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Are Law Schools and the ABA Contributing to the Unemployment Crisis?

The job market for lawyers is the weakest it has been in the last two decades.  Prospects for 2011 law graduates are bleak.  According to recent statistics from NALP, among law grads whose employment status was known, only 65.4 percent were in jobs requiring bar passage, the lowest percentage ever measured by NALP.

NALP’s executive director stated “the class of 2011 may represent the bottom of the employment curve for this economic cycle.”  Its members were caught up “in the worst of the recession, entering law school in the fall of 2008 just as Lehman Brothers collapsed.”

While only 65.4 percent are finding law-related jobs, the rest of the employment rate for 2011 law school graduates is not much better, with 85.6 percent finding employment, the lowest rate since 1994, when it was 84.7 percent.

With so few law graduates finding legal employment, what are law schools doing about this?

According to a recent Wall Street Journal article, some law schools are cutting the size of their incoming classes, a move legal experts describe as unprecedented.  However, of the roughly 200 laws schools accredited in the U.S., only 10 are looking to decrease their incoming classes.  Of those cited, are the University of California's San Francisco-based Hastings College of the Law, a top-tier school, Northwestern University School of Law in Chicago ranked 12th in the country by U.S. News & World Report, and George Washington University Law School, ranked 20th by U.S. News.

Why are so few law schools cutting their incoming classes?

The answer is simple: money.  Paul Schiff Berman, dean of the George Washington University Law School, ranked 20th by U.S. News, says the school, which enrolled about 480 students in 2011, hasn't decided how many slots would be cut for the incoming class, but he estimates the reduction would cost the school about $1 million.

Law schools are considered profit centers at many universities.  If incoming classes are cut, where will they find the money lost from these cuts?  Law students are finding themselves caught in a Machiavellian spiral.  On the one hand, law schools are profiting from large classes, and on the other, law grads are struggling to find employment.  Where does the responsibility lie?

Law schools don’t seem as worried about the employment prospects of their graduates as they are about their pocketbooks.  Even those that are considering cutting back incoming classes are not making significant reductions.  Hastings College of the Law announced a reduction of 1,000 from 1,300 in phases over the next three years.  100 less law graduates per year?  A drop in the bucket.  But Hastings is looking at cuts that could cost the school $9 million.  Now you get the picture.

That said, law schools are not alone in taking on the blame.  The ABA has contributed to churning out more law graduates than the market can bear, with no signs of slowing down.  According to the Wall Street Journal, the number of law graduates per year spiked to 44,495 this year from 42,673 in 2006, and the American Bar Association accredited 10 new law schools over the same period.

These 10 new law schools are not Harvard-type law schools either, so you can guess how marketable those law school graduates will be one they are ready to hit the job market.  Why the ABA would help worsen the job market by increasing the number of law graduates is hard to comprehend.
Moreover, one could argue that second and third tier law schools have more of a responsibility to cut their class sizes than top tiered law schools.  With exception of some of those at the best schools, going for a law degree today is simply a bad investment.  Well, those lower tiered law schools don’t seem to agree.

Thomas M. Cooley Law School, the largest in the nation, with 3,700 students, which has campuses in Michigan and recently expanded into Florida, is not interested in reducing the size of its entering class on the basis of the perceived benefit to society, arguing that they meet ABA requirements. "Cooley's mission is inclusiveness," adds Mr. Robb, who says he worries reducing class sizes could disproportionately affect minority students.
How noble.  I am sure those same law graduates will feel very included as they line up together in the unemployment line.  Luckily for these minority students, Thomas M. Cooley Law School is generously willing to give them the “opportunity” to be straddled with debt with little opportunity to pay it off.

Law grads are hitting the pavement with more debt.

Law students in the class of 2015 will rack up an average of $210,265 in law school debt, according to Law School Transparency, a non-profit group that provides law education information to prospective law students.  As for the class of 2016, the group estimates that students will accrue an average of $216,406 in debt.  The upward trend in law school debt is astonishing.

In an economic market where salaries are decreasing and opportunities are dwindling, how do law schools justify these increases?  When you consider the extreme belt tightening measures that private businesses have been taking to cut down their costs, one has to wonder what type of economic cutbacks law schools have been taking.

Together with the ABA, law schools are churning out more graduates, increasing student debt, and pumping more job seekers in a market that’s already saturated, with little care of how these graduates will fare.  In an industry that stresses ethics and moral responsibility, this type of behavior is highly questionable.  The worst part is that there does not seem to be an end in sight to this vicious cycle.

What’s the answer?

Should the ABA and law schools be penalized? Of course law school applicants may share some of the responsibility, but law schools and the ABA are the ones responsible for turning them into jobless graduates.  They are enablers that are contributing to the unemployment crisis amongst legal professionals.  Should we have regulations placing limits on the number of accredited law schools and law graduates? Scrape the ABA with an organization that is free of conflicts of interest? Or trust the market?

We’ve tried the market approach, and the adjustments are not helping turn back the numbers.  Today’s law graduates are carrying more than $200,000 in debt, and with 50% privileged enough to make between $45K and $60K per year, they are unlikely to dig themselves from under their debt.  Perhaps it’s time to consider other options, including government intervention.