There is a glut of new law school graduates. One former law school dean has estimated that there is a need for approximately 25,000 new lawyers each year. Tamanaha, Failing Law Schools p.139 (2012). On average, law schools have been graduating almost twice as many lawyers each year. Id. This situation has persisted since 2009. One result of this glut is that many well-educated men and women pay (or borrow and pay) up to $200,000 for a law school degree, but then are unable to find employment as lawyers. There is a market disconnect, an inefficiency of staggering proportions. Id.
Some believe that the problem is just a temporary dislocation in the market which will, in due course, right itself. I disagree. Yes, there has been some improvement since 2009. It is true that the entering classes at law schools today are 20-25% smaller in the aggregate than they were at the peak, in Fall 2010. Although that shrinkage is good, it is still not enough and it took too long for this contraction to occur. In the meantime, thousands upon thousands of law school graduates – perhaps one hundred thousand graduates in round numbers – found themselves up to $200,000 poorer, often with long-lasting non-dischargeable debt, with no real prospect for legal employment. I believe that it does not have to be so. A non-market solution should be found.
An Historical Perspective
In the nineteenth century, most lawyers were trained not in law schools but rather in clerkships with practicing lawyers. Harne, Legal Education in the United States, p.27 (1953). As of 1900, the majority of American lawyers had not attended law school or, for that matter, college. Moline, “Early America Legal Education,” 42 Washburne L.J. 775, 801 (2003). Law was a profession that one joined by apprenticeship.
Although I am not recommending we return to this approach, it did have several advantages. First, young soon-to-be lawyers learned by doing; they got practical experience. Second, there was an effective cap on the number of lawyers who could come into the profession at any one time because taking on an apprentice was a time-consuming task usually involving intensive one-to-one teaching. By contrast, law schools permitted one professor to instruct scores or hundreds of students at a time.
By the start of the twentieth century, law schools had supplanted clerking and apprenticeship as the dominant means of legal training. Harne, p.82. And, because of the potential high student-to-faculty ratio, law schools became substantial revenue centers for universities. E.g. Harper, “Law School as Profit Centers,” The American Lawyer Daily (Sept. 7, 2012). It was in the institution’s short-term financial interest to admit as many “qualified” individuals as its classrooms could hold, irrespective of whether they ever obtained work as a lawyer. Indeed, it was in the institution’s financial interest to build more classrooms.
In the mid-20th century, more than a few students went to law school with no interest in becoming lawyers, but because they saw a J.D. degree as a credential for advancement in business, politics, or government. However, as business schools (which were only two years in length) refined their curricula and became more widely respected, the M.B.A. degree began to fulfill this role. Additionally, specialized schools of politics, policy and government sprang up. In the last several decades, my impression is that law schools were operated to turn out lawyers-to-be, and they can no longer expect to have many graduates find comparable employment in business and politics.
2009 Recession and the Shift
Law schools, however, continued to grow as long as large private law firms (“Big Law”) looked to law schools to fill their growing cadres of first year associates, typically hiring law students for the summer between their second and third years of study, and then making offers of post-law school employment to those who performed well, while taking into account the projected hiring needs of the firm a year hence.
Such law firms regularly rode the boom and bust cycle of other parts of our economy. Woe be the law student who graduated during a brief one or two year recession. There was always going to be a new crop of fresh law school graduates to choose from. Thus, when a recession was over, law firms rarely went back to look at applicants who happened to graduate during that recession unless an applicant had done something in the interim (like clerking for a judge or working for a highly touted government agency) that burnished his or her credentials and kept her “fresh” for her re-entry into the private job market. This was the nominally self-correcting market cycle that only left behind portions of a year or two of law school graduates who had the misfortune to finish their studies in a brief recession.
In contrast with the small cycles of the past, the collapse of the legal employment market in 2009 was deep, long-lasting, and truly dramatic. See Tamanaha. In addition, the 2009 recession occurred at a time of technological change that is in the process of shrinking the domestic legal employment market. Just as one example, documents at one time reviewed by law firm associates for relevance and privilege are now likely to be stored electronically and capable of being sent by a mouse click halfway around the world to be reviewed for relevance and privilege by persons trained to do so in a foreign land at a fraction of the domestic cost.
One can debate the pluses and minuses of this shift, but the shrinking job market for law school graduates is hard to miss. Tamanaha, p.139 (45,000 graduates annually chasing an estimated 25,000 openings). We can also debate whether law schools were slow in coming to the realization that the marketplace for their graduates had fundamentally contracted, but at this time there is little doubt that it has. Chances are that, this summer, an embarrassing number of newly-graduated law students simply did not find jobs.
A Simple Proposal
Law schools are not to blame, neither individually nor in the aggregate. No one law school can solve the problem. But law schools are an essential place to focus on the solution.
So, how could this have been prevented? Better, how can it be prevented from happening again and again in the future? Simple. Make real employment rates a key component of law school accreditation and, in addition, cap incoming classes for any law school where some percentage (say 85%) of its graduates have not procured real legal employment within six months of graduation.
Law school accreditation is generally run by the American Bar Association. This has not been without controversy. In fact, the ABA’s accreditation process was at one point the target of an antitrust suit filed by the Department of Justice. E.g., Tamanaha, pp.11-19. Nevertheless, currently the accreditation process requires law schools to report on some metric the percentage of their graduates who are employed in legal jobs. See Tamanaha pp. 71-74 (law schools use various questionable methods to inflate reported employment statistics). But it does not appear that the ABA actually uses those numbers for the purpose of accreditation.
Imagine, for a moment, that, in the accreditation process, a law school were told that it should not matriculate more students than 120% of the number of its students who got real, paid legal (i.e., J.D.-required) employment from the last class it graduated. (I suggest 120% because there will always be some folks who don’t want a legal career, don’t seek employment as a lawyer, or don’t pass the bar exam.) If this were the standard, what might happen?
First, I suppose, each law school would spend still more money on its legal placement efforts than it does today. Probably not a bad thing.
Second, I predict, law schools would restructure their programs to include still more clerkships, internships, and other practical experiences, which often lead to jobs, rather than treat those experiences as a palliative for third-year blues. Probably, a good thing.
Third, law schools would downsize, even when their university’s revenue center motive would counsel expansion, not to run afoul of an accreditation standard. Law schools might try to match the size of their classes to the actual demand for their graduates. Definitely, a great thing.
This potential accreditation standard does not mean that law schools would suddenly become less diverse. A reduction in size of the class does not mean a reduction in the percentage of women, students of color, LGBT students, or students from any socio-economic background. This potential accreditation standard also does not mean that there is no role for private and public employers in addressing the issue, but it may give the law schools themselves the incentive to bring together those disparate employers to explore changes to how law students and recent graduates learn practical skills and find employment.
Something has to change. My suggestion is that the accreditation process is where that change should begin. And if the ABA is unwilling or unable to address the situation, then state Supreme Courts, which set the standards for admission to the bar, should be the catalysts for such change.
Richard J. Yurko is the founding shareholder of the business litigation boutique, Yurko, Salvesen & Remz, P.C.