ABOUT THAT LAWYER SHORTAGE…

Facts are stubborn things — almost as stubborn as persistent academic predictions that boom times for attorneys are just around the corner.

Back in 2013, Professor Ted Seto at Loyola Law School-Los Angeles observed, “Unless something truly extraordinary has happened to non-cyclical demand, a degrees-awarded-per-capita analysis suggests that beginning in fall 2015 and intensifying into 2016 employers are likely to experience an undersupply of law grads, provided that the economic recovery continues.”

In November 2014 after the Bureau of Labor Statistics proposed a new and deeply flawed methodology for measuring attorney employment, Professor Seto weighed in again: “If the new BLS projections are accurate, we should see demand and supply in relative equilibrium in 2015 and a significant excess of demand over supply beginning in 2016.” His school’s full-time long-term bar passage employment rate for the class of 2015 was 62 percent — slightly better than the overall mean and median for all law schools, which are just under 60 percent.

Likewise in 2014, Professor Rene Reich-Graefe at Western New England University School of Law used what he described as “hard data” to argue, “[C]urrent and future law students are standing at the threshold of the most robust legal market that ever existed in this country.” The Georgetown Journal of Legal Ethics published his dubious analysis leading to that prediction. Within ten months of graduation, only 43 percent of 2015 graduates from Professor Reich-Graefe’s school found full-time long-term jobs requiring bar passage.

Fact-sayers v. Self-interested Soothsayers

To his credit, Professor Jerry Organ at the University of St. Thomas School of Law has been fearless in challenging the relentless optimism of his academic colleagues. And he does it with the most persuasive of lawyerly approaches: using facts and evidence.

Analyzing the ABA’s recently released law school employment reports for all fully-accredited law schools, Professor Organ notes that the number of graduates dropped in 2015. But for the second straight year, so did the number of full-time long-term jobs requiring bar passage.

Professor Organ offers a number of explanations for this result: declining bar passage rates; regional factors that reduced hiring in Texas and elsewhere; the impact of technology. But whatever the reasons, he suggests, “[T]his employment outcomes data provides a cautionary tale.”

Proceeding Without Caution

“The fact that the employment market for law school graduates appears to have stagnated and even declined to some extent over the last two years,” Professor Organ continues, “may mean that risk averse potential law school applicants who focus on post-graduate employment opportunities when assessing whether to invest in a legal education may remain skittish about applying, such that this year’s good news on the applicant front may be somewhat short-lived.”

The “good news on the applicant front” to which Professor Organ refers is his projection that applications for the fall 2016 entering class are on track to increase for the first time since 2010. But he offers a cautionary note there as well. Law schools at the upper end “will see more enrollment growth and profile stability in comparison with law schools further down the rankings continuum.”

Perilous Predictions

Some prognostications are safer than others. Here’s mine: Faculty and administration at weak law schools will continue using the overall decline in the number of all applicants to persist in their misleading sales pitches that now is a “Great Time to Go to Any Law School.” They will discourage inquiry into more relevant facts.

But here they are: At the 90th percentile of all 204 ABA-accredited law schools, the full-time long-term bar passage-required employment rate for 2015 graduates was just under 80 percent. At the 75th percentile, it was 67 percent. But at the 25th percentile, it was 49 percent. And at the 10th percentile, it was only 39 percent.

It will always be a great time to go to some law schools. It will never be a great time to go to others.

THE END OF THE LAWYER GLUT?

Could a years-long oversupply of new attorneys finally be on the wane? Based on the trend of recent headlines, it would be easy to reach that conclusion. For example, a December 2013 Wall Street Journal headline read: “First-Year Law School Enrollment at 1977 Levels.” The first sentence of the article described the “plunge” in entering law student enrollments.

Likewise, in January 2014, National Jurist reported on steep enrollment declines at particular schools from 2010 to 2013. The big losers in that compilation were “the University of LaVerne (down 66.2 percent) and Thomas M. Cooley Law School (down 40.6 percent).”

Most recently, the National Law Journal took a closer look at the 13 law schools that saw “1L enrollment drop by 30 percent or more in the span of 12 months, while an additional 27 reported declines of 20 to 30 percent in all.”

Taken together, these reports create an impression that the severe lawyer glut is ending.

How about a job?

For prospective law students, the size of any drop in overall enrollment isn’t relevant; employment prospects upon graduation from a particular school are. According to the ABA, just under 40,000 students began law school in the fall of 2013 — down eight percent from the entering class of 2012. That’s significant, but not all that dramatic.

Meanwhile, for the entire decade ending in 2022, the latest estimate (December 2013) from the Bureau of Labor Statistics puts the total number available positions for “Lawyers, judges, and related workers” at around 200,000. That net number takes into account deaths, retirements, and other departures from the profession. More sobering, it’s yet another downward revision from earlier BLS projections.

As the profession makes room for 20,000 new attorneys a year, why all the media attention about 1L enrollments “plunging” to a level that is still almost twice that number?

I think the answer is that some law professors are running around screaming that their hair is on fire because, for many of them, it is. The media are covering that blaze, but the larger conflagration surrounding the crisis in legal education somehow gets lost.

U.S. News to the rescue?

Professor Jerry Organ at the University of St. Thomas School of Law has an interesting analysis of the situation. Schools in trouble are “picking their poison.” One option is to maintain admission standards that preserve LSAT and GPA profiles of their entering classes. Alternatively, they can sacrifice those standards in an effort to fill their classrooms and maximization tuition revenues.

U.S. News & World Report rankings now have an ironic role in this mess. For decades, rankings have contributed to perverse behavioral incentives that have not served law schools, students, or the profession. For example, in search of students with higher LSATs that would improve a ranking, many schools diverted need-based financial aid to so-called “merit scholarships” for those with better test scores.

Likewise, revenue generation also became important in the U.S. News calculus. As the ABA Task Force Report on the Future of Legal Education notes, the ranking formulas don’t measure “programmatic quality or value” and, to that extent, “may provide misleading information to students and consumers.” They also reward “increasing a school’s expenditures for the purpose of affecting ranking, without reference to impact on value delivered or educational outcomes.”

Now the rankings methodology has presented many schools with a Hobson’s choice: If they preserve LSAT/GPA profiles of their entering classes, they will suffer a reduction in current tuition dollars as class size shrinks; if they admit less qualified applicants, they’ll preserve tuition revenues for a while, but they’ll suffer a rankings decline that will hasten their downward slide by deterring applicants for the subsequent year.

As some schools become increasingly desperate, they will be tempted to recruit those who are most vulnerable to cynical rhetoric about illusory prospects on graduation. The incentive for such mischief is obvious: However unqualified such students might be for the profession, the six-figure loans they need to finance a legal education are available with the stroke of a pen. Revenue problem solved.

Some law professors argue that the trend of recent declines in enrollment is sufficient to create a shortfall in law school graduates by 2015. Maybe they’re right. Time will tell — and not much time at that.

I think it’s more likely that over the next decade, a lot of law professors will find themselves looking for work outside academia. Meanwhile, their best hope could be to run out the student loan program clock long enough for them to retire. Then it all becomes someone else’s problem.