Paul L. Caron
Dean


Thursday, November 14, 2019

Law Schools Are Unlikely To Increase JD Enrollment As Supply Of Lawyers Continues To Outpace Demand

Indiana Lawyer, Good Growth? Lawyer Population Grows, But Supply May Outpace Demand:

The last decade has been fraught with economic uncertainty, as a recession, recovery and an expected new recession have cast a shadow over many industries, including the law. But recent data from the American Bar Association indicates the ups and downs haven’t kept people from the practice.

According to the ABA’s National Lawyer Population Survey, the number of active lawyers nationwide grew by 14.5% in the last decade, up from 1,180,386 in 2009 to 1,352,027 in 2019. ...

These numbers can be seen as a reason to celebrate in a profession that was hit hard by the Great Recession. Law school enrollment, for example, took a nosedive in the early 2010s but has remained relatively steady ever since.

But industry experts also see a potential mismatch between lawyer supply and demand, creating the risk for oversaturation. Indeed, though the employment rate for recent law school graduates is up, the actual number of jobs has declined.

“It’s impossible for anyone to know what’s going to happen in terms of an event that might disrupt the economy,” said James Leipold, executive director of the National Association for Law Placement. “But if there’s another significant slowdown, not even as dramatic as the last one, we could see the job numbers fall more quickly.”

Given the conflicting data, experts say the best thing law students, schools and employers can do is keep an eye on the market. 

Analyzing the legal job market isn’t as simple as looking at the lawyer population, experts say. The number of licensed attorneys has increased, but law school applications and enrollment have experienced multiple years of decrease.

Plus, the number of jobs available to new graduates fell by 150 jobs between the Class of 2017 and the Class of 2018, according to NALP data. Given this disparity, Leipold said it can be hard to reconcile why the number of lawyers is going up.

Bill Henderson, the Stephen F. Burns professor of law at Indiana University Maurer School of Law, wasn’t surprised to see that the number of licensed attorneys was up, but he agreed those numbers should be put in context.

For example, Henderson noted many retirement-age attorneys are choosing to continue working. Kellye Testy, president and CEO of the Law School Admission Council, also said the last recession has played a part in some older lawyers declining to leave their jobs. Further, she noted that technology now gives older attorneys the option of continuing their work from home. ...

Though the recession is nearly a decade past, Testy doesn’t expect law schools to return to their previous enrollment numbers. Instead, she said many law schools now offer degrees outside of a J.D., such as a master of laws degree, that can help them maintain the number of students and revenue they need. “I don’t expect them to increase the number of J.D. students,” she said. “They’re trying to market to the market.”•

https://taxprof.typepad.com/taxprof_blog/2019/11/law-schools-are-unlikely-to-increase-jd-enrollment-as-supply-of-lawyers-continues-to-outpace-demand.html

Legal Ed News, Legal Education | Permalink

Comments

It's incredible how few people seem to understand basic concepts like supply and demand.

There are fewer law students graduating from law school, so there are fewer law students who have jobs. That's a supply issue.

The fraction of law graduates who are graduating who have jobs has increased. That's a demand issue.

https://leiterlawschool.typepad.com/leiter/2018/08/nalp-data-when-there-are-fewer-law-school-graduates-there-are-fewer-law-school-graduates-with-jobs-m.html

Lawyers are making more money than before, i.e., demand is growing faster than supply.

Posted by: Supply and Demand | Nov 14, 2019 2:18:16 PM

"There are fewer law students graduating from law school, so there are fewer law students who have jobs. That's a supply issue."

No, there are fewer grads getting FT/LT/license-required jobs within ten months the last few years than there were grads getting FT/LT/license-required jobs within NINE months during the aftermath of the Great Recession. It's gone from the 27k jobs/year range to somewhere in the 22s, if I recall correctly.

"The fraction of law graduates who are graduating who have jobs has increased. That's a demand issue."

No, it's entirely due to the declining denominator. Basic math can be hard, I know.

"Lawyers are making more money than before, i.e., demand is growing faster than supply."

1) The median NALP salary for the class of 2008 was $72k. In real dollars that works out to $84,235 or so today. What was the median NALP salary for the class of 2018? $70,000. Say, is $70,000 more or less than $84,235? For that matter, is $70,000 more or less than $72,000?

2) In real dollars, the $160k that Simpson Thacher raised to in January of 2007 and the $125k that Gunderson Dettmer raised to way back in 1999 are each higher than the $190k mark that a minority of large law firms pay today (others pay $180k, and I believe the plurality nationwide is still $160k).

3) Oh, and the unemployment rate for the Class of 2018 ten months after graduation was nearly 10%; compare to <4% for the overall adult population

It is amazing how few people understand concepts like supply and demand.

Posted by: Unemployed Northeastern | Nov 15, 2019 2:41:31 PM

“Say, is $70,000 more or less than $84,235? For that matter, is $70,000 more or less than $72,000?”
The median NALP salary only appears lower because many law graduates are now pursuing government and non-profit jobs to obtain the benefit of PSLF. Assuming that many of these graduates will have hundreds of thousands of dollars in student loan debt forgiven after ten years, they are effectively earning tens of thousands of dollars in additional income annually. These graduates will earn even more money when they leave public service jobs for private practice in ten years.
“the unemployment rate for the Class of 2018 ten months after graduation was nearly 10%; compare to <4% for the overall adult population” [sic]
It is amazing that you only cite a small sample of the legal population. The overall unemployment rate of all lawyers is only 1-2%, which is less than the national unemployment rate for the overall adult population. You cite a snapshot of the employment status of recent graduates at a certain point in time after graduation. Nearly all of these graduates will eventually obtain legal employment. When it comes to new graduates, employers want to ensure the graduate has a legitimate interest in working for them. An employer does not want to hire a new graduate, only to lose the graduate when a more appealing job opens up.

Posted by: Amazing | Nov 17, 2019 7:24:00 PM

"The median NALP salary only appears lower because many law graduates are now pursuing government and non-profit jobs to obtain the benefit of PSLF."

An artful way of rephrasing "There are thousands fewer FT/LT/license-required jobs today than when the economy was MUCH worse at the start of the decade." Also the reject rate on PSLF is like 99.7%. Interestingly, another Northeasterner - let's call him Tenuously Surviving Northeasterner 'cuz I don't remember his name offhand - was one of the 30 or so people to survive the PSLF gauntlet. He gave an interview to one of the finance sites a few months ago: Bloomberg, Marketwatch, something like that. IIRC less than $40k was forgiven, he still has $70k in private student loans, and the notion of having a family or taking a vacation is utterly conceivable in his future. Yay JD wage premium!

"Assuming that many of these graduates will have hundreds of thousands of dollars in student loan debt forgiven after ten years,"

See that 99.7% rejection rate. Do you actually own a can opener store or are you just a terrible wannabe economist?

"These graduates will earn even more money when they leave public service jobs for private practice in ten years. "

Assumes facts not in evidence.

"It is amazing that you only cite a small sample of the legal population. "

The ABA data for law school grads is the most thorough out there.

" The overall unemployment rate of all lawyers is only 1-2%, which is less than the national unemployment rate for the overall adult population."

Survivorship bias alert! Not even 2/3 of law school grads over the last decade have become attorneys at all.

"You cite a snapshot of the employment status of recent graduates at a certain point in time after graduation. Nearly all of these graduates will eventually obtain legal employment."

Yup, employers just LOVE to see resumes with >10 months of blank space on it. Many studies corroborate this. Obviously all the thousands of law school grads unemployed nearly a year after graduation get hired by S&C at month eleven. Yessir. No, wait - all those studies corroborate that after about six months job applicants are stone cold dead in the water. Dead as in "Employers would rather not fill the position than hire them." Or in the case of at least one study, "Employers would rather hire applicants with misdemeanor convictions than the long-term unemployed." See also: how the employment meter hardly budged when law schools goaded the ABA to change the reporting date from nine months after graduation to ten months after graduation a few years ago.

Tl;dr: your argumentation is insipid, your data is weak, and your assertions belie observable, measurable reality.

Posted by: Unemployed Northeastern | Nov 19, 2019 4:11:08 PM