Deborah Jones Merritt has just posted a new piece on SSRN (as well as a related blog post) that’s well worth looking at for anyone interested in the state of the legal job marketplace – and the implications for law schools.
Taking advantage of the wealth of information now publicly available on the internet, Merritt conducted a down and dirty longitudinal study of those admitted to the Ohio bar in 2010, when the full impact of the recession had hit legal hiring.
She finds that job outcomes nearly five years out are poor. She compares the 2010 Ohio figures with the 2000 national figures from the After The JD study, and finds that those who started out in Ohio in the midst of a recession in 2010 were in worse shape four and a half years out than the national cohort of those who started out in the 2000 recession.
From that, combined with a look at the changing structure of the legal marketplace, she draws a bigger – and undoubtedly more controversial – conclusion, which is that the contrast most likely is explained by the changing structure of the legal services marketplace, where US lawyer jobs are being replaced by everything from outsourcing to software. Put differently, she concludes that her Ohio figures provide data to support the claim that structural change is depressing job prospects for young lawyers.
Last but perhaps not least, she digs in to what this implies for law schools.
Merritt’s methodology is both clever and simple – in today’s world, job information can be found on the internet from a variety of sources. Those actively admitted to the Ohio bar are required to provide their employment information to the licensing authority; beyond that, sources such as LinkedIn and law firm web sites provide more detailed information on almost everyone engaged in practice.
As she notes, this method has its limitations. Her method provides no information on income or job satisfaction. Not everyone is traceable via the internet, and it is theoretically possible, however unlikely, that young lawyers of a generation that grew up online might have brick and mortar practices with no online footprint. More likely, her method may overstate job outcomes – young lawyers may present part time jobs in ways that make them seem full time, and may take a good long while to post job terminations. Law students who did not pass the bar – a small but not insignificant group, and perhaps poised to grow larger as admission standards slip – are not included at all.
There also is an obvious limitation in trying to draw conclusions about national trends from a study of one state. As states go, Ohio is as representative as any. It provides a home to large firms such as Jones Day, but it is not dominated by one big city market. Rural and small town lawyers fit into the mix. An argument could be made that its rust belt location skews results, an argument best answered by similar studies in other states.
What Merritt finds is that things started badly for the class of 2010, and, unlike in prior recessions, did not get much better. At a national level, nine months after graduation less than forty percent of graduates held jobs in law firms, barely two thirds held jobs that required a law license, and ten percent were altogether unemployed.
Four and a half years after graduation, Merritt finds, things have not rebounded, at least in the state of Ohio. One fifth of the 2010 cohort work in jobs that require no law license. Just shy of 50 percent were in private practice, but of those almost one fifth (9.1 percent of the total) were in solo practice, a category that, like consultants, includes some thriving professionals as well as some not so fully employed. Just under 15 percent were in legal jobs in government, and eight percent in legal jobs in business. Just over eighteen percent were in jobs not requiring a law license – and while she didn’t uncover any law graduate barristas, the ‘business’ jobs held by some graduates suggest to her that the category is not just fanciful. More than six percent were unemployed.
Merritt compares these outcomes to the results of the 2000 graduates tracked by the After the JD study, and finds that the 2010 class did less well at rebounding from a poor start. For example, the percentage employed in law firms for the 2000 cohort was at 48.7 percent nationally at the same time, compared to only 39.5 percent for the 2010 cohort. Of those in private practice, they skew toward smaller firms and solo practice compared to the 2000 cohort. Another sign of employment stress is that job changes for this cohort are much more frequent than prior national averages.
Merritt concludes – with caveats - that the outcomes for 2010 signal a structural change in legal employment. The lack of recovery comparable to the 2000 graduates, the decline in law firm unemployment, the percentage altogether out of legal employment, all signal to Merritt that a structural change is probably underway. She doesn’t ignore the possibility that the most recent recession was just deeper or recovery slower, but concludes in light of a shifting legal services marketplace that her results probably reflect a structural change in the market.
Those who would argue with Merritt’s conclusions need to take into account her review of the changing legal services marketplace. The positioning of lawyers as competitors for legal services business has changed since 2000, and Merritt relies on this along with her Ohio data in concluding that her 2010 lawyers were not just facing a tough economy.
If she’s right that recent graduates are already suffering from a structural change in the market, arguments and studies that assume that the current value of a law degree matches historical norms require adjustment. While I'm in the structural change is happening camp, I’m not prepared to say that the evidence the market has changed is conclusive -- but Merritt’s data suggests it may have passed the point where structural change can be assumed away.
If legal employment has undergone structural change that depresses job prospects, the implications for law schools as we now know them are obvious. If there are fewer good long term legal jobs, there will be less demand for law graduates, which will inevitably continue to put pressure on law schools.
Merritt reprises a proposal she has made before, which is that costs can be lowered and the social purpose of law school better served by offering a first year of law school in undergraduate school. For those not going on to law school, the legal training will make them better citizens and at least partially prepared for many JD Advantage jobs. For those pursuing a full JD, the cost would be lowered by cutting the length of post graduate studies.
Merritt’s article won’t be the last word in this debate. I’m quite certain that the law school scam crowd will hail it as definitive proof that end times are near, and that those in full defensive mode will latch on to the limitations Merritt herself identifies in her approach to argue her findings away. It does add unfreighted analysis and fresh data to a discussion that too often sees only heat and ungrounded opinions.