(1) “Fewer applicants means schools compete fiercely for decent students.”
So what? Getting into a slightly more reputable school still doesn’t mean that career-spanning legal positions will be there on graduation. Similarly, excessive tuition minus scholarships often still equals excessive tuition. Scholarships are given to the extent they keep a student from matriculating elsewhere, not to ensure students get good deals.
(2) “A lot of law jobs will be opening up over the next five to ten years.”
“The demographics are such that knowledgeable folks like the head of the Washington Bar Association are predicting a market gap. They worry that future demand for legal services cannot be met by a dwindling supply.”
“Knowledgeable folks” should look at their state government’s data. Washington is projected to add 460 new lawyer jobs per year between 2010 and 2020. The state admitted 1,148 lawyers in 2012 alone. Reasonable people can question the accuracy of the projections, but they do estimate a replacement rate based on current occupational demographics and typical retirement rates. A shortfall in projected jobs due to slow growth is plausible, an unprecedented wave of boomer retirements is not.
Since Calo’s is the second report this week to argue that the medium-run situation is improving, let me add a few points:
- In order to count, future law graduate jobs must be indefinite-duration, career-track positions that require a law degree or the knowledge and skills imparted in law school. No part-timers, no definite-duration full-time jobs, and decent starting client bases for self-employed lawyers.
- No law professor positions. “JDs to create more JDs” is unsustainable, and there are more than enough law professors now.
- Similarly, there should be minimal job displacement by new grads of old graduates. Certainly there are times when more productive newer graduates outperform older ones, but these situations should be the exception.
- Employed graduates must be able to maintain a respectable living standard, save for retirement, and repay some of their loans. I’m willing to bend my opinion of IBR’s loan-cancelation feature in this context, but jobs for graduates who face massive tax penalties in twenty years do not count.
Because of the large backlog of JDs out there, secure jobs and compensation are a long way off, even if the number of graduates falls below the number of jobs created annually.
(3) “Reports of the death of the legal market are greatly exaggerated.”
This line’s my favorite:
“I simply do not agree with the predictions that the legal market will, uniquely, fail to rebound with the rest of the economy.”
The unique failure of the legal sector to recover along with the economy is not a prediction. It’s an empirical fact.
Calo cites claims of clients’ disenchantment with biglaw and technological advances as driving a shift in demand for legal services. I agree that these phenomena may be exaggerated, but there is no reason to be optimistic about long-term trends, particularly in smalllaw.
Primarily, young Americans aren’t making money, so they aren’t getting married or building wealth (whether genuine or positional assets). Without wealth there’s little need to hire lawyers to draft wills and the like. Without marriages, people aren’t getting divorced (this might be good overall but not necessarily for lawyers, sadly). Without investment, people won’t start new businesses. Wealth concentration benefits a handful of lawyers handsomely, but overall the profession suffers.
In sum, the bad news about law jobs is in fact bad news about law jobs.