LSAC Data and Predicting of Applicants for Fall 2015, Part 4

The LSAC is reporting that "As of 1/09/15, there are 135,408 fall 2015 applications submitted by 19,904 applicants. Applicants are down 8.5% and applications are down 10.8% from 2014.  Last year at this time, we had 40% of the preliminary final applicant count."  If this year's applicants follow last year's pattern, we'll have approximately 49,760 total applicants for the class entering in fall 2015.

The last post in this series is here.

(I would add in light of a reader's email to me asking about my prediction of the first year class this coming fall, that I haven't been predicting the number of first years next fall.  But if the applicants continue to be down about 8.5%, total first year enrollment next fall of 35,000-36,000 sounds about right to me.  Probably a lot closer to 35,000 than 36,000.)

Comments

[anon]

Wow, salaries are going to soar in 2018. I'll be a lot of firms will have to raising starting salaries above $160,000, and they still won't be able to get enough people. I am concerned though about the underserved. With everyone who wants a biglaw job getting one, many minorities may not be able to find a lawyer who can assist them.

[Anon123]

I think they will be able to get enough people. The schools that BigLaw typically hires from will not be hurting. Maybe they will take a few more from the top 14-30 schools. Maybe the kids in the top 100 will have a better shot at government jobs. Maybe some recent grads will make lateral moves. But there is a huge pool of unemployed and underemployed lawyers to be absorbed.

[anon]

Incoming class of about 35K.

Last year, the estimate was that the top 100 schools would admit about 20K: this year, that would be about 57% of the total, if my math is correct.

Anyone have this info handy: what is the LSAT profile of the bottom 43% of takers?

Is it not from that pool of LSAT takers that the bottom 100 law schools will need to draw, generally speaking?

[anon]

Well played, 5:53. I was worried that you were some TTT adcom troll (the bad kind) until I noticed the “[w]ith everyone who wants a biglaw job getting one” kind of troll.

That said, how many <145ers are unlikely to catch the sarcasm?

[anon]

I take it the continued decline in LSAT takers portends that the law teaching market will be even worse next year than it was this year? Each of the last two years has been described as the worst in recent memory, but I am becoming increasingly skeptical of my ability to wait out the downturn.

With respect to the BigLaw point, I will note that my firm is already struggling to get enough quality students in the fold. Our hiring has increased dramatically for each of the past several years and our workload continues to outpace our hiring. It would not surprise me if a firm increases first-year salaries in the next year or two in an attempt to attract more of the top students from the top schools.

[anon123]

Anon at 8:33. More and more students realize that if they do not attend top schools, they do not have a chance at Biglaw jobs. Biglaw can jockey all they want, but more students are wise to employment options.

[Nathan A]

@ anon 05:53PM

"With everyone who wants a biglaw job getting one, many minorities may not be able to find a lawyer who can assist them."

Seriously, what is wrong with you?

@anon 08:33PM

"Our hiring has increased dramatically for each of the past several years and our workload continues to outpace our hiring. It would not surprise me if a firm increases first-year salaries in the next year or two in an attempt to attract more of the top students from the top schools."

I don't know about your firm, but others are worried about adding too many people too fast. There's still the fear that in a couple of years they might need to can a lot of these new hires because (a) PPP dropped, (b) rainmaker X leaves, and/or (c) demand for niche area tanks. I'd love to see an aggressive bidding war between law firms that drives up salaries, but it might take a little more time. Someone needs to do what Gunderson did in 2000 (Offering $120-125k when $90k was the norm).

Also, I don't quite understand why BigLaw management thinks salary is the only carrot. I'm not sure you could pay me enough to go back. Offering a lifestyle track that doesn't hurt firm finances (PPP) isn't that hard to do. I would have taken a 35% paycut to work 20-25% less.

[terry malloy]

Nathan. . . I'm pretty sure anon 5:53 was a joke.

Not completely sure though.

[Jojo]

Assume 35,000 matrics this fall. Assume further 10 percent attrition. That's 31,500 grads in 2018, which is still too many but not terribly so. At that level, lawyer wages and employment prospects may stop falling and involuntary exits from the profession after 5 years may decline. That's probably within 2 or 3,000 grads from equilibrium in the lawyer labor market.

The legal profession can probably absorb (and reasonably compensate) 22,000 to 32,000 graduates per year depending on the economy, etc. I don't foresee any "lawyer shortage" nor rising billable rates for workaday lawyers at that level of replacement. I do foresee fewer 30 year old attorneys living in their parents' basements at that level of grads, and more solo to 3 person firms able to clear $50,000 to $80,000 per lawyer per year (perhaps even health insurance) at that rate of graduation.

Though schools are loathe to admit it, that will be a very good thing for the profession and for clients. There will be less malpractice, more collegiality, better advocacy and general competence. In a world of only 100,000 total JD students, a number of schools will have a tough go of it, but it likely means that the survivors will have more respect and operate in a better professional marketplace.

[anon]

Jojo

HOw many law schools can exist in a world of 100K JD students?

The top 100 are admitting 20K per year ...

[MacK]

JoJo

The dropout rate from law school has historically been around 11% but given the more marginal students now being admitted it may rise; another factor would be a higher proportion of 1Ls attracted by aid packages leaving if their 1st year grades don't allow them to keep the aid (tuition reduction).

From your graduation number also needs to be subtracted the number who fail to pass (or try to pass) any bar. I've tried to get a handle on this number - overall bar passage after retakes seems to vary by state between 70-85% but seems to be around 80%. That means around 26-25,000 new lawyers. Pass rates may also fall significantly given falling admission standards.

How many new lawyers the profession can absorb is a bit of a moving target - but it seems to be around 22,000 p.a.

[JM]

Jojo - On top of that, those 31,500 will fail the bar exam at an unprecedented rate, so there will be a decent alignment between newly licensed attorneys and new jobs. The biggest problem will become debt. A $60k/year doesn't help put a dent into $150+ thousand in debt. IBR is a phony solution in my opinion and is just as likely to get yanked anyway.

[Anon123]

JM, not to worry, the lobbying will start soon to "massage" bar passage.

[Sned]

As a member of many community and business organizations, it is truly sad to see this lack of commitment to the law by the younger generation. I think professors should do more to reach younger students and inculcate the value of law studies and the benefit to society.

[anon]

Sned

The time has long since passed when law profs were able to inspire a love of practice in their students, because, generally speaking, they have little or no meaningful experience in practice.

Moreover, as demonstrated frequently in the FL, law profs, again generally, loathe practitioners and the practice of law (unless, of course, you run into the usual odd duck who says "I am married to a lawyer!" which means exactly nothing).

Finally, this crowd is so desperate to excuse themselves from any responsibility for the really historic crash of law schools that they are more preoccupied with clinging to their obscure, self-referential pursuits, like endlessly ranking each other along lines of increasing meaninglessness (did you notice the outpouring of twitter addresses)?

[anon]

I don't think that's a fair characterization. Law faculty may not have meaningful practice experience, which hopefully will change, but it's not the case that law faculty loathe practitioners or the practice of law. I have never heard a faculty member disparage lawyers or legal practice.

[anon]

anon at 1:49

Then, respectfully, you've never spent any time around law school faculty in private settings.

Or, public settings. Like the New York Times.

Geez ... just read some of the faculty comments here in the FL!

[Anon]

This seems inaccurate. Yes, law faculty may have chosen not to practice law, but this doesn't mean that they don't value lawyering or lawyers. It's also not in their interest to do so, as almost all students will go on to practice in some way.

[anonq]

Anon

One thing is for sure, the faculty defense team doesn't have its story straight.

[Anon2]

OK, I'll bite. Faculty are expected to research and produce scholarship. Practice experience potentially may be beneficial in that pursuit, but it is not essential.