[In]Securities Guest Blog: School's Out for Summer by Aegis Frumento Esq

June 11, 2020

School's Out for Summer

In any other year this would be when schools let out for the summer. This would be the season for high school and college graduations, and even eighth grade "moving up" ceremonies. These rituals would give natural vent to the stresses built during the prior weeks' cramming for final exams. 

But, alas, this is not a normal year. For the past three months -- practically the entire spring semester -- kids have been "studying" from home. The latest reports indicate that it hasn't turned out so well. See https://www.nytimes.com/2020/06/05/us/coronavirus-education-lost-learning.html. At least, it hasn't turned out so well for the poorer students. The failure of home-bound online learning seems to be global. https://www.theguardian.com/world/2020/may/10/homeschooling-under-lockdown-around-world-coronavirus. Are we misguided to think online learning has a key role to play in the future of education?

Let's not jump to conclusions. No one should be surprised that students and teachers thrust into online learning without warning or adequate preparation would not master it on their first try. Of course it hasn't worked out very well. By all accounts, the most difficult years to transition to online are the early years, elementary through high school. The reason -- obvious to me -- was given by an experienced homeschooling mom: Are we daft to think that young kids will sit actively engaged by a computer screen for 6 to 7 hours a day at a stretch? You need cartoons for that, not teachers droning about arithmetic. https://www.theatlantic.com/ideas/archive/2020/04/just-give-distance-learning/610222/.

You would think college kids would take to it better, but no. One professor did a survey of the students to see how they liked online learning and got largely negative responses. On the basis of that not-so-scientific evidence, he predicted that online learning will fail because students don't like it. https://www.insidehighered.com/digital-learning/views/2020/06/10/online-learning-not-future-higher-education-opinion. But the responses were illuminating. The most salient of them were basically that students weren't getting their money's worth. One respondent cogently complained, "we basically have to teach ourselves. It's like paying tuition to watch YouTube videos." It's an interesting response because, well, in the real world you really DO have to teach yourself. That's what high school is supposed to teach you, how to teach yourself. If you think being spoon-fed "knowledge" by a professor is education, then your education is lacking.

The professor's reaction also highlights a common complaint against higher education -- that it is "academic," and not practical. An amusing illustration is a recent survey by the Association of Public and Land-Grant Universities. https://www.aplu.org/library/from-academia-to-the-workforce-executive-summary/fileEmployers and faculty were asked to rank various attributes of graduates/employees on a 10-point scale. The largest disparity between employers and faculty as to what was important in an employee, which employers ranked first and faculty ranked almost least, was this: ""Understands [his/her] role in the workplace and has realistic career expectations." That is a PC way for a boss to say "Kid, know your place and do your job." Faculty, on the other hand, would fill their students' heads with visions of self-actualization in the executive suite, the job being just a demeaning step to get there. That's how college graduates, upon seeing the world as it really is, become disillusioned.

It's a false trope. The best college education is in every way practical, because it gives you tools to live a full life in the very real world. The real purpose of education is to teach humans how to live meaningful lives and citizens how to preserve a society worth living in. Many have noted how colleges and universities are failing in that mission; that we're in the mess we're in despite so many of us having college degrees proves it.

So, despite the early pratfalls, we have no choice but to make online learning work at least in college and beyond. The cost of higher education is obscene. It is out of reach for most Americans, who now shoulder a student debt load that in the looming recession most graduates won't be able to repay. Defaults on student loans, $1.4 trillion now securitized in much the same way that subprime mortgages were a decade ago, could result in another credit crash. 

But there is one group of students whose education I know did not suffer by pandemic-induced online classes. Those are second and third year law students. That's because, as we've known for decades, the last three semesters of law school are largely a waste of time.

The legal profession has been facing a crisis for years. On the one hand, millions of Americans do not have adequate access to legal services. On the other hand, hundreds of thousands of lawyers do not earn a decent living. Forget those relatively few lawyers at major "Big Law" firms and in corporate counsel's offices or in government service. That is a very small fraction of all the lawyers that work in this country. And getting smaller, as many striving Big Law firms furloughed and laid off 64,000 employees when the pandemic shut them and their clients down. 

No, I'm talking about the vast majority of lawyers who work in small practices, many in rural locations and otherwise outside the major metropolitan areas. The median earnings of those lawyers according to an ABA survey conducted a couple years ago is a shockingly low $40,000 a year. And that's not mentioning the very high percentage of law school graduates from less prestigious schools that can't even get a job for which a law degree is needed.

There's no shortage of suggestions of how to make legal services more accessible to Americans. But the simplest answer is to make law schools cheaper. There's no good reason for law school to be three years long, each year costing $50,000 to$70,000, all financed by student loans. You can do the math, but no one earning $40,000 can pay off $200,000 in loans.

I'm not the first one to suggest that law schools should be shorter. The relative uselessness of the third year in a law school curriculum has been noted by those who study the problem going back 1900, and most strongly in the early 1970s. Two books written in the past ten years, appropriately titled Failing Law Schools and Fixing Law Schools, highlight the problem, why it exists, and what can be done about it. But I think the fundamental issue is a misconception as to what the law is about, and that goes back to what I was saying about academic versus practical thinking.

Sometime around the turn of the 19th century, universities decided they wanted to have law schools. But in order for a law school to be a respectable part of a university, it had to be a scholarly institution. That's when the law became an academic subject. But the practice of law was never theoretical, and it isn't now. The practicing lawyer is not an intellectual; she is a practical solver of clients' problems. The practicing transactional lawyer comes up with practical ways of doing things, and the practicing trial lawyer finds practical ways of presenting evidence and framing arguments. Law schools don't need more than a couple of years to teach students the fundamentals of what is at bottom a craft, a trade. After that, it's all practice; none of it is theory.

I've meandered from online grade school to too-long law schools. The common thread is that education in this country has become too expensive. We need a solution, because whenever a thing becomes too expensive for the masses, it becomes reserved for the privileged. Education, once thought to be the great leveler, has become in too many ways another tool for entrenching the already powerful. The trumpster's ire at the "elites" is aimed at them, at us. It would be nice if all colleges and universities could follow NYU's medical school in reducing tuition to zero. https://med.nyu.edu/education/md-degree/md-affordability-financial-aid/cost-attendance. I don't know if that's what Bernie Sanders had in mind, but it sure would make higher education affordable.


Aegis J. Frumento

380 Lexington Avenue
New York, NY 10168

Aegis Frumento is a partner of Stern Tannenbaum & Bell, and co-heads the firm's Financial Markets Practice. Mr. Frumento represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations); SEC and FINRA regulated firms and persons on regulatory compliance issues and in SEC and FINRA enforcement investigations and proceedings; and senior executives of public corporations personal securities law and corporate governance matters.  Mr. Frumento also represents clients in forming and registering broker-dealers and registered investment advisers, in developing compliance policies, procedures and controls, and in adopting proper disclosure documents. Those now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises.

Prior to joining the firm, Mr. Frumento was a managing director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.

He graduated from Harvard College in 1976 and New York University School of Law in 1979. Mr. Frumento is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.

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[In]Securities Guest Blog: School's Out for Summer by Aegis Frumento Esq (BrokeAndBroker.com Blog)