I’ve just posted my most recent article on SSRN (here). It’s called “What’s New About the New Normal: The Evolving Market for New Lawyers in the 21st Century.” The paper focuses on the market for entry-level law-related jobs, which even the most casual observer of the profession knows has been deeply depressed, and has had very significant effects on the lives of recent law graduates and the legal academy. At a time when a lot is still changing and nothing has really settled down, the paper asks precisely what is new about what some refer to as the “New Normal,” and now normal we can expect it to remain as the effects of the Great Recession slowly dissipate.
The article uses the placement data accumulated by the National Association for Law Placement (“NALP”) and the ABA Section of Legal Education and Admission to the Bar (“ABA”) to derive quantitative measurements of the proportion of law graduates over the last thirty years who have obtained initial employment for which law school serves as rational substantive preparation (“Law Jobs”). With this (somewhat) normalized longitudinal data in hand, the paper reaches three hopefully useful conclusions:
First, in comparing entry-level hiring patterns since 2008 with those in earlier periods, a significant development emerges: While other sectors of the market for new lawyers have changed only modestly during the Great Recession, one sector—the larger private law firms colloquially known as “BigLaw”—has contracted six times as much as all the others. Though BigLaw hiring has historically accounted for only 10%-20% of each aggregate graduating class, it is responsible for over half the entry-level Law Jobs lost since 2008. And because BigLaw historically has hired a disproportionate number of the candidates most attractive to most employers, this contraction has sent a new cohort of highly accomplished law graduates previously absorbed by BigLaw into the competition for non-BigLaw jobs, disrupting common understandings regarding where new graduates with particular ranges of credentials could expect to find work. These findings suggest that the changes in and to BigLaw are driving the changes in the entry-level Law Jobs market.
Second, the first conclusion raises the question what we can expect from BigLaw going forward. The paper directly addresses the prevailing controversy over whether the currently depressed levels of entry-level hiring are predominantly attributable to a cyclical (recession-induced) reduction in demand for legal services in general and for BigLaw services in particular, or whether there have been basic structural changes in the way that legal services are being staffed, priced and produced that suggest that most of the current reduction in demand for new lawyers is here for the foreseeable future. The paper identifies several significant technological, competitive and economic developments that have generated structural changes in the way that the services traditionally provided by BigLaw are being produced. All of these developments seem likely to diminish BigLaw’s need for junior lawyers, both immediately and in the longer term. They were gathering force during the 2000s, but emerged in high relief as a result of the stresses imposed on BigLaw firms and their clients as the economy descended into the Great Recession during 2008. The arguments that the current contraction in the entry-level Law Jobs market is predominantly caused by cyclical economic phenomena (including, to the limited extent it is mentioned there, Michael Simkovic’s and Frank McIntyre’s recent, impressively thoughtful and detailed paper on “The Economic Value of a Law Degree”) don’t address any of the structural factors the paper identifies, whether to argue that they don’t exist or that they don’t matter for this purpose. The paper offers the prediction that entry-level BigLaw hiring, and thus the market for new lawyers overall, will remain depressed below pre-recession levels well after demand for the services BigLaw has traditionally provided recovers, and will lag substantially behind the pace and extent of any increase in demand for BigLaw’s services.
Third, and concluding on a somewhat brighter note, the paper suggests that the contraction in entry-level hiring is part of a dynamic market process that may in some important ways be self-correcting. In particular, the contraction in the entry level Law Jobs market has apparently caused a substantial reduction in the number of applicants to law school, which is already resulting in smaller entering classes of law students. It won’t be more than a few years before graduating classes are correspondingly smaller as well. With significantly fewer new graduates chasing even a persistently limited number of entry-level jobs, the lawyers produced by the shrinking legal academy should expect to fare better in the Law Jobs market than their predecessors who graduated in the last few years. This is not to understate the hardships visited on the “Lost Generation” of law graduates who found themselves released into a badly oversubscribed job market, nor is it to understate the hardships that are already befalling the faculty and staff of the law schools now finding themselves forced to accommodate a shrinking applicant pool. But it does provide some reason for optimism regarding the prospects for the smaller classes of new law graduates we can expect to see entering the job market in the next few years.
I will have more to say about the implications of this analysis for the legal academy in future posts, and also intend to speak further about how this paper and Simkovic’s & McIntyre’s recent article, which to be clear I consider an important, informative and valuable contribution to the literature, do and do not address one another.
Again, the paper is here for those who are interested. It is still very much in draft, so thoughtful and engaged comment is especially invited. Those habitually inclined not to be thoughtful or engaged (and I wish more of you knew who you were) are encouraged to check your bull at the entrance to the china shop, though I’m realistically resigned about whether you will.