Chronicle of Higher Education: Law Schools Mull Whether They Are Churning Out Too Many Lawyers, by Katherine Mangan:
At a time when law-school graduates are facing greater debt and fewer job opportunities, the University of Miami School of Law has offered to pay accepted students to stay away—at least for a year. The school's unusual offer, which followed an unexpectedly high number of acceptances for this fall's entering class, comes during a period of soul searching in legal education about just how many lawyers the nation needs and whether educators have an obligation to paint a realistic picture of students' prospects for landing jobs that would justify taking out loans of $70,000 or more.
At least 10 new law schools are on the drawing board around the country, in addition to the 200 already accredited by the ABA. At the same time, the demand for legal services has dropped during the economic recession, prompting hundreds of firms to lay off lawyers, cut salaries, and delay the start dates of new associates. As law schools continue to churn out graduates, the resulting bottleneck could make the competition for jobs even more fierce. And some legal experts predict that even when they do resume hiring, many big firms won't be able to continue paying new associates the salaries of $120,000 or more that students had counted on to whittle down their debt.
But that sobering news hasn't stopped students from flocking to law schools, which saw the number of applicants rise 4.3 percent for this fall, according to the ABA. ...
William D. Henderson, an associate professor at Indiana University at Bloomington's Maurer School of Law who has done extensive research on the legal job market, says he would like to see a Web site in which law schools published accurate details about bar-passage rates and employment statistics. That, he says, would give students a more realistic idea of how readily they would be able to pay off their debts. Instead of just reporting that a certain percentage of graduates went into "business," the site would detail the kinds of jobs and salaries they earned. “The reality hasn’t filtered down to students that this isn’t like Boston Legal where you get a law degree and walk into a great, high-paying job,” Mr. Henderson says. “We’re taking their money and putting people $100,000 in debt,” he says, while their job prospects are at best uncertain.
Update: Stephen Bainbridge (UCLA), Is Law a "Mature" Industry?:
If law in fact is a mature industry, we face a problem of systemic oversupply. The rate at which demand for new lawyers grows has permanently leveled off. Economic recovery will help, but it will not change the fundamental structural changes in the market for lawyers.
Unfortunately, the growth in the number of law schools and size of entering classes at many law schools was premised on the assumption that the demand for lawyers would continue to rise at the high rate characteristic of the period, say, 1960-1990. Because that growth rate was artificially high due to the exogenous shocks of the preceding decades, the number of law schools and large law school class sizes no longer make sense. Indeed, if law schools continue to grow in number and size at their current rate, the gap between demand for new lawyers and the number of new lawyers will continue to rise every year.
Put another way, we have been growing the number of law schools as though the demand for lawyers would permanently continue to experience exponential growth, whereas in fact it follows the classic natural growth x-curve.
My suggestion? Assuming we aren't going to have real free markets for legal services, but will continue to have such barriers to entry as ABA law school accreditation, bar exams, and so on, which presumably would solve the problem, we need to constrict supply. Lop off the bottom third of law schools and see if that solves it.