Reconsidering the Conventional Wisdom on the Legal Job Market - Part III

This is the third of three posts on the current state of the legal job market.  In the first post, I discussed the preliminary results of a study I did of employment of recent graduates from my law school and explained why nine-month job data does not tell the whole story on employment.  In the second post, I explained why I am skeptical of the idea that the current state of the legal job market is the result of structural change.  In this post, I discuss Bureau of Labor Statistics projections about the future of the legal job market.

The Bureau of Labor Statistics Projections. 

Recent projections by the Bureau of Labor Statistics have received a lot of attention in discussions of the legal job market.  For example, Eric Posner recently wrote on Slate that “the Bureau of Labor Statistics estimated that 218,800 new legal jobs would be created between 2010 and 2020.”  There is a significant mismatch between this number and the projected number of law graduates over the same period, and it is understandable why many people have raised concerns about them when talking about the future of law schools.

I think we need to be careful, however, in reading too much into these projections.  I have two specific concerns about the numbers.  Before I get to them, I want to note that the BLS is a remarkably user-friendly government agency.  Fearing a huge, impenetrable bureaucracy, I asked a research assistant to try to find me someone to talk with about the projections.  She came back ten minutes later saying that I could just call and they would connect me to the right department.  When I did call, a human being picked up the phone, and connected me to Michael Wolf, the Branch Chief of the National Employment Matrix, who was happy to talk to me about the statistics.  It was incredibly nice to not have to find my way through an automated phone maze to find someone to talk to.

Mr. Wolf explained to me that the job statistics are based on two surveys.  The first is the Occupational Employment Statistics survey.  This survey goes to employers throughout the economy (including government employers).  The responses are typically filled out by Human Resources people at each employer.  The second is the Current Population Survey, which is designed to help catch people who are self-employed.  For our purposes, the Current Population Survey should capture solo practitioners.  The data from these surveys are combined to form the base year data on employment – that is, a picture of employment in the current year.  Projections of future employment are then based on macroeconomic factors, tailored to each specific industry.  Estimates of job openings factor in both expected new jobs and expected retirements.

The BLS job statistics therefore have two basic components – the base year data, which is based on surveys of current employment, and projections of future employment, which are based on applying certain projected macroeconomic assumptions onto the base year data.  I think there are reasons to be cautious in interpreting both sets of data.

We need to be cautious in interpreting the base year data because the people included in the category “Lawyer” are people who are identified by the HR people filling out the survey as lawyers.  I should emphasize that I am not criticizing the HR people who complete the survey – the survey is designed to be based on their responses, and the “Lawyer” category is not designed to be tied in any way to having a JD degree or admission to the bar.  Some jobs typically held by lawyers have their own, separate category.  Take a look at this table.  Scroll down to category 23-1010, Lawyers and Judicial Law Clerks.  Look over towards the right hand side, and you will see 218.8 – this is the 218,800 job openings projected for 2010-2020.  This category, as its name implies, combines both Lawyers and Judicial Law Clerks, each of which has their own category immediately below.  The number for category 23-1011, Lawyer, is right below, with 212,000 job openings projected for 2010-2020.  Look right below that to 23-1020, Judges, Magistrates, and Other Judicial Workers.  Many (though not all) of these people will have a J.D., but are not included in the Lawyer category.  Nor are people with J.D.s who are legislators, other elected officials, law professors, community organizers, lobbyists, people in policy positions, people in business positions, people working in non-lawyer positions for NGOs, bloggers at legal tabloids, FBI agents, or any of the other positions that people with J.D.s might fill but not be described as a “Lawyer” by the person filling out the survey.  I would imagine that most of the people who take “JD Preferred” or “Professional” jobs, as described in my first post, would not be categorized as lawyers in these surveys.  As I mentioned in my first post, some of these other jobs are good, some are not.  The crucial point here is the one I mentioned above – the “Lawyer” category is not synonymous with either having a J.D. or being a member of a bar.

I should emphasize that there is nothing whatsoever wrong with the BLS doing the survey this way.  We just need to be careful in how we interpret their data.  The one thing I would criticize the BLS for is this statement:  “Employment of lawyers is expected to grow by 10 percent from 2010 to 2020, about as fast as the average for all occupations.  Competition for jobs should continue to be strong because more students are graduating from law school each year than there are jobs available.”  According to Mr. Wolf, this statement is based on a comparison between the projected number of Lawyer jobs and the number of law school graduates taken from Department of Education statistics.  The overall conclusion may or may not be correct, but there is a mismatch between these two sets of data.  Not all people who graduate from law school go on to get a job that would fit in the Lawyer category.  (There was some discussion in the comment thread to my second post about whether the dramatic decine in law school enrollment has brought law school enrollment into line with what we might expect in the future job market.).

We need to be cautious in interpreting the predictions of job growth because they are just that – predictions.  If you have any experience working with long-term projections, you will know one thing with certainty – they are pretty much always going to be wrong in one direction or the other.  The assumed growth rate has a tremendous impact on the numbers, and actual reality is almost certain to differ from the assumed growth rate.  To illustrate how projections can differ, take a look back at the 2002 survey data.  In that year, the base year survey had 695,000 lawyer jobs.  Based on an assumed 17% growth rate, the report projected 813,000 lawyer jobs in 2012.  (Look at page 85 – under category 23-1011, you will see 813 under the 2012 column.).  The 2010 base year data had 728,200 lawyer jobs, with 801,800 projected for 2020.  (Look at row 23-1011 – the Judicial Clerk stand-alone category is new to 2010, but the 23-1011 Lawyer category is the same in both the 2002 and 2010 surveys.)  In other words, in 2002 the BLS projections had more lawyer jobs for 2012 (813,000) than there in fact were in 2010 (728,200) and are projected for 2020 (801,800).  The difference is largely in the assumed growth rate.  The significant point here is that projections will typically differ from reality, often in major ways.  Maybe lawyer jobs in 2020 will be significantly higher than the projected 801,800.  Maybe they will be significantly lower.  We won’t know for sure until we get there.  The projections are useful in some ways, but they do not tell us with certainty about what the future will hold.

Concluding Thoughts

I have made three major points in this series of posts.  First, I have argued that based on data on what graduates of the Widener-Harrisburg classes of 2010 and 2011 are doing now, many more recent law schools graduates are getting legal jobs than the nine-month job data would suggest.  Second, I have explained why I am skeptical that the current anemic state of the job market is the result of structural, as opposed to economic, factors.  Third, I have explained why we should be cautious in our interpretation of Bureau of Labor Statistics data on the legal job market.

I will close with two other points.  First, I think that an important concrete step that we could take to improve graduate employment rates is to move the timing of the bar exam from the summer after graduation to the summer after the second year of law school.  As I explained in my first post in this series, I think that bar timing is one part of the story of why nine-month data does not provide a full picture of graduate employment.  Moving up the bar exam would help even in a more robust economy where more students are getting jobs within nine months of graduation, because graduates who landed jobs could start working sooner.

Second, nothing in this post suggests that we should not be concerned about student debt.  At a few points in this series, I mentioned as an aside that I think it is wrong to focus on first year salaries when talking about law school affordability.  I do think that – many entry level legal jobs (clerkships, ADA positions) have relatively low salaries but typically provide graduates with experience that can lead to higher paying jobs later.  Entry level small firm jobs also often don’t pay a high salary to start, but the salary goes up over time.  I also think that statements about graduates’ ability to service their debt that do not take cost of living into account paint with too broad a brush.  A given salary goes a lot farther in, say, Harrisburg PA, than it does in New York City.  This said, we could always use better and more thorough salary data, especially data that captures salary changes as a lawyer progresses through her career.  I hope to include some data on salary in future iterations of my alumni study.  Further, legal academics should be concerned about cost and student debt issues.  Constant tuition increases of above the rate of inflation are inherently unsustainable.  Finally, cost issues have come up at various points in the comments to this series.  I plan to address cost issues in a future post.

[Update - Comments policy.  I welcome pushback on any point that I made in any of the three posts in this series.  I have a think skin, and I welcome hard questions.  That said, I will delete any comment that doesn't actually engage in the subject of the post.  If you think I am wrong on, say, the BLS data, explain why.  Find another place on the internet to post things like "All law professors are lying scumbags."]

Comments

[Anonymous Coward]

Ben -- I admire you for sticking your neck out on these issues and providing data in what appears to be a measured and sober manner. A lot of time, people hesitate to comment on these issues with such a point of view using their real names, because the scamblogs (and the Camposes of the world) are always looking for someone to single out and slander and mock with your picture next to a pig and subject their institution to greater scrutiny. As such, only one side of the issue generally sees the light of day. I am sure that will happen to you, if it has not already; that's just how they roll. But this is important data to discuss, and I hope other institutions do similar "what happens after 9 months" surveys.

On one specific point, I am not sure that a second year bar exam is a great idea. For those folks who are lucky enough to have some form of employment in their second summer, it might be difficult to do both. You may be able to push state bars to do their grading and admission process faster -- there is no excuse for how long it takes in New York.

[Jeff Matthews]

Ben, you didn't address and important possibility in how to view the BLS data. It could be that the categories, "Lawyer" and "Lawyers and Judicial Law Clerks" do NOT contain mutually exclusive data. This is the assumption you are making. You might be right, but you might be wrong.

If we have 5 lawyers, and 4 work in law firms or as solos, and 1 works as a clerk, it is quite possible that the data on "Lawyers" might pertain to all 5.

This is a BIG maybe; I don't know.

[Ben Barros]

AC - you are right that the second year bar plan would present some summer employment issues. I think that issue could be worked out, but it is something to consider.

Jeff - this post is based on a conversation with Michael Wolf from BLS. I ran this post by him before I put it up. So it really isn't an assumption. Also, if you look at the tables, the numbers don't make sense if there is overlap.

[John Thompson]

@Anonymous Coward:

Thank God you're a law professor. I'm not sure how you could live out here in the real world, with things that are even worse than having someone question your point of view on the Internet.

@Ben:

For what it's worth, I appreciate that you've spent as much time on this topic as you have. When you begin to address issues of salary along with debt, I would appreciate you spending some time on the assumption that entry-level salaries grow over time in practice. It makes sense that they would, as one's skillset and network in a practice niche or geographic area increases, but how much do those salaries really increase for most people? Does it happen enough for prospective law students to take that seriously into account when they calculate the potential return on their investment?

[Ben Barros]

John, thanks, I'll do that. I actually think that that issue is probably the most important one on the salary front. I've been thinking about how to get at it, and have some ideas.

[Jeff Matthews]

Ben will find out when law schools have to get government bail-outs or shut down, or perhaps when professors lose jobs because admissions can't support the existing bloat. Not that I wish this on anyone. I don't. Everyone ought to want prosperity for everyone.

But the data points in a singular direction, and that trend is 20 years in the making. It's not about some 2008 bubble that went bust. That's merely a shallow, short-term attempt at an explanation.

Just as in real estate, colleges have bubbles, too. The only thing propping them up is guaranteed student loans - a guarantor who'd be fired if he was guaranteeing loans like these out in the market.

We'll see.... but I expect academia privately expresses concern while generally, it is quite worried for its own sake. As in all stressed organizations, you have to have the "Ken Lay's" of the world who take it upon themselves to reassure the public that the stock is still good. (not that Lay knew of the issues, but he sure denied them).

I think Tamanaha might have fairly described the primary, unspoken agenda of the Hawaii trip, but he'll have to articulate on that more if he cares to share.

[Steven]

I love that AC's big worry is that his institution might be subject to greater scrutiny! How horrible!

[Steven]

I didn't realize that Ben Barros works for Widener University School of Law

http://thirdtierreality.blogspot.com/2010/08/wipe-thoroughly-widener-university.html

I guess that explains it. This school is among the first that should close when the market correction takes place.

[Ben Barros]

Steven, is this the best that you can do? Do you have a point you want to make?

[John Thompson]

@Steven:

There are maybe as many as twenty law professors who have tried to engage publicly with the struggle faced by recent graduates in an honest way. Does it really serve any purpose to insult Barros by association with his place of work?

I remember before the conventional wisdom turned the scamblogs' way. I remember the constant, pointless attack levied by skeptics against people for daring to ask why the alleged benefits of a JD had not accrued to them and many of their contemporaries. "Of course *you* don't have a job. Why would you? You went to (at first, a third-tier school; then, a non-T1 school; now, a non-HYS school)." Mocking Barros for where he works is not a counter-argument to any points he raised, any more than mocking you for not attending Harvard is a counter-argument to any points you might raise.

[Jeff Matthews]

I am not a big fan of personal attack, but there are indeed some issues which bear introspection among academians.

I don't begrudge law profs maximizing their salaries. I don't mind their reluctance to give up pay, nor would I ever expect them to. I don't mind them questioning whether the problem is as bad as some say. I don't mind that they continue the casebook method despite complaints by students that, given how hard it is to land a job, maybe a more hands-on approach is in order. These things are open for debate.

But, in all honesty (and no profs need respond), for years we have all known that the law schools have been posting misleading employment statistics. While the language they employed was technically true, they have been selective in their data gathering and categorizing, without full disclosure as to the means used to skew the results. This has been common knowledge for at least 20 years. My graduating class from UT Law in 1993 can attest to it. Ask just about any of the 500+ attorneys we graduated that year. This has been the case for EVERY lawyer in any graduating class after mine in any school that I have ever known. I have never seen ONE lawyer, when the topic came up, who didn't agree the stats were bogus.

Though it has become common knowledge among lawyers after the fact (of attending law school for a while to figure out the bunk by watching all the hopeless-sounding 3rd-years ahead of us), it most certainly was not widespread knowledge among many of the members of the entering classes who really did not know many lawyers to begin with. I do think the advent of scamblogging has made the scam more transparent the more popular scamblogging has become. (Gotta love the internet for those who would have more trouble finding answers by walking pavement.)

So, in the sense that law school systematically published misleading figures, knowing they were misleading, in order to get kids with stars in their eyes to pony up $100k+, I call BS on that. Every law professor should have rebuked this practice until it was stopped. But you all (or dang near everyone of you) sat there quietly. You knew it, too. We know you did. Heck, Professor Powers even gave us 3rd years a speech about how not to worry that we didn't have jobs line-up like we expected we ought to have. It was apologetic with a dose of encouragement thrown in.

That practice was shameful. I hope you guys are more vocal about truth-in-education in the future. You don't have to be all negative on law school, but at least stand up and call for the truth when you see your compadres and employers teaming up to pull stunts like these. Don't just sit quietly and watch all those kids have their hopes dashed so that you feel obliged to give moral encouragement to "Hang in there. It's not so bad. Give it time. You'll be fine." This is little consolation, even if the damage is repaired over time by the efforts of the kids whose hopes were dashed.

[Steven]

I thought the point was clear. If a market correction is actually going to happen, your school is going to be among the first to go, because it is among the worst.

And that, to me, explains why a person would be motivated to present these arguments as you have. So the glass has a little more water in it than somebody (who?) thinks, but that doesn't mean we should call it half full. Attending your school is a dangerous and expensive risk that nobody should be encouraged to take.

[Ben Barros]

Steven, if you actually look at the data I present, you will realize why your argument is wrong. Your argument is lazy and frankly not worth responding to.

Up until now, the comments on all three threads have been constructive. Many have disagreed with me, some strongly. I will leave Steven's last two comments up, but will delete any subsequent comments that do not at least engage in the substance of the posts in a meaningful way. If you want to talk shit, find somewhere else on the internet do do it.

[Ben Barros]

I just deleted another comment by Steven. Steven, I meant what I said. Talk about the data, or take your crap elsewhere.

[Ben Barros]

And I just deleted another comment, by another person. I welcome pushback on any point that I have actually made in any of the three posts. Engage in what I actually said.

[Embarrassed to be a law professor]

You deleted my comment, which was pointing out that you (like Diamond, Katz, Mitchell before you) have made every assumption self-servingly in favor of the status quo. How is that not engaging with your what you actually said?

[Ben Barros]

See updated comment policy for this tread above. The prior threads were fine. I'm not sure why this post is attracting all the nonsense. If you disagree with something I said, explain why. Empty name calling does not advance the discussion.

[MacK]

Ben,

I am not going to argue that there are not some issues with BLS data - but it certainly seems to be a lot more reliable than the "statistics" that law schools published going back to the early 1990s - and Widener cannot be singled out for this sort of activity. I would treat the data from the BLS as fundamentally more trustworthy than that emanating from law schools, who combine a history of shameless dishonesty with a self interest in publishing rosy data that the BLS lacks.

I do think that as a professor at a low ranked law school that has had its share of recent controversies, you need to "think like a lawyer" about the credibility problem that you have when writing on this topic. As Mandy Rice Davies famously put it "well he would [say that], wouldn't he." Indeed, Anonymous Coward above misses the point when he complains about law professors pushing the view you are expressing here being attacked - you have entered a minefield where your motivations will be in question - how could they not? While in law school twenty years ago one ethics professor (and adjunct) I had provided us with data from various studies on conflict of interest - experiments that showed how interest consistently skewed decision making even when the subjects sought to make efforts to avoid being biased or being perceived as trivialising the consequences of the employment situation you describe.

The difficulty with the false data peddled by so many law schools is that the data was: (a) so transparently false; (b) so pervasively false (as in almost every school did it); and (c) false for so long, as to raise the question, why did law schools do this? What possible motive other than bilking law students can there have been. And to be blunt, why were so many lawyer-professors so untroubled by this activity. Why does Anonymous Coward not at least acknowledge the shameful deception before complaining about Campos and/or Tamahama - why don't you. This entire thread would have had considerably more credibility if you had at least started by even a nodding acknowledgement of the scandal that decades of false data presentation by law schools represents (even if you did not address Widener's own published data.)

I should add that my interest in this topic started about 4 years ago - and I had some correspondence with Campos at that time - long before ITLSS. It was sparked when I was researching salaries for lawyers for practical reasons (hiring) and found the BLS website and that it could give me salary data by major metro area. Out of curiosity I looked at the data for Washington DC - and then the reported average salary for each DC law school at 9 months. As Garrison Keiler might put it "all of our law graduates are above average" 9 months after graduation - everyone was averaging $160,000 - So who were these poor experienced schmucks on around $100,000 or less then? It was the BLS salary data that led to the first big clue of the fraud so many law schools were engaging in. It was also surprising to see how many low rank schools claimed higher average salaries than say Harvard and Yale.

Returning to your posting - Paul Campos' partner in apostasy Deborah Jones Merritt, pointed to an interesting aspect of the BLS data you just cited, the 728,000 lawyer jobs. This as addressed here http://insidethelawschoolscam.blogspot.co.uk/2011/09/553000-missing-lawyers.html and I have posted on this too. In doing so I have to point out that there is some variation in the BLS data which is a counting issues - but somewhere around half the legal practitioners that should exist - as judges, lawyers, etc. just don't. There is a huge number of missing lawyers in the data - why?

[Ben Barros]

Embarrassed, if you actually read my posts and think about them, you will see that you are wrong. If you disagree with specific statements, identify them. Say why they are wrong. I didn't get the sense from your prior post that you had actually read my posts. If you are really a law professor, act like a scholar and engage what I actually said.

[Embarrassed to be a law professor]

How about these assumptions that you have made (or are strongly implied by your posts):

1) That JDs who get their first lawyer job more than 9 months post-graduation will have salary prospects that bear a reasonable relationship with the out-of-pocket and opportunity costs of attending law school.

2) That JD Advantage and Professional jobs will have salary prospects that bear a reasonable relationship with the out-of-pocket and opportunity costs of attending law school.

3) That the current situation is cyclical rather than structural.

4) That, even if the current situation is cyclical, the cycle will end relatively soon (notwithstanding the fiscal situation).

5) That the BLS predictions will prove to be quite pessimistic.

From where I sit, you'd have to go 5 for 5 to have these posts be at all meaningful. (And, for what it's worth, I'd bet against you on every one of these assumptions.)