Brian Tamanaha has asked two interesting questions in response to Steve Freedman’s recent posts on jobs and law school admissions. Steve has started a series of posts that make the argument that now is a good time to go to law school, because enrollment declines will lead to a very strong job market in just a few years. So far, he has addressed the supply side of the argument, noting the dramatic drop in law school enrollment will lead to fewer graduates hitting the job market in just a few years. He just put up another post showing projections of the demand side.
In response to Steve’s first post, Brian asked:
Please address the apparent contradiction in advice like this. Assuming no substantial change in the legal market (for better or worse), the job outlook for graduates stands to improve precisely because fewer students are enrolling in law school these days. But of course, if significant numbers of people take your advice and "enroll today" (thinking three years hence the oversupply of law grads will be eliminated by falling enrollment), then the job outlook will worsen as a consequence because the oversupply will not go down as much. So your prediction will bear out only if most people thinking about law school do not take your advice.
In a later thread, Brian asked (or observed):
What I don't understand is why legal educators think it is right to push so hard: "Enroll today! It's the best time in a generation." Let's wait and see. If the job market is indeed good in three years, that would be great for our graduates, who will have an easier time landing desirable jobs (compared to the devastatingly bad employment results for the class of 2013 published by the ABA a few days ago). The news will then get out that the market has turned around, and more people will apply (including those who delayed, meanwhile working to save money to pay for law school). If we wait a few years before trying to ramp up enrollment again, the current oversupply of law grads will have time to clear and stagnant wages of lawyers in the low end might rise, making the enormous debt they carry more manageable.
To wait and see is the prudent course for legal educators to take.
I want to take a crack at answering these two questions. The first is the harder and more interesting of the two. The second is relatively easy, so I will start with it.
All of this depends, of course, on the relationship between two numbers: the number of expected law graduates and the number of expected jobs. The number of graduates for 2017 is relatively easy to pin down, because we can start with the number of students who enrolled this year and extrapolate the number of graduates. Steve goes with a reasonable 88% graduation rate to come up with 33,791 graduates in 2017. (This is very close to a projection that Deborah Jones Merritt made a while ago.).
The number for 2018 might be a bit lower, although we won’t have good numbers until we see how many students matriculate in the fall. So let’s go with the 33,791 for now.
What about the number of jobs? From Steve’s most recent post, it appears that we are making arguments with similar structure but different details.
Recent ABA data shows that graduates from the class of 2013 reported having 26,653 long-term, full-time Bar Pass Required jobs. This was 57% of class of 2013 – the largest law school graduating class in history. It would be 78.9% of the anticipated class of 2017. 78.9% might not sound great in isolation, but in fact remarkably strong for at least three reasons.
First, it would be the highest rate in recent memory. Take a look at the chart in this article by Jack Crittenden at the National Jurist. Even in the height of the boom in the early 2000s, the nine-month full time Bar Pass Required rate peaked at 72.3%. I was practicing law in that time period, and the job market for lawyers was robust. Further, when I look back at alumni data for graduates from my school from that era, I see people doing exactly the kind of jobs that you would expect law graduates to have – I don’t see evidence of significant numbers of un- or under-employed people. Put bluntly, the class of 2017 is virtually certain to graduate into the best job market in recent memory.
Second, nine-month job data does not provide the complete picture of legal employment. This point is related to the last. Even in good job markets, some law graduates get jobs more than nine months after graduation. This should be a fairly commonsense proposition – many legal employers have positions that open between March (more than nine months after most law students graduate in May) and August (when students have taken the bar) or October (when bar results are out). This point, however, is consistently missed by people with pessimistic views of the future of the legal job market. Deborah Jones Merrit, for example, is one of the most perceptive people writing about these issues, but I think her discounting of jobs that are obtained more than nine months after graduation leads her to unduly negative conclusions. (See her comments in the National Jurist article, and on posts at the Law School Café. If you haven’t been reading what she has to say at the Law School Café, you should.).
In a prior post here at the Lounge, I reported on a study that I did of my school’s graduates from the classes of 2010 and 2011. It showed that many graduates got Bar Pass Required jobs after they completed their nine month surveys. I did not argue there, and am not arguing now, that the job market for these classes was good – it was not. But the study does show that nine month job data alone substantially undercounts the number of jobs in any given category that are coming open in the legal economy. Even excluding solo and temp positions, the nine month job data underestimated the total number of jobs by about half. Adding 50% to the 26,653 Bar Pass Required jobs reported by the class of 2013 would lead to 39,979 jobs. 39,979 is significantly higher than our projected 33,791 2017 graduates. So we have more jobs than graduates looking only at full-time, permanent, Bar Pass Required jobs. (To be clear, I’m not arguing that having 50% of a given class having to wait more than nine months after graduation for a job is a good thing. If you want to do something about it, change the timing of the bar exam. I also suspect that in a better economy, the delay wouldn’t be as pronounced. But this basic model should hold even if the legal job market continues to be mediocre.).
Third, the analysis so far excludes JD Advantage and Professional jobs. Some of these jobs are very good, and some of them are relatively poor. I agree with the widespread complaints about the vagueness of these categories, though I don’t have a great solution to offer. One trend that I noted in my study of our classes of 2010 and 2011 is that a substantial number of people appeared to have moved out of JD Advantaged and Professional and into Bar Pass Required jobs over time. (The same was true with people moving from temporary jobs to permanent jobs.). I think that it is fair to discount these categories to some degree, but I don’t think that it is fair or accurate to exclude them entirely. (In my prior post on the 2010-2011 study, I give details on the jobs that I put into each category.). The important point for now is that a decent number of the 4,715 JD Advantage jobs reported by the class of 2013 are good ones. The same is true for the Professional jobs. (The Professional category seems to be excluded from the ABA report. If anyone can point me to the number for this category in the comments, I’ll update the post to include them.). Even if we presume that only half of these jobs are good ones, we have several thousand good, permanent jobs to add to the totals.
When I look at these numbers, I come to the conclusion that the class of 2017 will graduate into the best job market in recent memory, even if the economy does not improve. Indeed, it seems to me to be a virtual certainty that there will be a shortage of entry level lawyers in 2017. This might be good for a year or two, to help reduce any underemployment or unemployment that remains in the legal economy. (My 2010-2011 study, by the way, suggests that there is less existing slack in the employment market than many people might think.). I suspect that the number of legal jobs will improve as the economy improves, but my conclusion would not change even if the number of legal jobs remains stagnant. Law school enrollment has declined so steeply that, as Steve is arguing, the supply side of the equation has gotten out of whack.
Now to return to Brian’s questions. The second question was about the appropriateness of legal educators strongly encouraging people to go to law school. My take, based on the numbers above, is that the number of law students has declined way too far, and it seems to me that legal educators should not be shy about encouraging people to go to law school in these circumstances. I believe very firmly in the basic enterprise of legal education, even if I think that it can be improved in numerous ways. When I look at my former students, I see overwhelmingly positive outcomes. In prior discussions with Brian, I have agreed with his worries about the cost of legal education. I think that students should be concerned about debt, and that in the current admissions market they have a lot of favorable options to consider. The combination of what is probably the best admissions market in history with what is virtually certain to be the best job market for graduates in recent memory makes this, to me, a great time to go to law school.
Brian’s first question is harder to answer. He asked whether the “enroll today” advice is self-defeating, because if too many people take the advice they will change the conditions upon which the advice is based. My initial answer has two parts. First, this would be a problem with any kind of advice of this nature. If a stock analyst recommends that people buy a stock, that advice will be defeated if enough people buy the stock and drive the price up to the point where the advice would no longer hold. To a certain extent, if there is a problem in giving this advice now, there would always be a problem in giving this kind of advice. Second, based on my take on the numbers above, the advice would remain good even if there was a substantial increase in law school enrollment. I don’t think that anyone right now would argue that we should go back to the record-high size of the class that just graduated. There is a tremendous amount of room, however, between the class of 2013 and the class of 2017.
All of this leads to some questions for Brian, and anyone else who wants to express an opinion. (1) To me, the numbers are stark. Once you understand that a significant proportion of law graduates get jobs more than nine months after graduation, it seems clear that law school enrollment has shrunk too far. If you disagree with my analysis, why? (2) Part of the difficulty in answering Brian’s first question is that it is hard to get a sense of the “right” number of law students. I don’t know how to answer that question, and I’m not sure we should. How should we approach this issue?
I will close with a note on Bureau of Labor Statistics projections. I’ve seen a lot of references to them in the comments to Steve’s posts. I’ve explained before what those projections do, and do not, show. A lot of people are misusing those projections. They cannot be reliably used to predict the future of the job market. I was surprised and disappointed to see a reference to them in Law School Transparency’s press release on the last round of nine-month job data – I like a lot of what LST does, and this kind of thing undermines their credibility. That press release said this:
In addition to recent job outcome data, the Bureau of Labor Statistics projects only 19,650 new law jobs per year between 2012 and 2022, a number that is 10% less than an estimate two years ago that projected 21,880 new jobs per year between 2010 and 2020. That ten-year prediction was 9% less than an estimate a few years prior that projected 24,040 new lawyer jobs per year between 2008 and 2018.
This statement is problematic for two reasons. First, it places far too much emphasis on fluctuations on projections that are largely caused by changes in macroeconomic assumptions. Second, the numbers presented don’t mesh with the ABA survey numbers discussed in the press release. One reason to be hesitant to use the BLS data in this context is that there is no direct relationship between what they categorize as “lawyer” jobs and either a JD degree or bar admission. But let’s go with it for a minute, and assume some relationship between “lawyer” and Bar Pass Required. The ABA numbers have 26,653 Bar Pass Required jobs for this past year. Even if we ignore the fact that the ABA numbers miss jobs obtained more than nine months after graduation, the 26,653 is a whole lot bigger than 19,650. ABA nine month survey data isn’t perfect, but gives us a much better picture of the present state of the legal job market than the BLS projections do. They suggest that near-term, the BLS projections seriously underestimate the number of legal jobs being created by the economy.
Comments policy: I welcome criticism and push-back. Please keep comments focused on the arguments that I make here. If you disagree with me, please explain why. I reserve the right to delete off-topic posts.
Ben Barros
"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.
Posted by: Former Editor | April 15, 2014 at 05:18 PM
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.
Posted by: Ben Barros | April 15, 2014 at 05:22 PM
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.
Posted by: Doug Richmond | April 15, 2014 at 05:23 PM
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).
Posted by: Former Editor | April 15, 2014 at 05:28 PM
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.
Posted by: MacK | April 15, 2014 at 05:59 PM
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.
Posted by: Jojo | April 15, 2014 at 06:08 PM
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.
Posted by: Ben Barros | April 15, 2014 at 06:09 PM
@ 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.
Posted by: Steven Freedman (KU Law) | April 15, 2014 at 06:20 PM
"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?
Posted by: terry malloy | April 15, 2014 at 07:05 PM
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*.
Posted by: Barry | April 15, 2014 at 07:39 PM
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.
Posted by: Barry | April 15, 2014 at 07:41 PM
@ 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.
Posted by: Steven Freedman (KU Law) | April 15, 2014 at 07:51 PM
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.
Posted by: Ben Barros | April 15, 2014 at 08:19 PM
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.
Posted by: Ben Barros | April 15, 2014 at 08:47 PM
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.
Posted by: Ben Barros | April 15, 2014 at 08:52 PM
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.
Posted by: Ben Barros | April 15, 2014 at 09:09 PM
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.
Posted by: terry malloy | April 15, 2014 at 09:29 PM
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.
Posted by: Ben Barros | April 15, 2014 at 09:43 PM
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.
Posted by: terry malloy | April 15, 2014 at 10:06 PM
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.
Posted by: Ben Barros | April 15, 2014 at 10:27 PM