Several commenters asked if I could discuss the impact of more law schools--and more JDs--on the entry-level job market. The percentage of law graduates who obtain law-practice jobs with nine months of graduation has been declining. Is that due to reduced demand for law graduates? Or is it due to increased supply--schools graduating more JDs? Here are some attempts to answer that question.
First, here's the graph I posted earlier this week, showing the percentage of law graduates who obtain entry-level jobs requiring bar admission. That percentage has been declining for a quarter century, despite modest rises during economic recoveries:
Now let's add a line showing the number of JD graduates from ABA-accredited law schools. That line appears in red in the updated graph below. I've plotted the number of graduates in 1000's to keep the scales similar:
That's a little hard for the naked eye (or brain) to parse. One line is in percentages, while the other is in absolute numbers. Let's make this easier by plotting directly the number of jobs requiring bar admission that law graduates reported nine months after graduation. I've estimated those numbers from NALP sources, trying to account for the fact that reporting levels have changed over time. Here are the best numbers I've been able to generate:
What do we make of this? To me, there are two important points about this graph compared to the original one. First, the original graph does miss a 2005-2008 spike in the absolute number of law jobs. The increased number of law graduates flattened that peak when we looked at the percentage of graduates obtaining law-practice positions. If we look at the absolute number of positions, there were more entry-level law jobs during 2005-2008 than in 1985. My estimates from NALP figures suggest that there were 30,986 of those jobs in 1985 and 33,451 during the peak year of 2007.
But second, and equally important, the overall pattern is discouraging. The 2005-2008 boom looks much stronger when measured in absolute jobs, rather than percentage of graduates, but those years were not the culmination of steady growth that many professors seem to assume. Instead, those years offered a hiring burst in a market that has otherwise been declining. Notice in particular that the absolute number of jobs is lower in 2011 than it was in 1985-1990.
The bottom line is that both supply and demand seem to have played a role in reducing the number of law-practice jobs that new JDs obtain. The increased number of graduates makes it harder for all of them to find jobs. But demand also seems to be falling. When we plot the absolute number of law-practice jobs obtained by new graduates, the line doesn't move upwards with occasional dips for a recession. Instead, the overall direction is downward--with many more years below the 1985 hiring level than above it.
The downward trend is particularly surprising when we consider the rapid expansion of the U.S. economy during the last quarter century. Inflation-adjusted Gross Domestic Product was $6,950 billion in the fourth quarter of 1985, and $13,441 billion in the fourth quarter of 2011. In an economy that has more than doubled in size, grown in technological sophistication, and intertwined with economies worldwide, wouldn't we expect a need for more lawyers rather than fewer? Why has the demand for new lawyers declined overall since 1985?
That is the subject of another post. Meanwhile, the numbers are grim. Supply is up, and demand is down. That's not a recipe for market success.