Law Students

Glimmer of Hope for Law Schools and the Legal Industry
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Many are pointing to signs that the legal market is beginning to recover.

Summary: Although the legal market has much progress to make, signs of improvement are beginning to emerge.

By now, most individuals in the legal community know that law school enrollment has dropped to the lowest rate in the past several decades. Many wonder that, if enrollment is low, possibly at the lowest ever, is it a good idea to apply to law school?

  
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According to the New York Times, many say no. To some experts, the legal market has permanently changed, meaning that many legal jobs that attorneys used to hold have disappeared for good.

Law school enrollment declined for a significant period of time.

However, several recent studies show a few signs of recovery in the legal job market.

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First, many schools have created their own issues when it comes to law school enrollment. Many schools fabricated statistics on post-graduation employment to alter The U.S. News and World Report annual rankings. Also, many have become aware of law school graduates who earn their degrees with no job prospects and over $100,000 in student loan debt. Many blogs and other news outlets have criticized the market.

This caused students to become wary of attending law school, and enrollment sharply decreased. Enrollment peaked at 52,488 students in 2010. According to the American Bar Association, this year, it is 37,924, a 27.7 percent decrease.



It appears that law school applications for the current year may be becoming more stable. Professor Brian Leiter, a member of the faculty at the University of Chicago Law School, predicts a “bottom.” Since last year, applications have only declined 2.9 percent, so it seems that law school enrollment will remain around 37,000 students, on par with enrollment in the 1970s.

This year, smaller classes will begin graduating, and they will continue to shrink through the year 2018. Fewer graduates will probably mean better first-job percentages, so long as the legal market does not continue to decline.

Enrollment actually increased in some Washington area law schools.

The highest-ranked law firms in the AmLaw 100 survey witnessed a 4.3 percent increased in revenue in 2013, and their profits increased by 5.4 percent. Larger law firms are hiring attorneys.

At the most prestigious law schools, circumstances appear to be close to what they were before the 2008 financial crisis. Last year, an impressive 93.2 percent of the Georgetown Law class of 2013 was employed. The 2013 class included 645 graduates. Of these graduates, sixty percent earned a median starting salary of $160,000 in the private sector. The top 10 law schools have higher employment rates for the class of 2013, and the numbers are expected to improve.

Do you think the legal job market will ever be what it once was?

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However, the legal field still has some progress to make. In 2013, just 86.4 percent of graduates were still in school or had become employed. In 2010, 91.9 percent were employed or still in school. Many graduates also worked in lower-paid jobs at small law firms and in other positions that did not require a law degree, instead of jobs at big firms. According to the Philadelphia Business Journal, enrollment is down 35 percent from the high of the 2009-2010 school year.

Frank McIntyre and Michael Simkovic recently completed a study and analyzed student salaries from 1984 to 2013. The goal was to see if students who graduated in a weakened economy suffered financially in the long-term.

The findings show that unemployment in a rough economy will impact attorneys during the first four years of their career, This reduces the paychecks of these individuals compared to others with similar educations. However, law salaries can increase quickly. In a separate paper, the same authors discovered that acceleration in compensation adds $1 million in income to attorneys over their lifetimes compared with those who never went to law school. Therefore, over a thirty-year period, the impact of early employment and a bad economy will be felt less over time as the economy stabilizes and the graduates become more experienced.

In December, it was reported that enrollment was at a 27-year low.

A study by the American Bar Foundation echoed this study. The After the JD project surveyed attorneys who passed the bar in 2000 to study their career trajectory a decade after graduation. As of 2012, attorneys had high levels of job satisfaction and employment, as well as high incomes. Graduates with low grades from less prestigious schools earned a median income of $85,000 to $95,000. Law firm salaries have risen by more than inflation since 1995, the National Association for Law Placement found.

The American Bar Association added that the previous oversupply of attorneys resolved itself when law school enrollment declined.

However, not all are optimistic about the legal field. A professor at Emory Law, Dorothy A. Brown, recently said that “law schools are in a death spiral,” and predicted that “in three years, a top law school will close.” Brown proposes turning away from legal scholarships, and reducing the research budgets of professors to lower law school tuition.

There has been one law school merger between William Mitchell College of Law and Hamline University School of Law, but no actual closures have occurred.

However, not one law school has closed so far, and many law schools have laid off professors and reduced tuition. For example, Roger Williams University and Pace University have cut tuition, and others have implemented faculty buyouts.

Law schools tend to survive, even in difficult economies. The job market does fluctuate, and should continue to recover.

Corporate in-house legal departments are growing, which does hurt outside firms. Microsoft has 500 attorneys on its in-house team. Additionally, automation is damaging to small practitioners as well as big law firms that depend on income from discovery review.

Large firms are profitable, but must now work harder and deal with uncertain job security, even for the law firms’ partners. However, attorneys still have a major role in compliance and regulation in the United States.

Therefore, though the market has changed, the changes will continue as shifts from big law firms to corporate departments and compliance, which will become its own industry. Solo practice will suffer because of automation. However, for decades to come, there will still be attorneys in the workforce.

Source: New York Times

Photo credit: wisegeek.com



 

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