Original Research

BLS: 74,800 New Lawyer Jobs by 2026, Turnover of 22 Percent

On October 24th, the Bureau of Labor Statistics released its employment projections for the next cycle, 2016-26.

For 2016, the BLS Employment Projections program (EPP) estimates that there were 792,500 lawyer positions (as opposed to discrete lawyers) in the United States. This figure includes self-employed lawyers. In 2014, the EPP found 778,700 lawyer positions, so there has been some growth between the two years. According to the BLS’s Current Population Survey (CPS), in 2016, 1.133 million people worked as lawyers in the United States. The discrepancy between the CPS and the EPP has existed for some time. In their respective contexts, both figures are correct.

The BLS projects future employment trends in part to help job seekers evaluate career choices, and the projections play a significant role in the BLS’s Occupational Outlook Handbook. Here is an illustration, from various sources, of law-school graduate and lawyer growth since the 1980s.

Click here to read more:



2016: The Middle-School Premium Returns With a Vengeance

Mid-September, the Census Bureau publishes its Income, Poverty, and Health Insurance tables for the previous year. I spent a few hours combing through the latest update to see what they say about young people’s incomes by education level. Going back to 1991, the data tend to validate my position that college education is not raising people’s earnings with human-capital superpowers. This can be shown by observing how more people go to college while their aggregate income isn’t rising.

Okay, well, it rose a little bit this year.

Here’s the table comparing income growth by education level for people in the 25-to-34 age bracket. It’s the mean average of the annual growth rates of both aggregate earnings and per-capita earnings. We want college grads’ per-capita earnings to be growing at least as fast or faster than their aggregate earnings because it would show that the population effects aren’t being swamped by human-capital effects. Alas, they are.

In most years, high-school graduates’ incomes have risen more per capita than college grads’. Over a prolonged time period, this doesn’t bode well for college graduates.

But this year—whoa! Dig those less-than-9th graders! They received a more than one-quarter wage hike! When was the last time you got a quarter raise? Long live the middle-school premium!

Yes, this last one is horse-race reporting with erratic data, but until the consensus acknowledges that college is not producing positive outcomes in the aggregate, I’m not apologizing.


Past coverage:

Class of 2016 NALP Data

Happy post-Labor Day. Now back to work, Peasants!

Or, read on.

A few weeks ago, the National Association for Law Placement (NALP) published the national summary report for its Employment Report and Salary Survey (ERSS) (pdf). As with the last two years, I comb the data for more information that the NALP may not have commented on. Much of the NALP report focuses on year-over-year changes to percentages of employed graduates that aren’t very illuminating, especially when the resulting percentages of employed graduates are barely budging. Here’s what they look like.

I’m aware that we now have three consecutive years of data showing graduate employment outcomes ten months after graduation rather than nine, but I really don’t think that makes much of a difference.

It appears that the percentage of graduates not working fell a whopping 0.8 percent. Whoa.

Here’s also the number of graduates employed by status.

We’re seeing a pretty steep fall in total graduates, but the number and proportion of them not working is still higher than the peak employment year of 2007. A lot of this is elevated bar failure rates, but even so the JD-advantage category is still elevated. The NALP says 40 percent of grads in these jobs are seeking other work, which tells me these positions aren’t worth much. In fact, much of their growth (not shown) is visible in business-and-industry positions, further suggesting the definition of JD-advantage is overbroad. They also strongly correlate negatively with bar-passage-required jobs and positively with grads not working.

Here’s the contribution to the percent change in law grads by employment status since 2007 and going back to 2001. We can see that despite falling total grads, a greater proportion of them are either not working or in JD-advantage positions (which are probably not legal jobs themselves).

Meanwhile, with bar-passage-required jobs contributing -15.7 percent to the -14.6 percent change in law-grad outcomes, here’s how private-practice positions have fared (-9.2 percent to all 2007 grads).

The class of 2016 is the first one to be wholly below the 2007 line, meaning that even tiny firms aren’t hiring grads like they did in the peak year. Supply of law grads does not create demand for legal services, strongly indicating that grads in past years who found these jobs only worked in them transiently until they left the legal labor market.

The NALP’s selected findings (pdf) discuss “tightness” in the job market now or at least compared to the pre-recession market. The large fall in bar-passage-required jobs and private-practice jobs argues otherwise. A tighter market would see more grads working in bigger firms and smaller firms raising wages, something the NALP’s own data don’t depict.


Prior reporting on this topic:

LSAC Report Calls Into Question ‘Law-School Tipping Point’

One discovery I’m fond of is identifying the “law-school tipping point,” the moment when people with LSAT scores in hand decided to forgo law school entirely. I hypothesized that one could detect the tipping point by comparing over time the ratio of LSAT takers to subsequent applicants. Sure enough, the ratio spiked in the 2010 application cycle, which is the last applicant peak.

Here’s an updated version of the chart I created for that post:

(Source: LSAC (here for total LSATs and here (pdf) for first-time takers)

The arrow focuses on the pronounced gap between first-time LSAT takers in the 2009 calendar year and applicants for fall 2010. I took this as evidence of what I suspected had happened: Many people with LSAT scores in hand chose not to apply to law school the following year, presumably because they realized it was a really bad idea. In the three prior years, the ratio between first-time test takers and subsequent applicants was 1.08 on average. In 2010, it jumped to 1.19, accounting for 8,800 test takers who were not found in the 2010 application cycle. The ratio has since fallen to about 1.15 going forward.

The LSAC, however, recently published a report titled, “Analysis of LSAT Taker Application Behavior: Testing Years 2009-2010 Through 2015-2016” (pdf). It is an update of a similar report published in 2013, which I don’t recall seeing and cannot find, and it contains a table showing when test takers applied to law school.

Curiously, there’s scant evidence of a drop in test takers applying to law school, going by the first three columns of the table. People who took the LSAT between June 2009 and February 2010 pretty much all applied, save for 1 percent (~1,400 test takers). It doesn’t look like they delayed their applications either, which would cause them to appear in the rightward columns. (I don’t think the fact that I’m looking at calendar-year LSATs as opposed to June-February LSATs changes the results significantly.)

I have a hard time explaining the diverging results. It would certainly help to see previous years’ data, but my best hunch is that test-takers’ application behavior stayed the same while the frequency of their test-taking rose. In other words, perhaps many of these first-time takers simply retook the LSAT. As evidence, the LSAC report provides another figure (not shown) indicating that non-applicants tend to do very poorly on the LSAT, though they overlap with the low-end of applicants. These non-applicants may have doubled-down and chosen to retake the test again in 2010-11, and applied with whatever score they got then. Moreover, the ratio for second-time test takers to subsequent applicants (not shown) remained elevated after 2009-10 at about 0.42. Rather than walking away from the process potential applicants simply tried harder to beat the pack.

It’s a discouraging thought, but either hypothesis is valid at least to some degree until better information comes along. In the meantime, one thing the LSAC report teaches is that by and large people who do poorly on the LSAT are not as unsophisticated as they’re often portrayed. They tend to self-select by dropping out of the system. That doesn’t matter much to me since I care more about applicants, admits, and matriculants than LSAT takers, but whenever folks focus their attention on the smart people not applying to law school, just remember that many people who aren’t so good at standardized tests have been making the right choice all along.

Office of Management and Budget: +$725 Billion in Direct Loans by 2027

Every year in July the Office of Management and Budget (OMB) publishes its Mid-Session Review of the federal budget, which normally includes the Federal Direct Loan Program and projects its future. This year, the MSR (pdf) was only 22 pages because Director Mick Mulvaney said there were only “limited budget developments” since the administration released its misopauperous budget on May 23, 2016. So let’s take a look at that instead…

It’s titled, “A New Foundation for American Greatness.” My favorite part reading it thus far is the entry, “Invest in Cybersecurity,” which features an unspecified commitment.

Anyway, the budget has the Federal Direct Loan Program information we’re looking for, so back to that. The federal government’s direct loans consist primarily of student loans, but there are a few other programs in there as well. However, federal direct loans do not include private student loans, but these are a small percentage of all student loans. Thus, the OMB’s measure is both over- and under-inclusive of all student debt, but it covers most of it.

The OMB classifies direct loan accounts as financial assets net of liabilities totaling $1.227 trillion in 2016. According to the office’s projections, by 2027 this figure will grow to $1.952 trillion—59 percent.

(Source: Budget of the U.S. Government Fiscal Year 2018 (pdf))

As with previous years, the current (2016) direct loan balance is below the OMB’s past projections, but not by much. For example, in FY2012, it predicted the balance would be $1.486 trillion by 2016, $259 billion (21 percent) higher than what actually occurred. Here are the OMB’s direct loan projections going back to FY2010.

Indeed, the most notable difference between His Emolumence’s OMB and Barack Obama’s is that it is now predicting far less student lending going forward. Total direct loans won’t even exceed $2 trillion. This, I think, is a more realistic assessment of where federal student lending is going. Whether this has something to do with the new administration or is standard practice for the OMB is outside of my knowledge base.

The OMB’s measure of direct loans is the net amount owed to the government, and the annual changes to that amount are not the same as the amount lent out each year to students. The Department of Education tracks its lending, which I discuss on the Student Deb Data page.