Wednesday, September 28, 2011

553,000 missing lawyers

Courtesy of Matt Leichter, author of the invaluable Law School Tuition Bubble, more fun with numbers:

(1)  How many J.D. degrees were conferred by ABA-accredited law schools between 1974 and 2008? The answer is about 1,340,000.  (This number doesn't include people with law degrees from unaccredited law schools, which are currently pumping out about 10,000 J.D.'s per year, and people with law degrees from other legal systems).


(2)  How many people in America were employed as lawyers in 2008?  According to the Bureau of Labor Statistics, about 759,200.

(3) This suggests that 580,000 (43.3%) of the people who got law degrees from ABA-accredited law schools from 1974-2008 weren't working as lawyers in 2008.  What happened to them? (This is actually a very conservative estimate, since it assumes that everyone working as a lawyer in the U.S. has a degree from an ABA law school, which obviously isn't true. A more realistic estimate is that fully half of the people who have gotten law degrees from ABA law schools over the past 35 years are not currently working as lawyers).

Actuarial tables suggest around 27,000 of them have died.  So that leaves us with 553,000 unaccounted for law careers, that is, more than two out of every five people who graduated from law school from the mid-1970s until three years ago (Note these numbers omit everybody from the last three graduating classes, so they have nothing to do with whatever percentage of the current employment crisis is cyclical as opposed to structural).

All this would seem to indicate that the reaction of a lot of people in legal academia to the current state of affairs -- that the scam critique is just a product of the current recession, and that things will get back to "normal" soon -- completely misses the point.

The point is,  there was already a massive oversupply of J.D. degree-holders relative to the market for legal employment prior to the present crisis.  And, as Leichter's analysis so clearly shows, the bad consequences of this oversupply for law school graduates have been exacerbated drastically by the skyrocketing cost of getting a J.D.

30 years ago, you could get a J.D. from a typical state school for a total three-year tuition investment of around $10,000 (in present, 2010 dollars). A private school would cost a total of about $40,000 (again in present dollars), but in both cases the bulk of the cost -- in the case of public law schools basically all of the cost -- of going to law school was that it took you out of the labor market for three years.  Today private law school tuition is around $115,000 and public schools are twice as expensive relative to private ones as they were a generation ago (and the gap continues to close).  And that cost increase is now being covered almost exclusively by non-dischargeable debt.

Forget  about the last three years for the moment. Even if things magically went back to the way they were in 2007 -- in other words if 100% of the current employment crisis for recent law grads was cyclical rather than structural -- we would still be in the midst of two long term trends that together are wholly unsustainable. Those trends are:

(1) The increasing oversupply of people with law degrees relative to the number of people who can pay for legal services, given the cost of legal services, which in turn is a product of the cost of getting law degrees; and

(2) The increasing cost of acquiring law degrees.

In other words, this is what is known as negative synergy, or a destructive feedback loop, or less technically, a seriously messed up situation. The problem is not, as it is so often phrased, that there are "too many lawyers:" it's that there are way too many lawyers given what it costs to become a lawyer, which is what has made it "impracticable" for something like half of the people who went to law school over the last three and a half decades to practice law.

(Note that the BLS projects that over the next decade the American economy will generate about 27,000 new law jobs per year, i.e., a little more than half the number of J.D. degrees that will be granted by ABA-accredited schools during that time. So that's a couple of hundred thousand more missing lawyers right there).

The scam blog movement has merely put its own exclamation point on what in the halls of legal academia and the offices of the ABA is a still an astonishingly under-acknowledged set of facts.

58 comments:

  1. Ahem

    Women . . . have babies and drop out of the workforce.

    ::hides under desk::

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  2. I think you would have to know more about the people who aren't practicing law than these numbers tell you before you can draw the conclusion that law school has been a scam since the 1970s. It could be that, historically, law has been a profession that people leave after a certain period of time. Not just because there are no jobs, but also because people do not want to do it anymore, or come into contact with other ways of making a living and choose to do that. Or, they don't want to do the kind of law practice that involves servicing the poor who are in need of legal help. There are places that are under served by lawyers. Even when tuition was much lower, most people wanted to do the kind of law that brought the most money. There is nothing wrong with wanting to make money. But it does have an effect upon the distribution of lawyers and the question of supply.

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  3. In general I really like this blog, but this doesn't seem right. You'd have to know various other things before you could draw these conclusions:

    1) what caused these people to stop practicing law? Was it a negative reason connected to the over-supply problem you describe, or some other reason (having a family, starting a business, becoming a novelist, whatever) that the person attributes not to being unable to find legal work but to a personal preference for doing something else?

    2) what are the statistics for other professions? In other words, is getting a JD different in this way than getting an MBA or an architecture degree or an MD or an engineering degree? What percentage of people in those fields have changed careers as well?

    I do think you make a powerful point that the cost of legal education is connected to the cost of providing legal services, which in turn means that fewer people can afford legal services at the price point lawyers must demand, which in turn makes the high cost of legal education even more problematic.

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  4. 6:57, I'm going to try to avoid sounding too exasperated, but first I didn't draw the conclusion that "law school has been a scam since the 1970": you did. Second, it's no doubt the case that part of the drop-out rate from the legal profession is due to relatively benign or at least tolerable factors. But what's not in question is that the relationship between tolerable and intolerable factors is getting worse all the time.

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  5. 6:57 here. I apologize if I misunderstood what you meant, but what was the reason for including figures from the 1970s and mixing this in with an argument about oversupply of lawyers and the current crisis? How do the numbers from the 70s, 80s, and 90s fit in with all this? I'm not being facetious. Why start in the 1970s, except that it gives a dramatic number of missing lawyers? My overall point, as was also made by the second comment, this is an odd use of information. There may be something there, but the post jumps to some conclusions without much attention to detail

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  6. 7:04, if you look at the tables in the linked post from LSTB, you'll see that the number of doctors currently employed in the US and the 35-year MD degree total is almost exactly a 1:1 relation.

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  7. "is that this is an odd..."

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  8. I have a law degree and I am a Realtor. Having a law degree helps my bottom line because it makes me different from other Realtors in a good way. That being said, many of my classmates consider themselves lucky if they get a part time job doing document review. I pity them as I drive clients around while they slave away in front of a soul sucking/crushing computer in some cubicle.

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  9. 7:22, the reason for using a 35-year span is that this is a fairly conservative estimate of average professional career length. The question here is how many people who got JD degrees ended up having legal careers in the long term. Now obviously not all 553,000 missing law careers are a product of being unable to make a living practicing law, but in my view the fact that there are two people of working age who have law degrees and aren't lawyers for every three that are is very striking, given that the number of doctors and dentists is basically the same as the number of people who have gotten those degrees from US medical and dental schools over the past 35 years.

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  10. It does not surprise that doctors don't leave the profession as often. The investment in time in becoming a doctor is far greater-- it begins in high school taking the right math and science courses-- than the time investment in a JD or MBA, for example. The process is onerous and weeds out people who are at all ambivalent. Someone posted info about architects the other day saying, if I remember correctly, that only a minority of the people in his class were still working in the field. I could be wrong, but the point was that lots of people turned to other things. Anyway, as I said before, it would be interesting to know if moving to other fields has not always been a feature of the legal profession.

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  11. This amateur analysis fails to support your point that legal education is not justified on a cost-benefit basis. That point is worth fleshing out but these statistics don't support it.

    First, many, if not most, people who go to law school -- now, in 2007, or in 1980 -- do not ex ante *intend* to practice for more than several years. They may not know exactly what they ultimately want to do -- it might be "policy," or "government," or "business" -- but they don't intend to practice as a career. Like other commentators, they say they think it will give them good experience, connections, gravitas, whatever to do what they want to do next. (Here, of course, someone will point out that going to law school does not somehow land you a job as a CEO or qualify you to run the country; in point of fact, however, law does prepare you for other careers and many people do ultimately make the switch.)

    Add to that the number of people who *discover* they don't want to practice -- because they have kids and drop out of the labor force entirely or find it too hard to work part-time as a lawyer, or because they figure out practicing law is all the horrible things everyone said it was.

    The sum of those two groups is huge. And the percentage of JD graduates it constitutes is much higher than it is for doctors, dentists, etc., and that's ok. People go to law school for many reasons; people go to med school (and make years of additional educational/professional sacrifices) to become a doctor. This distinction does not make law school a scam.

    Stick to the transparency petition. If you want to add color by saying "even for the few who get well-paying jobs practicing law sucks," go for it. But to me this statistic says that while some people probably couldn't get or keep law jobs, a whole lot of others were successful in transitioning to other careers, and were able to do so whether they planned to originally or not.

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  12. Regardless of why people are leaving, whether they are forced out, burned out, or opt out, law schools should be more forthcoming with what happens to its graduates.

    When you're looking at your ability to service a massive amount of debt, start salaries are relevant, but not the whole story. It would be very useful to tell 0Ls that even if they do land a job as a lawyer, there is a 40% chance that they will leave the law, for one reason or another.

    Heck, it'd be a good stat to tell current students as well, so they can choose classes more intelligently, and start thinking about their Plan B.

    And, it's a number more professors should be made aware of. "Oh, your job here is to teach people to think like a lawyer? Are you aware that 40% of your graduates don't do that for a living?"

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  13. The problem, as the OP points out, is not just that law schools are (and have been for decades) producing too many JDs. The problem is that the overproduction is combined with obscene increases in what law schools charge for a service that has remained unchanged for 100 years. Betting wrong on law school should not result in a lifetime ruined by $150,000+ in non-dischargeable debt.

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  14. @ Law Prof, that's fair enough, you were trying to get a picture of an average career. It is striking information, but again, not particularly useful if you don't know what the "missing" lawyers are doing and why. In other words, is this evidence of a presumptive problem that has existed from the 1970s until now? Of course cost issue is a serious issue today, but it is of recent origin in relation to the stats you are using. The cost of getting a legal education in 1976 and not practicing (depending upon what you did instead) was very different from the cost of paying for an education today and not practicing, unless you find some other more or equally lucrative or satisfying thing to do. So, my only question originally was why those people from the 70s until the years that costs shot up, were in this inquiry. As for med schools, my suggestion is at 7:37. I think law and med schools are apples and oranges in the way of comparisons.

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  15. If you want to transition to something else and don't already have the connections to do it (see the son of the Steelers owner), you will have to practice first. You will probably have to practice at a large firm or prestigious government or public interest organization right out of law school. The number of students that are capable of doing that are a very small minority of the 53,000, perhaps 5,000 (i.e. most of the students at T14 schools and the top 5-20% grades depending on school rank). It's that simple.

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  16. This doesn't answer the question of why people leave (and that will never be answered more than anecdotally), but Forbes collected data on mid-career salaries for lawyers: http://www.forbes.com/2011/03/07/rich-law-school-grads-salaries-leadership-careers-education_slide.html

    The numbers are medians, and exclude public sector jobs.

    #1 was Stanford with $236,000. If mid-career is understood as being about 15-20 years in, this means not many Stanford grads are making partner at AmLaw 100 firms, where their salaries would be something like $1-2MM.

    The numbers drop off fast. By the time we reach #10, we're down to $191,000 (tie between Berkeley and Notre Dame).

    Down at #24 is George Washington at $170k, and #25 Ohio State at $169k. Mid-career pay, and they're earning 2nd year Big Law salaries. And remember, that's the median, half the students are doing worse.

    Some people making less are probably in jobs they love and don't mind the reduced pay (especially if they paid off their loans and banked some money before leaving Big Law). But, it's likely a lot of people are just in whatever jobs would take them and spend a lot of time feeling humiliated and depressed that even with 20 years of experience under their belts, they earn less than someone fresh out of law school.

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  17. LawProf,

    You really did a bad job here, no offense.

    A far more compelling exercise would be to compare the number of lawyers in 2000, with the number of lawyers in 2010 (an increase of approximately zero) and then calculate how many law degrees were awarded between 2000 and 2010 (approximately 300,000).

    The point is that your 35 year analysis benefits from solid career prospects that existed in the 70s, 80s and 90s but that do not exist now.

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  18. "half the students are doing worse."

    BL1Y, that's wrong because you're assuming the median for that group is the median for all students, but any way. Your numbers show how ridiculously, absurdly, out of what biglaw first year salaries are. You have this incredible oversupply of competent labor, and they respond by increasing salaries even though it pisses off their clients and causes their associates to be worked to death.

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  19. @BL1Y. Interesting numbers. I'm surprised they're so low for the top schools. But on reflection, I guess it makes sense -- the number of people who make BigLaw partner is far smaller than the number of people who get BigLaw jobs to begin with, and even at elite law schools, a decent proportion of students don't get/don't want BigLaw jobs.

    OTOH, if, as I assume, those numbers are based on self-reporting, they're probably a good bit higher than reality.

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  20. I wouldn't take those Forbes numbers too seriously. Besides the self-reporting problem they're not a representative sample (they're people who are looking to move out of their current jobs), plus there's no indication of the sample size but I bet it's really small (IIRC Santa Clara or some place like that is ranked #12 or something which might well be based on one response).

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  21. One interesting thing about BL1Y's Forbes numbers, is that they show you how grossly overpaid law professors are. If a 15-20 year top school grad who is actually working in the hell of private sector law is making about $160k, then why should a law professor make a penny more than $50k?

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  22. LP: There are definitely holes in the data, and I certainly wouldn't rely on it to choose where to go to school.

    But, looking at the total data, not data for individual schools, paints a more telling picture. Mid-career salaries for graduates of even top schools aren't all going to be in the $1-2MM range of Big Law Partners. Associates at Cravath outnumber partners 3.9:1. At Cleary, it's 3.7:1.

    The pre-partner phase of your career will likely be 8-10 years, while post-partner may run 20-30. With no attrition, we'd expect to see about 3 partners for every 1 associate. Instead we get the complete opposite.

    Yes, there are holes in the Forbes/Payscale data, but it's difficult to imagine that many of the people leaving law are finding jobs that pay even higher wages.

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  23. By the way, one interesting thing about this blog and the comments, is that no matter how knowledgeable I think I am (on the subject of the law school scam), there's always something knew to learn.

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  24. Lawprof, the answer to the situation you describe is so glaringly simply I'm surprised that you can't see it: the 553,000 missing lawyers are too busy managing the Pittsburgh Steelers to practice law. All of them.

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  25. "The scam blog movement has merely put its own exclamation point on what in the halls of legal academia and the offices of the ABA is a still an astonishingly under-acknowledged set of facts."

    That's an awfully generous and false characterization of the ABA and law schools' criminal activities. They know the truth, and they actively conspire to cover it up in the hopes of getting federal loan money. See the recent brazen meeting at the ABA where they voted to no longer distinguish between part time and full time employment or lawyer vs. nonlawyer employment in job placement statistics. We need to stop pretending they don't know, and start admitting they do know, and demand arrests.

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  26. @BL1Y - My advice to my kids on finding jobs, if I ever have them (kids that is), is firstly not to go into any industry where professional/permanent staff don't outnumber trainee/contract staff, and secondly not to take any job where you feel like the person you're speaking to is an asshole within 30 seconds of speaking to them. Having busted both these rules (joining a firm with ~10 tech assistants to every patent attorney) I think I'm in a position to say what the consequences are - and they're not great.

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  27. Don't forget, a study was performed in 2007 to determine the need for lawyers in California for purposes of assessing whether a new law school at UC Irvine made sense. It concluded it did not, and this was before the current crisis. So they knew better.

    But leave it to the UC Irvine administrators and Erwin Chemerinsky to say "Fuck you and fuck the data...

    And now you have UC Irvine Law - which is supposed to provide the "new model" for legal education, (oh, and which charges 40k for in-state tuition (not to mention living, etc. which puts COA at nearly 60k))

    These folks knew better, they are just hell bent on their own self-serving agendas at the expense of others.

    http://www.professorbainbridge.com/professorbainbridgecom/2009/07/kill-uc-irvine-law.html

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  28. Actually UCI is doing amazingly well so far at job placement. I would definitely choose them over Loyola if given the choice.

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  29. They only have 60 students to place in their inaugural class, and chemerinsky is hand placing each one. I could probably manage finding 60 people some sort of job.

    This will not be sustainable in the coming years when the get to their expected class size of 250 - 300. Especially in the over saturated southern California job market where you have UCLA, USC, Loyola, Pepperdine and San Diego to compete with.

    I agree with the Loyola comment, though. I don't think anyone should choose that school under any circumstances.

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  30. I was so pleased to not see the word f--- in the comments today but now it sneaks in via a fake quote. Too bad. This has been a good discussion but I fear that many of the folks who need to know are put off by the raging obscenities of just a few (I am not talking about you 10:42).

    In all events, I assigned Richard Susskind's book The End of Lawyers as the main text in my Law Practice Management and Technology class last Spring. You can read about it at: http://www.susskind.com/endoflawyers.html

    If Susskind is right, and I believe he is, the problem will get a whole new dimension in the next decade. Amazon's introduction today of a new tablet computer (Fire) that is completely cloud based is the start the next wave of computing that will fundamentally change what lawyers actually do and how they actually practice. The implications for legal education are profound.

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  31. The only people put off by the raging obscenities are the people who have a stake in keeping the scam in place, Law Office Computing.

    I would love to see a large swath of law professors completely scammed out of their nest egg, and then see how long they remain "civil."

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  32. Law Office Computing:

    Here's a raging obscenity for you.

    Hey, 7:50:

    ". . . law does prepare you for other careers"

    Are you out of your fucking mind? You must be a law professor, someone in practice who went to school back in the dinosaur age, or someone who is so deluded that you can't see reality. Please let us know when you return to planet Earth.

    Get this straght: a legal education doesn't prepare you for other careers. Hell, it doesn't even properly prepare you for a LEGAL career. If it did, you wouldn't have to take a bar review course.

    This statement about legal education preparing you for other careers is nothing but unsubstantiated tripe pushed out by pinheaded, venal, clueless law professors and administrators to rationalize the fact that most people coming out of law schools will end up not being even reasonably paid practioners, but instead heavily indebted serfs who spend their lives servicing debt they can never pay off.

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  33. @12:21
    Powerful! Compelling! Convincing! Artistic! Certainly a way with words.

    wdw

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  34. You wanna get nuts? Let's get nuts!

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  35. Look George, I am 74 years old. Been a lawyer since 1962. I was in the Navy. Grew up on a farm in the midwest. I AM nuts!

    woody

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  36. The first few comments in this post were unbelievably stupid. LawProf and Lemuel, thankfully, put them in their place.

    FOARP - you finally made me laugh:

    "and secondly not to take any job where you feel like the person you're speaking to is an asshole within 30 seconds of speaking to them."

    This is perfect. I don't even need 30 seconds anymore....I can smell them coming now.

    Law Office Computing - you are a blathering fucking idiot. What fucking planet do you live on? Do you even know any fucking attorneys? Not only is naughty language the last thing I worry about when discussing a situation where people are subjected to 6 figure lifetime debt (and lied to about many factors) and no employment but your framing of how lawyers interact is colossally stupid. You're either extremely naive or an academic. No kindly fuck the fuck off.

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  37. @11:33: I'm put off by the raging obscenities, not because I have a problem with obscenity, but because among the scambloggers it's often done so poorly.

    As for @7:50 saying that law prepares you for other careers, that is correct. Law, ie: practicing law, will prepare you for other careers. Law school, on the other hand, does not.

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  38. It's hard to express rage and frustration in palatable manner, B1LY. Generally, you don't get a lot of practice at it, unless you're a poor minority. But practice makes perfect, and the Millennials are going to have a lot opportunities for that in the near future.

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  39. As everyone pointed out above, the stats Campos posted have little to no bearing on whether there's a glut of lawyers, or too many law schools, or what have you. I'm in the top 1% of my t14, and I'm PLANNING to quit law after a certain number of years. There are a lot of people who go to law school because it's a relatively sure path to big salaries early in your career - and yes, if you're bright and know what you're doing, it still can be a relatively sure path. If you go to some t4 in anticipation of a 160K starting salary - for that matter, if you get into Cornell with a 164 LSAT and some compelling life story that has no bearing on whether you'll be a good law student, and decide to go there - you deserve what's coming to you.

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  40. 6:40: What's your plan exactly? Get a BIGLAW job, pay off your debt, and then?

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  41. 6:40 proves that you can still be in then top 1% of a top 14 and be rather dim. How does your little pipe dream apply to 99% of law students or that legal education costs over 6 figures?

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  42. 6:40 is right that the stats don't necessarily show there is a glut of lawyers. In fact, the huge number of people leaving law would suggest the opposite. Thinning the herd should mean more opportunities for the people who remain.

    But, the mass exodus from law does suggest that there are too many law grads. If your plan is to leave after a few years, why are you going to law school in the first place? After only a few years of work, the only new job opportunities that will be available are things like contract admin and procurement. Hopefully you're not going to a t14 for one of those exciting careers.

    When I was a 3L, I planned on leaving law as soon as I payed off my loans and found suitable work in a career I'd enjoy. But, my plan to leave doesn't reflect the value of a legal education, that it's so flexible. Quite the opposite, it reflected that law is terrible and that my best bet was to get out as soon as possible.

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  43. I'm calling bullshit on 6:40. Dude's "in the top 1%". Alright.

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  44. I agree. I don't know of any school that states who is in the top one percent (except when declaring valedictorian).

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  45. (I meant to say any T14 school. TTTs might do it)

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  46. I'm among those 553,000 if people are wondering..

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  47. Someone wants us to ask him why he left the law. Ok fine, tell us John Doe "Attorney" (even though you're not an attorney), why did you leave the law?

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  48. Here's a hypothesis: Lots of those 553,000 lawyers (my guess would be roughly half) left law practice after a few years because they're women who had children and were married to someone who made enough money to singlehandedly support the family. Because law firms jobs are generally rigid, demanding, and high pressure, yet often boring and trivial, many affluent female lawyers who weren't in love with the law chose family over work for a combination of the above reasons. I have several friends who fit into this category.

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  49. 10:33. I didn't leave the law. Although I didn't get my JD until 2010, I'm among the lawyers who are currently not working as an attorney. BTW, I am an attorney.

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  50. "Here's a hypothesis: Lots of those 553,000 lawyers (my guess would be roughly half) left law practice after a few years because they're women who had children and were married to someone who made enough money to singlehandedly support the family."

    Yes. That sounds perfectly plausible. Never mind that we graduate twice as many lawyers as jobs every year. We'll just call them all women who hit the jackpot of cynicism and everything worked out just swell. This is moronic.

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  51. John Doe: The numbers were only for grads from 1974-2008, so you're not actually part of that number.

    However, you are an indication of the critical reading skills possessed by a recent grad.

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  52. We'll just call them all women who hit the jackpot of cynicism and everything worked out just swell.

    It isn't a significant portion of that 553K, but the number is greater than zero.

    I know three women who dropped out of the law to make babies. I doubt they are coming back.


    However, you are an indication of the critical reading skills possessed by a recent grad.

    Ba-Zing!

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  53. This comment has been removed by the author.

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  54. B1LY,

    Yes, I realize those numbers are up to 2008. If you read my last comment, I indicated I'm not part of that study when I wrote , 'Although I didn't get my JD until 2010.' I was merely referencing the fact I'm among the many attorneys who don't have a job.

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  55. Class of 75 here. I stoped working as lawyer 10 years ago. Now, I am retired.

    I think lawyers are burning out a lot faster than they used to. Partnerships are no longer the sorts of clubby, congenial places they once were. Their tolerance for 50 or 60 yro lawyers who don't want to bill 2000 hrs/yr anymore is close to zero. Also if you loose a big client (it could be due to business circumstances beyond your control like merger or bankruptcy), you can get the gate.

    My grandfather was a lawyer. For his 60th birthday, his long time partner gave him a Patek Phillipe watch (2011 retail price ~$20,000). This world is very different than that one and not necessarily better.

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  56. Lawprof:

    Easily your worst post. Stick to transparency.

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