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Tuesday, November 20, 2012

The Job Market for Law Grads Has Been Declining for a Long Time

Marc Gans (J.D. 2012, UCLA), Not a New Problem: How the State of the Legal Profession Has Been Secretly in Decline for Quite Some Time:

My goal was to provide an in-depth analysis of the job market for new law graduates over time, as well as the state of the legal field as a whole. Using historical records, I reached the following results:

  • Depending on which dataset is used, of the 1.4 million law graduates of the last 40-years, 200,000-600,000 are not working as attorneys.
  • Using NALP data, I calculate a True Employment Percentage (full-time, JD-required jobs excluding those who start their own practice) and find that it has been bad for a long time, not just recently. Over the last 25 years this percentage has averaged 68%, meaning 1 out of every 3 graduates couldn't find legal work. I also use regression to show that it is not correlated with bar passage rates.
  • Using this True Employment Percentage, I found that the ABA should have stopped accrediting law schools in the mid-1970's.
  • The ABA dataset shows that overall, these "newer" law schools have worse employment outcomes, especially for the most desirable jobs. For example, 16% of graduates of schools accredited before 1975 found employment in firms of 100 attorneys, while under 4% of graduates of schools accredited after this time did.
  • Income inequality for starting salaries has been widening dramatically. Over the last 16 years, the 75th percentile real starting salary has increased 73%, while the 25th percentile real starting salary has increased just 11% (almost all of it occurring before 2000).

http://taxprof.typepad.com/taxprof_blog/2012/11/the-job-market.html

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Comments

I am continually astounded by the repeated suggestions--by people who are otherwise flatulant capitalists--that the ABA should limit law school accreditation in order to hold the line on law grads. Doesn't a "free" market system demand that the ABA accredit every single law school that meets or exceeds its rather minimalist qualifications?

Posted by: Publius Novus | Nov 20, 2012 3:15:06 PM

Lawyers leaving the practice of law to work for clients or to make money has been a source of pride for the profession for the 41 year history that I have seen. Lawrence Friedman's and Daniel Borsten's histories of law say that the law degree has always been the license to make money. Law degree gets you to where the money tree is, even for those who do not stay in litigation, which is the core of the lawyer's discipline.
That is not to say that the practice of law might well be shrinking. But osmosis of lawyers into money making alternatives opened up by law school is not the right measure of its.

Posted by: Calvin H. Johnson | Nov 20, 2012 7:36:06 PM

Calvin H. Johnson: "Lawyers leaving the practice of law to work for clients or to make money has been a source of pride for the profession for the 41 year history that I have seen..."

The author isn't talking about leaving a law practice (i.e. working for a firm), he is talking about no longer being an attorney. So the first group, lawyers leving the practice of law to work for clients, is generally NOT included in the 200,000-600,000 number above. An in-house attorney is still an attorney.

"...the law degree has always been the license to make money. Law degree gets you to where the money tree is..."

Do you honestly think that these 200,000-600,000 former attorneys are all (or even mostly) hanging around the money tree?

Even at your school (UT), a solid top 20, around 10% of last years class was not working 9 months after graduation, another 3% were either doing part-time work or non-professional work, and almost 2% went solo straight out of law school. Where is their license to print money?

Now just imagine what the numbers must look like for grads of a school outside the top 50, or outside the top 100.

Posted by: Dean | Nov 20, 2012 8:30:11 PM

Professor Johnson,

Your comment is exceedingly unclear.

Are you trying to dispute (opaquely) the claims of Mr. Gans?

The primary claim (strongly backed up by data) being that an extremely large fraction of law school grads (200k to 600k out of 1.4 million) end up not practicing law or practicing in a solo setting vastly inferior (economically) to the BigLaw "six-figure salaries" that law schools heavily promote in their marketing materials (and have done so, misleadingly, for decades - in order to justify their grotesquely inflating tuitions.)

You seem to imply, without a shred of empirical evidence (in contrast to Mr. Gans' paper) that 200k to 600k JDs have left the law to become millionaires (by conspicuously unspecified means).

This is the criminally vague and empirically void notion that "law school training is valued by many employers" - the first, last, and eternal refuge of the scoundrels profiting from law school fraud.

Put numbers to it, Professor.

Arguments from vaporous anecdote don't cut it in this connected age.

Unlike the large six-figure "forgivable" loans handed out to certain UT law profs in the dark of night, the crushing debt placed upon the vast majority of JDs is not even remotely "forgivable" (nor dischargeable in bankruptcy...).

Posted by: sca721 | Nov 20, 2012 10:03:50 PM

I conducted some "back-of-the-envelop" calculations on my own blog that may be of interest. Using ABA and U.S. Bureau of Labor Statistics data, I concluded that fewer than 54% of all JDs produced over the previous 40 years actually worked in the legal profession:

http://flustercucked.blogspot.com/2010/07/statistics-suggest-that-only-538-of-all.html

Related posts:

http://flustercucked.blogspot.com/2010/07/40-years-of-lawyer-overproduction-data.html

http://flustercucked.blogspot.com/2010/07/statistics-may-suggest-less-than-30-of.html

Posted by: Frank the Underemployed Professional | Nov 21, 2012 8:07:17 AM

Makes sense since about half of the schools out there are tier 3 and 4.

Posted by: Data | Nov 21, 2012 9:39:19 AM

Real median male salaries have not increased *at all* since the mid 1970s.

If the 25th percentile of lawyers has seen an 11 percent real increase, and the 75th percentile has seen a 73 percent increase, while the median worker has seen zero increase, that suggests that those with law degrees are doing far better than most workers.

I understand that law degree holders would like to be doing even better, but denying others the opportunities afforded by a law degree is simply selfish protectionism.

Posted by: Anon | Nov 21, 2012 12:10:15 PM

When can we expect that detailed map to the fabled "money tree", Professor Johnson?

Arboreal census? Analytical study of the shrubbery?

Posted by: cas127 | Nov 21, 2012 1:42:58 PM

"doing far better than most workers"

Who, at the median, have not paid for 7 years of higher education?

You take benefits into account (salary bump) but ignore costs (tuition and foregone salary).

It may be selfish protectionism (although keeping someone from likely financial suicide is hardly selfish) but it pales in comparison to the ethical sodomy of the law school professoriat and administrative apparatus - who have shamelessly, relentlessly cooked the books for a long, long time.

To their enrichment and others detriment.

But this angry army of the dispossessed are coming home, borne on blogs.

Posted by: cas127 | Nov 21, 2012 3:59:01 PM

The Gans article just hit the big time - the NY Times

(http://economix.blogs.nytimes.com/2012/11/21/law-school-admission-testing-plunges/)

with gory numbers and all (1.4 million JDs, 200k to 600k MIA).

This is big.

You should probably work on that money shrubbery census over the holiday, Calvin...

Posted by: sca721 | Nov 21, 2012 5:22:02 PM

"If the 25th percentile of lawyers has seen an 11 percent real increase, and the 75th percentile has seen a 73 percent increase, while the median worker has seen zero increase, that suggests that those with law degrees are doing far better than most workers."

Two points:
1. As cas127 pointed out, lawyers have spent 7 years and, on average, $125,000 to get those jobs. You have to account for this if you want to compare outcomes.

2. The percentile numbers you quote are for WORKING ATTORNEYS. You entirely missed the point of the abstract quoted above -- a significant portion of JD grads are not working as attorneys.

Posted by: Dean | Nov 21, 2012 6:25:56 PM

Who takes seven years to complete law school? It's only 3-4 years.

Posted by: V Hatchetts | Nov 22, 2012 12:28:10 AM

"Who takes seven years to complete law school? It's only 3-4 years"

It takes 7 years (4 for undergrad and 3 for law) to become a lawyer.

Posted by: Dean | Nov 22, 2012 7:53:05 AM

"Who takes seven years to complete law school? It's only 3-4 years."

It takes seven years to complete both undergraduate and law school (4+3).

The comment I was responding to wanted to compare the "median worker" in the US to law school grads (in terms of real income increases over the decades).

The median worker in the US is still just a high school graduate - therefore a lawyer has (by definition) 7 additional years of schooling (and tuition expense).

That significant additional tuition expense has to be included in any fair analysis when comparing the increased real earnings of lawyers relative to the "median worker".

Posted by: cas127 | Nov 22, 2012 9:35:12 AM