Macroeconomics Comes to Law Schools

From The Road to Tok, Tom Sadowski, Jimmie Froelich and Jeff Brown

From On the Road to Tok, Tom Sadowski, Jimmie Froelich and Jeff Brown

You have to pass a test called a bar examination to practice as a lawyer. In 28 states, that means taking a brutal 200-question test called the Multistate Bar Examination, the MBE. The scores on the MBE have been dropping, and more lawyers failing their state’s bar exams for three years in a row now. Law school deans and bar associations across America are in a tizzy.1

WC appreciates that most Americans and many of WC’s readers regard lawyers as a deplorable form of pond scum and could care less if tests are getting harder or law school graduates are getting dumber. But like it or not, lawyers are the grease that helps reduce the friction in our society. If the sand of stupidity is getting into that grease, you should be concerned. And it also offers a nice illustration of macroeconomics.

Here’s the problem: law school graduates can’t pass the Multi-State Bar Examination, the MBE. The American Bar Association Journal reports the mean test score on the February administration of the MBE fell significantly for the fourth consecutive time, down 1.2 points from 2015 to a dismal 135—its lowest score since 1983. That followed  an even bigger drop on the July 2015 exam of 1.6 points from July 2014. And before that the average MBE score on the test fell from 144.3 in 2013 to 141.5 in 2014. By objective measures, the test isn’t getting any harder.

So what’s going on?

Beginning in 2011, the market for freshly graduated law students started to dry up. Law schools had an increasingly hard placing their graduates at decent-paying jobs. That was especially problematic because law school has gotten increasingly expensive, meaning that law students graduate with a lot of student loan debt. 2011 was also the year that the ABA Section of Legal Education and Admissions to the Bar began requiring schools to disclose more detailed, meaningful and honest about law graduate employment outcomes. Brighter potential law students saw the problem, and chose another career path. The number of law school applicants shrank, especially top-end applicants, and continues to shrink. Law schools had to dip deeper into the application pool, accepting those with lower GPAs and lower Law School Aptitude Test scores.

Students with lower aptitude; three years later lower pass rates on the MBE. Sure looks like elementary supply/demand macroeconomics to WC.

There are dissenters. Law school deans seem to blame the MBE. Apparently the idea that one of their graduates, with $100,000 or more in student loan debt, might not even be able to get a job, let alone one that would allow him or her to repay the debt and eat, too, could possibly be a factor.

It’s bad news for folks needing legal advice. It’s bad news for law schools. And it’s a classic example of macroeconomics.


  1. WC thanks his buddy JJT for the background on this blog post. 

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