More bad news from the BLS

Updated Below

I posted earlier this week about the Bureau of Labor Statistics projections for attorney job openings. To recap briefly, the BLS projects only 218,800 openings between 2010 and 2020--or 21,880 openings per year. Accredited law schools are currently producing about 45,000 JDs per year, more than twice the number of available jobs. Even if schools cut enrollment by 20%, a relatively dramatic move, we will finish the decade with more than 200,000 JDs who can't find jobs as lawyers.

But that's just the beginning of the bad news. Those 218,800 projected jobs are not all full-time, secure jobs with good salaries and benefits. The BLS counts all positions--part-time, full-time, temporary, or permanent--as "jobs." (I confirmed that fact directly with a helpful BLS staff member.) Notably for the legal profession, the projected openings include individuals who will open solo practices.

Wait a minute: How can the BLS estimate how many desperate lawyers will hang out their own shingles? If new solos count as people who have filled "job openings," then won't the number of "openings" rise to match the number of law graduates?

No--and the answer demonstrates an important point about the BLS projections. Economists don't project job openings based on what people want to do in the workplace; that type of wishful thinking belongs to 0Ls. The BLS uses macroeconomic models, together with appropriate inputs, to project how many job openings the economy will support in each occupation.

Applying those models, the BLS projects that the economy will support about 218,800 lawyer job openings during this decade. That number includes the low-paid public defenders and public interest lawyers. It includes the contract and part-time attorneys. It includes the in-house lawyers. It includes the attorneys who work for small firms, earning much less than median salaries. It also includes all of the new solo practitioners who will earn enough to tough things out in practice. Those are the 218,800 who will have lawyer jobs.

The other 200,000 or so JDs will have to find something else to do. The economy won't support more lawyers simply because lots of people want to go to law school--or because there are professors eager to teach them. There is a limit to how much consumers, businesses, and government will spend on legal services. Lawyers can urge businesses to purchase more legal advice; law professors can advise individuals to get legal help. Those exhortations are natural expressions of our economic self interest: Every producer thinks that consumers would be better off with more of the producer's product.

But it's hard to talk back to the U.S. economy. Consumers, businesses, and government want lots of things other than legal services: health care, food, homes, cars, manufacturing equipment, schools, prisons, fire departments, airlines, national defense--the list is enormous. Lawyers play a valuable role in our economy, but we're not invaluable.

The BLS projections won't be exactly right. The economy may support somewhat more than 218,800 lawyers this decade. On the other hand, it may support less; BLS projections can err in either direction. The depth of the recent recession, the slow growth in overall employment, the accelerating impact of technology, and continued unrest in the world economy suggest to me that BLS's current projections may be overly optimistic.

There's another, even more worrisome, reason why the BLS projections may overestimate the number of lawyer openings this decade. The projections include both new jobs and openings due to workforce departures. In making the latter estimates, the BLS relies upon historical data. If baby boomers work more years than their parents and older siblings did, there won't be as many job openings as BLS estimates. Ditto if more parents decide that they need two incomes to support a family, rather than choosing to have one parent withdraw from the workforce for a few years. Both of those trends seem likely to me; if either occurs to any noticeable extent, the BLS estimates of lawyer job openings will be too high. There may be more openings for babysitters (to care for those two-career children) or drivers (to ferry those aging boomers to work), but there won't be as many lawyer jobs.

But even if we put those gloomy predictions aside and assume that the BLS has correctly targeted the number of lawyer jobs, law schools are producing far too many lawyers. It is sheer arrogance to suggest that we can force the economy to create more lawyer jobs simply because our graduates are bright and eager. And it is dangerously deceptive to keep encouraging large numbers of students to go to law school because "the economy will turn around" or "there will be more jobs when you graduate."  The BLS has already assumed that the economy will turn around:  A fully turned, full-employment economy will produce 218,800 openings for lawyers this decade--leaving more than 200,000 new lawyers holding JD-sized debts and BA-sized jobs.

Update: A few comments have asked how the BLS counts temporary jobs. E.g., if 50 document reviewers work for one month on Project A, then move on to Project B, does that count as 50 openings or 100? The answer is that it depends on what the document reviewers were doing before they started Project A. If the document reviewers were already doing lawyer work of some kind, then this hypothetical includes zero new openings.

I could have made this more clear in the original post, so let me explain a little further. When the BLS projects the number of "job openings" that will occur in an occupation over the next decade, it is estimating the number of new entrants that the occupation can absorb. It is not trying to predict how many new jobs will be advertised or how many lawyers will move from one law job to another; it is only looking at how many slots will be available for new people to take.

Suppose, for example, that Microsoft increases the size of its in-house department by adding a new lawyer to its team. Microsoft consults a headhunter and hires a senior associate from Big, Big & Law firm. Big, Big & Law replaces that associate with a third-year attorney from Small law firm. Small then hires a new graduate from State U Law. Three jobs were advertised here, and three people started new work, but this is only one "job opening" in BLS terms: only one new worker moved into the lawyer occupation category.

The BLS, in other words, answers precisely the question that troubles many readers of this blog (and that should be troubling law school faculties): How many new lawyers can the U.S. economy absorb over the next decade? The answer is about 218,800--not 450,000 or even 420,000.