In the US, the number of law school applicants shows a decreasing trend. According to the Law School Admission Council (LSAC), the number of applicants in the 2014 fall semester is 51,570 as of April 7th, 2014, compared to 78,500 in 2011, 67,900 in 2012 and 59,426 in 2013. This decrease can be partly attributed to the serious consideration given by students regarding a job shortage for the legal profession after the Lehman shock and subprime crisis. For comparison, the period 2001-2003, which was marked by the Enron scandal and subsequent legislation of the Sarbanes-Oxley Act, shows that the number of applicants was 100,000 on average. It is said that students who previously enrolled in business school or accounting school expected a career in the legal profession.
In Japan, in a similar fashion, the number of applicants for 2014 is 11,450, compared to 18,446 in 2012 and 13,924 in 2013. The peak number of applicants was 72,800 in 2004, the year when the new law school system was started. However, the downward phase has come rapidly. It is obvious that students were discouraged by the lower passage rate of the national bar exam, as well as the job shortage at law firms which awaited successful examinees.
After the Lehman shock and subprime crisis in the US, many law firms have become keen on cutting the jobs of young lawyers and staff. It is reported, in 2011 data, that only 55% of law school graduates found a full-time job that requires a bar license. Some students who failed to find a full-time job as expected took a class action against their law school because the defendant law school provided misleading information on job opportunities as too optimistic. Plaintiff students claimed that correct information would have prevented financial upheaval due to student loan debts for tuition.
In Japan, the Japan Association of Law Schools conducted a survey in 2013 to investigate the career path of law school graduates. The Association received answers from 57 of the 67 law schools which were surveyed. The total number of graduates from the responding schools was 25,926, of which 11,922 passed the national bar examination. 6,396 of graduates who passed the bar examination registered in the bar. The remaining 9,893 of 25,926 graduates are categorized as “Unknown.”
In response to the recession since the Lehman shock and subprime crisis, the legal market is rapidly shrinking and job opportunities for law students are disappearing at a drastic rate. A full-time job as a legal profession is critically vital to students with an average student loan debt of $120,000 at the time of graduating from law school. This debt is not discharged in the bankruptcy rule.
Economic downturn has a serious impact on corporate legal practice. This impact is particularly severe when a sophisticated corporate client does not need legal service for stylized documentation, thus leading to cost-cutting for the respective amount of such services. Upon receiving a request for cost-cutting from a corporate client, many law firms become keen on out-sourcing and the use of information technology for stylized documentation. The more those law firms implement cost-cutting and out-sourcing, the fewer job opportunities that exist for law students.
In Japan, debate on the population of the legal profession reflects shrinkage of the market in the same fashion as in the US, where the legal market does not demand a legal professional who completed a JD course at law school.
In addition to market shrinkage caused by economic recession, a certain degree of failure in institutional design can be observed for the new law school system in Japan.
On June 9th, 2014, deans of six law schools delivered to Mr. Tanigaki of the Ministry of Justice an urgent proposal for reform of “preliminary examination” for the national bar exam. The proposal points out that the number of applicants for preliminary examinations who ultimately passed the bar exam has increased rapidly. Indeed, not only undergraduate students but also current JD students tend to focus on the preliminary examination in disregard of learning at law school. In this case, many would-be users of law school avoid the learning process at law school, thus providing evidence to show that institutional design of the law school system based on the US model was a failure.
The structure of institutional complementarities can apply to the legal system including legal education and nurturing professional lawyers. The legal system in a particular country has originated endogenously, formed and developed from a historical, cultural and social perspective. Thus, in the case of designing a new system, it is required to apply the concept of institutional complementarities to analyze possible impact of the new system on other systems, assuming the current system and possible correlation among those systems in an endogenous institution. Without such cautious thinking, the result would be a negative “transplant” effect. In Korea, for example, the government now requires university who plan to establish a new law school to discontinue the undergraduate legal education, and has decided to introduce the “unified bar” system by 2020. This method of transplanting the US model is a useful reference for discussion on the current law school system in Japan.
ABA approval standards for law school that require three-year JD courses, curriculum with academic subjects, relaxing a professor’s teaching-road, etc., Tamanaha says, are mismatched with the fundamental changes in the legal market. He proposes to set up a new training institution, instead of law school, with two-year education for professional skills after three-year undergraduate courses. The cost of the institution must be reasonable. He also stresses that the institution offers practical training through apprenticeships, not through in-school clinical programs. He notes that such in-school programs are artificial and not useful in equipping students with real professional skills.
In Japan, the rapid transition of an aging society and globalization will create diversified and variable interests among those members of society. In case a conflict between members of the society happens to occur, a lawyer who commits to the dispute must be required to acquire interdisciplinary integrity and professional skills for problem-solving as in the US. Referring to Tamanaha’s thoughts, I will now try to illustrate a prospective design for a new legal education system that would suit our endogenous institution.
A new College of Law or Inn of Court: this educational institution is to focus on practical training by a senior practicing lawyer through an apprenticeship. The Carnegie Report 2007 insists that apprenticeship is the best pedagogy for training a member of a professional body like the bar. Regardless of whether or not this institution is called a “law school,” the size and management would be similar to past organizations like Middle Temple or the current “College of Law” in the UK.
Eligible Students: Students are required to have two undergraduate degrees: a law degree (LL.B) and non-law degree (Bachelor of Arts, etc). Even under the current University system, students have an opportunity to learn interdisciplinary integrity. In Australia, for example, many universities offer “dual degree programs” under which students can earn two Bachelors degrees in five years.
Practical Training: After one-year courses for professional skills, students are entitled to register as a trainee solicitor or pupil barrister. She/he can’t represent a client by himself/herself alone, but can provide legal service only with a senior lawyer. After a two-year practical training period at a law firm, she/he can register to the bar as an independent lawyer with a letter of recommendation by a senior partner of the firm. This framework is already in effect in Hong Kong.
By looking at the existing framework in foreign jurisdictions, particularly those with common law culture, the above ideas could be incorporated into Japan with considerable thoughts on the structure of institutional complementarities in legal system. It is true, however, that when reviewing a decade of history as portrayed by “Houka Daigakuin,” no one is capable of predicting the workings of a newly designed institution. With its long tradition as “English Law School” and high prestige in producing a number of practicing lawyers, Chuo University must actively contribute to debate on how to improve “Falling Law School” through a comparative perspective and collaboration with many colleagues in every jurisdiction that shares the same concerns about legal education.