Law Vs. Undergrad: How Different?

optimism_thumbsupIs Legal Employment on the Upswing?

Want to start a food fight on social media? Try this: Publish an article entitled “Apply to Law School Now” and argue that legal employment should pick up due to decreasing class sizes. That’s what happened to Jordan Weissmann, Slate‘s senior business and economics correspondent, who had the audacity to make this statement: “The only reason the class of 2016 is looking at a relatively upbeat future is that enough students gave up on the idea of becoming lawyers amid a market that was flooded with jobless young people.” Oh, the horror! Weissmann’s opinion kept the scribes at Above the Law busy, as they nitpicked his rosy employment projections. Who’s right? You can’t blame Above the Law for being guarded, with recent ABA data showing a 57 percent full-time employment rate for the class of 2013. What’s more, the New America Foundation recently reported that the average law school debt is $140,616, while Matt Leichter at Law School Tuition Bubble projected a 27-29 percent increase in law school tuition over the next decade. That said, Weissmann isn’t the first expert to forecast a more optimistic future for JDs. In November, Appalachian State’s Paula Marie Young argued that jobs would exceed grads by 2016. And the University of Washington’s Ryan Calo expressed similar sentiments in Forbes last November. So what’s the basis for Weissmann’s partly sunny outlook? It’s based on simple math: Law graduates should drop from nearly 47,000 in 2013 to roughly 36,000 in 2016. According to Weissmann, fewer graduates means less competition for good jobs. Here’s how it works: “We can break down last year’s class, using data from the American Bar Association. Among all graduates who reported their job status, 32,775 found full-time, long-term work, meaning the job lasted at least a year…Of those jobs, 26,337 required passing the bar, meaning they were typical legal jobs. An additional 4,714 were in fields that technically did not require law degrees, but where employers preferred to hire J.D.s anyway—think congressional staffers, labor organizers, or NGO workers. Finally, 1,724 were in jobs completely unrelated to law, which sounds bad, but the reality is that a certain number of graduates always do something unconnected to their degree. Let’s say those numbers hold. In that case, we can expect that about 91 percent of the class of 2016 will find long-term, full-time work, compared with about 72 percent last year. About 73 percent would be in full-time, long-term legal jobs, compared with 58 percent last year. Essentially, employment rates would look similar to those in 2007, when the mid-2000s legal hiring wave crested. That year, about 92 percent of graduates were employed, and 76.9 percent obtained legal jobs. (Both those figures included part-time and short-term positions).” Weissman further factors in law school-funded jobs, which accounted for 918 positions for 2013 grads. Remove them and, according to Weissman, “about 88 percent of all grads would have full-time, long-term work, and 71 percent would be in legal jobs.  Essentially, law grads would be partying like it was 1997.”


Source: American Bar Association and Jordan Weissmann

However, Weissman remains cautious about salaries ever returning to pre-recession norms: “…we’re still not heading back to the heady days of the Big Law hiring binge that ended with the recession. The era of mega-firms fighting tooth and nail for their pick of graduates and pushing entry-level salaries ever higher are dead and gone. For 2013 grads who went to work at law firms, the median salary was just $95,000, compared with $125,000 in 2008. Nobody should expect a return to bubble-era pay scales.” In a follow up article entitled “Now Is a Good Time to Go to Law School,” Weissmann rebuts his critics, observing that “law school looks like a stock that crashed too far after a panic, and is suddenly a bit undervalued.” Make no mistake: Weissmann is no Pollyanna when it comes to the legal profession: “If you’re a somewhat type-A, risk-averse personality with an argumentative streak and a virtually endless capacity to wade through dry-as-jerky documents—perhaps under the thumb of a stern law firm partner or while earning a government worker bee’s salary—then you’ll survive the experience. If not, consider an MBA.” Even more, he concedes some points to critics. For example, Weissmann is pessimistic that less competition will benefit unemployed graduates, particularly ones from bottom-tier programs, pointing out that “firms—especially large firms—are creatures of habit, and one of those habits involves hiring candidates for entry-level positions straight out of law school; some government agencies work the same way. That means they’re likely to ignore the graduates who are already out there struggling.” In spite of the six-figure debt loads, Weissmann contends that law school is still a good investment, citing a 2013 paper from Seton Hall Law Professor Michael Simkovic and Rutgers Economist Frank McIntyre. Factoring in tuition debt, “The Economics of a Law Degree” study found that a law degree had a pre-tax lifetime value of roughly one million dollars, a much higher yield than professionals who’d earned only a bachelor’s degree. In fact, according to Weissman, the research showed that law school was still a good investment, even when students averaged $60,000 a year in tuition. So decide for yourself. And consider Weissmann’s analysis: “There’s a good chance that at least 32,000 full-time, long-term jobs will be available to the law school class of 2016, which shouldn’t graduate more than 36,000 students. That would likely lead to some of the highest employment rates in recent memory. Their salaries won’t be as high as during the bubble era, and their student loan debts might be considerably higher. But the evidence suggests that financially, their three years in school will still pay off in most cases, at least as long as they don’t attend a bottom-tier, predatory school. Law school isn’t a risk-free proposition. But it’s about to become orders of magnitude less risky than it has been for the past several years.” To read Above the Law’s critiques of Weissmann’s arguments, click here and here. Sources: Slate (Part 1) and Slate (Part 2)