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Monday, March 3, 2014

The Improving Job Prospects for Law Grads (Especially Those Who Pass the Bar on Their First Attempt)

The Legal Whiteboard:  Is the Employment Market for Law Graduates Going to be Improving?, by Jerry Organ (St. Thomas):

this post will focus solely on the market for full-time, long-term Bar Passage Required jobs. Initially, it will analyze those jobs in relation to all graduates; then it will look more specifically at the percentage of graduates who are likely to be eligible for Bar Passage Required jobs for whom full-time, long-term Bar Passage Required jobs likely will be available, a point on which few others appear to have focused up until now. ...

Classes of 2014, 2015, 2016, 2017 – An Improving Dynamic.  What are the employment prospects for those currently in law school or considering starting law school in the fall of 2014? They almost certainly will be getting better – not necessarily because there will be more jobs, but because there will be fewer graduates. ...

Even if the number of full-time, long-term Bar Passage Required jobs does not continue to rebound, but plateaus at 26,000, as the number of graduates declines over the next few years, the percentage of law graduates obtaining a full-time, long-term Bar Passage Required job ... will grow to between 77% and 84% by 2017 (depending upon first-year enrollment in fall 2014) [from 56% in 2012]. ...

Even if we assume no growth in the number of full-time, long-term Bar Passage Required jobs in the coming years and simply hold the number of such jobs at a constant 26,000, the decreasing number of law graduates will mean an even more improved employment market for those seeking full-time, long-term Bar Passage Required jobs who will be eligible for those jobs by virtue of having passed the bar exam on their first attempt, increasing from nearly 70% in 2012 and 2013 to nearly 90% by 2016 and over 90% by 2017. ...

Whether this improving employment situation will be enough to change the trend in terms of declining number of applicants to law school remains to be seen.  While the future may be brightening, the "news" in the coming weeks will be the report on employment outcomes for 2013 graduates nine months after graduation.  As noted above, that may be somewhat uninspiring because any increase in the number of full-time, long-term Bar Passage Required jobs may be masked by the larger number of graduates in 2013 compared to 2012.  As a result, potential law school applicants may remain reluctant to make the commitment of time and money that law school requires because the "good news" message regarding future employment prospects for law graduates may fail to gain traction if the messages about employment outcomes for recent law school graduates continue to be less than encouraging.

http://taxprof.typepad.com/taxprof_blog/2014/03/the-improving-job.html

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Comments

I generally like Jerry Organ's work, but feel obligated to note that the Bureau of Labor Statistics hasn't predicted 26,000 legal job openings per year (including attrition) since like 2009. The numbers I saw from them a few months ago indicate 190,000 some odd openings from now through 2024, which for our numbers-challenged readers, averages out to 19,000 openings per year. We should be so lucky to have legal employment plateau back at 26,000!

And of course, even if the percentage of grads who land the proverbial FT, LT, license-required jobs improves, that 1) does not mean they can afford their student loan payments and 2) does nothing for the seven or eight years of graduates in the lurch.

Posted by: Unemployed Northeastern | Mar 3, 2014 12:16:55 PM

This analysis is flawed in two respects.

First, it ignores the “overhang” effect. It analyzes the projected likelihood of new graduates in the 2014-17 time period finding full-time legal employment based on a comparison between the projected # of law graduates in that year with the projected 26,000 new law jobs available.

But there are a massive number of underemployed and unemployed recent law graduates who will be competing with future graduates for precisely the same jobs. Take your 2012 and 2013 numbers. There are some 20,000 excess law graduates who did not find FT/LT employment upon graduation. What will the impact of this cohort (and those that follow) be on the employment prospects for the new graduates in the 2014-2017 period?

Second, the analysis ignores the issue of cost. It states that “potential law school applicants may remain reluctant to make the commitment of time and money that law school requires because the "good news" message regarding future employment prospects for law graduates may fail to gain traction.” But dismal employment prospects are only part of the reason why large numbers of potential law school applicants are ceasing to apply.

The other reason is because the cost has surged all out of proportion to the expected return. To take one example: the University of St. Thomas School of Law. Leichter’s data indicates that tuition there increased from $24,842 in 2004-5 to $36,022 in 2010-11, an increase of 45%, or 25.62% over the cost in inflation. http://lawschooltuitionbubble.wordpress.com/2011/01/22/the-law-school-tuition-bubble-data-tuition-increases-law-school-by-law-school-from-2005-to-2011/#MN
[Total cost of attendance, however, can run around $200,000, according to the school’s own estimates.]

Naturally, this is simply one example of many (and far from the most extreme – UST deserves some praise for actually implementing a tuition freeze). Ultimately, the “good news” will only start to reach students when the cost of most law schools readjusts (through a combination of market pressures and perhaps at some point, federal student loan reform) at a much, much lower level than now. Tulsa’s decision to slash effective tuition in half (to $16,430/year) is a sign of which way the wind is blowing. Other schools will follow. That will force a vastly larger readjustment of the existing structure of American legal education than many law professors currently realize.

But it will happen.

Posted by: Disagree | Mar 3, 2014 12:32:55 PM

Wow, you guys in the law faculty don't quit, do you? It's getting better because fewer people are applying to school?! That's not the same thing as an improving job market.

You realize that this argument, in essence, is "Great news! Smaller classes mean fewer unemployed law graduates! Things are looking up now." It doesn't sound so great when you put it that way, does it?

Posted by: Jojo | Mar 3, 2014 12:35:00 PM