Theodore Seto (Loyola-L.A.) responds to Sunday’s post, NY Times: Law School Economics — Ka-Ching!:

Jonathan McCarthy, of the Federal Reserve Bank of New York, has posted a new study on demand for discretionary services during and after the recent crash. Discretionary services include education — e.g., what we sell. He notes that demand fell 7% during the crash, far more than in other recessions, and that demand for discretionary services has yet to begin to rebound. In this regard, demand for discretionary services has behaved quite differently from demand for other services.

If Dr. McCarthy’s analysis is correct, the current demand problem law schools face is not limited to legal education. Indeed, it is not even limited to education. This does not mean that legal education is correctly priced or that our current problems are necessarily temporary; it may be that the crash was merely the trigger for correction of problems long in the making. But it does mean that current measures of demand are not likely to be reliable indicators of long-term prospects.