Paul L. Caron
Dean




Wednesday, December 17, 2014

Seto: More on the 2016 New Lawyer Job Projections

Seto (2014)TaxProf Blog op-ed:  More on the 2016 New Lawyer Job Projections, by Theodore P. Seto (Loyola-L.A.):

On Dec. 10, Matt Leichter published a response to my TaxProf Blog op-ed of Nov. 19 analyzing new Bureau of Labor Statistics projections of the likely demand for lawyers over the next several years. While I am flattered that anyone would spend an entire article responding to my rather pedestrian analysis, I am bemused to be accused of “optimism” and “exuberance.” If I am guilty of these faults, it is entirely unintentional. My goal is to be as ploddingly fact-based as possible.

In particular, Mr. Leichter quotes me as claiming that “by 2016, the number of law graduates [will] exceed the new projected annual job growth rate, creating ‘a significant excess of demand over supply.’” What I actually wrote was: “Based on 2012 and 2013 matriculation rates and historical drop-out rates, we should expect 40,082 ABA-accredited law school graduates in 2015 and 35,954 in 2016. If the new BLS projections are accurate, we should see demand and supply in relative equilibrium in 2015 and a significant excess of demand over supply beginning in 2016. (These estimates only take into account JD-required jobs. Demand from JD-advantage employers is not included.)”

Please note my use of the word “IF.” I do not and cannot vouch for the accuracy of the new BLS projections. I am a lawyer, not a labor economist. But IF those projections are correct, we may soon see an end to the horrible jobs environment we have faced for half a decade. I cannot speak for all law schools, but I know that at my school, permanent full-time employment in JD-required or JD-advantage jobs 10 months after graduation has increased by double-digit percentages in each of the last two years.

In further defense of my post, I would note that in the past commentators have relied heavily on BLS projections to support predictions of doom: Above the Law, Inside the Law School Scam, Slate, and, of course, Mr. Leichter himself. The econometricians at BLS believe that their new methodology – which they are applying to all job categories in all industries, nationwide -- will be more accurate than their old one. Mr. Leichter, a lawyer, disagrees. Time will tell.

Finally, I want to assure Mr. Leichter that I agree with him on many issues – most importantly on the unsustainability of law school tuition increases in excess of the rate of increase of lawyer compensation. Law schools must find ways to provide more value added at lower cost. We should insist that rating organizations like US News stop ranking schools higher simply because they charge and spend more. I would add that over the past several years Mr. Leichter has performed a valuable public service by bringing to light much otherwise difficult-to-access statistical data.

But we should all remember (myself included) that the best legal counsellors, when faced with new evidence, adjust their advice accordingly. They do not simply attack the evidence.

https://taxprof.typepad.com/taxprof_blog/2014/12/seto-.html

Legal Education | Permalink

Comments

@Mark P. Yablon

Except multiple studies have shown that students with LSAT scores below 145 only have about a 50% chance of passing the bar; a number that drops to about 25% at 140. And let's not pretend that law school admissions are remotely holistic; one's undergrad GPA and LSAT are virtually all that they consider. Ergo, a few lines of code could replace most admissions offices.

Posted by: Unemployed Northeastern | Dec 18, 2014 2:00:18 PM

LSAT scores were never intended to be a proxy on the quality of a law school or its students. LSAC continues to stress LSAT scores and UGPA are predictors of first year performance and not much else. LSAT scores should be considered in conjunction with other variables. Otherwise, a computer could admit most applicants.

Posted by: Mark P. Yablon | Dec 18, 2014 9:35:27 AM

@Daniel,

I had an interview at a Big4 firm some time ago - and only because I strong-armed and networked my way to it. Here was the offer on the table: I could intern for them for retail store wages while I went back to school - entirely on my own dime - to get an accounting degree; after that, I could start in an entry-level job at the bottom of the ladder. JD Advantage my eyes.

Posted by: Unemployed Northeastern | Dec 17, 2014 12:41:01 PM

"We should insist" that US News and others do XY and Z. Where to begin? First, you are a law professor, not a "despot." The only people you can insist do anything are your kids and maybe your students, but only until grades come out. Second, holy non sequitur batman! What role does US News play in any of this? You are in an artificial arms race because you are worried about a magazine? That's your cost cutting plan? The toaster manufacturers don't spend all their time whining about Consumer Reports. They try to build a better toaster. The problem, of course, is that YOUR PRODUCT IS A COMMODITY THAT SERVES ONLY AS A SIGNAL FOR STUDENT INTELLIGENCE AND AMBITION. You add almost no value in 3 years. That's why a magazine matters so much. And yes, I said "magazine" and not "ratings organization" - we're not talking about Moody's here.

There's no there there in law school. Now that the secret's out, the institution is getting trounced on the Internet. What happens when a luxury good becomes a commodity? Anyone can go to law school now, so who would want to? Congrats, Professor Seto, you killed the golden goose.

Posted by: Jojo | Dec 17, 2014 10:21:21 AM

Ted, I agree with the general trend you are anticipating. However, I would hold back on any public proclamations until your school's job metrics improve substantially. Even if they are slightly less terrible than a year ago, they are still terrible.

There is no guarantee that employers will ever hire in the bottom half of the class at a school like Loyola. If you want a system like medical school, where even the last placed grad gets hired, then you need to have uniform quality coming in. That is not the case here, and, in fact, student quality is deteriorating rapidly. You will not just offload the problem on the legal profession while you reap the reward of student loan money.

Posted by: JM | Dec 17, 2014 9:44:53 AM

I love the JD advantage game. I have my job because I have a JD and LLM, but almost all similarly situated people have only an accounting degree and CPA license. I invested 200k to get where my Big 4 counterpart invested $10k. Yet I am sure my schools say I am in a JD advantage job. I also have this job because my boss, the CFO, was willing to take a risk on an attorney for the role. For most companies, my JD/LLM was a bar to being considered.

Posted by: Daniel | Dec 17, 2014 8:04:35 AM

One more thing: with ever-falling LSAT and GPA scores at most law schools of late, there is going to be a bar passage issue by the time 2016 and especially 2017 come around. While I'm sure that this will be 100,000% of the fault of NCBE and state bar examiners, there will still be a bar passage problem. Dozens of schools have median LSATs in the 140s now, and a few are flirting with the 130s. Their students. Simply. Won't. Pass. Any. Bar. Even assuming that there will be all of these magic new lawyering positions springing out of the ether, one still needs to pass the bar in order to get one of them.

Posted by: Unemployed Northeastern | Dec 17, 2014 7:54:54 AM

It seems to me that the ABA disclosures are germane here, as they represent the aggregate picture of each school's granular data. Since 2011, when the Senate pressured the ABA to make a new jobs reporting format, we have learned that fewer than 60% of each class of law school grads are able to enter the profession - and as we all know, at least a plurality of full-time, long-term, license-required jobs are either temporary (i.e. state court clerkships) or do not pay anything like a living wage, let alone a wage that justifies law school tuition (see the ABA's coverage of a Boston law firm offering $10,000/year salary last year). So my question is this: what magic is going to transpire over the next two years that will lift the 42-45% of excess law school grads each year into actual legal jobs? The BLS recalibrating its stats won't actually do anything. We have a collapsing middle class, corporations are putting the screws to large law firms, the judiciary is underfunded, the Justice Department has more than 100 unpaid lawyers in their offices according to ProPublica, etc, etc. Boomers by and large can't retire, because they were wiped out in part or in total by the events of 2008 and lifetimes of profligate spending and avarice. So I ask Ted: where are the jobs coming from? And for the millionth time, if you are so confident in these future outcomes, take the bulls by the horn and guarantee future students' loans for them: if they default or have to go on IBR or PAYE, Loyola will pay the government the full balance. Put your money where your mouth is.

Incidentally, I just looked at Loyola's ABA disclosures for the last few years. From 2011 to 2012, the NINE-month (it's not ten months yet, professor) FT, LT, license-required numbers increased from 172 out of a class of 403 to 170/411. Not only is that not a double-digit increase, it is, in fact, a decline. Moreover, the number of unemployed & seeking graduates increased from 65 to 82. In 2013, the performance improved ever so slightly, to 197 of 389, with 55 unemployed. Nevertheless, that's barely above 50% of the class. I didn't bother to count JD Advantage because I've seen way too much evidence of law schools counting JD-cum-legal assistants or bank tellers as JD Advantage. Give us a granular listing of what those JD Advantage students are doing, and we can talk.

Posted by: Unemployed Northeastern | Dec 17, 2014 7:18:20 AM