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Two out of three 2011 law school graduates did not get real legal jobs

[ 42 ] June 8, 2012 |

NALP has released preliminary employment statistics for the class of 2011 as of nine months after graduation. They are, unsurprisingly, terrible.

12% of 2011 graduates were completely unemployed in February 2012, and another three per cent had re-enrolled in further graduate study, which can be treated as the functional equivalent to post-law school unemployment. So the first takeaway from these numbers is the nearly 15% unemployment rate for people who got law degrees from ABA-accredited schools last year. This compares with an 8.2% overall national unemployment rate, which, to my surprise at least, is also the unemployment rate among 25 to 34 year-olds (see Table A-10). So getting a law degree correlates with a doubling of the risk that a young adult will be unemployed nine months after receiving it.

But of course this 85.6% “employment” rate includes every kind of job law graduates obtained: legal, non-legal, full-time, part-time, long-term, and temporary. Let’s work with this preliminary data to make an estimate regarding how many 2011 graduates of ABA law schools had real legal jobs nine months after graduation, with a real legal job defined as a full-time non-temporary paying position requiring a law degree.

We can begin by eliminating jobs for which a law degree was not required. 24% of employed law graduates fell into this category, including the large majority of the 18.1% of all graduates who reported being employed in “business” (For most law graduates getting a job in “business” is short hand for either a low-paying service sector job that the graduate could have gotten more easily before going to law school, or in a smaller number of cases a good job that the graduate was qualified for prior to getting a law degree – indeed often literally the same job the graduate left in order to get a law degree).

What about those graduates of the 2011 class who had a job for which a law degree was required? Note that only 60% of graduates were working full-time in a job requiring a law degree. (Since it appears the status of somewhere around 7% of graduates was unknown, and since those graduates surely had far worse outcomes than average, this suggests that perhaps 56% to 58% of graduates had full time legal jobs. 12% of all jobs, legal and non-legal, obtained by graduates were part-time). Now consider how many jobs in this category have to be tossed out if we are limiting ourselves to real legal jobs, even liberally defined. The 5% of all “jobs” funded by law schools themselves for their own graduates must be excluded, as should the 6% of all private practice jobs which consisted of graduates reduced to the desperate expedient of attempting the start a solo practice straight out of law school.

NALP has not yet reported what overall percentage of jobs were temporary — defined as being for a term of less than one year – but for the class of 2010 26.9% of all jobs obtained by graduates were defined as temporary (To be conservative I’m going to treat all judicial clerkships as full-time long-term legal jobs, even though many state court clerkships are one-year way stations on the road to legal unemployment). We do know that 7% of all jobs obtained by graduates were reported as both part time and temporary.

Then we have the always tricky category of jobs with law firms of two to ten attorneys. A remarkable 42.9% of all graduates who obtained jobs in private practice (49.5% of all graduates went into private practice) were listed in this category. Many of these positions are of course real, if generally low-paying, associate jobs with established several-lawyer firms. But some are of a much more tenuous nature, including transient law clerk positions with solo practitioners, eat what you kill arrangements, in which people are given office space in return for a percentage of whatever they manage to bill, and basically fictional “law firms” consisting of two or three graduates banding together in a last-ditch attempt to avoid formal unemployment. But let’s be optimistic and assume that 80% of new graduates who were reported as obtaining jobs with firms of two to ten lawyers were in fact getting real legal jobs, liberally defined.

Thus once we exclude jobs that don’t require law degrees, law school-funded jobs, other temporary jobs, and part time jobs, and then make a generous estimate of how many private practice positions with very small firms were real legal jobs, the numbers look like this:

60% of all graduates whose employment status was known were in full-time jobs requiring a law degree.

Minus the 4% of all graduates in law school-funded temporary jobs.

Minus the approximately 15% of all graduates in temporary (less than one year) legal positions other than law school-funded jobs.

Minus an estimated 4.25% of all graduates in fictional “firm” jobs.

Minus the 3% of all graduates working as solo practitioners.

This leaves us with 33.75% of all 2011 ABA law school graduates in real legal jobs nine months after graduation.

This is, in my view, a conservative estimate of the scope of the disaster that has overtaken America’s law school graduates. It counts almost all positions with law firms and with government agencies as real legal jobs, even though we know some of these “jobs” are actually one-year unpaid internships. (See for example these). Indeed it counts whole classes of time-limited jobs that are likely to leave graduates with no legal employment at their conclusion, such as most state judicial clerkships, as long-term rather than temporary employment. Most of all, it makes what by now must be considered the questionable assumption that law schools are reporting these numbers accurately, rather than misreporting them to their advantage.

Yet even this generous estimate of how many 2011 graduates of ABA-accredited law schools managed to get real legal jobs leads to the conclusion that two-thirds did not.

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  1. mike in dc says:

    …and yet the middle-class remains a grossly-underserved legal market. It’s almost as if you could kill two birds with one stone through some sort of public/private initiative.

    By the way, Prof. Campos? Excessive debt? Yes, that’s a big deal. Too many people enrolling in law school? Also a major concern. Law Schools still misrepresenting their employment numbers? Huge problem. But…
    The single biggest and most pressing problem here is the people who have already graduated and can’t find permanent work practicing law. Everything else is secondary, from the perspective of someone actually living this stuff right now(I’m a Class of 2011/Lost Gen’r). Part of the discussion needs to focus on “how do we help these people become practicing attorneys?” Everything else is either just mitigation of the damage(loan forgiveness) or future prevention(law school reform).

  2. rea says:

    and yet the middle-class remains a grossly-underserved legal market.

    I’m not at all sure that’s correct.

    Part of the discussion needs to focus on “how do we help these people become practicing attorneys?”

    Supply side economics doesn’t work any beter with the practice of law than it does anywhere else. Just becasue we have a large supply for lawyers doesn’t mean there is a demand for their services. There’s an old joke about the single lawyer in town who was going broke until another lawyer arrived, and then they both prospered suing each other’s clients, but I’m not sure that works in the real world.

    • mike in dc says:

      90 percent of the populace can’t afford a lawyer for many common tasks. The reason is because lawyers charge too much. The reason lawyers charge “too much” is because they have high overhead. Loan debt contributes to this high overhead. If there’s a way to “zero out” that debt as a part of overhead, then lawyers can charge less. If you link that zeroing out to charging lower rates to the middle class and small businesses, then you 1) create work for people with law degrees and law licenses, 2) resolve the loan debt problem, and 3) meet the legal needs of the largest segment of the population.
      Look, if you don’t believe me, you can look it up–the middle class has unmet legal needs, and they generally are unmet because they can’t afford to pay some guy a 5,000 dollar retainer and a 250/hour billable rate to take care of it for them.
      The false assumption here is that the need for legal services is insufficient to support the number of people with law degrees. The truth is that there’s a mismatch between “need” and “ability to pay market rate”. Normally, the market would adjust to this reality, but the loan debt issue prevents this. The solution is to link debt forgiveness to the provision of affordable legal services for underserved markets.

      • Paul Campos says:

        Mike,

        I agree there’s an enormous amount of unserved need for legal services. But I don’t think the educational debt levels of lawyers have anything to do with that. A lawyer’s educational debt is a sunk cost: no client is going to pay Lawyer A more than Lawyer B because Lawyer A has high debt.

        There are hundreds of thousands of lawyers who have little or no educational debt — people who graduated from law school when it was much cheaper. Indeed small firm legal services are not more expensive now in real terms than they were 25 years ago, before the debt levels really took off.

        The reason people who need lawyers can’t pay for them is because they don’t have any disposable income to speak of. It’s pretty much impossible to run a small legal practice while charging less than around $150 an hour or the equivalent — the overhead and non-payment rate is just too high.

        The only way to meet the unmet need for legal services is through public subsidy, which is an incredibly unpopular political position at present.

        • mike in dc says:

          Well, I do think there’s a real market for legal services among people who have modest disposable income. If you have mixed-income clientele(that is, some clients paying top dollar and others paying discounted rates) then you can probably get away with charging half your clients less than your “standard” rate. Certainly if one opens up shop in a market and charges half their clients 50-100 bucks an hour, and the other half 150-200, that’s going to eat into the business of the lawyers charging all their clients 150.

          • rea says:

            I don’t think the math makes sense. Say you’re billing 2000 hours a year (40 hrs. per week X 50 weeks–probably unrealistic, too high). At $50 per hr., that’s $100,000 gross, if everyone pays. But, of course, you hsve to pay for an office, and secretarial help, and a host of other things out of that gross. You’re barely clinging on to a middle class existance by your fingernails.

            Then look at the other side of the coin–at $50 per hr., $2000 buys you 40 hours of attorney time, which isn’t all that much if you, for example, need to sue someone.

            It just doesn’t work.

            • mike in dc says:

              But…suppose I bill 1000 hours at 150 dollars an hour, 500 hours at 75 dollars an hour, and 500 hours at 25 dollars an hour. That’s 200,000 dollars total. Suppose also I’m doing the “virtual office” thing, pooling resources with other attorneys, minimizing my overhead as much as possible, and deferring hiring support staff until some of my sunk costs are paid off(say, the first year or two). Seems tough, but doable, to me. As I get more experience, I can raise my rates a bit, and maybe even have enough pooled resources to have a full office and a couple support staff. I can still bill out a portion of my work at a substantial discount for working class clientele.

              • rea says:

                Well, great–don’t hire support staff. I do it all myself–I don’t hire anyone to do typing, scheduling, bookeeping, etc., for me. But if you do it that way, you have to recognize that you are, in fact, paying for support staff–it’s just that the support staff you’re paying is you. The time you spend doing support staff stuff is time you’re not spending doing billable stuff.

                • mike in dc says:

                  Well, of course. But one can see it either as “that’s less time I can bill” or as “that’s more time I’m going to have to work”. I know a lot of part-time law students pursuing law as a second career, who were already in possession of “support staff skills” when they enrolled. From my perspective, in forming a new, low-overhead, no staff firm, that’s a net plus to bring those folks on board, because they have some core competency for getting that important non-billable stuff done.

          • L2P says:

            In most people’s experience, if you charge half your clients $50-100 instead of $150-200, then you have to charge ALL your clients $50-100. Most work you get is referral, and you pretty much have to stick with your rates. You can make exceptions for different types of work (higher trial rates are common) but you can’t just blanket charge half your clients twice as much.

            In any event, I don’t know where the “middle class” is going to get $50/hour for legal work. Say you need a will; you either pay for a custom will, or you just get one online for $20 and do it. There’s no reason to go to a bargain-rate lawyer for it.

            There is already a market for cut-rate legal services, but it’s just different than what you think. Lawyers will draft a complaint and advise on court procedures, and then tell the client they’re on their own. Lawyers will “look over” a pre-drafted will. Lawyers will file a “quicky” 13 or 7. There’s just no market for full-service lawyers at bargain-rate prices. Either you need a lawyer and will pay for it, or you don’t really care that much and won’t.

            • Lee says:

              The other problem is that a lot of legal work becomes involuntary pro-bono work because a lot of clients can’t pay or try to wiggle out of paying.

              • Xenos says:

                Exactly. What starts as a case you take on a discount can go on to get more complicated in a hurry. Then you find yourself halfway through a case with a client who can’t afford to pay you. You can request to withdraw, but if you are representing a plaintiff, then good luck with that. Then you are working for free.

                A case like that will wipe your profits out for the year. And half your cases will be at serious risk of turning into the case from hell.

                Count on successfully billing more that 1,000 hours per year and you are setting yourself up to be crushed sooner or later by the ‘tar baby’ cases that will surely come knocking.

                The middle class as presently situated has no business taking any cases to court. I was able to do well with divorce cases for the middle class during the housing boom when there was always an asset to be liquidated, if necessary, at the end of the case, but that is over now.

            • mike in dc says:

              Mental health professionals use a sliding scale all the time when determining what they charge patients. People intuitively understand the equity aspects of that. If I’m charging for legal services based on client income, I’m doing the exact same thing. There are reasons to be found, if one needs any further justification for rate differentiation. Big law does differential billing all the time, they just label it differently–on big, important cases, they put partners and senior associates billing higher rates; on “milk run” cases, they put junior and mid-level associates and maybe one junior partner, billing lower rates; and, of course, on pro bono, they bill their time out at zero dollars per hour.

        • cpinva says:

          i’m curious. you (and other posters) keep claiming there is a huge well of unmet need for legal services, such that if all of it were met, the unemployment rate among would drop significantly. what is your source for this claim? i ask because, well, this just seems, on the surface, to be inflated.

          i’m among the middle-class (ok, probably upper middle-class), and i doubt i need the services of an attorney, of any specialty, even once a year. most individuals only require legal services for special events: drawing up a will, buying a house, dealing with a traffic ticket, etc. i work with a group of people in roughly similar economic circumstances, and their legal requirements are roughly similar as well.

          i realize extrapolating my personal situation (and that of my known peers) to the entire population isn’t statistically legitimate, but i’m just hard pressed to believe that all of the “unmet” legal needs of the population would be, by itself, sufficient to absorb all the legal services capacity currently available.

          am i horribly wrong in this assessment?

          • BL1Y says:

            I keep thinking the same thing when I hear about the under-served middle class.

            A middle class person will probably get a will, and maybe have it updated two or three times (birth of kids, divorce, etc). Maybe a single civil suit that can’t be handled in small claims court, and a lawyer to handle the kid’s DUI/POM charge. And, maybe also a lawyer to handle the parents’ estate when they die. So we’re looking at something like 5-6 times you’ll need a lawyer. Or, about once every 10 years of your adult life.

      • PSP says:

        The overhead is not just loans. The cost of insurance is hardly negligable, and the various states seem to delight in adding annual fees and other expensive requirements.

        • rea says:

          The big overhead items are office space and secretarial help.

          • mike in dc says:

            …and those are precisely the two things one can economize on, starting out. The big challenge for new solos and small firms is establishing a practice and drawing in clients. My dad’s been a solo GP for decades, has never had a secretary, and currently has a de minimis office space. This stuff isn’t as vitally necessary as one thinks. You don’t have to have brass escalators, ala Cravath, to practice law.

  3. daveNYC says:

    And those are the numbers for all graduates. You know that Harvard and Yale graduates are doing better than that, so that means that there’re schools out there with graduating classes that are in absolutely horrendous shape. Not that the overall numbers are any good.

    • John says:

      Yeah, I think one of the big lessons of all this has got to be that there’s at least 50% of law schools that are basically putting out graduates who have no real chance of getting a job.

  4. Tracy Lightcap says:

    One quibble: the idea of “fictional” law firms seems a stretch to me. After all, many successful firms started as a collection of two or three recent grads who set up shop on their own. There’s no doubt that new law firms have about the same kind of chance of surviving in today’s economic environment as other new businesse. But there’s also no doubt that such firms, if they get their house in order to do so, can much more easily adopt new ways of doing business that lower overhead to the point that they can be competitive. Combine that with youthful energy and, while you may not have a sure thing, you can at least have a chance. Further, the Little Depression won’t last forever; if “fictional law firms” can hold on for a couple of years then they could be the new firms of the next decade.

    In short, I agree that these new firms will have a hard time going forward. However, they are about as fictional as any new business; i.e. not very much at all.

    • Templar says:

      The fact that there may be some successful firms that are started by recent grads does not mean this is an effective method for making a living as an attorney. Your comment is a perfect example of confirmation bias. We have no idea how many of these “fictional” firms fail. Thus, the fact that there may be a few such firm that succeed is entirely irrelevant to the issue of mass unemployment and underemployment for recent law school graduates. There is a hell of a lot of conjecture and speculation in your quibble. I say that as one of the lucky 2011 grads that managed to get a real legal job nearly 10 months after graduation.

    • Barry says:

      “After all, many successful firms started as a collection of two or three recent grads who set up shop on their own. ”

      Is this true? And by ‘true’ I mean ‘more than the odd exceptions which prove the rule’.

  5. Katya says:

    Clarification question–might “business” include jobs in corporate General Counsel offices, which would be “real legal jobs”? The charts seem to separate out the question of whether a job required a JD, whether a JD was preferred but not required, or whether a JD was not necessary from the question of what sector a job was in.

    • Paul Campos says:

      I’m not excluding business jobs that required a JD, such as a job in a GC’s office, from JD-required jobs (It’s extremely difficult to get an in-house job at entry level).

    • BL1Y says:

      Jobs listed as Business + Bar Passage Required include both in house counsel and doc review. Guess which of those is the more popular landing spot.

  6. lawguy says:

    I work in a small town. Of the 5 lawyers who graduated and moved back to town in the last couple of years 2 went to the prosecutors, 1 went into her Dad’s firm and 2 are working without any support staff.

  7. Jeffrey Beaumont says:

    I highly agree with your overall assessment, and your law school project in general, but I want to quibble with throwing the “pursuing further graduate education” in with the unemployed.

    Surely some of those people are pursuing MBAs and LLMs which, in theory, make them more employable, right? So I am not sure that is functionally the same as unemployed. Only 3%, I know, but surely a lot of these people will be employed in the future. Small point, but I think precision is called for given the scope and challenge of your project.

    • BL1Y says:

      If you need the LLM or MBA because your JD was insufficient to get a job, that looks a lot like being unemployed (worse because you’re hemorrhaging money).

      I understand the argument of “these people might get jobs after their next degree,” but look at someone who working part time at a law firm for minimum wage. Would you say this person is underemployed? Almost certainly yes.

      But, surely some of these jobs will make the graduates more employable, right? So, do we say you’re not really underemployed because sometime in the future you might get a full time law job?

  8. Captain Haddock says:

    I know that the number of judge advocates is quite small relative to the whole population of lawyers (almost definitely below 5000 across all branches of the military), but being a judge advocate is a a job that strictly speaking does not require a law degree (at least in the Department of the Navy). Yet de facto all judge advocates are graduates of accredited law schools. Are there other legal jobs like that?

    • Paul Campos says:

      Yeah, law professor.

      Except now several dozen professors at top schools don’t have law degrees, but rather social science (most commonly Econ)PhDs, with an occasional humanities doctorate thrown in for good measure.

      So you’ve got professional training schools with tenured faculty who have not only never practiced law, but have never even been inside a law school before they started training people to be lawyers collecting a much larger paycheck than they could have in their own fields.

  9. […] Two out of three 2011 law school graduates did not get real legal jobs […]

  10. Dig Deeper says:

    This analysis is either sloppy, dishonest, or both:

    “(For most law graduates getting a job in “business” is short hand for either a low-paying service sector job that the graduate could have gotten more easily before going to law school, or in a smaller number of cases a good job that the graduate was qualified for prior to getting a law degree – indeed often literally the same job the graduate left in order to get a law degree).”

    Where’s the data to support this critical assumption? Has Campos personally conducted a scientifically valid survey of grads who go into business and determined that their jobs are low paying? Has he reviewed their employment records and compensation and determined that they had the same job–at the same pay and level of seniority–before law school? Has he surveyed their employers and determined that their law degree didn’t give them a leg-up getting hired or promoted?

    Or his he just making stuff up?

    According to NALP, most of this group had jobs for which a JD was preferred, but Campos simply ignores that. Is there a reason? What research has he done to justify ignoring his own source, NALP?

    How about this gem:
    “12% of 2011 graduates were completely unemployed in February 2012 . . . this compares with an 8.2% overall national unemployment rate. . . the same as for people 25-34.”

    Great. People in their 30s and beyond with years of experience on the job have lower unemployment levels than 25 year old law graduates with zero work experience.

    What percent of undergraduates with humanities degrees were employed in a decent job 9 months after graduation? That’s the relevant comparison, not the unemployment rate for experienced professionals in their 30s. For those 20-24–i.e., people, who, like most law students, have little work experience and are entering the work force in a down economy–the unemployment rate was between 14.6 and 13.8. For those with humanities degrees, it was much higher.

    Or this:
    “Note that only 60% of graduates were working full-time in a job requiring a law degree. ”

    Actually, it’s 65.4%. Campos inexplicably rounds down.

    What Campos leaves out is that 80% were employed in jobs for which a law degree was either necessary or preferred.
    http://www.nalp.org/2011selectedfindingsrelease

    Now I realize the idea that law school can be useful for something other than working as a lawyer may sound peculiar to someone who teaches “Theory of Punishment”–but some law students actually enroll in classes which come in handy in business like say contracts, insurance law, taxation, intellectual property, commercial law, industry-specific regulatory regimes, etc.

  11. Eric Titus says:

    Thanks for the great analysis! Despite all these dire numbers, I wonder if many of these law school graduates won’t end up seeing the benefits somewhere down the line. After all, legal knowledge is useful within business jobs and even one’s personal life. And some of those unemployed or underemployed JDs may need to spend time in the labor market before they finda job that properly uses their skills. It took me half a year to find a job after college that actually used my programming/database skills.

    I am not trying to pain a rosy picture of the market for JD grads, but I do think that the labor market has changed in ways that matter for interpreting this data. Gone is the heavy recruitment in law school and the easy-to-find entry level positions. Current grads have to struggle to find a good job, and it may take several years or more, even if it happens. Obviously, this is very problematic given the high levels of student debt. But the long-term value of a law degree may be higher over the lifetime of graduates than over the next year or two.

    One other remark regards your surprise at the low unemployment rate for the 25-34 age bracket. It seems likely that the unemployment rate for 25 year olds is closer to the 13% rate for the 20-24 group. But the unemployment may also be understated due to high levels of incarceration and military service (Bruce Western makes this argument).

  12. Guy who thinks lawyers are making America a crappier place says:

    Wow. No wonder the law profession take on frivolous suits all the time…. You’re desperate!

  13. […] Two out of three 2011 law school graduates did not get real legal jobs   Paul Campos […]

  14. […] not exactly. Not at all, actually. As the data clearly shows job opportunities for law school graduates have been sharply […]

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