Good morning. Andrew here. We’re taking a look this a.m. at a counterintuitive phenomenon: Just as questions are being raised about the potential for artificial intelligence to take jobs from lawyers, law schools are seeing a surge of applicants. A DealBook contributor, Elizabeth Olson, explains. And Sarah Kessler speaks with an official from Virginia Tech, which is using A.I. to screen college applications this year for the first time. Also, take our Davos-themed quiz. (Was this newsletter forwarded to you? Sign up here.)
The law school gambleFor decades, the American law school has served as a popular hedge against a cooling economy. When the “Help Wanted” signs disappear, the “J.D.” applications surge. That’s what is happening now. The number of U.S. law school applicants for the 2026 cycle is up an estimated 17 percent from last year, according to data from the American Bar Association compiled by the Law School Admission Council. That figure is a staggering 44 percent increase from just two years ago. But for this new wave of aspiring lawyers, the safety of the ivory tower comes with a steep entry fee and a shifting floor. Between new federal loan caps and the looming shadow of generative artificial intelligence, the legal profession’s newest recruits are walking into a high-stakes gamble that looks very different from the one their predecessors lost after the 2008 financial crisis. Enrollment rose to 52,404 by 2010, a 7 percent jump from three years earlier. Many of those students didn’t enter the legal careers they may have envisioned; about half of 2011 law school graduates were not working in full-time jobs that required a law degree within a year of graduation. The job prospects for lawyers have since greatly improved, with more than 80 percent of students who graduated in 2023 and 2024 working in jobs that require their legal credentials within a year, according to the American Bar Association. But the flocks of people applying to law school face new risks. New limits on student loans that go into effect this year could make financing a degree more expensive. And artificial intelligence threatens to bring major changes to the industry, affecting which jobs are available and how much they pay. “It’s too early to know how things will change,” said Kellye Testy, the executive director of the Association of American Law Schools, which has more than 170 members. “Some worry that A.I. will decrease demand for lawyers,” she said, adding that eventually the technology could have a more direct role in legal work. “That could matter in three years,” she said. Growing costs In 1985, going to law school at a private university cost on average about $8,000 a year, according to the Law School Admission Council. Now the average cost is about $60,000 a year at private universities — and a still hefty $32,000 a year at public ones. At some law schools, tuition and annual living expenses exceed $110,000. Financing that big bill is about to get more expensive. Stricter limits on student loans, which were passed as part of President Trump’s tax and spending law last year, go into effect in July. They impose a yearly limit of $50,000 for students seeking professional degrees, with a $200,000 lifetime cap. Alternative financing options like private loans can have higher interest rates and more restrictions than federal direct loans, said Susan Bogart, director of financial aid for Penn State Dickinson Law, where the cost of attendance will be about $90,000, according to its website. During a surge of applications, law schools may also pull back on the discounts they offered to entice promising students when applicants were scarce. It can be difficult to estimate how well the investment in a law degree will pay off. Law students often anticipate landing high-paying legal jobs in private law firms or corporations, where the entry-level salary can be around $225,000, according to the National Association for Law Placement. But the median starting salary for public service lawyers, for example, is around $65,000 — which can make monthly student loan payments more of a stretch. A.I. uncertainty In 2023, Stanford researchers, in collaboration with a legal technology company, announced that ChatGPT had passed the bar exam, scoring in the 90th percentile. That claim, which other researchers later challenged, set off a wave of speculation about how A.I. would affect lawyers. Economists at Goldman Sachs estimated that year that the technology could automate 44 percent of legal work. But it’s still unclear how new A.I. tools for lawyers, including Thomson Reuters’s CoCounsel and the A.I. legal assistant Harvey, will affect the availability of legal jobs or how much they pay. The tools can make routine legal tasks, including document review and case research, faster. (Lawyers who have tried to use A.I. for more than that have sometimes been embarrassed by A.I.-generated briefs that cite made-up court cases.) “It’s really good at sifting through massive amounts of information and trying to pare that down a little bit,” Michael Kohagen, a lawyer in the mergers-and-acquisitions practice at WyrickRobbins, a law firm in Raleigh, N.C., told the “I Am the Law” podcast. So far, more efficient grunt work hasn’t stopped firms from hiring new lawyers: Law students who graduated in 2024 had the highest employment rate ever, according to the National Association for Law Placement. More than 90 percent found jobs. Things could get dicier: The association also reported that law firms had hired fewer summer associates in 2024 and 2025, which it said suggested “that there will be fewer graduates employed by large firms over the next few years.” Testy said that it was possible A.I. could shrink job openings, but that it was also possible it could expand what lawyers do. “It could be used to streamline small disputes in court, for example,” she said. Neither the growing expense nor potential changes to the industry are deterring students like London Cooper, who is a political science major in her final year at Dillard University in New Orleans and plans to pursue a law degree. Cooper has applied to five law schools, after carefully checking into how to afford the cost of the degree. “I factored so many things in, even looking at projected salaries for starting lawyers,” she said. But A.I. wasn’t part of her calculations. Instead, she’s banking on the more timeless appeal of a legal education. “I feel like law is one area where you can see how society really runs,” she said.
It was a different kind of Davos. At the opening ceremony, Larry Fink, an interim co-chair of the World Economic Forum, took aim at the institution itself, saying it “can’t remain an echo chamber.” Climate change, once a central topic of discussion of the annual gathering, retreated to the sidelines, and where there was once talk of a shared political and economic future, President Trump instead made a laundry list of threats against other nations. Prime Minister Mark Carney of Canada received a standing ovation after describing the end of Pax Americana. The future of Greenland remains uncertain. Trump has walked back threats to use military force or tariffs to acquire Greenland and said Wednesday that he had reached a deal with NATO over the autonomous Danish territory. Proposals under discussion are said to include giving the United States a sovereign claim to its bases in Greenland and checking Russian and Chinese influence in the Arctic. TikTok struck a deal for a U.S. entity. Its U.S. operations will be managed by a group of non-Chinese investors — including Oracle, the Emirati investment firm MGX and Silver Lake — which will own 80 percent of the new venture. The announcement ends a legal saga over the app’s future in the United States after a 2024 law required it to be separated from its Chinese owner, ByteDance, but some experts say the deal does not resolve concerns that China could still influence the new entity. Trump sued JPMorgan Chase over “debanking” claims. The $5 billion lawsuit, which also names Jamie Dimon, JPMorgan’s C.E.O., as a defendant, contends that the bank stopped doing business with Trump after the Jan. 6, 2021, attack on the Capitol. Other big deals: Netflix converted its $83 billion bid for large parts of Warner Bros. Discovery into an all-cash offer. Supreme Court justices appeared skeptical of Trump’s effort to remove Lisa Cook from the Fed. And natural gas prices spiked ahead of a powerful winter storm. A.I. enters college admissionsOver the next few days, early-action applicants to Virginia Tech will find out whether they’ve been admitted to the school. That’s more than a month sooner than last year — and the university says A.I. is to thank. Virginia Tech is among the first schools to use A.I. to assess college applications, of which it received 58,000 for the 2026-27 school year. Previously, essays were reviewed by two human readers, plus a third if the scores differed significantly. This year, each essay got one initial score from an A.I. tool and one from a human, then a third read from a human as needed. The school made the change after three years of testing. Juan Espinoza, the vice provost for enrollment management at Virginia Tech, estimates it saved his department more than 8,000 hours of work. DealBook’s Sarah Kessler talked with him about the process. The interview has been condensed and edited. How did you make the decision to incorporate A.I. into admissions? We were getting our decision back to students much later than other colleges and universities. So we knew we needed to accelerate the review process, but we didn’t want to get rid of the essay. Louis Hickman, an assistant professor who studies the intersection of technology and work, reached out and said: “Hey, I’ve done a lot of research on artificial intelligence, and I feel like we can help. Would you be willing to partner, just for research purposes?” After a third year of running it in the background, he was able to show with high confidence that the A.I. tool was operating just as strongly as our human readers. We agreed that if we’re going to do this, we’re going to tell the world. We’re going to tell our applicants — students. Because I truly believe there’s a level of trust they’re giving us that their applications will be handled with care. On the other side, can you tell when students are using A.I. to write their responses to their essays? When you feel like you’ve got something that can detect it, it’s almost immediately out of date. So I actually have very little confidence in anyone who states that they have something that can detect A.I. use. Are we even attempting to do that? No, we’re not. I tell students: “If you feel you can use A.I. as a brainstorming tool, use it. I do not think it’s in your best interest to use it to write the essays completely — it may not best represent who you are, and that would be a disadvantage in our process.” So at some point you might have an A.I.-generated essay being read by your A.I. assessor? Yeah, very possible. Do you think at any point the ability of A.I. to generate responses to questions will change the application process itself? For example, maybe essays become obsolete? Absolutely. We don’t use recommendation letters in our process. But for some schools who continue to utilize them, I’m hearing of counselors using A.I. to write those letters. On the surface that might bring some level of concern. But I would argue if the counselor is still able to represent that student well by using that tool, the result is going to be less time writing letters and more time talking to students. I think some people fear A.I. admissions tools will create a black box that filters you out in a way that you don’t understand and might be a mistake. That’s where safeguards are so important. If we were solely using A.I. to evaluate the essays, not having a human read, I think we’d see a very different reception to this change. Quiz: The Davos price spikeOne week each year, the world’s elite descend on Davos, a Swiss mountain town that has a residential population of about 10,000. Businesses there adjust prices accordingly. Snagging a table for two in the lobby restaurant of the Hilton Garden Inn — which is within the security zone of the World Economic Forum — cost about how much per hour this week, according to The Wall Street Journal? A. $50 B. $120 C. $170 D. $200 Find the answer at the bottom of this newsletter. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Quiz answer: C. Thanks for reading! We’ll see you Monday. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
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