Yesterday morning I got back to New York on the redeye from Seattle where I’d been at the annual NALP conference, attended by well over 1,000 people involved in career services from law firms and law schools. (I was there figuratively wearing my JD Match hat, not my Adam Smith, Esq. hat.)
For those of you unfamiliar with NALP, it’s the association for legal career professionals, headquartered in Washington, DC, and per their tagline, their mission is “we advance law careers.”
This isn’t a column about NALP.
Rather, I’d like to share with you a moment of insight delivered in a smallish presentation room by NALP’s executive director, Jim Leipold (disclosure: I’ve known Jim for years and consider him a good friend and conscientious advocate for the best interest of the industry). Jim had just finished going through a presentation recapping the annual job statistics for law graduates aptly summarized by the National Law Journal as “We’re not going back to 2006.”
One of NALP’s great assets and ongoing contributions to Law Land is its long-running, comprehensive data series on employment and job outcomes, particularly for law students entering the market. I know of no data series comparable in scope or span of years.
Here, some of Jim’s slides were sobering. Just a few examples:
- The unemployment rate among all US law school graduates 9 months out doubled from about 8% in 2007 to nearly 16% in 2012.
- On Campus Interviewing (“OCI”), traditionally a bulwark of student/employer matching, and certainly the traditional forum for the top level of the market to clear, dropped at least as precipitously: In 2008 37% or more than one in three and nearly two out of five of all jobs were obtained during OCI, but in 2011—2012 barely more than 20% were, or about one in five.
- The median number of summer associate job offers extended by BigLaw (in Jim’s data set, firms of more than 100 lawyers) was also down by about 50% from the 2007 peak: For example, in the largest slice of the market, firms over 700 lawyers, from 30 offers in 2007 to about 11 or 12 in each of the past four years.
- For law firm jobs obtained during OCI, the numbers were also pretty much cut in half, from 24.4% in 2008 to about 13% in 2011—2012.
For those of you who follow these markets, this is updated and fresh data, but hardly anything shocking given what we’ve gotten used to since the Great Reset.
The interesting part came when Jim presented a chart going back nearly five decades (1968—2013) showing total number of LSAT’s administered, law school applicants, and 1L’s.
Here it is:
This isn’t an eye test, so let me tell you this is a time series going back to 1968 for LSAT’s administered (the top line), and 1L law students (the bottom line) with a third series (the middle line, starting in 1980) of applicants to ABA accredited law schools.
And the numbers that got my attention are those from 2009 to the end of the series, showing LSAT takers down from nearly 170,000 to barely 110,000 (down over 35%), law school applicants down from 90,000 to about 65,000 (down nearly 30%) and 1L enrollments from over 50,000 to barely above 40,000 (down 20%).
Jim was kind enough to clarify how he sees these numbers developing:
- He expects the class entering in the fall of 2014 to be in the 37,000 neighborhood (2017 grads);
- This has been stepping down about 10%/year since the Class of 2013 entered in fall 2010;
- So the total drop over the period has been on the order of 30–35%.
Note this has happened in the space of only four years.
My reaction upon seeing this was to be gratified at how dynamically the law student market had adjusted: Down at a sharper rate and with a steeper slope than ever in this time series, responding with great alacrity for such a large cohort of people to the increasingly dubious cost/benefit calculus of three years of law school with its attendant debt and depressing job prospects.
And you know that Tier 1, 2, and 3 schools—unless it’s of their own purposeful choosing—have no need to, and have not in fact, shrunk their enrollments, which means that on average the remaining schools have to be down a lot more than 30-35%, some of them a lot lot more. With high fixed costs including, most conspicuously, enough tenured faculty to support a three-year program, it’s tough to slash expenses to match large double-digit drops in revenue fast enough.
This prompted me to ask Jim, at the conclusion of his presentation, whether he expected to see some law schools close their doors. While it’s understandably awkward for someone in Jim’s position to make such a prediction, he’s far too honest to deny the possibility, while of course naming no names—much as I, wearing my Adam Smith, Esq. hat, would agree with the view that more large law firms will fail, while naming no names.
The moment of insight came as Jim elaborated on his answer (I paraphrase from memory):
What is happening is a lot more schools are experimenting—much greater emphasis on the LL.M track, of course, which has been going on for awhile, but also one-year “master of laws” programs, accelerated two-year degrees, more course sharing and tuition-revenue sharing with the rest of the university (should they be part of one), and real and concerted efforts to turn the third year into a genuine work/study mix, with students getting paid by whatever organization has hired them for the entry-level work they’re doing. This should both make them more employable upon graduation and of course help a bit with the student loan debt-load.
So no, I think schools that do a lot of these things will find new sources of income and students and may be able to escape the “one size fits all” model of legal education we’ve had so long.
What Jim left unsaid, again understandably, was the strong implication that schools that have no gold-plated pedigree to buy time in temporarily shielding them from market forces—and which don’t innovate and adapt—will go extinct.
I said this column isn’t about NALP, and it also isn’t (really) about law schools.
It’s about firms.
You are now at liberty to draw your own conclusions.