How Many Lawyers?

January 7th, 2014 / By Deborah J. Merritt

How many lawyers will our economy support during the next decade? As legal educators, we are often bullish about our industry. We know our graduates’ talents, and we see vast unmet needs for legal services. We also know that legal rules are more complex than ever. From those perspectives, it seems logical that demand for lawyers will increase sharply–especially as the effects of the Great Recession fade.

But our perceptions can mislead us. Most of us lack economic training; we also know little about the macroeconomic data that inform labor market forecasts. As academics, we don’t even know much about the economics of law practice. Our very position in the industry, finally, tempts us to take a rosy view of the job market.

The best source of labor market predictions, in our industry and others, remains the Bureau of Labor Statistics (BLS). Every two years, the Bureau prepares a ten-year forecast of job openings in more than 800 occupations. The Bureau uses extensive data and complex macroeconomic models to prepare those predictions. Its economists analyze the economy as a whole, accounting for demographic shifts, technological change, complex interactions among industries, and consumer purchasing power. The final projections are much more reliable than anything that armchair experts might offer.

The Bureau recently released its projections for occupational job openings over the next decade. How will the legal profession fare? The news remains depressing.

Declining Projections

In 2008, at the height of our profession’s prosperity, the BLS projected that 240,400 job openings for “lawyers” would occur in the ten years between 2008 and 2018. That estimate encompassed all jobs practicing law, including work done by solo practitioners. It also counted both jobs generated by expansion and those required for replacement. The projection did not include jobs for judges and judicial law clerks, small categories that the BLS counts separately. I return to those categories below.

Note that even this 2008 projection fell far short of the number of students graduating from U.S. law schools at the time. ABA-accredited law schools conferred 43,588 JD’s in 2008. Even if just 80% of those graduates (34,870) sought jobs as lawyers, that number far exceeded the 24,040 new lawyer jobs per year that the BLS projected at that time.

The forecasts, however, got worse. In 2010, in the wake of the recession and rapid shifts in the legal profession, the Bureau adjusted its projection downward. It estimated that in the ten years between 2010 and 2020, the economy would support only 212,000 new lawyers. That number represented an 11.8% drop in the number of openings for new lawyers.

“Well, of course,” you might think, “the economy was in a serious recession. Of course the number of job openings would decline.” Remember, though, that this projection covered an entire decade. The Bureau assumed that, even if the economy returned to full strength by 2020 (an assumption built into its models), the number of job openings for lawyers would be substantially lower over the decade than previously predicted.

Now the news has gotten even worse. In its latest projections, the Bureau has again lowered the predicted number of openings for lawyers. It now estimates that the economy will support only 196,500 new lawyers between 2012 and 2022. That’s another loss of 7.3%. Put another way: Four years ago, BLS expected the economy to support about 24,040 new lawyers per year. Now it expects only about 19,650 new lawyers per year to find jobs. That’s a loss of 18.3%.

The Bureau expects the absolute number of lawyer jobs to increase between 2012 and 2022, but the increases will be considerably smaller than previously predicted. The available openings, furthermore, won’t come close to accommodating the number of law school graduates–even if those numbers decline as anticipated.

Graduates and Openings

I previously calculated that about 36,260 students will obtain JDs from ABA-accredited law schools in 2016. Those are the students who just finished their first semester of law school and are on track to graduate. Once again, let’s assume that only 80% of them will seek jobs as lawyers–a generous allowance for JD Advantage jobs. Even if one-fifth of our graduates take jobs outside the “lawyer” category, we will still graduate 29,008 eager new lawyers in 2016.

The BLS, however, predicts that the economy will support only about 19,650 new lawyers per year. If that prediction proves correct, then lawyer jobs will exist for only two-thirds (67.7%) of the graduates seeking them–or only 54.2% of the full graduating class. Those ratios are slightly worse than the ratios for the Class of 2008, when the job market was much stronger. Even with reduced class sizes, we are losing the placement race. Graduating classes will have to shrink substantially more to approach the number of lawyering jobs that the economy is predicted to support.

Other Job Categories

As mentioned above, the BLS counts some “lawyering” jobs in categories of their own. Judges, Magistrate Judges, and Magistrates, for example, constitute a separate category from lawyers. So do judicial law clerks. Neither of these categories, however, offers much comfort for law graduates: BLS has dramatically reduced projected openings in these categories. In 2010, the Bureau estimated that the economy would support 9,600 new judges/magistrates and 6,800 judicial law clerks between 2010 and 2020. The more recent predictions have cut those numbers to just 5,200 new judges/magistrates and 2,500 new judicial law clerks over the next decade. The latter reduction is particularly notable; it may represent cuts in government budgets as well as an increase in permanent law clerks.

Adding these small categories to the estimates offered above doesn’t alter the picture much. If we include job openings for judges, magistrates, and judicial law clerks, then the BLS predicts about 20,420 new openings per year for lawyers. That number will accommodate only 56.3% of the students projected to graduate from ABA-accredited schools in 2016. (To be clear, I think it’s appropriate to include judges, magistrates, and law clerks in these projections. I omitted them in my initial calculations because the numbers are small and the BLS has redrawn these small categories over the years. For clarity, it’s easier to focus first on the primary “lawyer” category.)

According to the BLS, only three categories of law-related professionals enjoy better prospects today than they did two years ago: paralegals, title examiners, and other legal support workers. The Bureau raised projected openings in each of those fields in its latest estimates, producing a combined total of 119,600 expected openings during the next decade.

Why Won’t the Economy Support More Lawyers?

The reasons for this decline are complex. They include lasting effects of the recession, technology, new efficiencies in the provision of legal services, and changing demographics. The last factor is particularly intriguing; it is one that we in the legal academy often overlook. My next post will explore these economic change-agents in more depth.