Transfers, US News Gaming, and Brand Dilution

Entering credentials of transfer students are irrelevant to U.S. News ranking calculations.  As a result, many have speculated that transfers are fertile ground for U.S. News gaming.  This post examines data on 2L transfers, which the ABA recently collected and released in the 2008 Official Guide.  In short, there are a lot of transfers, particularly to schools with high U.S. News rankings.  Here the breakdown by US News Tier:

USNWR '07            Net Transfers 
    Tier 1                                +694
    Tier 2                                +223
    Tier 3                                 -114
    Tier 4                                 -739

Why am I posting on transfer students?  That is an important subtext.  During a recent conversation, hiring partners at one of the nation's largest and most prestigious firms (biglaw X) complained to me that they were running across a lot of transfer students at elite law school Y (where pre-screening is not permitted) with nondistinguished 1L records from Tier 2 or 3 schools.  As a follow-up to our conversation, I crunched the numbers from the 2008 Official Guide.

But the more salient issue is how firm X responded in the absence of hard data.  Because the transfer students could not meet the grade cutoff for an interview at their old school, (a) they did not receive a callback, (b) firm X wasted 30 minutes x 2 lawyers for each incident, and (c) a perception took root that elite law school Y was diluting its product through an unprincipled transfer policy designed to "sell" 2L admission at full tuition price in order to constrict and subsidize a smaller crop of 1L students with higher LSAT scores--and through the process, increase its US News ranking.  The hiring partners had a clear, unflinching grasp of the underlying dynamics.  Did administrators at law school Y really believe that no one would notice?

In our Student Quality as Measured by LSAT Scores study, Andy Morriss and I theorized that a heavy intake of transfer students was likely the preferred gaming strategy of high ranked schools (lower ranked schools, in contrast, relied upon part-time programs).  For schools who were in the U.S. News first quartile in 1992, constriction of the 1L full-time class over the next 12 years was associated with larger gains in median LSAT scores.  (At the time, we lacked the data on transfers, which we thought would reveal a revenue-neutral strategy that worked in lockstep with 1L constriction.)

But here are the difficult institutional questions: 

• Reputation.  Is a slight increase in median 1L LSAT scores worth the damage to a law school reputation among employers?   Arguably law school Y's biggest mistake was taking all comers rather than building a larger pool of transfer applicants.  Apparently, some Tier 1 and 2 law schools actively solicit transfer applicants and thus can be more selective.  Over time, this could easily evolve into a second, substantial admissions process.
• Payoffs to the school.  Although students and faculty may be jubilant over a bump in the rankings from #14 to #12, or #22 to #19, are more opportunities thereby available to graduates, especially if the gaming strategy is being flagged by key employers? 
• Payoffs to transfer students.  And what about the students with nondistinguished records from lower ranked schools who incurred huge debt for a elite credential in order to subsidize a high LSAT 1L--are these transfer students, with a paucity of callbacks and no 1L peer relationships, clearly better off?  See 2005 LSSSE Report (showing heightened social isolation for transfer students)
  
• Externalities on legal education.  Can we all agree that any underlying increase in U.S. News rank has zero substance?  If so, should the ABA crack down on law schools that divert a lot of resources toward recruiting 2L students for no other purpose than boosting entering credentials of 1Ls?

Without further ado, here is the graph for transfers (Tiers 1-2), ordered by 2007 U.S. News rankings and normalized as a percentage of each school's graduating class [click-on to enlarge].  In Tier 1, Georgetown (+14%) and Washington University (+18%) have the largest net inflow of transfer students.  In Tier 2, the big net gainers are Florida State (+20%) and Rutgers-Camden (+16%).  The graph for Tiers 3-4,  in many respects the mirror opposite of Tiers 1-2, is after the jump.

Here is the chart for Tiers 3 and 4.  The biggest net outflows are from Thomas Cooley (Tier 4, -28%), Valparaiso (Tier 4, -18%), and Whittier (Tier 4, -17%). 

Comments

[Corey]

"may be diluting their brand and not giving the underqualified transfer students a leg up"

First, I think you are correct about the motivations of the transfer-admitting schools. I have a critique on a side point:

You seem to take for granted that the hiring partners were correct to shy away from "underqualified" transfer students after discovering that their 1L year wasn't perfect.

It is at least possible that some personal or professional issue during their 1L year is both what motivated the transfer and hurt their 1L performance.

Are B+/A-'s in 1L year at a mid-range school really so horrible that hiring partners should discount everything learned during 2 subsequent years at Georgetown? (or wherever we are trying not to insult by mentioning) Either top schools offer superior educational opportunities or they don't. If they do, then those hiring partners should have focused on whether or not the student in question had benefitted from the opportunities at Georgetown. That is a question that may not be amenable to an empirical proxy answer.

I personally don't think that top tier school "product" is so pure and magical that it cannot be wasted on anyone not selected for such blessing at birth. I dislike grade cutoffs to begin with, preferring holistic evaluations, but I find it even more disturbing that partners would enforce a mid-range school grade cutoff on transfers now at a top school. How exactly are people meant to advance above their assigned station in the face of that mindset?

I know from experience that one can pull an LSAT that would be above the median at top schools and be denied admission because of B's in an undergraduate engineering program a decade earlier. I also know from experience that remaining loyal to one's friendly mid-range school through three years of A's will block out most boutique firms, judges, and teaching jobs, for whom the first cut is not on grades but US News rank. It is almost funny that whether or not I got a clerkship last year depended more on a decision to tread water in Advanced Semiconductor Physics class in 1995 than on aceing law school.

I cannot retroactively transfer my degree to a school that lies above the US News cutoff for the academic legal practice I believe I was meant for, and thus will continue to chart my own course. However, my experience leads me to a strong appreciation for the potential hierarchy-busting effects of transfers, no matter what motivates schools to undertake them.

[William Henderson]

Transfer Student,

You are overgeneralizing from your own experience. Nothing you said undermines anything in my post.

My primary empirical observation is that transfers are on the rise because they offer a revenue neutral way for a law school to boost its 1L credentials for US News purposes. The baseline has always been that students with strong 1L records had a good chance at obtaining admission as transfer students.

But when a law school needs to admit a lot of transfer students to make up for lost revenues from a smaller 1L class, a school may be tempted to loosen its standards because (a) the underlying credentials have no effect on US News rankings, and (b) transfer students often require very little financial aid. Indeed, some law schools explicitly state that transfer students are ineligible for grant financial aid. For example, look at the admissions website for Washington University.

Now, with that hypothesis in place, consider the variation in the orange bars on the first chart. Obviously, some elite law schools admit a small number of transfer students; others admit a much larger percentage of their total graduating class. Perhaps the variation is partially explained by law schools that apply rigorous versus liberal admissions standards for transfer students. The variations in the first graph are too extreme to be a likely product of a single, high admissions standard for transfers, or de minimis recruitment efforts by all schools.

Presumably you were admitted to a school with a rigorous transfer policy. That is one data point. But another is School Y, mentioned in the original post, which, in fact, has a very long orange bar. Perhaps Y is using transfer students to boost its US News 1L credentials in a revenue neutral way. Because Firm X has encountered several transfer students from School Y with nondistinguished records from Tier 2 and 3 school, they drew this very inference without talking to me or reviewing ABA data. Firm X is a large repeat player. It is well-positioned to notice a change in school's policies.

Finally, Andy Morriss and I have regression results covering a 12-year period which are consistent with strategy of shrinking a 1L class and taking on more transfer students. At the recent plenary Rankings session of the AALS annual meeting, we witnessed several law school administrators who expressed outrage at the rampant solicitation of 1L transfer applications by several aggressive law schools.

Thus, what assumptions do I need to rethink?

This post is not a commentary on transfer students. Rather, it is about systemic changes in admission policies driven by a misguided emphasis on US New rankings. Transferring is not costless, see LSSSE data, yet this option is resorted to by more students because several elite schools have shrunk their entering classes.

A better solution is admitting more students (roughly the number you hope to graduate) through whole person review--i.e., the process upheld by the Supreme Court in Grutter. The idea of admitting high performing transfer students--at least enough to replenish transfer out or other attrition--is a old one, which I favor.

[Transfer Student]

Why do you assume that students with "nondistinguished records" were able to transfer to higher ranked schools? I had an extremely, extremely distinguished record at my 1L school and that is why I was able to transfer to a top school. All of the students in my transfer class, as far as I knew, had somewhat similar records. Transferring is very difficult, so schools can be extremely selective in transfer admissions.

And as for success in interviews, I and most or all of my fellow transfer students did quite well. Some of us went on to clerk for 2nd Cir. and 9th Cir. judges and now populate the most prestigious firms.

Perhaps you should reevaluate some of the assumptions underlying your argument.

[Bill Henderson]

Anon,

You raise some excellent points. Indeed, outside the first tier, our data show heightened cost sensitivity of students. So FSU and Rutgers-Camden could be very much in demand in the transfer market. Of course, the magnitude of the net transfers (20% and 16%) is pretty large. Rutgers-Newark, which is one spot lower in USNWR, had net transfers of +1.0%. And Seton Hall (net 0.0%) is located in Newark.

And yes, it probably is cheaper to educate 2Ls and 3Ls than 1Ls. So the patterns definitely could be affected, or in response to, shrinking state subsidies. bh.

[Anon]

You might consider whether there is a difference between public and private schools on transfers (both in and out). For example, you would expect a public school like Florida State or Rutgers-Camden to get vastly more transfer applications than roughly comparable private schools because of the tuition advantage for in-state residents (e.g., FSU gets Stetson transfers, Rutgers-Newark gets Seton Hall transfers, and Rutgers-Camden might get Villanova or Weidner transfers). Even students at comparable private schools might attempt to transfer in to public schools because of the tuition break, which could mean that these are equivalent or better students than FSU admitted as 1Ls. Thus, public schools might admit more transfers because they have a better and deeper pool.

Also, you might consider an alternative hypothesis, which is that some schools (primarily public) are bumping up transfer admits for financial reasons. For public schools, the declining state subsidy means that the overall number of students in the school must rise (a similar effect may be true for private schools because of spiraling costs). Admitting larger 1L classes, though, has additional costs that do not appear for transfer students. For example, you need more legal writing class sections or you need more professors to teach small sections of 1L courses. By contrast, extra 2Ls do not require adding new sections of classes. They can typically be accommodated by maximizing seat capacity in large sections of classes or by simply maximizing overall seat utilization in all classes. Thus, transfers are a more cost-effective way of maximizing tuition revenue.

[Bill Henderson]

Re Michael's comment: "If you want to prove sinister intent, then it might work better to look at percentage growth in total class size from 1L to 2L."

Statistics of the sort available don't "prove" anything. This is observational data. I am looking at patterns consistent with a hypothesis.

To that point, percentage of graduating students who are net transfers (i.e. after replacing the 1L's that transferred out) shows growth in the size of a 1L versus a 2L class. All of the orange bars to the right of zero show gains in 2L classes over the 1L class size. The stats above are responsive to the very point you raise.

To my mind, the interesting thing about the charts is not their direction (that highly ranked schools gain and low ranked schools lose) but the magnitude: Many schools at the top have transfers well in excess of replacement (i.e., net transfers = 0).

[Eileen Braman]

More Random thoughts

First, given my excellent spelling and grammar skills (evidenced in my last post) it is no suprise Fordham passed on my first application...

Second, lots of law students leave law school for various reasons in their first year (its not for them, ex.) so I'm not sure the transfers are "taking spots" from anyone -- again not withstanding my own experience.

Third, I really don't mind if potential employers feel a bit "put off" if students that can do the work are getting admitted to schools at a later point in the process. Especially if the initial criteria are not sufficiently identifying their capacities to succeed in the program. Statistics up top show THESE STUDENTS GRADUATE -- worrying about whether interviewers feel "deceived" by having to talk to them for a half an hour is putting our emphasis in the wrong place.

Again I am just one person and others may disagree but I guess that's part of the reasons there have been strong reactions to this post.

[Michael]

The breakdown of net transfers by tier, and the shape of the distribution by ordinal rank, seem unsurprising given the positional nature of the list. Students will have progressively less incentive and fewer options for transferring out, the further we look up the rankings.

The top schools, after all, can hardly avoid a high number of "net transfers," if they accept any transfers at all. What students would leave these schools, other than those with personal issues that compel a lateral or downward transfer (as noted by one of the posts above)? Likewise, schools at the bottom have nowhere to draw from, so can not avoid having negative net transfers.

If you want to prove sinister intent, then it might work better to look at percentage growth in total class size from 1L to 2L. If you can show consistent higher growth (or lower shrinkage) from 1L to 2L at certain schools, then this might support the argument that some schools deliberately constrict their 1L class size, making up the difference with higher tuition and transfers.

Looking at growth or shrinkage in class size would account for the sum of effects of transfers in and out, along with attrition, which otherwise seem to introduce too much noise into the data. As suggested above, schools with a high intake of transfers may just be trying to deal with high attrition. Or they may be pursuing some other goal. The net effect on total class size would reveal the difference.

[Eileen Braman]

point taken Bill -- and by the way I was denied admission when I applied to Fordham as an undergrad eventhough I was admitted as a tranfer -- so my andotal experience may provide as much evidence for your theory as it detracts from it (in the sense that it is not all "payoffs" and roses for the transferees.

[Bill Henderson]

Eileen (and all other transfer students who are not the subject of this post),

I am talking about what I think is an increasing trend: law schools admitting fewer 1Ls and more transfer students than in years past in order to increase median LSAT scores in a revenue-neutral way. It is extremely unlikely that Andy Morriss and I would have gotten our same regression results if this trend had not accelerated in the US News rankings era.

So the relevant comparison is not more or less transfers, but an older system (pre-US News gaming) in which law schools admitted roughly the number of students they intended to graduate, and used transfers to compensate for normal attrition, versus an emerging system in the 1L class is shrunk, thus permitting the school to be more selective, and the revenue is made up by charging full freight tuition to a large incoming cohort of transfer students. Insofar as these transfers don't meet the usual criteria of strong performance as a 1L -- and the large proportion of transfers at some schools suggest that this may very well be the case -- I would categorize this maneuver as gaming. (Based on its experience, Firm X believes this to be the case at School Y.)

The data strongly suggest this is what is going on. A NLJ story corroborates it. And admissions directors and deans readily acknowledge the ascendancy of this strategy. So speculation on strategic motive is not groundless.

Finally, although from a transferee perspective, this system may seem good, remember that just as many students were denied admission as 1Ls to make those extra transfers possible. Those people don't know who they are, so we don't have the benefit of their anecdotal experience. Had they been admitted, a lot of 1L relationships would not have been disrupted. That is the real cost I am talking about.

[Eileen Braman]

I WAS a law school transfer --from one tier I school (Geroge Washington) another (Fordham) for very personal reasons.

Believe me transferring is no cake-walk. And I had a respectable GPA at GW. It was a very stressful time. I was accepted to two days before classes started for my second year -- and I've always felt that it HURT me in the job search -- I didn't really get the advantage of interviewing over that first summer; and I was not considered for law reviews at my transfer institution. Eventually I got a part time job though an alumni connection -- that I held my second and third years -- which turned into an associate position at a small firm in NY.

Plus I always felt like I lost a lot in terms of leaving my first year cohort. It really is amazing how much of the law school "experience" is a social experience -- involving interactions with peers etc.

Point is in accepting transfers law schools are often doing students a service (I don't think I would have finished otherwise). Given the few law students who do transfer I'm concerned about imputing strategic motives on elite schools making them less likely to take transfers.

Obviously I am one person -- my story is anecdotal -- but I did want to share.

[Gary Rosin]

1. I know that my own, Tier 4, school loses a big chunk of our top 1Ls to our cross-town, more highly ranked, competition. I understand that one of the reasons is to let them report higher entering LSATs & GPAs.

2. I wonder how net transfers might relate to my own work on law-school Bar passage rates as a function of entering LSATs. I suspect that net outflows would be related to lower than expected BPRs. You're suggesting that net inflows would also be associated with lower BPRs. I need to figure out how to get a testable proposition out of that.

[Bill Henderson]

Robert, great question. Net transfers = transfered in - transfered out. It is brand new data that the ABA just started collecting.

Attrition is tracked separately and includes "academic" versus "other" attrition. It is even more controversial when ordinally ranked and highlighted. But that is for another day.

[Rob Mikos]

Bill --

Interesting finding, but I'm curious: How do you define "net transfers"? In particular, do you exclude students who drop out of law school altogether (and hence do not transfer elsewhere)? This could be an important omission, and it may help to explain why almost every Tier 1 and Tier 2 school admits more transfer students than it loses. For example, suppose school X has 100 students in the starting 1L class; 20 of those students leave after 1L -- 10 transfer to another school and 10 drop out altogether. If school X admits 20 transfer students, they have a positive net transfer score, comprising roughly 10 percent of the graduating class. School X isn't necessarily gaming the rankings system (holding back on 1L admissions in order to inflate admit LSAT scores, etc.), it's just trying to maintain a particular class size -- though it might generate negative reactions from employers, as you suggest. One way to test this would be to check whether class sizes generally increase from 1L to graudation.

[Bill Henderson]

Jason,

My post is NOT a commentary on transfer students generally. What are my questionable assumptions?

1. That transfers, largely unconnected to 1L performance, are on the rise. That seemed to be Firm X's experience. In terms of overall transfers on the rise, it is highly unlikely that Andy Morriss and I would have gotten our Quartile 1 results without an upward shift in transfers to compensate for fewer admitted 1Ls. Yes, I am assuming that transfers are on the rise. A recent NLJ story documented the complaints of law school administrators who were losing large numbers of students. I think I am on firm ground here.

2. Insofar as a transfer did extremely well as a 1L, he or she will likely fare well on the job market. That is the baseline, which I have no problem with. But the question is whether demand for 2L transfers, because law schools are looking to cross-subsidize between transfers and higher credentialed 1Ls, is outstripping supply of strong 1L performers who want to transfer.

3. I have no idea whether transfers perform better or worse as a group. But in my 2004 study in the Texas Law Review, which included data from a national law school, LSAT was a stronger predictor of grades for transfer students that 1L admitted students. Why? Probably because the transfer students had lower credentials; thus, there was less "range restriction" in ability as measured by LSAT scores. If transfer students were outperforming their credentials, we would see little or no relationship between law school grades and the LSAT scores of transfer students. Of course, this is just one school, and I have no idea if these transfer students were strong performers at their original law school--a crucial fact.

4. I am merely making the claim that law school who aggressively seek transfer students, without a significant quality check, may be diluting their brand and not giving the underqualified transfer students a leg up. The LSSSE data documents greater isolation among transfer students; while some transfer students will buck this trend, the data on transfer students as a group are pretty striking.

Again, this is NOT a commentary on transfer students generally. Rather, it is on the use of transfers as an artifice to drive up a school's US News ranking.

[Jason Czarnezki]

Bill,

I seriously question a number of your underlying assumptions (especially as a former transfer student myself).

First, many transfers did extremely well at their earlier school, and thus might employers assume most transfers were at the top of the class, leading to many callbacks?

Second, I have heard rumors (which means administrators have made the claim but I have yet to see data) that transfer students, on average, perform better in law school (higher GPA and class rank) than non-transfers. Is this true?

To summarize: Do transfers actually perform poorly in getting callbacks? How do transfers perform in law school? And how do the answers to these questions relate to employer satisfaction?

Thanks,
Jason