Monday, September 24, 2007
More Graduates, Fewer Jobs: That Can't Be Good
The WSJ has a big story today on the fact that the legal services sector has lagged badly behind the economy in recent years and that the number of law schools (and graduates) has proliferated over the same period. As the numbers bear out, this isn't good news for most law graduates. While the top firms continue to pay top dollar for the best graduates, those students who don't find jobs at elite firms can expect lower starting salaries than they would have earned in years past. This fact, combined with the fact that tuition (and student debt) at both private and public law schools has skyrocketed over this time makes the financial prospects for students who don't graduate near the top of their class pretty chilling.
None of this is exactly news, of course, but it certainly is compelling to see this data collected in one place. A few weeks ago there was a lot of discussion on the blogs about the bi-modal distribution of salaries among first year lawyers. The WSJ story hammers home the point that the bi-modal distribution made at least implicitly: A law degree simply isn't the guarantee of the good life that it used to be. In this environment, we can expect fewer students to apply to law schools and for those who do to be better and more knowledgeable consumers of law school services. They are certain to demand more from law school and to gravitate toward those that offer good value for the money. The WSJ takes some schools to task for providing incomplete or misleading data on student employment and lauds others for being honest about post-graduation employment. This is the sort of thing that motivated consumers are sure to notice.
Given all of that, can a shake-out in law schools really be that far behind? Will there really be over 200 ABA approved law schools in 10 years? In 5?
(Cross-posted at MoneyLaw)
Posted by Sam Kamin on September 24, 2007 at 12:17 PM | Permalink
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I read the article and wondered, how much of this problem is the fault of law school hiring decisions? After all, the primary gripe of the students in the article isn't that they can't find jobs per se -- it's that they can't find jobs while they're suffering under a crushing debt burden.
Law schools could reduce tuition costs by dialing back the number of professors teaching niche courses, and increase the teacher-student ratio in the more popular courses.
Posted by: Know Better Than To Use My Name! | Sep 24, 2007 12:46:54 PM
Ah, but one of the rankings criteria is student/teacher ratio. I doubt law schools (especially the top-tier ones) will sacrifice their ranking to reduce student debt.
Posted by: Marianna Moss | Sep 24, 2007 1:06:38 PM
Sam, I'm curious what process you think might yield fewer accredited law schools in 5-10 yrs: declining applications yielding weaker student bodies and therefore decreasing bar passage rates at lower-ranked schools? pressure for law schools to drop tuition to the point that some schools start losing money? tighter accreditation standards leading to the de-accreditation of certain schools? something else?
Posted by: Scott Moss | Sep 24, 2007 2:42:05 PM
Scott -- Yes, something like that. I think the ABA will feel pressure (and has already felt pressure) to do something about the glut of law graduates vis-a-vis decently paying jobs. The law schools closer to the bottom of the hierarchy will have trouble recruiting qualified students and the students they do recruit will have trouble passing the bar. There seems to be a disequilibrium at the moment and I can't help thinking that it's going to be corrected one way or the other.
Posted by: Sam Kamin | Sep 24, 2007 3:00:58 PM
Thought you might find this firm-specific data interesting... Insurance law firm salary data is collected and made available at this handy website:
There are also some firm profiles. I've worked in insurance defense a total of about 2 yrs and I can say that this info is pretty accurate.
Posted by: Insurance Lawyer | Sep 25, 2007 6:45:44 PM
Sam: Maybe the ABA should take into account, for accreditation purposes, the ratio of median graduate salary to tuition. I'd have to think harder about it, and surely schools would fudge the numbers... but if yuo're a school that's on the border of having accreditation issues, maybe the ABA could actually audit their salary data and consider whether the school is charging premium tuiton for a degree that won't yield a salary bump-up commensurate with paying >$100K...
Posted by: Scott Moss | Sep 26, 2007 2:13:42 PM
Do we need 200 ABA accredited law schools, probably not. But are their only positions for those who graduate from the first tier or in the top 10% no. I am also not so sure that law school lie on purpose, I am sure they fudge the numbers, but I think quite frankly that a lack of knowledge and understanding about the profession exists in many law schools. If one looks at the career paths of most law professors, even at fourth tier schools, one will see that what most faculty have experienced as law school graduates is not what the bulk of their students will experience. Plenty of lawyers, who graduated from lower ranked schools in the middle of the class or even lower, are doing quite well 5 to 10 years out. I think law schools need to make a greater effort to bring students into contact with these lawyers so the students will understand that they do indeed have other routes to establish themselves. For every one whom does well many others will fail, but at least students would have a better idea what to expect and what options are open to them.
The law is full of niches that are worth filling law schools seem to prepare students for only one of them. Students need to be given more information about different avenues to success. This may mean a deliberate effort to bring students into contact with lawyers that would have no chance of ever being tenure track faculty members, after all unlike a PhD program most law students don't want to be faculty at any rate.
Would students attend law school with a reasonable chance of making over $100,000.00 ten years out, I am not sure, but this is the real option for many students. If they enter knowing this and are taught among other things how to establish themselves, they would have little to complain about upon graduation.
Posted by: Steve | Sep 27, 2007 3:47:55 PM
This comment was wiped out, so I'll try again.
Prior to 1940, the annual incomes of lawyers and doctors in the US were pretty much the same.
Then in the early 1940s the American Medical Association took the bold step of making it nearly impossible for new medical schools to get accredited. By contrast, the American Bar Association did nothing.
The result was a skyrocketing of law schools, a stagnation of medical schools, a skyrocketing of doctors' incomes, and a stagnation of lawyers' incomes.
But even today these determinative macro-economic facts are hardly known.
Posted by: Anthony D'Amato | Oct 1, 2007 6:08:16 AM