If there were any question as to whether there is an over-supply of lawyers in the US, the recent spate of reports should lay that to rest. As Steve Harper noted in a January American Lawyer article, “Eighty-five percent of today’s newest lawyers are carrying six-figure law school debt. Only about half of all those graduating from law school in 2012 found full-time long-term jobs requiring a J.D. The most recent U.S. Bureau of Labor Statistics employment report indicates that between December 2012 and December 2013, employment in the ‘all legal services’ category actually declined by 1,000 people…. While the profession was losing 1,000 jobs last year, law schools graduated a record number of new lawyers—46,000—and more large classes are in the pipeline…and recently revised BLS estimates suggest an ongoing lawyer glut for years to come. In the midst of this disaster, law school tuition keeps increasing. It’s all quite perverse.”
The law school market has certainly taken note of these developments. Law school applications have plummeted. The National Law Journal reported late last year that for the fourth year in a row, the number of those taking the LSAT in October dropped–falling to 33,673 in 2013, down from 37,780 in 2012, but down astoundingly almost half—45%—from the high of 60,746 who took the October LSAT in 2009.
In many cases, that profound decrease in applications has meant a smaller number of matriculants at law schools. A Kaplan Test Prep Survey, released in Oct. 2013, found that while law schools had a combined 602,300 applicants in 2010, only 385,400 students applied in 2013, the lowest level of applicants in decades. Kaplan further reported that 54% of law school admissions officers said that in response to the lower level of applications, they have decreased the size of their incoming classes for 2013-2014, meaning a second year of falling class sizes, after 51% smaller classes for 2012-2013. “The trend does not seem to be pointing upward either, as 25% say they already plan to cut class sizes for 2014-2015 as well.”
Clearly some law schools are suffering more than others from the reduction in applicants, as the list of 18 law schools whose enrollment has gone down 30% or more since 2010 attests.
Nonetheless, Harper assures us that “law school applications are down, but acceptance rates have gone way, way up to compensate.” According to him, schools in trouble are “picking their poison. Either they can maintain admission standards that preserve LSAT and GPA profiles of their entering classes, or they can sacrifice those standards in an effort to fill their classrooms and maximize tuition revenues… the rankings methodology has presented many schools with a Hobson’s choice: If they preserve LSAT/GPA profiles of their entering classes, they will suffer a reduction in current tuition dollars as their class size shrinks. If, on the other hand, they admit less qualified applicants, they’ll preserve tuition revenues for a while, but suffer a rankings decline that will hasten their downward slide by deterring applicants for the subsequent year.”
In January of this year, the ABA Task Force on the Future of Legal Education released its (final) Report and Recommendations [PDF], a 41-page document that supersedes two prior documents. As Matt Leichter, who operates The Law School Tuition Bubble, reported, “Much like task forces set up by bar authorities in various states, the ABA panel was created to study the rising cost of law school tuition, the decline in job opportunities for lawyers and even the effects of structural changes to the practice of law and lawyer supply [PDF]. As with examinations of the reports produced by its state bar counterparts, analysis of the ABA report’s most salient topics depicts a mix of good ideas and disappointing confusion.”
He notes, among other things, that “the final report no longer describes the training of lawyers as a ‘public good,’ but rather something that provides ‘public value,‘ and clearly comes down against formal legal education as providing public value when training lawyers. It is in favor of the limited licensing of legal practitioners, fewer undergraduate requirements for lawyers, fewer law school requirements, the uniform bar exam, more law school ‘heterogeneity’, and substantial accreditation reform allegedly aimed at reducing the cost of law school. The task force even implies that law schools aren’t providing students with core lawyering competencies and that law schools aren’t benefiting society by absorbing federal loan dollars.”
And yet the report does not deal with what Leichter describes as long-term structural problems in the legal business model and the federal loan program that props up law schools and gives students who have little chance of gainful legal employment an incentive to nonetheless go to law school. “Demand for private legal services grew rapidly until about 1990. It recovered only slightly amid the stock bubble, and has been in decline for the last ten years. This information is publicly available (pending BEA data revisions) and largely beyond dispute. Why bar authorities won’t acknowledge it when discussing the ailing legal sector is, to me, the biggest baffler of the task force’s report.”
In March, Leichter followed up his analysis of that ABA Report with one of the Fellows of the American Bar Foundation preliminary findings from the third wave of the “After the J.D.” study (AJD). “That study tracks a robust sample of more than 3,000 people who passed a bar exam in 2000 after graduating from a wide variety of law schools, including some that were unaccredited. This cohort was first surveyed in 2003 (AJD I), again in 2007 (AJD II) and, most recently, 2012 (AJD III). The good news to be gleaned from the latest batch of preliminary findings: On a scale of 1 to 7, with 7 being highest, respondents gave the statement “I would go to law school if I had to do it all over again” an average rating of 4.91. Those queried gave relatively higher ratings to questions about whether they felt attending law school had been a good investment and whether they were satisfied with their decision to become lawyers. The not-so-good news is that as of 2012, only a minority of respondents were still in private practice, and roughly one in four had left the practice of law entirely (by contrast, most respondents were in private practice in 2003). Moreover, the gap in median full-time earnings between graduates of elite law schools and those who earned their degrees at less reputable schools had widened considerably, as had the gap in earnings between graduates of nonelite schools based on GPA.”
“There are two other striking comparisons to make between the Census Bureau and AJD earnings data. AJD participants earned more when working in nonlawyer business positions than lawyers in many practice areas did. Also, depending on their employment category and percentile, many lawyers made less money than the median bachelor’s or master’s degree holder in the same age bracket.”
What might be even more disconcerting for those thinking of entering law as their life-long career are the stats coming out this month about the minuscule number of new equity partners being made at even the richest, most successful law firms.Life-long career in deed.
Of course, that assumes that Gen Y and the Millennials are even interested in a long-term career. One of the reasons given for Greenberg Traurig’s new “residency” program, where new lawyers are denominated “residents” and not “associates” –with the clear implication that they are not on any kind of partnership track– is that these youngsters aren’t that interested in staying in the same place, anyway, so why make it seem like they might?
Wouldn’t they be better off, anyway, with another degree–even a bachelor’s or master’s degree–in a different, nonlawyer position?