The Crisis That Wouldn’t End

May 14th, 2016 / By Deborah J. Merritt

The crisis in legal education was supposed to be over by now. The recession, after all, ended in June 2009. Even allowing for a slow recovery, legal educators predicted that JD hiring would be robust by this point. When applications fell and schools cut class sizes, educators hoped for a recovery bonus: An improved job market, combined with smaller graduating classes, would boost placement rates and attract applicants back to law school. Meanwhile, some projected, the economy would suffer a lawyer shortage.

Things haven’t worked out that way. As the ABA employment report for the Class of 2015 shows, JD employment remains depressed–and there is some evidence of a downward trend. In this post, I explain why law schools need to take this news very seriously.

First, Look Back to 2014

The ABA’s employment report for the Class of 2014 caused quiet consternation. The percentage of graduates obtaining jobs in most categories increased, but that gain stemmed almost entirely from reduced class size. The absolute number of jobs fell in almost every category. Law firm jobs, for example, declined from 18,545 to 17,856–a 3.7% decrease.

Overall, the number of full-time, long-term jobs requiring bar passage fell from 26,653 in 2013 to 26,248 in 2014. That was a small (1.5%) but still notable decline. Nor did the fall-off occur because employers had exhausted the number of available graduates. Ten months after graduation, 4,295 members of the Class of 2014 (9.8% of the graduates) were unemployed and seeking work.

At the time, the declines seemed like an oddity. The legal market, many assumed, was still regaining strength while absorbing the glut of 2013 graduates. Educators celebrated the increased percentages of graduates employed without worrying too much about the absolute numbers.

Now Consider 2015

But now we have the 2015 employment report. As I have written before, the numbers in that report are very troubling. Graduating class size fell significantly, by 8.8%. That allowed percentages in most employment categories to remain fairly stable; some inched up slightly, while others fell marginally. (As I’ve already explained, a change in data reporting requires some adjustment in the ABA’s reported figures.)

This apparent stability, however, masked substantial declines in the absolute number of jobs. Those numbers fell in every reported category. Law firms, for example, hired 8.8% fewer graduates in 2015 than they hired in 2014. Government jobs declined at the same rate. Overall, the number of full-time, long-term jobs requiring bar passage fell from 25,417 to 23,687–a 6.8% decrease. (Those figures remove school-funded positions from the calculation to allow an apples-to-apples comparison.)

Once again, the smaller number of jobs does not reflect a lack of graduates to fill positions. Almost 4,000 members of the Class of 2015 (9.7% of the total) were unemployed and seeking work ten months after graduation. Jobs just weren’t available for them to take, reflecting contraction in the hiring market.

What Does the Future Hold?

We now have two years in a row of contracting jobs for law graduates–with the decline in the second year substantially greater than in the first year. This, moreover, is happening 5-6 years after the recession ended. It’s not an optimistic pattern.

The number of entry-level lawyering jobs might increase over the next few years, but there is no factual basis for predicting that. It is just as likely, given the mix of market conditions, technological advances, and existing oversupply of lawyers, that the number of these entry-level jobs will continue to fall.

Let’s assume that the number of entry-level lawyering jobs remains steady at 23,687. When will that number of jobs accommodate 75% of law school graduates, the level reached during the early years of this century? Only when the graduating class size falls to 31,583 students.

To place 80% of graduates in lawyering jobs (as we did in the 1980s), the number of graduates must fall to 29,609.

We’re a long way from either of those targets. Last fall, 37,508 students matriculated at ABA-accredited law schools. Assuming an attrition rate of 8.7%, 34,245 students will earn their JDs in 2018. If 2015 employment levels hold, 69.2% of those graduates will secure full-time, long-term lawyering jobs. That’s an improvement over the dark days of 2010, but it’s still a long way from home.