Paul L. Caron
Dean





Thursday, August 2, 2018

Overall Employment Rate Of Law Grads Hits Post-Recession High, Full Time Bar Passage Required Jobs Surges 4 Percentage Points; But Number Of Jobs Down 4th Year In A Row

NALP, Class of 2017 Notched Best Employment Outcomes Since Recession:

The National Association for Law Placement (NALP) today released its Employment for the Class of 2017 – Selected Findings, a summary of key findings from the upcoming annual Jobs & JDs: Employment and Salaries of New Law School Graduates — Class of 2017 report, coming out in October 2018. This year’s Selected Findings show a rise of more than one full percentage point in the overall employment rate for the Class of 2017, to 88.6% of graduates for whom employment status was known, compared with 87.5% for the Class of 2016, even though the number of jobs found by graduates fell again, by more than 1,200 compared with 2016.

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“The employment outcomes findings for members of the Class of 2017 are surprisingly strong. Most notable is a bar passage required employment rate that jumped more than four percentage points from the previous year, and a private practice employment rate that has now increased for six years in a row,” noted James G. Leipold, NALP’s executive director. “Barring another economic slowdown or interruption and barring a significant jump in law school enrollment as a result of rising applications, the employment outlook for recent law school graduates looks brighter (if not exactly rosy) than it has at any time since 2008, and that is good news.”

Selected Findings — Other Highlights:

  • For the third year in a row the actual number of jobs obtained was flat or went down in virtually every sector except the largest law firms of more than 500 lawyers. Members of this class  ecured just 16,390 jobs in law firms of any size, down by more than 4,000 since the number of those jobs peaked for the Class of 2007. And while the largest law firms of more than 500  lawyers hired more law school graduates than at any time since the recession, the number of entry-level jobs at those firms is still off by nearly 600 positions compared with the peak hiring measured with the Class of 2008.
  • The size of the 2017 graduating class was smaller, with just 34,922 graduates entering the job market compared to the historically large Class of 2013 that produced 46,776 job seekers; this represents a contraction of more than 25% over four years.
  • The national median salary for the Class of 2017 was $70,000, up from $65,000 for the Class of 2016. The national mean for the Class of 2017 was $95,320, compared with $90,305 for the Class of 2016. For the Class of 2017, salaries of $180,000 accounted for just over one in five of the full-time long-term salaries reported.
  • The mean law firm salary also rose 4% to $119,740, nearly $5,000 more than the previous high measured in 2009. The effect of the $180,000 salaries can be seen in the national median salary at law firms, which, based on reported salaries, climbed to $117,000, the third increase in a row. Salaries of $180,000 accounted for almost 37% of reported law firm salaries, compared to about 28% for the Class of 2016.
  • Beyond the improvement in the overall employment rate, the single most important indicator of an improved market was the increase in the percentage of graduates taking jobs for which bar passage is required or anticipated, from 67.7% to 71.8%, a single-year increase greater than in the previous four years (2013-2016) combined.
  • JD Advantage jobs fell to just 12.3% of graduates for whom employment status was known, lower than the rate measured at any time since 2010. This suggests that despite the growth of new JD Advantage opportunities in areas like compliance, many law graduates prefer bar passage required jobs practicing law if they can be found.
  • The percentage of jobs reported as part-time has declined for six years in row, and now stands at 5.4% of jobs, compared with 6.1% for 2016. As a result, the figure is now comparable to that of 2007 and the years immediately prior.
  • The number of jobs taken at the largest firms—those with more than 500 lawyers—increased by about 370, which, in concert with the decrease in the overall number of law firm jobs, pushed their share of law firm jobs up by 2.6 percentage points, from 25.5% of law firm jobs in 2016 to 28.1% in 2017.
  • Public service jobs, including military and other government jobs, judicial clerkships, and public interest positions, accounted for 29.9% of jobs taken by employed graduates, compared with 29.5% in 2016.

“All of this suggests that the dramatic falloff in law school enrollment, coupled with a recovering Big Law market, has in some ways provided the correction that was needed, and we are closer than at any time since the recession to having the number of law school graduates more closely match the number and kind of jobs available,” said James Leipold, NALP’s executive director. “While the worst of the underemployment problem has now been remedied, the unemployment rate ten months after graduation still remains much higher than it should be. Despite the strong recovery of the job market for law school graduates since the recession, this elevated unemployment rate remains an important marker of the current job market for new law school graduates.”

https://taxprof.typepad.com/taxprof_blog/2018/08/overall-employment-rate-of-law-school-graduates-hits-post-recession-high-full-time-bar-passage-requi.html

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Comments

@Anon,

I think Tuphat was wondering if a JD in the tax department of a Big 4 would be considered JD-Advantage or another category.

I remember the last conversation I had with a Big 4, which I only had through copious, multi-layered networking. It went something along the lines of "If you go back to get an undergrad degree in accounting on your own dime we'll hire you to be an entry-level drone." So much for that supposed premium everyone puts on the JD...

Posted by: Unemployed Northeastern | Aug 4, 2018 12:01:39 PM

"Asking out of ignorance: how is a position in tax dept of Big 4 acctg firm scored?"

Just apply on their website. Not being facetious really just do that.

Posted by: anon | Aug 3, 2018 9:45:09 PM

"The size of the 2017 graduating class was smaller, with just 34,922 graduates entering the job market compared to the historically large Class of 2013 that produced 46,776 job seekers; this represents a contraction of more than 25% over four years."

Wow that's like closing 1/4 of the law schools. No wonder graduates' job situation improved.

Posted by: anon | Aug 3, 2018 9:44:17 PM

"even though the number of jobs found by graduates fell again, by more than 1,200 compared with 2016."

*again*

'Nuff said. The only good news from this report is enough people chose not to attend law school, thereby making dismal job stats look good when presentad as a ratio.

One hopes, in light of schools' incesant efforts to peddle their 60K+ annual tuition defective widget to new GRE markets, that class sizes (and thus, law graduate numbers) don't increase. But they will. And NALP's good news will be eviscerated. The schools don't seem to care.

Posted by: Anon | Aug 2, 2018 6:17:29 PM

Ahem. $72,000 in 2008 is worth $85,954.18 at the moment. This year's $70,000 median starting salary represents an 18.5% real dollar decrease since 2008. For that matter, the $160k market rate Biglaw starting salary in 2008 is worth $191,009.29 in today's dollars. So the market has yet to even catch up to inflation, to say nothing of the increase in the cost of attending law school. Harvard Law, for instance, had sticker tuition of $41k in 2008 and is north of $60k today.

“For the third year in a row the actual number of jobs obtained was flat or went down in virtually every sector”

That speaks for itself. All too often acquiring a law degree and bar license makes one a “lawyer” in the same vein that acquiring an undergrad poly sci degree makes one a “politician.”

“The size of the 2017 graduating class was smaller, with just 34,922 graduates entering the job market”

Still far too large. Per the ABA, there are only about 23,000 FT/LT/license-required jobs for the Co2017. In the dark days of the Great Recession, when law school crisis articles crowded the nation’s news sources and folk were pretending that the profession’s structural change was cyclical, that number stood around 27,000. Gosh, it’s almost as if the declining demand for new law grads might be tied into that 18.5% real dollar decline in median starting salary. Maybe that’s why one has to follow multiple links to get to the NALPs full report, which admits “the percentage employed full time in jobs requiring bar passage that will last at least a year was 68.8%.”

Also it should probably be noted that NALP median salaries have always been inflated by their refusal to count the 7-10% of grads who are known to be unemployed every year in their tallies, even though their salaries are known ($0). One can only imagine what the median becomes once it is dragged to the left by all those $0 data points. The full report admits that 9% of law school grads were still unemployed in March – more than twice the 4.1% national unemployment rate that month – which equates to 3,142 unemployed law school graduates. But then again, even the NALP has admitted in the past that its top-heavy data collection efforts skew the salaries upward 12%.

Finally, and as always, any changes to GradPLUS or IBR plans, which the majority party desperately wants to enact, are nothing less than a Sword of Damocles dangling as an existential threat, whether anyone wants to admit or not.


Posted by: Unemployed Northeastern | Aug 2, 2018 9:21:51 AM

Asking out of ignorance: how is a position in tax dept of Big 4 acctg firm scored?

Posted by: Tuphat | Aug 2, 2018 7:00:07 AM