On Drexel Law's two-year J.D. program

So Drexel University is launching a new two-year J.D. program. Usually, it takes three years to get a law degree in the U.S. Six of the 200-odd American law schools offer a two-year path; Drexel's first two-year grads will start in 2014. It seems like a good deal -- you don't have to get loans for a third year of living expenses, and you can get a job one year more quickly -- but I did the math and found that it's an even better deal for Drexel, where I earned my law degree with the inaugural class in 2009. From e-mail I sent to a fellow alumnus:

I think the premise is that Drexel's two-year J.D. program addresses the assertion that the third year of a J.D. program isn't necessary. That is, a person should get their two years done (some even say only one year), be awarded a J.D., and then get experience through an internship or apprenticeship, and then sit for the bar. But a two-year J.D. doesn't address that problem, because you still need all the credits of a three-year program. That issue won't be fixed until the A.B.A. and/or state supreme courts allow a two-years-plus-apprenticeship path to attorney licensure.

Until then, the law schools with two-year J.D.'s reap the rewards of graduating three classes, instead of just two, every six years. Notice that Drexel's two-year J.D. will still cost almost $112,000 in tuition, because it's the same 85 credits as the three-year J.D. (85 credits x $1,315/credit). Yes, the candidates save a year's living expenses and the opportunity cost of being unemployed that third year. But the real answer to cui bono? is the law school. The Class of 2015 (three-year program) is 140 students. If 140 get past the no-refund point in their third year (minus a few for attrition and transfers out, plus a few for transfers in), then that's over $15 million in tuition and fees, or $5 million/year. If one class of a two-year J.D. program is 1/3 the size of a regular three-year program, then a law school gets $5 million every two years, or about $2.5 million every year. But note that that's not 1/3 the amount they get from one year of a three-year program; it's 1/2. Drexel's bottom line is that they gain half a class's worth of tuition every year by adding this program.

Note: here's where I have to Emily Litella a little bit. Dean Dennis explains that the law school will keep its "current class size of about 130 students, but with a quarter of them enrolled in the new program." However, when I did the math before, I started with the assumption that the two-year students would be in addition to the full classes of three-year students. Rather, they will be a sub-set of the incoming class. To re-do the math, this means that every year once the program is fully implemented, about 33 students will be paying half their $112,000 total tuition, while about 97 students will be paying one third of their $112,000 total. Every year, this means (33 x $112,000 * 1/2) + (97 x $112,000 * 1/3), or ($1.848 million) + ($3.621 million), or $5.469 million/yr. Without a two-year program, all 130 students simply pay one third of their $112,000 total tuition: 130 * $112,000 * 1/3, or $4.853 million/yr. Each year, the school takes in $616,000 more in tuition per class -- it's like growing the class by some 15 students while adding zero bodies to the student body. You can hire at least four law professors with that kind of change.

To [one colleague's] point, I'm a little concerned about the loss of value in Drexel's J.D. brand. It appears to me that the two-year J.D. is not a trend among top-tier schools (except for Northwestern), even though it's probably inevitable in the very long run. I think the lowered prestige in a Drexel J.D. is a big risk for the school, and not a good deal for the graduates. But Drexel must have done the math and decided that there is a sufficient financial advantage for Drexel to be on the vanguard of this type of program.

As I concluded to my fellow alumnus, there's a huge reason why I'm certain this is all about the benjamins for Drexel, and not about the students or the profession, which is super-saturated and unable to employ new graduates. Drexel isn't offering a night or part-time program, which would increase enrollment of "students who are a little bit older," as Dean Dennis says. But since a night program takes longer than a three-year program, it doesn't infuse the school with extra cash up front the way an accelerated program does.

My fellow alumnus wondered if there were any other industry that responds to decreased demand by increasing supply. My answer: one where an invisible hand brings it an extra $616,000 every year.