College of Law, and Texas Wesleyan University. The decreases ranged from 21 percent at South Texas College of Law to 4 percent at The University of Texas at Austin. During the same period that these institutions experienced decreases in their entering class enrollments, the remaining five law schools experienced anywhere from 21 Law School Admissions Council, 2011 Official Guide to ABA-Approved Law Schools. Texas numbers are drawn from each Texas law school s information sheet indexed on the site. 11

17 slight increases to more than doubling the size of the entering class. The smallest increase in the first year law class during this time period took place at the University of Houston which posted a 6 percent increase in entering class size, while the largest increase took place at St. Mary s University with an increase of 140 percent. 22 If 2000 enrollment levels had been maintained at Texas Southern University, Texas Tech University, The University of Texas at Austin, South Texas College of Law, and Texas Wesleyan University, an additional 227 students would have graduated in The number of graduates from Texas law schools has remained fairly stable during the last decade. In 2000 there were 2,296 graduates from Texas law schools. By 2009 the number had risen to only 2,340 graduates. Graduation numbers bottomed out in with only 2,015 graduates but then jumped to a decade high of 2,526 graduates the next fiscal year. Since , though, the number of graduates has declined. 24 An increase in the number of graduates in the next several years is anticipated, however, once the University of North Texas College of Law is established in Dallas, Texas. Figure 6: First-Year Entering Enrollment Trends in Texas Public and Independent Law Schools TSU TTU UH UT-Austin Baylor St. Mary's South TX SMU TX Wesleyan Average Source: Coordinating Board. Of final consideration when examining the status of current Texas law schools and the ability to meet the needs of Texas legal education is the issue of Bar entry. Although graduation from an American Bar Association accredited law school is necessary to be able to sit for the State of 22 Texas Higher Education Coordinating Board. 23 This calculation is based upon an attrition rate of 4 percent, the current attrition rate for Texas law schools. 24 Ibid. 12

18 Texas Bar Exam, it does not guarantee entry into the legal profession; candidates must still receive a passing grade on the Bar Exam. The performance of graduates from Texas law schools on the Texas State Bar Exam varies, although over 80 percent of examinees from the majority of schools pass the exam on their first try. Among public institutions, The University of Texas at Austin boasts the highest first time pass rate at percent, and Texas Southern University has the lowest pass rate at percent. Among independent institutions, Baylor University boasts the highest first time pass rate at percent and St. Mary s University the lowest at 83.6 percent. 25 Figure 7: Pass Rates of the Texas Bar Exam (2009) Institution Pass Rate Baylor University 94.96% St. Mary s University 83.60% South Texas University 86.84% Southern Methodist University 89.46% Texas Wesleyan University 84.16% Texas Southern University 66.05% Texas Tech University 93.37% University of Houston 91.29% The University of Texas at Austin 91.67% Average 87.35% Opportunity There are a number of issues that factor into determining whether sufficient opportunity for Texas students to attend law schools exists. These factors include the educational pipeline, number of seats available for entering students, regional interests, and the costs of tuition and fees at public institutions versus independent institutions. Admission to law school is highly competitive. However, almost all entering students graduate. Based upon the current 4 percent average attrition rate for Texas law students, 96 percent of the class of 2009 is expected to graduate. 25 Texas Board of Law Examiners, February 2009 Examination Statistics and July 2009 Examination Statistics, 2009, (accessed July 23, 2010). 13

19 Figure 8: Educational Pipeline to Obtaining a Law Degree in Texas ( ) 30,000 25,724 25,000 20,000 15,000 10,000 8,482 5,000 2,789 2,677 0 Applications (Duplicated) Offers of Admission (Duplicated) First -Year Entering Students Estimated Graduates in 2009 Sources: Applications (2006): Law School Admission Council. Offers of Admission (2006): ABA-LSAC Official Guide to ABA- Approved Law Schools, 2008 Edition. First-Year Entering Students ( ) and Estimated Graduates: Coordinating Board. Note: Degree estimate is based on an attrition rate of 4 percent, which is the current average attrition for Texas law students. Applications (Duplicated) Offers of Admission (Duplicated) First-Year Entering Students 2009 Texas Southern Unviersity 2, Texas Tech University 1, University of Houston 3, The University of Texas at Austin 5,275 1, Baylor University 3,659 1, St. Mary's University 1, South Texas College of Law 2, Southern Methodist University 2, Texas Wesleyan University 1, Total 24,886 7,390 2,700 Note: date was used for this analysis and reflects only full-time students. Although unduplicated numbers of applications and offers of admission are not available, it is clear from the duplicated numbers that there is a much greater number of duplicated applicants, over three times as many, than there are offers of admission. 14

20 Another factor that determines opportunity is the number of seats available for entering law school students. In 2009, Texas had 35 entering law school seats per 1,000 baccalaureate holders, a slight increase since Opportunity to attend law school in Texas compares favorably to other large states. Texas 35 seats per 1,000 baccalaureate holders is the second highest among the 10 most populous states, surpassed only by Pennsylvania s 45 seats. 26 This means that even though admission to a Texas law school is becoming more competitive, Texas students still have a richer opportunity to attend law school than students in other states. 60 Figure 9: Entering Law School Seats per 1,000 Baccalaureate Degrees California Florida Georgia Illinois Michican N. Carolina** New York Ohio Pennsylvania Texas Average*** * Sources: Seats-ABA-LSAC Offical Guide to ABA-Approved Law Schools, 2002 Edition and 2011 Edition; Baccalaureate Degrees- National Center for Education Statistics. *2009data include 2009 law school seats and baccalaureate graduates data were the most recent available through NCES. **North Carolina data for 2000 are not available. **Average is for the 10 most populous states. Because the number of projected law school seats has remained relatively stable, competition for entry into law school will increase in the future, however, as the number of baccalaureate graduates increase. Figure 10 indicates that by 2015 there will be an estimated 112,500 baccalaureate graduates with a little over 3,000 law school seats. This increased competition does not necessarily mean that a greater number of students will not have access to law school. A number of students may choose to go out of state for their legal education. Furthermore, the total number of available law school seats will increase with the opening of the University of North Texas College of Law. 26 Law School Admissions Council, 2011 Official Guide to ABA-Approved Law Schools. 15

21 Figure 10: Texas Baccalaureate Degrees, Law School Applications, and First-Year Entering Enrollments 120, , ,000 90,000 88, ,000*** 112,500*** 80,000 70,000 60,000 55,000 60,000 67,000 75,000 50,000 40,000 30,000 20,000 16,520 17,976 15,102 27,126 26,417 29,311 10, ,300 2,322 2,332 2,566 2,801 2,865 3, * 2010** 2015** Source: Coordinating Board. Baccalaureate Degrees Applications (Duplicated) First-Year Entering Enrollment *First-Year Entering Enrollment data from 2006 were used rather than data from 2005, because 2005 data were not available from all institutions. ** Projected: See Appendix 2 for the methodology used to make projections. ***Closing the Gaps targets for baccalaureate degrees. Another aspect of opportunity that should be taken into consideration is regional interest and potential student demand which is discussed in greater detail in the section of the report entitled The Development and Costs of New Law Schools. Of final consideration in determining opportunity is the cost of a legal education in Texas. There is a considerable difference in the affordability of a public law school versus a independent law school. At the national level, the Association of American Law Schools reports that the nationwide median debt incurred is $54,509 for a public law school education and $83,181 for an independent law school education. 27 This is certainly the case in Texas. Independent law school tuition in Texas is 63 percent more expensive than public law school tuition in , but independent law schools also have 32 percent more funds available for grants. After the average amounts of financial aid and scholarships for both independent and public schools are taken into consideration, Texas independent law schools are approximately 61 percent more expensive than the public law schools (see Figure 11). 27 Nancy H. Rogers, President s Message: Preserving the Route to Public Service Careers, Association of American Law Schools (April 2007), (accessed July 25, 2010). 16

22 $35,000 Figure 11: Average Tuition at Texas Public and Independent Law Schools $30,000 $25,000 $20,000 $15, $10,000 $5,000 $0 Average Public Average Independent Source: Law School Admission Council (LSAC). John O. Sonsteng s recent work A Legal Education Renaissance: A Practical Approach for the Twenty-First Century puts the impact of high tuition and fee costs into perspective. According to Sonsteng, From 1995 to 2005 public law school in-state tuition rose 58 percent (from $5,530 to $13,145), public out-of-state tuition rose 49 percent (from $11,683 to $22,897) and independent law school tuition rose 42 percent (from $16,798 to $28,900). As a result, the annual amount borrowed by law students rose to $2.55 billion in This indicates a doubling of the average debt of law school graduates between 2003 and Special Issues In addition to reviewing workforce need, potential student demand, and opportunity to attend law school, several other factors need to be considered in order to determine the need for additional public law schools in Texas: hiring trends, under-represented groups in the legal workforce, development and cost of new law schools, and alternatives to starting new law schools. 28 John O. Sonsteng and others. A Legal Education Renaissance: A Practical Approach for the Twenty-First Century, (Lake Mary, FL: Vandeplas Publishing, 2008), Ibid,

23 Hiring Trends The legal profession has experienced a shift in hiring trends over the last several years. Although some emerging forces will increase demand for lawyers with specializations in health care, intellectual property, venture capital, energy, elder, antitrust, and environmental law, many other traditional legal positions will be eliminated as firms look for ways to eliminate costs and show growing enthusiasm for staffing alternatives, such as using non-lawyers or contract lawyers for certain services. 30 Contract attorneys are often recent graduates who accept this work at greatly reduced rates while looking for more permanent and steady full-time jobs. Furthermore, 2009 graduates reported that nearly 2.5 percent of their jobs were temporary, and between 3,200 and 3,700 graduates had deferred start dates beyond December 1, A number of other forces are also expected to decrease demand for legal services, such as businesses increasing their use of paralegals and accountants for services once performed by lawyers, the availability of software packages and websites for do-it-yourself legal documents such as wills and contracts, the globalization of financial and legal markets, and new efficiency models adopted at many firms. The effect of these factors on the overall national job market for lawyers is difficult to accurately predict. According to the most recent projections from the U.S. Department of Labor, from 2008 to 2018 the employment of lawyers is expected to grow at 11 percent, which is about average for all occupations during that decade. 32 In Texas, the outlook is a bit better with an anticipated increase of 16.6 percent between 2006 and 2016, but the anticipated number of annual openings is still exceeded by the annual number of law school graduates. 33 During economic downturns, the trend has been for applications to law schools to increase while hiring of new lawyers decreases. However, according to the National Association for Law Placement although 88.3 percent of 2009 law school graduates reported being employed, this still represented a 3.6 percent drop from 2007 s 91.9 percent employment high. While the job placement numbers at law schools often look impressive, there is no way to determine how many of these jobs actually require use of a law degree. The U.S. Department of Labor Occupational Outlook Handbook, Edition predicts that because of keen competition for attorney positions, recent law graduates will increasingly find work in nonprofit organizations, social work, business, education, banking, insurance, real estate, writing, and government at all levels. And although the American Bar Foundation estimates that a little over 60 percent of United States lawyers are engaged in independent practice, it estimates that a great many of the 40 percent who are not engaged in independent practice work for organizations, or for themselves, in enterprises where licensure or even law school graduation is not a prerequisite Debra Cassens Weiss, Law Firms Express Growing Enthusiasm for Contract Lawyers, ABA Journal, July 23, 2010, ats_sh/ (accessed August 5, 2010). 31 National Association for Law Placement, Market for Law Graduates Changes with Recession: Class of 2009 Faced New Challenges, NALP, July 22, 2010, (accessed August 5, 2010). 32 Bureau of Labor Statistics, Lawyers, Occupational Outlook Handbook, Edition, (accessed August 6, 2010). 33 Texas Workforce Commission, Labor Market Information: Tracer (accessed July 10, 2010). 34 Gary A. Munneke, William D. Henslee, and Ellen Wayne. Nonlegal Careers for Lawyers, 5 th edition, (Chicago: American Bar Association, 2006), 3. 18

24 Also of note is that for those lawyers who are in salaried positions, that growth will be concentrated in urban areas where government agencies, law firms, and large corporations are found. The number of self-employed lawyers, the kind most likely to practice in rural communities, are expected to show slower growth due to competition from larger, established law firms. 35 The growing complexity of law, according to the Department of Labor, favors the resources of the larger firms. Thus, new attorneys are most likely to settle in urban areas, regardless of where they attended law school. Under-represented Groups in the Legal Workforce One of the most prevalent arguments for the creation of another public law school in Texas is that there is a greater need for lawyers who more accurately reflect the demographic make-up of Texas. As Figure 14 indicates, the current pool of Texas lawyers is out of sync with the Texas population. According to the State Bar of Texas 2008 State Bar of Texas Membership: Attorney Statistical Profile, 84 percent of all Texas attorneys are White, while only 4 percent are African American and only 7 percent Hispanic. Law is also still a predominately male profession in Texas: 68 percent of all licensed Texas attorneys are men. 36 This is significantly out of proportion with the larger Texas population where in percent of Texans were White, 12 percent were African American, and 37 percent were Hispanic, while 49.9 percent of all Texans are women. 37 The American Bar Association s Presidential Initiative Commission on Diversity reported in its 2010 study that The legal profession is less racially diverse than most other professions and racial diversity has slowed considerably since Furthermore, according to the American Bar Association (ABA), the diversity that has been achieved is largely present in the lower ranks of firms while diversity remains thin in the higher ranks of law firm managing and equity partners, general counsels, state or federal appellate judges, and tenured law professors. 38 In fact, the National Association of Law Placement reported that in 2009 only 1.7 percent of law firm partners were African American, while only 1.7 percent were Hispanic and only 19.2 percent where female. 39 Data for law firm associates during this period showed more diversity, though still far from proportional: 4.7 percent of associates were African American, 3.9 percent were Hispanic, and 45.7 percent were female. 40 Although data are only available for the Austin, Dallas, and Houston metropolitan areas, a very similar trend exists for both law firm associates and partners. 35 Bureau of Labor Statistics, Lawyers. 36 State Bar of Texas, State Bar of Texas Membership: Attorney Statistical Profile ( ), State Bar of Texas, (accessed July 11, 2010). 37 Texas State Data Center and the Office of the State Demographer, Texas Population Projection Program, Estimates of the Population by Age, Sex, and Race/Ethnicity for July 1, 2008 for State of Texas, 2008, (accessed July 10, 2010). 38 American Bar Association, Diversity in the Legal Profession: The Next Steps. (ABA Presidential Initiative Commission on Diversity, 2010), National Association for Law Placement, Women and Minorities in Law Firms by Race and Ethnicity, NALP Bulletin, January 10, 2010, (accessed on July 14, 2010). 40 National Association for Law Placement, Law Firm Diversity Demographics Show Little Change, Despite Economic Downturn, NALP Bulletin, October 21, 2009, (accessed on July 21, 2010). 19

25 90% Figure 12: Texas Lawyers in Relation to Texas Population ( ) 80% 70% 60% 50% 40% Texas Lawyers ( ) Texas Population (2008) 30% 20% 10% 0% White African American Hispanic Asian/Other* Sources: Lawyers: State Bar of Texas. Population: Texas State Demographer. Figure 13: Associates at Texas Firms (2009) 41 White African Hispanic Asian Women Men American Austin 84.9% 3.4% 9.0% 2.7% 43.4% 56.6% Dallas 85.7% 4.9% 5.1% 4.4% 40.8% 59.2% Houston 81.4% 5.8% 6.1% 6.7% 42.7% 57.3% Figure 14: Partners at Texas Firms (2009) 42 White African Hispanic Asian Women Men American Austin 91.3% 2.3% 5.0% 1.5% 24.1% 75.0% Dallas 94.7% 1.2% 2.6% 1.4% 17.8% 82.2% Houston 93.5% 2.1% 3.0% 1.5% 17.0% 83.0% 41 National Association for Law Placement, Women and Minorities in Law Firms by Race and Ethnicity. 42 National Association for Law Placement, Law Firm Diversity Demographics Show Little Change, Despite Economic Downturn. 20