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

[Kyle McEntee]

Like Jeff, I find the idea of an actual undergraduate degree intriguing. (Not the 3+3 nonsense at schools now.) My concern is transition. It's much harder to envision how we transition from what we have now system-wide to a model like that. Seems like more coordination than we can realistically expect.

[John Steele]

An undergrad degree in law (similar to degrees in accounting, business management, etc.) would be a great idea even if it's extremely unlikely to be accomplished, given entrenched interests. Students could get a BA (or LLB) at low cost at their state schools, could take a dozen or more courses on a variety of legal topics (both theoretical and practical), could amass little debt, could take a first job in government, corporations, or law firms, and could then decide if they wish to get a 1 or 2 year advance legal degree if they like the legal field and want to climb the ladder further. Back when Paul Caron's Tax Prof Blog was publishing suggestions for Dean Chemerinsky and UC-Irvine's new school, I fleshed out the idea a little there. (I would add a link but this post might end up in a spam trap.)

[Concerned_Citizen]

http://taxprof.typepad.com/taxprof_blog/2007/10/john-steeles-ad.html

[Concerned_Citizen]

Test: Treat it like a jigsaw.

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[Deborah Merritt]

"Staff attorneys" include a range of positions, and I'm not sure I know all of them. Firms don't talk as much about these lawyers as about partners and associates, so it can be hard to get information.

There is one category of staff attorneys that consists of associates who did not make partner, or who opted off the partnership track, but who still had value to offer their firms. Firms started keeping some of these lawyers on as "staff attorneys" although they use other names as well.

A second category consists of people hired specifically to be staff attorneys. These lawyers are often, but not always, entry level when they accept a position at the firm. In Ohio BigLaw firms, the starting salaries seem to be about $60,000, plus full benefits. I don't know if that salary holds in NY or other high cost-of-living cities. In any event, the salaries seem to be comparable or a bit higher than government work--but much lower than what associates in the same firm are paid.

Most of the staff attorneys that I know do discovery work for their firms. There are also staff attorneys doing due diligence work, and there may be some who do other types of legal tasks.

The staff attorneys in my article all fall into this second category, that is they're people who were hired as staff attorneys rather than associates who fell off the partnership track. The Class of 2010 is still a little junior for that other type of position. And most of the staff attorneys in my population are doing discovery work, although a few may be doing the other types of work I mentioned.

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

Professor Merritt:

May I say, I think your work is valuable and important. Moreover, I think everyone here should recognise the integrity and moral courage that it took to attach your name to this work.

Bravo.

[Haskell Murray]

John Steele, A few undergraduate schools are already offering a BA in law. University of Arizona and Western Carolina University are two I know about, but there may be more.

[Carl]

Dear Bracket Man: Please say that was tongue in cheek. Even if you do not mean it.

[Sb]

Yes, it's quite encouraging to learn that some professors actually know about legal practice and what lawyers (at firms at least) actually do.

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

Carl,

There has been a quite concerted campaign against the small number of law professors who were willing to stick their heads above the parapet and say that there is trouble in paradise, that law schools have not been honest about student outcomes, that debt, cost and unemployment are serious issues. That campaign has, by all accounts, been directed at the professor's careers - you can see how vicious it has been with respect to Campos, Tamahama and Merritt quite easily if you look.

It shows a lot of moral courage and integrity to speak out in such circumstances. Indeed, Professor Merritt article takes direct aim at the results of the Pollyanna Simkovic and McIntyre study that is the favourite of one of the more disgraceful of the band asserting that nothing is wrong.

[Concerned_Citizen]

Hi Debbie, much appreciate the informative explanation for the staff attorney positions.

[carl]

Sorry to needle you bracket man. I agree with much of what you say but doubt that any of the people you mention would view themselves a courageous. All have tenured, well paid jobs and while they annoy some people I don't think any of them gave it a second thought. Obviously, I cannot speak for them and I have seen some nasty things about Campos. Based on his most strident attackers, I'd say he should feel proud.

[Former Editor]

I'd have to disagree with you Carl. I think at least some of them gave it considerable thought and knew they were likely to be attacked when they started speaking out. I've personally gotten advice not to drop this handle and use my real name from one of them on account of the odds of professional reprisal against me should I do so.

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

And I have encountered some pretty nasty stuff including vaguely threatening emails from he who cannot be named because of he spam filter (I'm a partner in my own firm, he's an idiot) and very personal attacks by another on my recently dead father - as it happens in this forum. Yes, real efforts have been made to hurt the careers and employment of law school critics - ones in which many professors either acquiesced or indeed facilitated.

Campos, Tamahama and Merritt made a pretty dangerous career choice.

[anon]

Prof. Merritt: Is it your conclusion that a recent graduate who wants to go to law school will be better off going through life with just a BA degree?