What Happened To the Class of 2010?

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. 

Comments

[anonprof06]

Deborah--I think a 6-year BA/JD would be great, with the first year of law school being the last undergraduate year. But I have two worries. First, this might actually result in an increase in lawyers each year, as it would reduce the cost of legal education. (Yes, I'm all in favor of reducing the cost of legal education, just pointing out a side effect). Second, undergraduate schools might fight against it, as it would presumably direct tuition from those schools to law schools. Any thoughts about these? Thanks.

[[M][@][c][K]]

I have my doubts about the 6 year BA/JD - but this may be because of my area of practice which is best described as international technology law.

First, we put a very high premium on lawyers with a STEM background, preferably a degree in physics, math or chemistry. Most of our work requires the ability to understand the technology involved. We have two BSc/PhD's in physics on the team. (We also put a premium on international backgrounds.) We recognise that our clients also are looking for this.

Second, we have observed that in the UK and Ireland, where the basic model is a 3/4 year BL plus 2-3 years of traineeship (i.e., apprenticeship) the graduates who have followed the other track, i.e., an undergraduate degree that is non-law, a 2 year conversion course in law followed by the traineeship are often better lawyers than those who came out of the straight law track. Those with backgrounds in various useful subjects are certainly very attractive candidates, while the straight law graduates often seem callow and dare I say, overly academic as lawyers. Inter alia, when the conversion approach was introduced 20/30 years ago, straight law graduates tended to deride those who took the conversion course as "retreads," but that jeer has pretty well disappeared.

Now to be fair, this may be a somewhat exotic end of the profession, but still it raises an issue. I deeply dislike the legal professions obsession with prestige - in the US demonstrated heavily by "sniffiness" over where someone went to law school - and do not like the idea that there will be first, second and third class lawyers, or that poorer people will have to take lesser lawyers. I'll admit that as a large number of law schools go to virtually open admissions, this may in effect becoming institutionalised (the selective law schools and the rest.) Still, I worry that there is a real risk that a lot of the proposals to shorten law school seem to run the risk of further institutionalising that division in the profession.

There really are few alternatives to cutting the cost of law school and reducing output to what the profession can absorb. We have reached a situation where despite a glut of law graduates, people are not being served. Now there are substitutes for lawyers showing up such as the Limited License Legal Technician http://www.washingtonpost.com/opinions/closing-the-justice-gap/2015/03/13/a5f576c8-c754-11e4-aa1a-86135599fb0f_story.html

[Just saying...]

I agree with anonprof06. Anything that increases the number of lawyers is a bad idea -- so high tuition, admission standards -- play a positive role in reducing the number of applicants. I would also think that undergrad faculty, with their own agenda, would not take to the idea of a 6 year program.

[(M)([a)(c)(K)]

It appears that I am back in the spam filter, hey D, see how easy that was.

[(M)([a)(c)(K)]

I made a comment that DF chose to delete or filter or both.

So let me make the point again - perhaps shorter this time.

1. At least for our practice we would not be keen on 4+2 or 6 year law school. We place a high premium on STEM backgrounds and international experience.

2. In the UK and Ireland the experience in the 20-30 year that non-law undergraduate have been taking diplomas in law over 1-2 years and then going to legal training is that law firms are pretty enthusiastic about hiring them - regarding the non-law undergraduate degree holders as often brining something more to the table and to the profession.

3. There is a real concern about the possibility that, in a profession that is already very prestige conscious, a different legal training will lead to more than one class of lawyers.

4. That some law schools have gone to essentially open admissions is already creating a split between the selective schools and the rest.

5. There is now the advent of the Limited License Legal Technician, which may create yet another strata in the already stratified profession, while competing with the already struggling but indebted law graduates.

The only real solution is restructuring

a. law schools need to cut attendance costs drastically to align with what lawyers can earn,
b. reduce the number of graduates so as to allow more lawyers to get decent jobs in a shrinking market, and
c. reduce the number admitted so that selectivity is restored.

[Ray Campbell]

Mack, it's me on the spam filter, not Dan, and no one is targeting you. I'm in China with sketchy internet access and I get to it when I can. It's trapped every message I posted on this thread, not to mention those of Professor Merritt, so you are not alone.

[(M)([a)(c)(K)]

Ray,

sorry, but after past experience and the need to use this stupid bracketed name, I tend to assume the worst is still continuing.

Now would Dan fix the silly name additions to the spam filter and announce he has done so.

[Barry]

Ray: " I’m not prepared to say that the evidence the market has changed is conclusive..."

How many years of miserable outcomes are needed before it is conclusive?

[Barry]

Big Bob: "As for for what happens in the longer run, I am not sure 5 years is much of a long run..."

I'm sure that you are not, and I'm also sure that a 10 year follow-up would also not be considered so by you.

[Deborah Merritt]

I know WilmerHale's Dayton office quite well: I have several former students who work there and, as Kyle mentioned, have interviewed the director of that ediscovery team. I don't think that the WH office skews the results because there are lots of BigLaw firms with concentrations of staff attorneys in a particular place. It's not always a designated office like WH's Dayton one; sometimes it's part of a regular practice office

For example, Littler has an office in Cleveland, and three of the associates in my database work there. But Littler doesn't have any of its ediscovery attorneys in Ohio--and they have quite a large team. So in many states, there will be associates from one BigLaw firm and staff attorneys from another one.

It's also remarkable how the associate/staff attorney division has spread beyond BigLaw. Take a look at Kellogg Huber, the elite litigation boutique in DC. They have 20 staff attorneys, and 28 associates. Browse through the bios and notice the very different JD schools.

In any event, if you remove the WH staff attorneys from the calculation, then staff attorneys make up 27.8% of the Class of 2010 lawyers working at BigLaw firms in Ohio--probably still a lot higher than most people would think.

[Steven Freedman]

Since a few posters have indirectly mentioned my posts from last year, thought I'd chime in here with a very short comment. I enjoyed reading Professor Merritt's article, and while I have a few qualms (is 2010 a representative year? is Ohio a representative state? considering the different research methodology, is it apples and oranges to compare After the JD data with data from her study?), I think her article adds to the big picture.

Frankly, nothing Prof. Merritt states contradicts what I posted nearly a year ago. There is no doubt that 2010 was a terrible year to graduate from law school. I also would not doubt that for many students graduating into such a terrible market affected their long-term outcomes. But my posts never claimed 2010 was the best time to graduate from law school, my posts concerned the near future, 2017 & 2018. What about students graduating then? Will that be "the best time" to graduate from law school, at least within the past fifteen to twenty years? Quite possibly.

And don't take it from me, consider Prof. Merritt's comment. She stated that the market can support no more than about "29,250" new lawyers. As laid out in my posts, a safe prediction for the number of law graduates in 2018 is 32,100. Considering about ten percent of students do not pass the bar, that leaves about 28,890 graduates entering the job market. Even without counting people who decide to pursue a different, non JD required path (FBI agent, foreign service officer, management consultant, etc.), 2018 will likely see fewer graduates enter the market than Deborah Merritt's stated baseline. As laid out in my posts from last April, this will be the best ratio since at least 2001.

So in some respects, Prof. Merritt and I are on the same page. I'd add that I definitely like her idea of teaching the first year of law school as part of the undergraduate program. We implemented a 3+3 program two years ago here at KU and look forward to having our first 3+3 students enter the law school in Fall, 2016.

[Big Al]

I am not sure what the proposals have to do with the class of 2010 and that generation of grads are those victimized by the scam. There was a clear period of deception by law schools. It continues but the word is out not to trust them and none of the proposals have anything to do with those who were deceived.

Any student entering law school today knows the story. Plus, lowering the cost for current applicants just increases the glut making the generation that includes the class of 2010 even worse off. In theory, this means less debt and a greater willingness to serve those not currently served. And, it also means a long term income in the 30-50 range.

[Deborah Merritt]

Here are a few more thoughts about my proposal to move the first year of law school to the undergrad curriculum:

1. This would be a major, with courses spread through 2-3 years of college, not all courses concentrated in the senior year. I have always found the "coordination" among 1L courses more theoretical than real. E.g., the folks in Civil Procedure taught late in the semester what I (in Torts) would have liked them to teach early. There are much stronger pedagogic advantages to sequencing the courses and integrating them with non-law courses. How about taking economics at the same time that you take torts or contracts? Spreading courses over several years also improves understanding because of the circling back that will occur. E.g., some of criminal law will remind you of what you learned in torts (and vice versa).

2. We would not lose a whit of the rigor or rite of passage that law school now provides. Colleges offer plenty of rigorous courses: organic chemistry, engineering, advanced language courses. And it's hard to beat organic chemistry as a professional rite of passage. In my plan, students would take two doctrinal courses in their sophomore year, along with a full year of legal writing and analysis. If they don't like it, or their grades aren't what they hoped, they could switch to another major.

3. I don't think there would be much increase in the number of lawyers. Students who complete the BA won't be able to do licensed lawyer jobs, just the law-related "JD Advantage" ones. Non-lawyers are going to take those jobs no matter what we do. And, for that matter, colleges are likely to create these courses no matter what we do.

4. There are several options for the bar exam, which relate to this issue of supply. One option is to make a version of the MBE (without Evidence) the entrance exam for the JD program. I.e., students would be tested on the current subjects they learned in college. Students passing the exam would both get into law school and know that they are halfway there in terms of bar admission. Then restructure the post-JD bar exam to be more practice-oriented. This is obviously controversial in itself and I would more space to develop it. So I'll toss this out there and see if I get through the darned spam filter.

[Douglas Levene]

Thanks, Ray, for the report on Merritt's research.

What would be really interesting would be research on outcomes 5 and 10 years out. What's happened to the classes of 2000 and 2005? They graduated in boom times. How have they fared in the restructuring/downsizing of the legal profession?

[Observer]

"Frankly, nothing Prof. Merritt states contradicts what I posted nearly a year ago. There is no doubt that 2010 was a terrible year to graduate from law school. I also would not doubt that for many students graduating into such a terrible market affected their long-term outcomes."

Interesting - that statement contradicts Simkovic and McIntyre's latest research.

Among Simkovic's summary takeways of S&M's latest paper (from Stephen Diamond's blog):

"4) You can’t “time” the market by waiting for the “right” time to go to law school, so don’t try. The best time to go to law school doesn’t depend on entering class sizes and it doesn’t depend on what’s currently going on in the economy.
(there might be an exception if law school is particularly inexpensive at a particular point in time because of more scholarship money, and the quality isn’t any lower, but that’s a cost issue, not a value issue).

5) The best time to go to law school is the earliest point possible after which you make the decision that you’d eventually like to go. By waiting, you’re spending more of your limited working life working for lower wages, and you aren’t changing your chances of graduating into a more favorable economy.

6) There’s no evidence that young law graduates in recent years are doing worse, relative to bachelor’s degree holders, than would be expected based on the historical data and the recent economic downturn. In other words, there is no evidence that structural change has reduced the value of a law degree; if anything, it seems to be increasing over time as the earnings of highly educated workers keep increasing in real terms over the long run."

So who's right: Freedman or Simkovic - Simkovic seems to be saying that there is no such thing as a "terrible year" to graduate from law school.

[anon]

Steve, I don't want to turn this thread into another opportunity for some here to start cussing about people who dare to point out that ridiculously overbroad and bold predictions when portrayed as near certainties by persons in a position to induce others to act thereon are inappropriate, but a few words in response to your comment above seem in order.

No overhang, right? All the unemployed grads NOW, every year, simply disappear and the slate is wiped clean in 2017, so we can just measure new grads to "new" openings?

And, as usual, you seem to have ignored the aspects of the report that don't fit your claims. One of the main points was to question whether there is good evidence that structural changes are ongoing. I missed the part, however, about stabilization in these ongoing postulated structural changes.

Finally, overall, unlike you, it seems, I take economic predictions not as facts, but as guesses that are provably wrong, almost always.

Like yours, I expect.

[John Thompson]

@Freedman/10:57 a.m.:

"But my posts never claimed 2010 was the best time to graduate from law school, my posts concerned the near future, 2017 & 2018. What about students graduating then? Will that be "the best time" to graduate from law school, at least within the past fifteen to twenty years? Quite possibly."

Given that it would only take 57+% of the graduating class employed within nine months as full-time lawyers to make 2017 or 2018 the "best time" since 2007 to graduate from law school, it's not that much of a guarantee to your prospective students.

Also, the only thing that would make 2017 or 2018 so good is that more people stay away from law school to better the chances of the remainder. Would you emphasize that in your recruitment pitches to prospective students?

[Jeff Harrison]

I really like many of Professor Merritt's proposals especially number 1. I think in the long, long run we will need to evolve to a more European version of "law school" where it is essentially a undergraduate major and then there are hoops to jump through in order to practice -- one or two extra years, an internship, and perhaps a bar exam.

[Concerned_Citizen]

I think at least 2 comments mentioned that reducing tuition would or could result in more students entering LS. I'm not sure this is the case given how incredibly price non-conscious the applicant pool seems to be (thanks Uncle Sugar for unlimited grad school loans). Instead, it appears that people who (a) want to go to LS or (b) think they have no where else to go but LS, do go to LS no matter the cost.

Debbie:
"courses spread through 2-3 years of college, not all courses concentrated in the senior year" and "would not lose a whit of the rigor or rite of passage that law school now provides".

I'm not so sure. There's something to having everything jammed into 1 terrifying year that I think helps prepare people. Also, my natural inclination if faced with your two doctrinal year-long classes my sophomore year would have been to soften their impact with a few fluffy EngLit, Psych or Latin classes (or whatever the student finds to be fluff; that's just my list) instead of taking them at the same time as I'm taking PChem or OChem.

The other issue will be writing ability. College grads intending to go to LS write poorly enough as it is at the time they hit RWA in LS. I'm not sure when you intended to place the RWA type course(s) but I'd want them jammed in ahead of any doctrinals.

Question for Debbie or anyone, really. When discussing "back office attorneys" and "staff attorneys", isn't this just a more presentable way of saying they are doing "document review" for a (bare) living? Or is there more to these sorts of positions?

[anon]

"back office" seems to be, as so common in these circles, a particularly inapt expression: "back office" as a term of art has nothing whatsoever to do with what those using these term appear to wish to express