LSAC Data and Predicting Number of Applicants for Fall 2014, part 4

52,000 applicants? That's a huge reduction from a few years ago. I think that was the historic enrollment in 2010, right?

Rough math, 52,000 applicants means 39,000 admits, and 33,000 enrollees? Dang, that's a sharp dropoff.

At this rate equilibrium of say 22,000 admits might well be reached by 2017-8

But it's going to hurt – a lot

For a little recent historical perspective, from 2004-2011, the low number for ADMITTED applicants to law schools was 55,500 in 2008, with total applicants ranging from 77,800 to 98,700. http://www.lsac.org/lsacresources/data/lsac-volume-summary

In 2010, 52,500 students actually enrolled in law school. http://www.lsac.org/lsacresources/data/lsac-volume-summary

When reviewing the numbers, it is easy to see how law professors/deans were so dismissive of the law school crisis that has been crippling graduates for years. As long as those applicants continued to submit those applications and FAFSA forms, the music continued to play in law-law land. It's looking like next year will be the fourth straight year of declining classes, from 48,700 in 2011, to 44,500 in 2012, to 39,675 in 2013 (http://www.americanbar.org/news/abanews/aba-news-archives/2013/12/aba_section_of_legal.html) to 3?,??? in 2014. To quote one of your colleague's favorite lines, "if something can't go on forever, it won't."

"But it's going to hurt – a lot"

Some, yes. However, it will not hurt law students and new lawyers.

MacK, what are you basing the 22,000 number on? And what, precisely, do you mean by equilibrium?

A rough projection – if the fall continues at the current rate 52,000 to 33,000 (suggested ) in 4 years, that is 40% in 4 years. At that rate 33,000 in 2014 could reach around 22,000 by 2017-8.

By equilibrium I am taking the BLS projection of about 22,000 new legal jobs p.a. If that is right demand and supply may be near level. However, bubbles typically undershoot long-medium term pricing and demand when they burst. In any event the rate of decline is astonishing. If some of the lower ranked law schools close and the remaining schools feel less marketing pressure and discount less the levels could fall even lower after apparent equilibrium.

You will note that I am discounting the large number of unemployed JDs – or at least not employed as lawyers. Frankly, it is tough, but if someone has no practice experience 1-2 years post graduation (except clerks), or has not practiced for 4-6+ years! it would be very hard for them to get into the profession.

Terry – no it won't hurt lawyers and new law graduates, but I see a lot of pain for law schools and law professors.

Agreed, MacK.

Sic transit gloria mundi.

Okay, thanks. I think you are making a serious mistake in relying on BLS projections in this context, for the reasons I explained in my prior post about BLS numbers. You might be right that applications will continue to trend down that far. They shouldn't, but this isn't a rational market right now. We are virtually certain to have the best job market ever for entry level lawyers within two years, and should have outright shortages of entry-level lawyers soon thereafter. The only argument to the contrary is based on two related incorrect assertions. The first is that nine-month job data is the final word on legal employment. As you know, I showed that is false. The second is that in a good job market, we would have 100% employment in nine months. Even in the very strong job market of the early 2000s, the full-time, permanent JD job percentage was 70%. (Nine month data, of course, wasn't the full story then, either. If we really wanted to do something about how long it takes people to get jobs, we would change the timing of the bar exam). Based on these two points about nine-month job data, I can't imagine how there won't be a shortage of entry-level lawyers, even if the economy does not improve.

MacK, you think a lot about these things. I'm guessing that you disagree with these points. If so, why? And can you point to reliable data to back up your position? I'm seriously interested in the answer. I look at the numbers, and I can't see how anyone could come to the conclusion that the legal job market in a couple of years won't be the best ever.

Ben,

Even if the job market in a couple years is the "best ever," it still doesn't mean it will be good. Many law jobs are terrible, and worth nowhere near the three years and $100-$200k investment it takes to qualify for them.

Ben,

3 points. First, the BLS is official data, compiled by a staff of professional labor economists. You did not "show[] that is false." Second, the BLS looks at net jobs in the sector, not entry level jobs, etc. You can't assume 22,000 new jobs mean 100 percent employment for newbies. There are scores of un/underemployed grads from the last few years out there. These will sop up a lot of excess and put the brakes on brand new hiring to some extent. Third, try harder to imagine "how there won't be a shortage of entry-level lawyers." Biglaw was/is the biggest soak for entry level lawyers. Government jobs were the second source. Many of those jobs have disappeared and aren't coming back. If you were a firm (a mid to small firm) or a governmental agency, why wouldn't you hire lawyers who have 2 or 3 years of experience for your entry level job at entry level pay? There is so much slack in the market now, that for the next 3 or 4 years, wages will continue to fall, not rise. PAYE incentives further exacerbate this as there is very little turnover in government jobs now.

Ben,

There are a large number of reasons the legal job market won't be the best ever. First, and most important, there is a huge difference between the market now and say in the 60s – which is that you do not have an enormous number of experienced practitioners far away yet from retirement and without the actual financial resources to retire on. So a huge part of the problem is that many of the last 30-40 years worth of entrants to the profession have years to go before they need to, or can, retire.

Second, there are structural changes happening in the profession that frankly, law professors don't have a clue about. BigLaw is in reality in very unhealthy shape – it relies on an increasingly steep pyramid structure for revenues, while GC's, the people who hire BigLaw are coming down hard on costs. Since a lot of the work that the base of the pyramid in BigLaw relied on for the last 3 decades was fungible clerical tasks, this is proving brutal for junior lawyers who did that work – hence all the document review monkey jobs you heard about for your graduates paying $20 per hour with no job security.

Third, cost pressure is relentless – I know, I negotiate bills all the time. And while my "rack rate" is eye-popping, actual fee structures are much more complex. I can honestly say I have never seen cost pressure as hard as it is today.

Fourth, you talk about a strong general job market – but this is a factor that I had not mentioned – graduate school including law school enrolment is CONTRA-CYCLICAL, in recessions law school applications historically WENT UP not down. Realistically right now they application rate should be soaring – but its not. What do you think better employment for ordinary graduates will do to law school applications – if they are falling now – the will plunge when employment goes up.

Next you say the 9-month data is false – I hate to say this, but Campos, Dybbuk, you and me (but not Brian Leiter and Steve Diamond) all seem to agree that the date is – well at least unreliable. Maybe our view of its unreliability is different. However, the big issue is a simple one, someone that is not employed by February the year after they graduated law school is pretty unlikely to find legal employment – and at 2 years, frankly, they will almost never find legal employment. You talk about the timing of the bar exam – but someone who has not passed the bar exam by the February after graduation – presumably failed the exam the first time – that is pretty fatal for employment (since Leiter leaked my name (thanks Dan)) I passed the first time, but the nature of my 'clerking' meant that I could not travel to take the interview in May the next year, but that is unusual.

Now I will add something, I know a lot of lawyers that never received a NALP form – but did get begging letters from the alumni office. I have never worked out why, but it does seem to me that placement offices were spinning even 20 years ago the numbers, and seeking to cherry pick the data so that they only asked those they know to be employed in BigLaw straight out of law school.

Frankly BLS's data is the most reliable. I'll add a point, that I will admit to discussing with Paul Campos from time to time – in almost every metro area – at least 2 years ago, when you looked at BLS data, average and median earnings for lawyers were less than every law school in that metro area was claiming its new graduates were earning – EVERY NEW JD WAS AS A FIRST YEAR LAWYER WAS APPARENTLY EARNING MORE THAN EXPERIENCED LAWYERS. It was nonsense then, it is nonsense now.

One other thing to know about employment data from the BLS – unemployment and employment levels are based on the last job the worker had. Even if they have a JD and passed the bar, if they were never employed as a lawyer they will never be counted as an unemployed lawyer. If you were last a barrista – you won't be counted as a barrister. That is part of why the data shows low unemployment for lawyers. Drive a cab, work a bar, make coffee, you'll never be a statistical lawyer until you practice law. Stop practicing law to drive a cab, work a bar, make coffee – same result.

Former Law Review Editor:

I have to disagree with your statement "Biglaw was/is the biggest soak for entry level lawyers." In reality BigLaw at its peak probably took maybe 15% of new JDs. The perception was that it was hiring everybody and paying 98% of graduates from every law school $160k p.a., but that was always horses hit. The reality was that most new graduates secured employment for a few years with small and medium law – and a few (like me) in specialist boutiques. In the 60s-80s tuition was not enormous, property prices moderate, Joe Banks still offered a decent suit and a law graduates earned around 2 times the median income in the US to start. It was reasonably viable for small and medium law to take in the occasional associate and train them up, and if they worked out, offer them a partnership in 5-7 years.

Soaring tuition more than anything else destroyed that model – that and the weird greedy associates phenomenon – plus I argue a series of awfully unrealistic legal drama series starting with LA Law and continuing to Ally McBeal. We will see where things end up, but I suspect we will return to a model where starting pay is a lot lower, rises steadily until more partnership offers are made – but it could take decades.

Enough precincts have reported in to LSAC that our projection desk can confidently call the results for 2014 to be 10-15% below 2013 enrollment. Most likely closer to 10% as we seem to be continuing last year's trend of the percentage decline in applicants lessening as the year goes on combined with the likelihood that admissions offices will be ever more aggressive in their attempt to fill out the class. Thus, we're looking at a 35-36K enrollment next September.

I think FLRE overstates the ability of BLS to project demand. That fact that this is "official data" prepared by "a staff of professional labor economists" doesn't mean squat. It doesn't mean their estimate is too conservative nor does it mean that it isn't. We are getting closer to a balance between graduating students and increased demand whatever that is, though this has been occurring with little help from the law schools or their faculty. What will be happening over the next year or two is that the focus will be less about the inability to find any job at all and more toward the imbalance between the cost of attending law school and the salaries that the typical graduate can expect.

A final point to consider is how the decline in attendance will be accommodated. Do a substantial number of law schools have to shut down or will most schools from the lower T-14 down have to reduce their enrollment? There are plenty of schools that have class sizes below 100 so it is theoretically possible to keep reducing enrollment. However, this will require some combination of headcount and compensation reduction well beyond what most schools can expect to accomplish through attrition. It's time to get your box of popcorn out and watch as it plays out.

Mack,

Are you certain the BLS stats are the best numbers to use to determine how many jobs will be available for law graduates? If so, how do you explain the following stats from NALP for graduates finding full-time JD required positions:

2010 25,654
2011 24,902
2012 26,876
(www.nalp.org)

Note that this does not include students finding JD advantage jobs, students finding professional jobs, students taking part-time positions that lead to full-time ones, etc. It also does not include students who find employment after the nine month mark, as Prof. Barros' survey demonstrated occurs frequently.

Considering it's not such a crazy idea to expect some growth in hiring as the economy improves, seems to me that the 22,000 figure is not a particularly useful one when trying to figure out how many attorney jobs will be available to law school graduates. It also seems to me that students graduating in 2015-2018 will be in a very good position for employment.

Frankly, Steven, when you ask "how do you explain the following stats from NALP for graduates finding full-time JD required positions" you are ignoring the range of scandals, admissions, etc., of law schools cooking the books on employment. You will recall (Steve Diamond usually glosses over this detail) that the law schools won the scam suits not because they cooked the data, but because the judges rules that as sophisticated consumers, the applicants to the law schools were not fooled. I have to say by the time a law school is using a "puffery" defines that would not work for a lawyer in front of a bar ethics panel, things are pretty desperate.

NALP's data is junk – many people can tell you that, spun, cooked, smoothed bullshit! The law schools have been gaming NALP for decades – and it is by now not a secret to anyone well informed, including many faculty posting on this forum.

BLS data is derived from much more reliable sources, with no incentive to cook the data. If you don't believe me, read this:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2192694

I do not think there is anything more likely to cause a mushroom cloud to appear over the head of many readers than anyone suggesting NALP data can be relied upon, from NYU to Cooley, there are so many instances of schools being caught cooking their NALP employment data as to be an outright joke.

Jilly, I disagree with your premise. I agree that people should be concerned with cost. All of the actual data, however, shows that law school is worth it. See Simkovic and McIntyre. The third wave of the After the JD study, which will be out in a few months, is broadly consistent with Simkovic and McIntyre. If anyone has good data to the contrary, I'd be happy to see it. I'd hope that by this point in the debate, people would be embarrassed to point to entry-level salary data when they are discussing the long-term value of a law degree.

FLRE, you didn't read my comment correctly. I did not say that I had disproved the BLS data. I did say that I had disproved the notion that nine-month data tells the whole story on legal employment. What I did do re: BLS data is actually talked to the people at the BLS about what their data means and how they collect it. In other words, unlike pretty much everyone else on the interwebs, I tried to figure out what the BLS data mean before spouting off about them. See my prior post on BLS data here on the Faculty Lounge. On the subject of the number of currently underemployed and unemployed recent graduates, read my prior post here on nine month job data. Then think about it. Sure, there are some unemployed and underemployed recent grads out there. My study strongly suggests that there are far fewer than you are assuming. (Unless you are using "scores" literally to mean groups of 20, which is undoubtedly correct nationwide). This gets to your third point about slack – I don't think there is that much out there. Some, but not enough to meet demand in a couple of years. Also, as MacK point out, big law isn't as big a driver as you suggest. I'm confident, by the way, that big law will come back, though it might take some time. See my prior post about why I don't buy the structural change argument, at least as it relates to the current job market.

MacK, thanks for the response. Some thoughts, following your points. On your first point on retirement age, the conventional wisdom is that boomer retirements should clear out slots. Is that wrong? Is part of the point that many of these folks are not in a financial position to retire? I don't think this issue is dispositive of the larger point, but I think it is interesting. Is there any good data on this issue?

On the structural change and cost pressure points I agree, in a sense, but none of this is new. Sure, clients are fiercely reviewing bills. They were doing this at least by the late 1990s, when I was practicing. Around that time, a lot of clients were hiring consultants to review law firm bills. Maybe it is worse now, but this is not a new phenomenon. Also, right now clients have all the leverage. When the cycle turns around, the leverage will even out a bit. I was using a lot of contract attorneys in 1997 when I was running a huge document review. Yes, those jobs aren't great. I'd like to get a better sense of how many people are in those jobs, and how long they stay in them. In my study, it was 2 of 247, or 0.8%. It certainly could be higher in other markets. A little big-law related factoid that shows how quickly labor markets can change – in 1997, first years made $86K. Less than five years later, it was $160K. We always make a mistake, in good times and bad, if we assume that things won't change.

On the contra-cyclical point, let's be honest (not to suggest that your point is dishonest). The reason law school enrollment has dropped so far is that a conventional wisdom has taken hold that there are not enough jobs for graduates. At some point in human evolution, we must have interbred with some herd animal. This is just following the crowd.

On the nine-month data, I'd just say that my study showed that someone who is unemployed in February after they graduate is highly likely to get a job. I understand the intuitive idea behind this point, but it is just wrong. This is what I demonstrated in my post on nine-month job data. Too many people think about biglaw and federal clerkship hiring patterns. These patterns do not hold for the vast majority of the legal job market.

On the spinning data collection, I've never seen any evidence of it personally. If there was an effort to do that, the shift towards highlighting the response rate eliminated that incentive.

On the BLS data, it is interesting, but has its limits.

My take away so far is that there in fact is no data out there to refute the idea that there will be shortages of entry-level lawyers in a few years. Maybe law school enrollment needed a correction. Maybe it did not. But the drop has been so severe that there just won't be enough entry level lawyers out there to meet basic demand. In my view, this makes it a great time to go to law school, especially with the financial incentives out there. I don't, however, expect things to turn around quickly, because it is hard to change the conventional wisdom. If I was a legal employer, though, I'd start thinking now about what I'm going to do when that job that just a few years ago got 100 resumes isn't getting any at all.

Steven,

Your commentary brought a couple issues to mind, and I'm going to ramble a bit, so bear with me.

First, I don't think the difference between 22k and, say, 26k is a huge one, although it is a significant one.

Second, if I recall, many of the make-work jobs created by law schools are full time/JD required, as are certain contract attorney/doc review jobs. Likewise, even full time bar required jobs offer minimal salaries.

Third, I have seen no evidence that JD "advantage" jobs, part time jobs, or anything other than a full time lawyer job is a desired result for the vast majority of law grads (see here: http://www.lawschoolcafe.org/thread/straight-talk-about-jd-advantage-jobs/ and here: http://insidethelawschoolscam.blogspot.com/2012/11/jd-other.html(yes, I know you all can't stand Campos)).

Fourth, because of the last few points, consider the number and proportion of jobs that might actually be desirable in any way to a given student.

Fifth, there are a few issues that make nine months a reasonable, if imperfect, number. As others have noted elsewhere, student loans (yes, that old bugaboo) generally come due about six months after graduation and bar results are uniformly released by the nine month mark. I think nine months is more than reasonable for that reason alone, since paying loans is going to be the issue that matters to most law students at the end of the day. Likewise, there really aren't many good jobs, other than perhaps some lower paying PI/government work, that are available to graduates after the nine month mark.

Sixth, there is the question of salary, which all too often goes ignored in these discussions. As much as it might be great to have one of those full time, long term, bar required jobs, it isn't so great unless one can afford to pay their loans and still live a modestly comfortable life.

Seventh, regardless of long term outcomes, the short term matters as well. If I'm a prospective student and I think I will need to go through ten or more years of misery just to maybe make a little bit more money or finally do some interesting work when I'm, say, 40 or 50 years old, it's still a raw deal.

TL;DR: Employment rate, job type, debt, and salary (perhaps relative to hours worked?) are the issues that matter. If prospective students view their expected outcome as a 50/50 chance of a real lawyer job with a low salary and high debt — as I believe many rightfully do — then they are absolutely right to avoid law school.

Sorry for not articulating the above better! Lawwwwwwwng day today, and I'm sleepy, and I'm not gonna reread that. Almost weekend time.

There are a number of law grads from the last few years who never got a legal job out of law school. For some of them, 2, 3, 4 years have passed and they are going to start completely giving up any hope of having a legal career. Yet those people are saddled with $150,000 – 250,000 of student loan debt for the rest of their lives.

Ben,

Retirement age is something again that law professors really don't understand, since they are employed by universities with pension plans, etc. You need to get your head around a scary concept – most lawyers in private practice are essentially self-employed. They are responsible for their own pension – and they make pension contributions after the rent, the secretaries, the electricity, the malpractice insurance, IT, legal pubs and their own living expenses have been paid. So as a law professor, you know that come 65 or 67 or 25 years service or 30, you get to retire and your law school pays you a pension. As a law firm partner – well that's my problem – and if my mortgage is big, or we have a big tax bill, or my secretary needs a raise, or a client does not pay their bill – I don't make a pension contribution that year.

What does this mean in the overall economics – well I have maybe 15-20 years before I can retire, but I only recently was able to make any significant pension contributions – which NO-ONE matched! I mean, who is there to match, ME! And that is the case for the vast majority of private practice lawyers. So the idea that the baby boomers in the legal profession (I am just a boomer/buster) will enthusiastically retire over the next decade or two is a complete fantasy – most cannot afford to.

Leverage is a funny thing – maybe I have leverage, maybe my partners and I do, but we are a pretty special boutique, we do not do fungible work. Have you actually thought about what BigLaw associates do – for most tasks basic literacy is enough – and I hate to say it, but that applies to a fair amount of the corporate work the partners do too. A huge amount of what BigLaw has been paid is massive fees for volume work – document review. I had a girlfriend who was a Fulbright scholar, top Wall Street firm – she spent two years in their corporate department mostly making sure that no one fixed the typos in bond offering circulars for car credit and credit card securitizations (when you issued $20+ billion over many years with the typos and no-one sued you, it was worth having someone brilliant to make sure that the earlier typos and grammar errors did not get fixed.)

My contra-cyclical point is a simple one – the recession is driving students to law school, but it is insufficient to offset the drag that real information about employment outcomes and debt has created. Take the recession away and the collapse in applications will get worse, not better.

On nine-month data, you ignore employment quality. A temporary document review gig is not the same as a full time associate position. That some of those who are un-hired at 9-months secure some marginal employment does not address the basic issue – if someone is going to get good quality employment with a professional future in law, they will normally have secured it 9-months after graduation. The jobs that are left are mostly marginal, short term, and not good for a career.

Again, BLS data is compiled by professional labor economists using objective data, from the IRS, from surveys, from employer reports. NALP data is compiled by law school placement offices and marketing (enrolment) offices who have enormous incentives to skew the data. Who do you think is more trustworthy?

By the way, I'm preparing a cross-exam right-now where skewed data is at its heart – this is a look up my weary eyes moment.

Why wouldn't law professors understand retirement age? Why can' t you answer questions without lobbing insults that often make no sense. So, everyone has to personally experience something, or else they can't know how it works. People who have employers who match contributions do not know how retirement without matches work– or do not understand retirement AT ALL. But you, who have no one to match your contributions, know how all other systems work. Just crazy stuff, and so unnecessary.

Ben, just saw your post. Though (I think) we disagree on the majority of the issues, I appreciate that you have engaged on many of them.

Couple of points:

Re: Simkovic and McIntyre, there were several significant problems that stood out to me. First was the past-performance-does-not-guarantee-future-results issue, aka the structural/cyclical debate. I thought that went plenty unaddressed in substance, although it received a cursory nod.

Second, the comps used by S/M were terrible. If I recall, it was a direct comparison between, e.g., the "bottom 25%" of BA holders and the "bottom 25%" of JD holders. I thought that was a huge red flag considering that JD holders are a self-selected subset of BA holders. The controls they employed were not exactly thorough (and I believe only encompassed a few demographic variables).

Third, S/M's focus on averages missed the point, especially given the differences in hiring patterns between, say, a Northwestern and a Wayne State. The average isn't the concern. The concern is the bottom X% of grads who get completely hosed, *especially* at sub-elite law schools. I think the comparison referred to in my second point was S/M'S attempt to address the issue, but to me it's just not persuasive to compare a self-selected subset to a whole.

Fourth, I have a normative problem with the focus on long term outcomes. Even assuming that on average, JD holders will do better than BA holders over the long term, there is still the issue of whether the probable short term financial, mental, and emotional pain for many of them is actually worth it. By my memory, the break-even point for S/M's average graduate was around ten years. If that hypothetical average grad completed law school at 26, s/he would be 36 before even breaking even. This is to say nothing of a "below average" grad. Consider what that means for one's non-economic life.

Fifth is the issue of causation. What evidence is there that the degree itself "caused" the increase in earnings for anyone other than practicing lawyers? I know S/M attempt to address this via a similar comparison to that referenced above, but again, there is a self-selection problem and the controls are awful.

Re: your commentary on the nine month figure — student loans are only kicked six months out, and then payments are due. In the meantime, food, shelter, and bar prep/exam fees are necessary. There are also not many mid- to high-paying jobs available to grads more than nine months out. Even if students are grabbing full time bar passage required jobs after nine months, what kind of salary are they receiving for their work? What kind of hours are they working? I do agree with you that most law graduates will eventually find employment, even if they are not employed nine months out — but I attribute that not to their law degree but to the fact that people who go to law school are likely more ambitious/hardworking/willing to grind/[arbitrary personality trait that gets one employed] than people who don't. But I think nine months is fair because student loans are due, bar results are out, and most of the best jobs are gone by that point.

Re: your closing point on the contra-cyclical stuff, I'd rephrase as "The reason law school enrollment has dropped so far is that finally, some accurate, specific data is now available to prospective students via, e.g, Law School Transparency."

In any case, that was another ramble. Enjoy the weekend in a day or so, folks.

JBM, show me the data. I'm sure people like this exist. How many, exactly? My data suggests the number is low. Do you have data to the contrary?

MacK, I'm enjoying this conversation. I'd remind you that I actually practiced not that long ago, that pretty much all of my friends are lawyers (mostly practicing), and that I know a lot about my local job market. I'm not some clueless law professor who never came closer to practice than an appellate clerkship. On the contra-cyclical point, my view is that if you take away the unsupported negative inferences, and look at the actual data, the number of applicants should go up. On the nine-month point, I do nothing of the sort. I paid close attention to the quality of the jobs. The jobs acquired later are of the same basic quality as the jobs acquired before. Remember that the context of my study was of employment outcomes of graduates of a small, unranked, regional school. Most of our students go into small firms. Those kind of jobs wait for bar results to hire, and don't follow calendar-based hiring cycles. Re: trustworthiness of data, I wasn't comparing BLS to NALP. I actually trust both. I just think that people misuse both. Good luck on the cross.

No, Breh, thanks for these thoughts. It is true that Simkovic and McIntyre were looking at the past. No one can predict the future with certainty. I would point out that there is no evidence whatsoever that supports the structural change view of the legal job market. Of course, there isn't any data that proves the cyclical view, either. We'll have to wait and see. Being old enough to have lived through a couple of economic cycles, I'm a very confident cyclicalist. I've seen arguments like the structural change view before, and they always turn out to be wrong in the long term. (To be clear, I'm talking about the argument that structural change explains the job market of the last few years; there are interesting long-term changes in legal practice that are important to think about.). Beyond that, I'll leave it to them to defend their methodology. From what I've seen, they've refuted every criticism leveled at them pretty convincingly. On your third and fourth points, I'd say a couple of things. First, the study I mentioned above was of graduates from my school, an unranked regional school. Beyond that study, I'm very close with many of my students (current and former) and am connected on Facebook and LinkedIn with at least 500 of them. They are by and large doing very well, professionally and economically. Second, I agree with you that short-term is a relevant concern, but things like IBR make short-term manageable. I worry a lot, by the way, about cost, and I don't think that law schools should use things like IBR as an excuse not to worry about tuition and debt. Two things on your nine-month points. First, I don't like the amount of time it takes. As I noted above, the timing of the bar exam makes this worse. This problem was one of the major drivers behind my proposal to move the bar exam to the second year summer. Second, as I noted above in responding to MacK, the jobs are quite good. Remember that not all aspects of the legal job market follow biglaw hiring patterns. On the contra-cyclical stuff, as I mentioned above, I think the current state of law school admissions is more the result of mis-information than anything. Re: LST – I like a lot of the things they have done, and dislike some of the others. But there is a lot of negative opinionating out there in general that is not supported by data. Cheers!

Will somebody, anybody, get these people jobs? They ruin any thread about the future of law schools, so tiresome.

Anon: What woiuld you prefer? A thread that simply keeps repeating the bizarre notion that all is well, that dwindling enrollment is simply a mistake on the part of a herd of ignorant persons, and that, in the future (a few years) there will be a shortage of lawyers???? Jobs will go unfilled, becuase there won't be anyone applying!!!
Doesn't that sound nice? Very soothing, indeed. Not like all those people without jobs who are ruining things here in the Lounge!
It would be great to stay in the bubble without intrusion, would it not?
Anon, if you in a position to do so, one would suggest that you raise tuition and admit fewer students to your law school! No worries. All is well!

CHS –

Your own post shows that you really do not "get it." The issue for many lawyers is that there is no employer, no one to match contributions, no one to make contributions but themselves – in years where there is enough of a surplus that they can make contributions. That is the basic catch with being self-employed – that and the fact that taxes are always somewhat uncertain and you get to write a check, never get a refund. There is an inherent cluelessness in anyone who is used to an employer withholding tax, and employer running pension funds (or TIA-CREF or whatever, but organised out of a regular pay check) and a self employed lawyer having to manage their own pension. Many partners have essentially no pension fund – NOTHING – because they have not had a large enough surplus, or they used the money to keep the firm afloat. Do you use part of your salary to keep the lights on in your law school?

So when I say you don't get the retirement age point – it is obvious that you really DO NOT! For many lawyers I know there is no clear retirement option because there is no pension – they get to work until they drop. Do you remotely get that concept – clearly not based on your comment. If you are a self employed lawyer there is not only no retirement age, there is not necessarily any retirement at all. Thus the idea that a large number of baby boomers are going to start retiring from legal practice is a fantasy based on law professors projecting their circumstances onto the legal profession. That so many start arguing that there will be lots of 50-70 year old lawyers retiring shows a stunning cluelessness that underlines why so many practitioners think professors needs a good whack upside the head. It is almost as antagonising as the blasé comments about graduates' employment prospects.

Ben,

To add one or two more quick comments —

I cannot emphasize enough how much I would love to see your proposal re: moving the bar exam to the second year summer put into action. Seems like it's all upside and only very minor logistical issues as a downside. On the other hand, I'm also one of those degenerates who thinks the third year should be eliminated as well, so who knows how much that means.

Separately, just to be clear, I don't think that nine months is a perfect time to take a snapshot of a class. But I don't think it's terribly problematic either, for the reasons I've mentioned above. In a perfect world, I think I'd like to see employment outcomes at graduation, 6 months out (loans coming due), 12 months out (time to take the bar twice), and 5 years out. But, you know, it's real life.

Anon — No, breh.

Ben-

I think they've hardly refuted many of the claims discussed in No, breh's post. Given the limitations of their data, most of his objections are impossible to refute because they deal with the conclusions an individual prospective applicant looking at a specific range of schools can draw from the study. What does the study tell someone considering Duke with a half-scholarship right from undergrad? What about Charlotte at sticker when they would have to leave a 50K job? Really not much, since the basic conclusion (JD = earnings premium) isn't anything law schools haven't been touting for years.

Re: the structural/cyclical point, things are always cyclical until they are not. Good arguments have been made on both sides, but after the last few years of shenanigans the burden is firmly on the law schools to show that there is a very good reason for people to take out 100K or 200K+ to go to Seton Hall or Widener. I've seen nothing that convincing. "Let them eat PAYE" is not likely to be a good enough reason, even from just a PR standpoint. And let's be honest, PAYE would not have been something many faculty members would have considered an acceptable outcome for themselves after graduation (can you really say you would have been satisfied making 45K with 150K in debt?).

"Second, as I noted above in responding to MacK, the jobs are quite good. Remember that not all aspects of the legal job market follow biglaw hiring patterns."

How can you tell if the jobs are "good quality?" I think you discussed this limitation on your survey, and it's going to be hard to get any kind of reliable data without pulling people's tax returns. What little we know from NALP is not promising. Again, would you have welcomed making 50K starting in Harrisburg after taking out six-figures of debt?

"On the contra-cyclical stuff, as I mentioned above, I think the current state of law school admissions is more the result of mis-information than anything. Re: LST – I like a lot of the things they have done, and dislike some of the others. But there is a lot of negative opinionating out there in general that is not supported by data."

The mis-information was coming from law schools. For a long time, there was a mismatch between the kind of jobs/salaries people thought they were going to get after 3 years and 200K of education and the kind of jobs/salaries they actually got. This was ignored or pushed aside by law schools. Eventually, the truth was going to filter into the public consciousness in a way that changed the common wisdom surrounding law school.

The simple fact is that it really just doesn't make much sense to put yourself in a 200K hole to make 50K or less afterwards. Law schools are still, to some extent, ducking this very fundamental problem with their business model.

@MacK–Maybe we have different definitions of the word "get" as you are using it. If "get" equals "understand", then I most assuredly understand that lawyers– I was one for seven years–including the person I am married to, three other very close family members, and, at least, a dozen friends–have to make their own contributions to their retirement with no matches from employers. That is the situation for most Americans, by the way–not just lawyers. Many Americans do not have incomes sufficient to make adequate provision for their retirements– every year is a "no contribution" year.

What you mean is that professors–not just those in law school– have a benefit that others do not when it comes to retirement.

In addition, there has been much talk about the now long-running (for years) problem of professors (in all disciplines) who avoid retirement– some because they like what they are doing, many because they cannot afford to retire.

CHS,

Your comment about many Americans not being able to make pension contributions may be true of many workers today, but it was not largely true of white collar workers in the 70s- 90s except for the self employed. The boomer lawyers will retire theory is built around that group. The catch is that legal incomes have been very unstable for the last 30+ years.

Certainly there are professors who cannot retire – I have known of. A few, but that is more typically because of peculiar personal circumstances – a new young family for example.

But again,the issue here is will retiring boomer lawyers create job openings in large numbers – and that proposition is dubious because a very large proportion cannot in fact retire

Exactly–which is why your assertion that law professors do not understand the situation of practicing lawyers and retirement was not necessary to the overall point you were making.
Yes, there will be lawyers who cannot retire. And no one knows with real precision what that number will be. But there will be those who do retire. And all of us will die at some point.

The entry level market is not booming. Prof. Barros, go talk to a few 3Ls or reach out to a few random class of 2010 – 2013 grads. Ask about their job prospects/income prospects.

Ben,

I encourage you to respond to BoredJD's excellent questions above.

As for data that law school is a bad deal, here's a study, Challenges Facing New Lawyers, conducted by the State Bar of Wisconsin.
http://taxprof.typepad.com/files/challenges-facing-new-lawyers-task-force-report.pdf

A few highlights:

– More than 4 out of 10 respondents would not go to law school again, given what they now know.

– 8 out of 10 respondents reported that their law school debt was more than expected.

– More than half the respondents reported that as a result of having law school debt they have delayed a major purchase, had their happiness impaired, made suboptimal career choices, delayed marriage or having children, requested a forebearance or deferment, or found it difficult to pay Bar dues or court fees.

– 79% reported that their earnings were less than they expected during law school and within that group, the average law practice compensation was $41,591. Additionally, 71% of respondents had less employment related benefits than expected.

With outcomes like these, do you really think more people should be applying to law school?

Tom Joad, I did not claim that the job market is booming. Read what I said. Also, read this:

http://www.thefacultylounge.org/2013/04/reconsidering-the-conventional-wisdom-on-the-legal-job-market-part-i.html

Just to be blunt, I know a lot more about the entry level job market than you, and most people commenting on these threads, do. It was bad a few years ago, and even though it seems to be improving, it is still not great. My basic point is that with the drastic reduction in graduates that will happen over the next couple of years, there will be more jobs than graduates even if the job market stays weak.

BoardJD, thanks for the thoughts. I'll address them in a second, but I'd like your thoughts on the point I raised above: I look at the numbers, and it seems remarkably clear to me that there will be more jobs than graduating lawyers in a few years. Do you interpret these numbers in a different way? On to your points. I'll fess up to not having the social science chops to fully evaluate critiques of Simkovic & McIntyre. It does seem to me, however, that the fact that you could imagine people who did not get a high earnings bump from law school does not undercut their larger findings. On whether the jobs are of "good quality," I take an associate position at a small law firm, or a job as an ADA or judicial law clerk, to be a good job. I care far more about whether people are building their skills and networks than about their initial salary. If people are building their skills and networks, then I am confident that they will have a very good chance of long term financial and professional success. On your final point about borrowing $200k to make $50k afterwards, I'd say three things. First, as I've noted before, I don't think that entry-level salary is that relevant to the long-term value of the investment. Second, as you know, I care a lot about tuition and debt. Third, given all of the discounting going on now, most people who borrow $200k are doing so by choice.

Jilly, thanks for the pointer to the Wisconsin report. I'm having trouble downloading it right now, but I'll respond to some of your highlights. Re: the 4 out of 10 number, this is hardly surprising for people who graduated into a terrible job market. I'd be interested to see what they say long term. Re: 8 out of 10 reporting that law school debt was more than expected, that is appalling, though maybe not in the way you suggest. Students should take some responsibility about taking on debt. Did they somehow expect the tuition fairy to pay some of their law school expenses? On the more than half, that is so broad a set of categories that it is almost meaningless. I'll be interested to see the more detailed numbers in the report, if they are there. I'll also be interested in seeing the breakdown of the earnings numbers. But in answer to you final question, the answer is yes, for two reasons. First, I am optimistic about this cohorts long-term prospects. Second, the surveyed cohort was comprised of record class sizes graduating into a poor economy. Class sizes have dropped so dramatically that even if the job market does not turn around (and I think it will), the job prospects for people entering law school in the next couple of years is almost certain to be very good. Finally, I don't mean to sound callous about people who graduated into the bad market. I know that a lot of them suffered a lot. I graduated from college into a terrible job market, and so I can relate. It is always impossible to predict a job market four years out with any real certainty. The numbers of applicants have come down so much, though, that this is about as good a bet as I've ever seen.

So I posted a lengthy comment responding to BoredJD and Jilly. It seems to have disappeared. Hopefully it will show up. I don't have time to re-type it now. But I will make this request of BoredJD – what do you think about my basic point about the numbers. I look at the drastic drop, and I can't imagine how the job market in two to three years won't be the best ever. Indeed, I expect there to be a dramatic shortage of entry-level lawyers. Do you read the numbers differently?

If the comment doesn't show up, I'll try to respond to your points later.

Ah, there it is. BoredJD, sorry about the typo in your nom de internet. I wonder what a BoardJD is? A lumber attorney? Corporate governance person?

Ben,

While the 40% of young attorneys in Wisconsin who wish they never went to law school may not be surprising to you, it has to be quite enlightening to prospective law students. People generally try to justify their decisions, especially those involving years of their lives and hundreds of thousands of dollars. The fact that 40% of young lawyers openly regret going to law school is a pathetic statistic, and one that law professors should think long and hard about. That 40% is providing valuable feedback on the adequacy of the job you are doing.

The 80% of lawyers with more debt than anticipated is at least partially the result of law schools misleading students about costs, yanking scholarships, and advertising unrealistic starting salaries. I am all for personal responsibility Ben, but when a non-profit institution tells you that the average graduate makes $100k/year starting out, that $100-$200k investment starts to look pretty reasonable. Of course, many schools have stopped advertising those ridiculous numbers, but when a lot of current "young lawyers" were applying to law school, those representations were common.

"the job prospects for people entering law school in the next couple of years is almost certain to be very good"

Please define this very good job market for lawyers so certain to occur in a few years. What types of jobs, at what types of salaries, are certain to be so plentiful? Does it make sense for college graduates to spend three years and $100-$200k to qualify for those jobs? If you were a prospective law student, wouldn't you want to know what type of job you can realistically expect to obtain, and what it pays, before such a large investment of time and money?

Perhaps it is a JD who works at a lumber yard. One of those “JD Advantage” positions.

"I look at the numbers, and it seems remarkably clear to me that there will be more jobs than graduating lawyers in a few years. Do you interpret these numbers in a different way?"

I just don't see the applicant numbers continuing to drop by double-digits unless the federal government makes fundamental reforms to the GRADPLUS loan program (which would doom many law schools). I think and hope that we will level off at around 27-30,000 law students per year. One major unanswered question is whether most law schools continue to chase the USNWR dragon. Since it’s hard to be a prestigious law school when you’re in the red, I think we’ll see a lot higher acceptance rates in the coming years.

"On to your points. I'll fess up to not having the social science chops to fully evaluate critiques of Simkovic & McIntyre. It does seem to me, however, that the fact that you could imagine people who did not get a high earnings bump from law school does not undercut their larger findings."

I don't think it’s really a matter of evaluating either the study or the critiques (you probably have better chops than I). At a very basic level, Simkovic-McIntyre and [some] people in the anti-law school crowd are talking past each other. Although very interesting from a macro perspective, the study can’t hope to provide meaningful guidance for individuals considering law school right now beyond what has always been the common wisdom surrounding higher ed (more school = long term earnings premium). I remember seeing those arguments (albeit much less definite and much less well supported) long before the study came out.

Beyond even that, it can’t answer the question of whether law schools are justified in charging $609,000 per year as long as they can show a median earnings premium of $610,000. (I'm not attributing this position to you, but I’ve seen similar reasoning bandied about).

"On whether the jobs are of "good quality," I take an associate position at a small law firm, or a job as an ADA or judicial law clerk, to be a good job. I care far more about whether people are building their skills and networks than about their initial salary. If people are building their skills and networks, then I am confident that they will have a very good chance of long term financial and professional success."

I absolutely agree with you that career development is important, especially the first few years, but dire financial circumstances pose a huge restriction on a person’s ability to take advantage of opportunities. For example, it might be a good long-term move to take an unpaid position with a US Attorney office or federal district court or a low paid position with a small firm over a document review job. But you can't just forget Sallie Mae, and most people who are not from wealthy backgrounds will need to take the guaranteed $30/hr for X hours. If law schools know they are going to send people into small law, then they need to price themselves accordingly.

Excessive debt may also restrict the ability to get enough savings to move to greener pastures and take another bar, or the willingness of a bank to give someone a small business loan. Being able to do that is even more vital when the argument is that recent grads should be setting up firms to try and tap the unmet need for legal services.

"On your final point about borrowing $200k to make $50k afterwards, I'd say three things. First, as I've noted before, I don't think that entry-level salary is that relevant to the long-term value of the investment. Second, as you know, I care a lot about tuition and debt. Third, given all of the discounting going on now, most people who borrow $200k are doing so by choice."

I think you've been very attentive to the debt issue, and apologize if my post implied otherwise. I think law schools ignore it, and that’s pretty stupid of them even from just a selfish, business-oriented perspective. To your first point, it would be very unwise for law schools to end the analysis at a long-term investment perspective because applicants certainly won't. They will consider the short-term value of the investment (what's my life going to look like in 3 years, 5 years, 8 years) as well as the value of other possible investments at the time (maybe I should see what I can do in that 40K job) when considering whether to take on such high amounts of nondischargeable debt. In other words, there’s a price at which even Harvard starts to look like a bad deal, and it’s going to be much lower than the earnings premium for a Harvard degree (which is probably much higher than $610,000).

On your third point, I am just not that certain whether the choice is really an informed one. People on this forum and others have the wisdom of experience and can view things from a different perspective. For example, you could get discounting data much easier than I and could probably see what the real the price has gone down, although that might just be because the school is struggling to maintain medians. It would be interesting to hear from some admissions people whether they’ve seen an uptick in negotiation strategies from applicants.

I think a lot of prospective students still don't really understand how their relative bargaining position has increased. For example, given the wealth of free or cheap study material and advice out there, it's almost always the right move to retake the LSAT. Because of USNWR, getting even a 2-3 point bump (which is average on the retakes) can translate into tens of thousands of dollars in scholarship cash. And there's little downside because so few schools average scores anymore. But retake rates have not increased measurably in the last few years, like one would expect if the pool was getting savvier. There’s still a lot of work to be done on our end.

Jilly, two things. First, I think at the end of the day we agree on some basic points – students should take responsibility, but schools should care about debt. It is paternalistic, but I think I know a lot more about personal finance and debt than a 22 year old. So I, and other legal academics, should care about cost and debt. And we should provide good, clear information to prospective and incoming students. Second, as far as the quality of jobs go, they will be the same range in quality as they are now, but the market will favor the graduating students, giving them a better ability to choose.

BoredJD, thanks. As always, I appreciate your thoughts. I don't have much to add in response. I'd just say that I acknowledge the need for recent grads to pay their bills, and the negative consequences that debt can have on life choices. Also, you raise an interesting point about informed choices by applicants. I don't have firm data, but I do think that many incoming student are savvy about demanding money. Many of the current crop of applicants learned how to do this for their undergrad schools. My guess is that real tuition is down a lot across the board. Finally, it really is crazy how much USNWR inflates the value of LSAT score. A couple of point difference indicates nothing on ability, but has a huge practical impact on admissions and scholarships.

Ben,

I do not know about a couple of points difference in LSAT scores. I do know that I have met the products of say Florida Coastal – and it has been genuinely frightening. I do not know what the situation is at Widener, but at the bargain basement end of law schools – well the low LSATs do matter.

I am not going to argue that a poor GPA or a bad LSAT should keep individual candidates out of law school – there may be many reasons why someone did poorly in college or on the LSAT – and it may be that on individual consideration that person has aspects that override the poor performance elsewhere – or maybe a poor GPA is offset by sky high LSAT or vice versa. But when we consider the bottom tier of law schools that individual exception is not what is happening – rather they are recruiting those who seriously have no prospect of being lawyers – and if they do pass a bar are a public menace.

Agree with MacK. The LSAT scores which now earn acceptance at many schools is unconscionably low, which is underscored by the fact of retaking the test without the disincentive of averaging scores. So law schools have basically told previous classes not only did they have to pay more for their degree, score higher, but that our selling out (I actually would use a more offensive term in replace of "selling" if this was in a bar as opposed to an online discussion) of admission standards will further devalue your degrees. This lowering of standards to fill seats, especially those at the bottom really is the equivalent of a payday lender offering easy credit.

I appreciate Professor Barros' willingness to engage, appreciation of debt concerns, and fully agree with him on the need that students/borrowers also bear some responsibility. Just as with the housing bubble, too many people bought more "education" than they could pay back. I think finally many are making more informed decisions and rational choices, by being pickier on where to enroll, doing cost-benefit analysis (when possible), and are probably beginning to do so at the undergraduate level as well.

As to BoredJd's finding that there aren't the repeat LSAT takers one would expect… Maybe just a stubborn case of irrational exuberance. Beats me why someone wouldn't retake it.

Law schools are now akin to those who sell tobacco, alcohol and firearms. They sell products that are dangerous to one's well-being. I guess it's good for them that it's a free country. Just no more preaching please from them about evil corporate American, Walmart or RJ Reynolds.