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April 15, 2014

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Former Editor

"Brian asks why legal educators argue that students should go to law school now. Shouldn’t we wait to see how things play out in the next couple of years? I think the answer is no, because (a) the numbers so strongly suggest that the job market will be exceptionally strong in a couple of years, and (b) the admissions and scholarship markets very strongly favor applicants right now. Potential applicants who are interested in law school should go now because (a) they will start their legal career sooner, and (b) they might not fare as well on the admissions market if they wait until the conventional wisdom on the desirability of law school shifts."

Doesn't this translate into "Now is a great time to go to law school if (a) you are going to a top tier school or (b) have a huge scholarship?" That's not quite the same thing as the broader claim being made.

Ben Barros

FE, no, because the outcomes I see for my former students are generally very strong, and I don't teach at a top tier school. More scholarship money is better than less, but I think the outcomes make it worthwhile even at full cost.

Doug Richmond

Isn't an additional factor to consider when deciding whether to "push so hard" the quality of the jobs available down the road? Those jobs may look nothing like--and pay nothing like--the law firm associate jobs that many of us took right out of school. Most legal educators other than Bill Henderson seem to be ignoring this consideration altogether.

Former Editor

Can you tackle the debt issue in relation to that then? Maybe I'm missing it, but I don't see anything in your numbers indicating that the value of the outcomes would be sufficient to service the median 140k student debt (from the NAF report).

MacK

As I understand this post - it suggests that now is a great time to go to law school because based on very optimistic back of the envelope calculations only ¼ of JDs in 2017 or 2018 will be unemployed, in debt to an amount of circa $200,000 and ecstatically happy - or they may be one of some ½ of newly minted JDs earning circa $40-70,000 with $200,000 in debt to service, or they can be one of the lucky 5,000 or 1/6 who get jobs at salaries sufficient to service the debt.

Are all law professors this oblivious - well maybe, there is Dean Chemerinsky (see NYT), Oregon Law School professor Rob Illig or Lisa T McEvoy of Drexel.

Jojo

Ben,

I think it will be easier for a 3L to get a job in 2017 than it is today, other things equal, but I don't foresee a return to the 2000s for various reasons. First, the last 7 or 8 years have produced a glut, which has depressed wages and driven many lawyers from the marketplace. My experiences have revealed a lot of slack in the system, and a lot of lawyers willing to work for sub-college graduate level wages. I suspect that they will be the ones to benefit from any decline in supply. This is doubly so given the comparatively poor academic credentials that the class of 2017 will have vis a vis the class of 2013. Put another way, the relatively good cogs generated by the factories from 2007 to 2013 don't disappear and will displace the relatively bad cogs generated by the factories in 2017 and 2018.

There is less hiring in biglaw and less turnover in government employment now. This really began in 2008, and entry level jobs are difficult to come by.

There are structural changes in demand for lawyers recognized by Henderson, et al., that are ignored in these forecasts.

Another separate critique has gone unaddressed. Cost is wholly ignored in these forecasts. While employment is good, and legal employment is very good to law graduates, having a job that pays what you could have earned with your B.A. is a poor outcome for students, especially if the cost of law school is debt-funded.

Ben Barros

Crud, I appear to have a comment stuck in moderation because it includes a link. FE, it said that I'm using my phone right now, and will address the debt service issue later tonight. Doug, my response to you had the link that appears to be causing the delay. It was to a post where I explain why I don't buy that particular form of the structural change issue. I'll try to get it out of moderation, but can't from my phone.

Steven Freedman (KU Law)

@ Doug Richmond. For job quality, there's evidence pointing in both directions as to how the market might play out. The DoJ just ended a three year hiring freeze, biglaw hiring of law grads has increased 38% the past two years from 2,878 in 2011 to 3,970 this year, and the economy continues to improve. There's also the coming decline in law grads that will bring better balance to the employment market. On the other side are many of the issues Bill Henderson has talked about, including outsourcing and web-based legal services, as well as the attorneys laid off during the recession who might still be on the market (not sure how large that total is, since the unemployment rate for attorneys is only around 3%).

@ Former Editor. I think the Simkovic paper addresses the economic utility of a JD.

p.s. I'm going to go back to my post now, but just wanted to chime in on Ben's post for a moment since I think it's a really good one.

terry malloy

"the unemployment rate for attorneys is only around 3%"

Hmm, That sounds like an outright lie. At the very least, it sounds like the knowing misrepresentation.

Source?

Barry

Terry, there a trick (as there is with all such numbers):

1) If you graduate and don't get a lawyer job, you may be unemployed, but you are not an unemployed *lawyer*.

2) If you lost your lawyer job, can't get another one, and take some other job, you are an *employed* *non-lawyer*. And you'll probably take whatever you can get within the year.

3) If you lost your lawyer job, can't get another one, and can't get any other job, and stop looking, you no longer count as *unemployed*.

4) Only if you lose your lawyer job and are still actively seeking work as a lawyer are you an *unemployed* *lawyer*.

Barry

Steven Freedman: "...biglaw hiring of law grads has increased 38% the past two years from 2,878 in 2011 to 3,970"

Those are the sort of jobs with which one has a chance of paying off $150K - $200K of debt. And 3,970 openings means that ~1 out 10 grads will get such a job.

I count those as rather bad odds.

Steven Freedman (KU Law)

@ terry malloy - I understand you might be skeptical about such an anemic unemployment rate for attorneys. If you listened to the critics, you'd think half of all JD's are on the bread lines somewhere. This was the best I could do on short notice, I'm sure the BLS has stats buried somewhere deep on their website.

"While the overall unemployment rate for lawyers is a microscopic 2.1%, that doesn't take into account the trouble recent graduates are facing to find work that will soon pay off their debt."

http://www.theatlantic.com/business/archive/2012/01/what-do-lawyers-and-bankers-have-in-common-they-lost-jobs-in-2011/251130/ This is from an author who clearly had not seen my graphs and charts, nor read the Simkovic report.

Ben Barros

Doug, trying again, here is the link to the post where I explain why I am skeptical of the impact of structural change on the job market:

http://www.thefacultylounge.org/2013/05/reconsidering-the-conventional-wisdom-on-the-legal-job-market-part-ii.html

As I explain there, I think that there is some long-term structural change in the market, but that it does not do much to explain the current job market.

Ben Barros

Former Editor asked about the very important issue of debt service. There is a lot to say on this topic, but here is the relatively short version. I worry a lot about the cost of law school. I've said repeatedly that I think it is a problem for law schools (and other institutions of higher education) to be constantly raising tuition. This said, I think that law school is worth the tuition costs, even at $150k in debt. I think that the long-term value of a law degree greatly outweighs the costs. Steve mentions the Simkovic and McIntyre paper, which went a long way towards documenting the value of a law degree. The After the JD studies and my own experience as a lawyer and law professor give me a lot of confidence in the long-term value of a law degree.

I know that long-term value is different from the issue of debt service. I think it is very important, though, not to focus only on entry-level salaries. I am confident that if young lawyers take jobs that develop their skills and networks that they will be in a position to increase their salaries, if they choose, later. The classic example is someone who takes a job as a prosecutor, and later has the choice to make more money in private practice. If someone has to go on IBR to pay the bills for a few years, that would still be a good long-term investment. I don't think it is particularly hard for lawyers in my region to get to the $80-100k salary level over a period of years. Looking at the whole picture the debt service seems manageable.

One reason I have confidence in the financial outcomes is that I know that a lot of my former students graduated with a large amount of debt. They generally seem to be doing well professionally, personally, and financially.

All of this said, less debt is better than more debt. I'd personally encourage students to consider going to lower-ranked schools that are strong players in their regional markets at a large tuition discount rather than going to a higher-ranked school at full price.

Ben Barros

I just deleted a comment from an anon because it didn't address any of the arguments in my post. If you have something of substance to say about anything in my post, please contribute. If you just want to troll, do it elsewhere.

Ben Barros

MacK, you clearly don't understand the post. Read it again and think about it. You aren't that stupid.

Jojo, I agree in a sense that we won't be returning to the boom of the early 2000s anytime soon. But the number of graduates will fall so far that the market for entry level lawyers will likely be even better than in the boom. As I noted in the link above, I'm skeptical of the systemic change argument. All of this said, I don't deny that there has been a lot of pain in the entry-level market for the past five years or so. I think that this was largely the result of record-size classes graduating into a terrible economy. As I noted in the post, it wouldn't be a bad thing for there to be an undersupply of graduates to help lift whatever slack there still is in the market. I just think that the number of enrolled students has shrunk too far.

Terry, to follow up on Steve's point, don't confuse the overall unemployment rate for lawyers and the unemployment rate for recent graduates. Even with the recent graduates rate, you have to be careful to take into account things like bar passage.

terry malloy

You're supposed to be an academic.

Where does 3% unemployment for attorneys come from?

If you're citing the atlantic, I stand by my statement. It's a lie or a knowing misstatement.

If it's BLS, find it and cite it.

If Barry is correct, and this is only lawyers actively seeking legal work, or some other such alchemy, you are intentionally misrepresenting this statistic and should feel a deep shame.

Ben Barros

Terry, read this:

http://www.lawschoolcafe.org/thread/unemployed-lawyers/

I'm going to start aggressively deleting comments that don't address the topic of the post.

terry malloy

So, it was a misrepresentation (if Steve understood the number).

3% excludes all manner of folks who event to law school, passed the bar, and for one reason or another don't show up in the statistic.

Thanks, Ben.

Ben Barros

Terry, no, it wasn't a misrepresentation. There is a difference between talking about the unemployment numbers for lawyers overall, which is low, and unemployment numbers for recent graduates. If you look at Steve's comments, you will see that he was referring to the rate for experienced lawyers who might have been laid off in the recession, not entry-level people who had trouble finding a job.

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