- Market Watch
Market Outlook for Legal Profession Jobs in 2012
Over the past two decades, law school tuition has increased at an alarming rate, far exceeding inflation and leaving students in loan debt for somewhere between $70,000 and $100,000 depending on whether they go to public or private law school. And now over 40% of graduates are receiving lower and lower starting salaries. Firms that used to offer $160,000+ a year to start are now offering $65,000 a year.
This scenario only applies if you actually make it through law school. Many students don't, leaving them in deep debt with no law degree to show for it. At this point in time, if you're considering taking up law as a profession and need to get loans to do it, I have one suggestion: don't.
There are simply too many law school students and not enough job opportunities right now. The schools continually raise tuition and accept numerous students. The faculty is paid handsomely and some students get fantastic first-year salaries upon graduation. But this is no longer the norm. In fact, the legal job market is changing so dramatically at such a rapid rate, a legal degree may not carry the same weight it used to.
Students are angry, understandably so. They've put in the time and effort, and put themselves into debt only to find themselves jobless or taking positions they could have gotten without the legal degree. Because of this, some students are blaming the law schools' marketing departments, even going so far as to sue them for false advertising. The starting salaries advertised by these schools are often completely wrong or based on previous year's figures.
A graduate from New York Law School sued her former school when she wasn't able to find a suitable job following graduation. The advertised salaries ranged from $70,000 to $80,000 to start and all students were assured that they'd get ample support in finding a job. However, this student received no such help and got zero interviews as a result of her degree. She had no job for six months and once she finally found employment, she was a legal document reviewer.
The school's dean, Richard Matasar, leads the American Law Deans Association, which was set up to change how law schools dole out accreditation but still defends how the school advertises its programs.
Some schools dubbed "diploma mills," by some students aren't solely to blame for the overabundance of graduates and the lack of jobs, however. According to David Anziksa, lawyer for Kurzon Strauss, and representative for the cases brought up against schools like New York Law School, law schools have been perpetuating this problem for years. It's not just the bad economy causing it. In fact, they've been overselling the idea of super-high starting pay and an abundance of positions despite the fact that there are fewer and fewer jobs available.
An End to the Doom and Gloom?
It's not all depressing news in the legal job market. In fact, the American Bar Association took a big step this year toward making law schools have to state a realistic job outlook for all outgoing graduates. This could help prevent the high hopes of incoming students and help thin out the number of people seeking law degrees. In addition, the ABA Section of Legal Education & Admissions to the Bar is being questioned in regards to how it can explain a sudden and dramatic increase in defaults in federal student loans. The fact is that law students as of 2011 wind up with an average of $98,000 of debt. This is a 200% increase from 1987. Something is definitely up.
Law School Transparency, a nonprofit organization dedicated to knocking down the doors to law schools and make public what they know about what graduates can expect in the job market, is relieved to know there is a rise in efforts to collect graduate income information. This organization takes every effort to make it clear to potential students what they'll be getting into. Especially since the disparity between income expectation and actual income is so great.
Finally, the ABA is holding law schools' feet to the fire and requiring them to report graduate employment information. This will be a requirement for accreditation. The first survey goes out in February to collect this information. At the moment, the questions are unknown.
As positive as this step is, it won't fix everything. Educators need to get on board with reform as well. Just students raising awareness isn't enough.
According to information collected by the National Association of Law Placement, 51% of 2010 graduates are currently employed. If you narrow the field to full-time and permanent positions, this number drops down to 45%. This is a pretty dramatic difference between the 90% employment promised by most law schools, right?
Some students are even afraid to speak up to say they're unemployed because they're afraid it'll reflect poorly on their alma mater and decrease the value of their degrees.
Law schools are also afraid of devaluing their degrees and reputation, which are reported in the U.S. News and World Report annually, leading them to report misleading information about themselves. This hurts everyone.
Application numbers are dropping, but they're still high with about 80,000 people applying to law schools for the fall semester. This is down 10% from last year.
High-End Law Firms Aren't Hurting
The big law schools are still doing well. Many have starting salaries of $160,000 or more. However, there are too many graduates to fill a limited number of jobs post-graduation. So, if students don't rank at the top of their classes, they will have trouble finding work and paying off their debts. Many resort to taking part-time work for low hourly wages and must forego benefits.
Much of the employment problem can be blamed on demand. While the legal market grew considerably between 1970 and 1987, it has slowed since 1988 and now grows at a rate that's slower than the rest of the economy. Really, it was only a matter of time before supply and demand caught up with one another and switched places.
While the number of new lawyers entering the job market continues to increase, the number of jobs available has decreased. In 2006, 43,883 Juris Doctor degrees were given out by the ABA. Much of this can be blamed on an increase in accredited law schools.
A reduction in the number of jobs available can be blamed on a number of areas. For instance, some focus areas for different practices have gone out of favor like medical malpractice, personal injury and securities class-action lawsuits.
More discouraging news comes in the form of a survey given to 600 lawyers at firms in Indiana. The majority of the lawyers had salaries that stuck with inflation or dropped below it in the past five years. And the 14% of lawyers that enter the public sector don't fair any better. Salaries increased with inflation, but that's it.
The real problem here is justifying the enormous investment in education and the amount of debt new lawyers incur only to get a lackluster salary in the end. This isn't about making tons of money, either. It's about being able to afford to pay back those massive loans.
Should you have the good luck of falling at the top of the list at a major law firm, your starting salary will be high, however. And if you're a top performer, you're likely to get significant raises, even larger ones than were awarded previously when the market was flourishing.
But some within the faculty of law schools believe nothing has really changed. In fact, they note that the legal market has always been a meritocracy, and the top of the class gets the most interviews; the top performers get the highest pay. Nothing has changed, they argue.
This may be a case where incoming students see the amazing salaries offered at top firms but pay no mind to the smaller firms or lower markets. This is a big mistake. The majority of new lawyers will take up positions at these smaller firms and thus their incomes are lower. It would be much easier for students to get an accurate assessment of the entire legal job market if all of the data was available, not just the stats from the high-end firms or surveys conducted by schools wishing to promote themselves.
The Problem with Surveys
Income surveys are notoriously inaccurate. Think about. Students that make lower salaries generally won't report how much they make. However, the students that pull in higher salaries will be proud of that fact and report it, eagerly. This skews the results of income surveys, leaving off the bottom portion of the income statistics. It's even possible for students to lie on these surveys. There's no real way to determine the accuracy of these reports.
Data from the NALP shows that law school graduates are holding steady employment in private practice, with the numbers falling between 55 and 58% for over 10 years. However, these jobs aren't necessarily long-term or career-worthy. These numbers include contractors that don't get benefits.
Here's another example: the brochure distributed to prospective students at Brooklyn Law School shows an expected starting salary of $100,000 but this comes into direct conflict with the experiences of graduates. Only 41% of last year's graduates work for firms with over 100 lawyers and this doesn’t even take into account temporary workers, contract workers, or those who don't draw benefits.
One of the biggest problems with law schools is the rapid increase in tuition rates. The massive amount of debt incurred is harder to deal with now that tuition is higher, especially for those than live in major metropolitan areas. Many students take on this debt eagerly when they hear starting salaries are $160,000 at the big firms. But this is misleading and doesn't accurately reflect the starting salary for most graduates, especially since the big firms recruit almost exclusively from the big schools.
This is a very real problem in the legal market. Those considering entering it in 2012 should think twice. Unless you are confident you can get into one of the very best schools and perform at the top of your class, it might not be worth the time and monetary investment at the moment.