The Lawyer Bubble

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The Lawyer Bubble

Traditionally, a law school education has been seen as a solid investment toward a prosperous future.  As recently as 2007, 91.2 percent of law school students found jobs in their profession soon after graduation.  Starting salaries at the top law firms still begin in the low six figures; partners at those firms routinely make salaries in the seven figures. 

But for many students today, that promised future will never materialize.  After completing a three-year program, tens of thousands of law school graduates enter the real world without a job offer and with the crippling burden of student debt.  Over the past decade, adjusted for inflation, law school student debt has soared by 25 percent for private schools and 34 percent for public schools.

An article on pinpoints the problem:  The Bureau of Labor Statistics (BLS) estimated in 2012 that fewer than 74,000 new lawyers would be needed between 2010 and 2020.1  However, because U.S. law schools have been issuing degrees to an average of 44,000 students each year over that ten-year period, the result will be six times as many lawyers as there will be jobs—and that doesn’t even count all the earlier law school graduates who couldn’t find work during the recession who haven’t given up hope and are still sending their resumes to law firms.

Because of the glut of graduates for scarce jobs, and because of clients’ increasing unwillingness to pay exorbitant legal fees, entry-level salaries are dropping.  While the BLS calculates that the median salary for a new associate at a private law firm is now about $85,000 a year, this is down one-third from what it was a mere two years ago—and in the public sector, pay can be as low as $40,000.

Compounding the problem is the fact that the Department of Education found that law school graduates amass $125,000 to $250,000 in debt on student loans for law school, which can double when undergraduate student loan debt is added.

According to the most recent statistics, 40.8 percent of 2015 graduates had not found a job in their profession within ten months of graduation.  This is an improvement from the worst year for employment of new graduates; in 2011, 46.2 percent of graduates were still unemployed when surveyed. 

However, the American Bar Association (ABA) changed the metric starting with the Class of 2014.  Until then, the organization tracked how many graduates had found jobs after nine months; by moving the survey date to ten months, the ABA can provide an illusion that the market for young lawyers is improving when it’s not.

According to a post by Kyle McEntee, Executive Director of Law School Transparency, “The raw number of legal jobs for 2015 graduates indicate[s] a still-troubled entry-level job market...

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