More on the Legal Job Equilibrium: The National Jurist Provides its Calculations

Refining the Data Analysis Further 

and 

Adding Assumptions

The National Jurist, as promised, has followed up its December 2013 article (apparently no longer available if you don't have a subscription) with the data on which it relied to predict that an equilibrium between new legal jobs and new law grads would come in 2015.  Here is the link.

This article also predicts jobs will exceed law graduates for the graduating class of 2016, but reaches that conclusion by applying an historic average for full-time employment in "bar-passage required" jobs of 69 percent. It says:

The analysis by both [Profs. Young and Merritt] assumes that the number of [new] jobs remains flat and that the balance point between supply and demand is 100 percent full-time legal employment by graduates within nine months of graduation. 

But since NALP began tracking data in 1985, the percentage of recent graduates who were employed in full-time legal jobs has never exceeded 84.5 percent. 

In fact, from 2001 to 2008, the number of full-time bar-passage required jobs averaged 69 percent, and the number of full-time bar-passage jobs and J.D.-advantaged jobs averaged 75 percent.  That is because some graduates chose not to pursue legal employment, and others found it difficult to land a job when they failed the bar exam.  In 2012, 77 percent of all first-time takers in the U.S. passed the bar exam, a percentage very similar to the number who found full-time employment between 2001 and 2008. 

So if the 69 percent figure is used as the historic equilibrium point, The National Jurist analysis finds that the class of 2015 will be the first to return to it.  

In other words, in 2015, the graduating class will see the number of legal jobs equal the number of law grads.

The graduating class of 2016 will have better news.  It will graduate into a market where legal jobs will exceed graduates (when applying the historical average for employment in those jobs).

I am happy to say that I made a contribution to this conversation by being one of the first bloggers to attempt to calculate when the equilibrium might come.  Over time, later bloggers and commentators have refined those calculations (including myself). While my analysis included certain assumptions later bloggers modified (and criticized), my ultimate conclusion corresponds to the prediction of The National Jurist.  (That may show again that even a blind squirrel can find a nut.)

For my analysis of the topic, look at the following posts, which include links to other commentary and analysis in the updates.

• Prediction: Full-Time Jobs Will Exceed New Law Grads for Graduating Class of 2016
• The Red Velvet Lawyer Mentioned in National Jurist Article on the Job Equilibrium
• How Should We Count "JD Advantage" Jobs in Assessing Job Equilibrium for Law School Grads?
• So What's a "JD Advantage" Job?
• How Should We Count the Unemployed and Students Seeking Advanced Degrees in Assessing Job Equilibrium for Law School Grads?

P.S. This edition of The National Jurist also has a story entitled: Wanted: Rural Lawyers.  Need a Job? Many Rural Communities are Desperate for Lawyers.  

A number of ASL grads, as our founders intended, return to rural areas of the central Appalachian Mountains to provide much-needed legal services to residents of these small communities.  Our grads also provide political leadership and community service as the profiles of our distinguished alumni illustrate.

March 2, 2014 Update:  Professor Organ, who launched this conversation at the MAPLA conference, has provided his well-supported analysis of the future market for legal jobs here.

Nov. 18, 2014 Update: Analysis of new BLM calculation of legal market. The author suggests it inflates the need for new lawyers. 

A Deeper Look at the "Law School Crisis"

Professor Brian Leiter 

Takes on the Scambloggers

Professor Brian Leiter, a well-known blogger, is now writing for the Huffington Post. In American Law Schools: The New Reality, he describes the many factors that have contributed to the down turn in applicants to law school including:

• Competition among law school for US News rankings, which forced them to compete based on expensive services instead of affordable tuition;
• Rising student debt;
• Poorer employment outcomes for graduates in a recessionary economy;
• Congressional overhaul of bankruptcy laws as they relate to student loans; and
• Lax oversight by the ABA regulators.

I've blogged about all these topics this past year.  And, it is nice to have this summary for easy reference.

In his second article, American Law Schools and the Psychology of Cyber-Hysteria, Professor Leiter looks at the "toxic" environment law schools face while trying to respond to the market downturn in responsible ways.  He starts the article by saying:

Previously, I wrote about how the steep decline in applications to law schools was an unsurprising "consumer" response to the downturn in the legal sector in the wake of the financial crisis and the recognition that student debt was no longer dischargeable in bankruptcy. What was surprising, however, was the new "meme" that took hold in cyberspace: this economic catastrophe was the fault of law schools and law professors. The psychology of this "meme" is our topic here.

* * *  

The cyber-hysteria about law schools is not only tediously repetitive, it is immune to facts or evidence.

He concludes:

If, as The National Jurist predicts, we are only a couple of years away from an equilibrium in the market between jobs and new law school graduates, then the irrational cyber-hysteria about law schools will soon be a thing of the past. The suffering that has brought it on, however, remains real, and soon Congress will need to take up debt relief for a generation of students caught in the vise of an economic catastrophe.

I want to thank Professor Leiter for using this national forum for enriching the conversation about law schools, the value of a legal education, the job market, student debt, and the role U.S. News and the ABA have played in creating the current situation.  Perhaps with a more measured analysis, we can limit and avoid suffering by all the interested stakeholders.  

The Red Velvet Lawyer Mentioned in AmLaw Daily

In the ongoing discussion about when law graduates and available law jobs will reach equilibrium, Matt Leichter, of the Law School Tuition Bubble blog, has continued to work with the numbers and published in the AmLaw Daily here a story called: No, It's Still Not a Good Time to Apply to Law School. (You may need a subscription to read the story but his blog posting covers all or most of the same data.)

He mentions my launch of this conversation and concludes that Prof. Merritt may have the better analysis. He looks at several more data-bases to reach that conclusion. 

As I've said before, I want prospective students to make decisions about law school using informed decision-making.  The more we talk about the numbers, the more information they have to make better choices about the careers they want to pursue.

I'd invite Leichter to expand his analysis to other professions, because the bubble may be bursting for students attending vet, dental, pharmacy, optometry, and med schools (for two practice areas: primary care and psychiatry).  What an expanded analysis might tell us is that a generation of college graduates will be shut out from using professional schools to climb into or secure a solid middle-class income.    

Are Law School Success Stories Really that Rare?

Law School Success Stories

Elie Mystal, of Above the Law, which I would characterize as one of the leading "scambloggers,"  made a posting yesterday entitled:  The Lack of Law School Transparency Claims Another Victim.

Here is the lead in paragraph:

Some guy on Twitter was complaining that Above the Law focuses too much on the negative side of going to law school. Apparently this person mistakes us for a law school admissions office — people who ignore facts when they don’t fit their happy-clappy narrative. We do bring you some law school success stories when we hear of good ones. Do you know why those stories are “news”? Because law schools are so effective at leading people down a path of career frustration and financial ruin that when somebody beats the odds, it’s mildly noteworthy.

This blog tends to focus on graduates from top-ranked schools who had expected to join BigLaw. They routinely paid $40,000-$50,000 per year in tuition at the top schools.

As some of my posts here, here and here have indicated, the largest percentage of job loss during the recession came in large law firms of 500+ lawyers. Hiring at smaller firms (2 to 10 lawyers), to which most of ASL's graduates head, has increased, even if salaries at these firms fall in the bell curve described here, with most new graduates earning between $40,000 to $65,000 to start.

So, I am putting these questions out there to our ASL alums:

• Are you some of the law school success stories?  
• If so, how and why?  
• Are you happy you made the decision to attend law school?   
• If you had not attended law school, what would you have otherwise done with your college education?  

I expect our unhappy graduates to respond first. But, I would like as many points of view as possible.

I am especially curious about this issue because I have now profiled twelve ASL graduates working in lower paying public service jobs in postings beginning here.  I have two more profiles in draft.  Based on my conversations with these alumni, admittedly about 10 percent of our graduates, they all seem happy in their careers and with the personal and professional opportunities their law degrees opened for them.

I am certain that their expectations about law practice have changed from the expectations they held as incoming 1Ls.  But, would they call a "do-over" and not attend law school?  Would you attend another graduate school even though the bubble may be bursting for graduates of vet, dental, pharmacy, and optometry schools -- and even some practice areas of medicine?

Wow! This Chart Depicts the Dramatic Change in BigLaw Staffing

Now I Really Get 

the Law Job Market

In a blog posting entitled, Did the Market for Law Firm Associates Peak 25 Years Ago, Bill Henderson, of The Legal Whiteboard, graphically shows the change in the BigLaw staffing model I discussed, in part, here.

You must take a look at this material!

From the posting (with permission):

Based on the chart below, which reflects 35 years of large law firm data, the answer appears to be yes. The chart enables us to compare two very simple trendlines: the percentage of lawyers in NLJ 250 law firms who have the title of Associates versus the percentage with the title of Partner.

* * * 

Indeed, the 35-year graphic above provides a true wide-angle view, which in turn reveals an absolutely remarkable story. Associates were most integral to the large law firm model over 25 years ago. Although large law firms went on a hirng spree at various points during the 1990s and 2000s, the firms themselves were simultaneously adding a new layer of human capital that was neither associate or partner/owner. And in the process, associates were gradually being marginalized.

The graph below (also NLJ 250 data) reveals the growing middle section of the so-called Diamond Model:

The Diamond Law Firm 

A firm with a diamond structure has a relatively small number of entry-level associates, a growing bulge in the non-equity and counsel ranks, a sizable but largely invisible group of permanent staff attorneys, and a proportionately smaller equity class of partners who grow and control valuable client relationships. See Figure 3.

Figure 3. Two Models of Law Firm Demographics

Red Velvet Lawyer Mentioned in National Jurist Article on the Legal Job Equlibrium

The Red Velvet Lawyer 

Gets Some Notice

In an article predicting when law-related jobs will exceed the number of law school graduates, the National Jurist discussed my blog posting on the same topic, found here.

I want to clarify that my posting attempted to support the prediction made by Prof. Organ at the MAPLA conference in October 2013.  And, as noted in updates to my posting, I am happy that other folks are further examining the data and making a more precise prediction.

I fully support the informed decision-making of any person applying to law school right now.  I also strongly recommend that prospective students work closely with pre-law advisors.  As I have posted elsewhere, they are a highly professional and committed group of people who strive to serve the best interests of the students they advise.

I also noted that 70 percent of prospective law students fail to take advantage of this important resource.

Leading Law Blogger Recognizes The Red Velvet Lawyer

Appreciate the Recognition for ASL's Mission!

I got back from some restorative massage to find a nice email from ADR colleague, Art Hinshaw, a blogger on ADR Prof Blog. He congratulated me for getting recognition from Brian Leiter's ABA Top 100 Blawg for my recent posting on job prospects for future graduates.

Here's Prof. Leiter's posting:

Thursday, November 21, 2013 

We are on track for there to be more new jobs for lawyers than there are new law school graduates...
By Brian Leiter

...by 2016 or 2017. Hopefully this will help some of those currently unemployed, but it is also probably quite good news for those starting law school now or next year. (I commend Professor Young for taking the time to run the numbers, which in the current toxic cyber-environment where facts are never welcome [recall the irrational reception in cyberspace of the Simkovic & McIntyre study, even though it completely altered the terms of debate in the real world], requires considerable courage. I also commend to the attention of readers Professor Young's profiles of graduates of the Appalachian School of Law, a nice snapshot of the important role legal education plays in communities throughout the nation.)

I am very happy to see this leading blogger, from one of the top-ranked law schools, appreciating the mission of my law school.

Prediction: Full-Time Jobs will Exceed New Law Graduates for Graduating Class of 2016

The Tide Turns Again?

New Jobs Exceed the Number of Law Graduates in 2016?

At the conference of the Midwest Association of Prelaw Advisors held at the end of October 2013, Professor Jerry Organ predicted that jobs would exceed the number of law school graduates in 2016 (as I recall).

He suggested that the market would turn because applicants to law school would continue to decline while the trend in new law jobs would hold at least steady.

So, here is my attempt at supporting this prediction.  I am using data provided by LSAC at the MAPLA conference, which I have discussed in earlier postings.  I am also relying on data provided by NALP.

I make the following assumptions:

• Enrollment of first-year law students will decline by 8.0% from the previous year through the 2015 entering class.
• Each entering class experiences an attrition rate of 12 percent. So, only 88 percent of each first-year class graduates three years later.
• New full-time jobs in three categories -- bar required, JD advantage, and other professional jobs -- will hold steady at the 2012 level of 31,776 jobs.
• All categories of full-time jobs will hold steady at the 2012 level of 33,759 jobs.

If all these assumptions hold up, full-time jobs (in three categories) will exceed the number of graduates from law school in 2017. If I include all full-time jobs in the count, then those jobs will exceed law school graduates in 2016. 

Here's my math: 

Decline in first-year law students from the prior year, according to the LSAC data. Pointed brackets (<>) indicate my predictions.

2009-10     52,500          3.5%     (number graduating in 2012:  46,364) (all time high)
2010-11     48,700        -7.2%     (projected number graduating in 2013: <42,856>)
2011-12     44,500        -8.7%     (projected number graduating in 2014: <39,160>)
2012-13   <40,940>   <-8.0%>   (projected number graduating in 2015: <36,027>)
2013-14   <37,665>   <-8.0%>   (projected number graduating in 2016: <33,145>)
2014-15   <34,652>   <-8.0%>   (projected number graduating in 2017: <30,494>)
2015-16   <31,879>   <-8.0%>   (projected number graduating in 2018: <28,054>)

[As noted in an update below, NALP and ABA report data differently.  According to the ABA reports, the all-time-high enrollment of 52,500 occurred in the Fall of 2010 (not 2009).  Accordingly, my data is off by one year because I use the NALP data.]

Employment for 2012 graduates, according to the NALP data:

• 46,364 total.  (The data shows that about 12 percent of law students who start law school in 2009 did not graduate in 2012.)  

• 44,339 reported their employment status to NALP.

• Of those reporting their employment status, they fell within the following categories:
• Bar passage required, full-time:   26,876
• JD Advantage, full-time:                4,730
• Other professional, full-time:          1,770
• Non-professional , full-time:             330
• Unknown, full-time:                            53
• Total full-time employment:          33,759

• 2012 graduates with jobs in the first three categories total 31,776.  

Nov. 19, 2013 Update:  The Faculty Lounge blog suggests that the down turn in law school applications (and hence first-year enrollees) could be higher than expected. So, my estimated 8.0% decline in first-year enrollees could be conservative.

Nov. 20, 2013 Update:  Brian Tamanaha, in his book Failing Law Schools,  cites data from the Bureau of Labor Statistics indicating that "from 2000 to 2010 the economy created 123,000 new lawyer jobs; departures from the legal profession over ten years added another 151,400 openings.  Combining the two, there were about 275,000 job openings for lawyers . . . ."  I assume his use of the terms "lawyer jobs" or "job openings for lawyers" ties to the NALP category of "bar passage required, full-time" jobs.

He also says: "The Bureau of Labor Statistics projects about 25,000 openings for lawyers each year through 2018 (new positions and replacements for departures) . . . ."   Thus, if the discussion is confined to full-time jobs requiring bar passage, the decline in applicants to law school would need to be sharper and more sustained to ensure that every graduate got a job in that category.

Nov. 22, 2013 Update:  I received this email today from Professor Deborah J Merritt, John Deaver Drinko/Baker & Hostetler Chair in Law, Moritz College of Law:

Paula, I saw your interesting post on when the number of law graduates will equal the number of jobs that were available in 2012. Unfortunately, I think you confused the degree totals for 2012 and 2013 -- it's an easy mistake to make because of the odd way in which the ABA reports data. I've made a post on my blog in which I re-run the calculations and also make some different assumptions about jobs. I thought you might like to see the results:

http://www.lawschoolcafe.org/thread/when-will-graduates-jobs/

Just to make it clear, I relied on a report prepared by LSAC for the MAPLA conference.  It does not make the source of the data clear, but does drop a footnote suggesting that the applicant data came from the ABA. I know the two entities share data, but I've not done the research to know how or what.  Thanks, Professor Merritt for your further analysis.  She predicts that law jobs requiring bar passage will not exceed the number of law graduates until 2021.

Nov. 23, 2013 Updates:  One of the scambloggers has picked up this posting and offered commentary, most of which is an ad hominem attack against me and my law school (or its graduates).  As I have said elsewhere, and as the headlines clearly indicate, this was not my prediction, but an effort to support the prediction of Prof. Organ. In addition, I have continued to update this posting with links to the analysis of other people and have posted all three of the comments received so far.

As far as his barrista comment, yes, barristas would be included in the total count of full-time jobs needed to see a market turn in 2016.   They would fall in the non-professional, full-time category, which in 2012, included 330 of the 33,759 graduates reporting employment.  As far as I know, none of our ASL graduates became full-time barristas after graduation.  And, even if they did, they soon found better employment. Please see the comments to this posting about the limitations of the 9-month cut off for employment data.

Nov. 27, 2013 Update:  Wall Street Journal blogger, Jacob Gershman, picked up the story and concludes:
"So is it a good time to consider law school? The jury is still deliberating."

Dec. 6, 2013 Update:  For more on this topic see here (JD Advantage jobs), here (JD Advantage jobs), and here (the unemployed and grads working part-time) and the embedded links to the National Jurist article on the job equilibrium.

Dec. 7, 2013 Update:  An ABA Journal blogger has picked up the story and mentioned The Red Velvet Lawyer here.

Dec. 9, 2013 Update:  Job data reported for legal industry here.

Dec. 10, 2013 Update:  TaxProfBlog picks up the story and says I've predicted a 2017 equilibrium date. I'm not sure where he got that.  I'm still saying 2015 or 2016 depending on how you define "employment."

Dec. 27, 2013 Update:  One blogger, Matt Leichter, of the Law School Tuition Bubble blog, has continued to work with the numbers and published a story in the AmLaw Daily here.

Jan. 9, 2014 Update:  The National Jurist has analyzed the data and made a prediction here.

March 2, 2014 Update:  Finally, Prof. Organ, who started this conversation, has weighed in with his well-supported prediction here.

March 12, 2014:  Professor predicts "almost guaranteed legal employment for all law school graduates" over the next two decades.

March 21, 2014 Update:  Another professor offer insights.

Survey Reveals Flexibility of Passionate Pre-Law Students Pursuing a Law Degree

Here's the headline:

Adapting to the Current Realities of the Employment Landscape for Lawyers, Half of Pre-Law Students Say They Plan to Use their Law School Degree in a Non-Traditional Legal Job

So started an April 11, 2013 news release published by Kaplan Test Prep.  It goes on to report:

The employment stats don’t paint a pretty picture for pre-law students looking ahead, but flexibility about their future career and their passion for it is driving them forward. According to a recent Kaplan Test Prep survey of more than 200 pre-law students, 50% say they plan to use their law degree in a non-traditional legal field. Of that 50%, nearly three out of five (58%) said the current job market for lawyers factored into this decision. 

Forty-three (43%) percent of survey respondents overall said they plan to use their law degree to pursue a job in the business world rather than in the legal world—which helps explain why 42% said they’d likely pursue an MBA if they weren't already pursuing a JD.

The growing interest in non-traditional legal jobs comes on the heels of the latest report from the American Bar Association which shows that just 56% of 2012 graduates secured long-term, full-time jobs that required bar passage—a 1% increase over the class of 2011.

I reported on this aspect of the job market for law grads in my recent posting here.

The historical NALP data shows that 55 to 58 percent of law grads obtained or sought jobs requiring bar passage, typically law firm jobs.  Thus, up to 42 to 45 percent of law grads historically pursued "JD preferred" (or "JD advanatge") jobs out of law school.  I am cautious about this last statement because remaining grads could fall into other categories on the NALP reports, including "other professional job" and "non-professional job." But the percentages of law grads falling into these latter two categories tend to be below 10 percent -- when taken together -- even in the 2012 job market.

By comparison, one-third to one-half of established lawyers pursued careers outside of law firms.

The April 2013 Kaplan Test Prep survey of pre-law students also found:

Most students say they’re motivated to go to law school by passion, not money: 71% say the primary reason they are applying to law school is “to go into a career I am passionate about.” Only 5% listed salary potential as the primary reason.   

Passion only goes so far, without financial assistance: 43% say they are likely to postpone or alter their plans to attend law school if they don’t get the financial aid package they were hoping for. That line of thinking aligns with advice proffered by graduating law school students: in a separate Kaplan Bar Review survey** of third-year law students, 87% say a law school’s financial aid package should play a significant role in helping pre-law students determine where to enroll."

So, appropriately, students are looking at the big picture and letting the realities of a recessionary economy and the cost of tuition -- after scholarships -- help them decide whether to invest,-- at this time, and in this particular way -- in themselves and their future careers.

Students should have access to complete and reliable information about each law school of interest to them. As a mediator, I hold as a core value informed decision-making based on high-quality information.

For prospective law students and law grads, they are making their next career decision, and certainly not the last one.

Nov. 3, 2013 Update:  Another law professor commented on this survey here in a much more opinionated way.  

Nine-Month Post-Grad Employment Rates Don't Tell the Whole Story

Recently, Above the Law decided to develop its own law school ranking system based on employment rates nine months after graduation.  For the list of top ten schools look here.  I especially like the first comment to that story.  This list clearly fails to recognize that most students will not have the GPA and LSAT scores to get admitted to the law schools Above the Law ranks at the top of its list.  Moreover, the list covers only the top 50 schools, leaving about 150 ABA-accredited schools out of the analysis.  See here.

My last post here discussed how the reported employment numbers could mislead a prospective student.  This new ranking system reflects only the last category of numbers I discussed:  full-time, long-term, bar-required employment within nine months after graduation.

I am not the only law school professor frustrated with the coverage these numbers get.  Brian Leiter of the University of Chicago has lodged his concerns here and refers to a post by Northwestern Dean Dan Rodriguez here explaining a broader perspective on the topic.  He discusses the other categories of employment that may matter to graduating law students, especially the J.D.-preferred category.

This past week Debra Cassens Weiss also reported data showing that employment rates nine months after graduation don't tell the whole story.  Her article appears here.  She describes the empirical research conducted by Prof. D. Benjamin Barros, Associate Dean for Faculty Research and Development at Widener Law School.

His research shows that  80.4 percent of Widener's 2010 grads had jobs requiring bar passage, up from the nine month post-grad percentage of 47.5.  For the class of 2011, 74.1 percent of grads had jobs requiring bar passage, up from the nine month post-grad percentage of 46.8.

Barros says: "It is not reasonable . . . to treat the nine-month numbers as the final word on employment for a particular class of graduates."  Barros recognizes the role the bar exam may play in delaying job offers.  In addition, the bad economy likely makes job hunting more difficult.

He concludes: "[I]t is a mistake to be unduly fixated on initial job outcomes in evaluating any higher educational program."