State-Level Employment Projections: High Lawyer Replacement

Every two years the Bureau of Labor Statistics (BLS) publishes state-level employment projections on its affiliated Web site projectionscentral.com. The data from this site include estimates of the number of lawyer positions (not people who are lawyers) out there in 2016, a prediction of how many there will be by 2026 (assuming full employment), and the projected number of annual lawyer job openings.

In past years this topic was one of my favorites because I could compare the number of lawyer job openings to the numbers of law-school graduates (via the ABA) and new bar admits (via the NCBEX). However, because the BLS changed its methodology for calculating occupational replacement rates a few years ago, this is no longer possible. Instead, I can show the ten-year replacement rate for lawyers by state, but first here are the basic numbers compared to those from the previous cycle two years ago.

STATE/BEA REGION	NO. EMPLOYED LAWYERS			LAWYER EMPLOYMENT PROJECTIONS			ANNUAL LAWYER GROWTH RATE
	2014	2016	% CHANGE	2024	2026	% CHANGE	2024	2026	% CHANGE
Alabama	7,050	6,860	-2.7%	7,410	7,400	-0.1%	140	350	N/A
Alaska	1,070	1,030	-3.7%	1,020	930	-8.8%	20	30	N/A
Arizona	9,630	11,830	22.8%	11,870	13,310	12.1%	370	670	N/A
Arkansas	4,720	3,900	-17.4%	5,360	4,520	-15.7%	130	240	N/A
California	91,900	97,400	6.0%	102,700	108,000	5.2%	2,420	5,330	N/A
Colorado	15,800	14,630	-7.4%	19,270	17,370	-9.9%	600	1,010	N/A
Connecticut	12,620	12,260	-2.9%	13,080	12,960	-0.9%	230	590	N/A
Delaware	3,540	3,270	-7.6%	3,660	3,550	-3.0%	60	170	N/A
District of Columbia	38,920	39,360	1.1%	41,480	41,770	0.7%	830	1,920	N/A
Florida	59,400	60,180	1.3%	68,400	67,970	-0.6%	1,770	3,440	N/A
Georgia	18,160	20,570	13.3%	19,690	22,800	15.8%	420	1,120	N/A
Hawaii	2,410	2,690	11.6%	2,500	2,820	12.8%	40	130	N/A
Idaho	3,030	1,460	-51.8%	2,960	1,610	-45.6%	50	80	N/A
Illinois	35,840	36,230	1.1%	37,950	39,280	3.5%	740	1,870	N/A
Indiana	9,450	10,500	11.1%	10,520	11,530	9.6%	250	560	N/A
Iowa	4,340	4,330	-0.2%	4,880	4,880	0.0%	120	250	N/A
Kansas	5,090	4,750	-6.7%	5,570	5,350	-3.9%	130	270	N/A
Kentucky	9,490	6,850	-27.8%	10,640	7,250	-31.9%	250	330	N/A
Louisiana	9,180	8,390	-8.6%	9,730	9,210	-5.3%	190	450	N/A
Maine	3,170	3,000	-5.4%	3,210	3,020	-5.9%	50	130	N/A
Maryland	11,690	14,520	24.2%	13,370	14,930	11.7%	360	540	N/A
Massachusetts	22,100	22,220	0.5%	23,080	23,880	3.5%	420	1,120	N/A
Michigan	17,900	18,770	4.9%	19,230	20,140	4.7%	400	940	N/A
Minnesota	12,640	12,640	0.0%	13,340	13,800	3.4%	260	660	N/A
Mississippi	3,760	4,150	10.4%	4,030	4,200	4.2%	80	180	N/A
Missouri	12,470	12,220	-2.0%	13,160	13,510	2.7%	250	660	N/A
Montana	2,550	2,490	-2.4%	2,830	2,700	-4.6%	70	130	N/A
Nebraska	3,910	3,720	-4.9%	4,400	4,220	-4.1%	110	220	N/A
Nevada	6,030	7,050	16.9%	7,880	7,560	-4.1%	270	350	N/A
New Hampshire	2,010	1,950	-3.0%	2,070	2,090	1.0%	40	100	N/A
New Jersey	24,520	26,610	8.5%	25,140	28,660	14.0%	420	1,350	N/A
New Mexico	3,810	3,600	-5.5%	3,830	3,760	-1.8%	60	170	N/A
New York	90,830	84,230	-7.3%	99,020	93,900	-5.2%	2,150	4,660	N/A
North Carolina	16,020	14,430	-9.9%	17,870	16,010	-10.4%	420	790	N/A
North Dakota	1,740	2,080	19.5%	1,790	2,240	25.1%	30	110	N/A
Ohio	20,180	20,150	-0.1%	21,290	20,120	-5.5%	410	830	N/A
Oklahoma	9,480	8,280	-12.7%	10,290	8,930	-13.2%	220	420	N/A
Oregon	8,250	8,180	-0.8%	9,440	8,960	-5.1%	240	430	N/A
Pennsylvania	31,240	31,640	1.3%	32,960	33,790	2.5%	630	1,570	N/A
Puerto Rico	4,420	4,260	-3.6%	4,500	4,250	-5.6%	70	170	N/A
Rhode Island	4,210	4,050	-3.8%	4,460	4,250	-4.7%	90	190	N/A
South Carolina	7,220	8,160	13.0%	7,670	8,870	15.6%	150	420	N/A
South Dakota	980	970	-1.0%	1,080	1,070	-0.9%	20	50	N/A
Tennessee	7,990	9,660	20.9%	8,690	10,850	24.9%	200	550	N/A
Texas	51,420	N/A	N/A	63,140	N/A	N/A	1,920	N/A	N/A
Utah	5,310	5,550	4.5%	6,360	6,800	6.9%	180	380	N/A
Vermont	1,940	1,950	0.5%	1,990	1,940	-2.5%	30	80	N/A
Virginia	21,860	21,530	-1.5%	24,150	23,660	-2.0%	550	1,150	N/A
Washington	17,290	15,510	-10.3%	18,940	17,040	-10.0%	430	830	N/A
West Virginia	N/A	3,230	N/A	N/A	135	N/A	N/A	150	N/A
Wisconsin	9,620	9,400	-2.3%	9,940	9,870	-0.7%	170	450	N/A
Wyoming	1,160	1,020	-12.1%	1,130	1,060	-6.2%	20	50	N/A
STATES (EXCL. P.R.)	774,940	777,640	0.3%	854,470	857,480	0.4%	19,410	40,240	N/A
U.S.A. (EXCL. P.R.)	778,700	792,500	1.8%	822,500	857,500	4.3%	15,770	40,700	N/A
New England	46,050	45,430	-1.3%	47,890	48,140	0.5%	860	2,210	N/A
Mideast	200,740	199,630	-0.6%	215,630	216,600	0.4%	4,450	10,210	N/A
Great Lakes	92,990	95,050	2.2%	98,930	100,940	2.0%	1,970	4,650	N/A
Plains	41,170	40,710	-1.1%	44,220	45,070	1.9%	920	2,220	N/A
Southeast*	164,850	164,680*	-0.1%*	183,640	182,740*	-0.5%*	4,300	9,020*	N/A
Southwest*	74,340	75,130*	1.1%*	89,130	89,140*	0.0%*	2,570	>3,180*	N/A
Rocky Mountains	27,850	25,150	-9.7%	32,550	29,540	-9.2%	920	1,650	N/A
Far West	126,950	131,860	3.9%	142,480	145,310	2.0%	3,420	7,100	N/A

(Note: Only Texas did not report its numbers this year, which is lamentable because it’s a large state. West Virginia did not report two years ago. For the purposes of the regional estimates, wherever there were gaps, I used Texas’ 2014 numbers for this year and omitted West Virginia entirely.)

Superficially, one can tell that the data are erratic. It’s unlikely that half of Idaho’s lawyers disappeared in two years, and there are other wide swings like Maryland and Kentucky. The BEA regional numbers look steadier though.

On to the specifics. You can clearly see that the annual job growth numbers are much higher for 2016, but that’s because of the methodology change, not anything to do with the legal labor market. Presumably, had the new methodology been used in the past, the numbers would have been quite higher. Even as it is, unfortunately, the new methodology gives the misleading impression that the legal profession is capable of absorbing significant numbers of law-school graduates and new lawyers. Indeed, the class of 2017 only had about 34,500 persons, and nearly 42,000 people were admitted by examination or diploma privilege. Certainly this should indicate a healthy employment situation for law graduates, right?

The question isn’t simply whether grads get jobs, but what kind of jobs they are and how long they keep them. Moreover, lawyer positions that open by replacement won’t necessarily be filled by new lawyers. So, here’s a table depicting the projected annual number of new lawyer jobs created each year until 2026, the number created by replacement, and an estimate of the ten-year replacement rate.

STATE	Annual New Lawyer Jobs		Annual Replacement Lawyer Jobs		10-Year Lawyer Replacement Rate
	2024	2026	2024	2026	2026
Alabama	36	54	104	296	43.1%
Alaska	-5	-10	N/A	N/A	N/A
Arizona	224	148	146	522	44.1%
Arkansas	64	62	66	178	45.6%
California	1,080	1,060	1,340	4,270	43.8%
Colorado	347	274	253	736	50.3%
Connecticut	46	70	184	520	42.4%
Delaware	12	28	48	142	43.4%
District of Columbia	256	241	574	1,679	42.7%
Florida	900	779	870	2,661	44.2%
Georgia	153	223	267	897	43.6%
Hawaii	9	13	31	117	43.5%
Idaho	-7	15	N/A	65	44.5%
Illinois	211	305	529	1,565	43.2%
Indiana	107	103	143	457	43.5%
Iowa	54	55	66	195	45.0%
Kansas	48	60	82	210	44.2%
Kentucky	115	40	135	290	42.3%
Louisiana	55	82	135	368	43.9%
Maine	4	2	46	128	42.7%
Maryland	168	41	192	499	34.4%
Massachusetts	98	166	322	954	42.9%
Michigan	133	137	267	803	42.8%
Minnesota	70	116	190	544	43.0%
Mississippi	27	5	53	175	42.2%
Missouri	69	129	181	531	43.5%
Montana	28	21	42	109	43.8%
Nebraska	49	50	61	170	45.7%
Nevada	185	51	85	299	42.4%
New Hampshire	6	14	34	86	44.1%
New Jersey	62	205	358	1,145	43.0%
New Mexico	2	16	58	154	42.8%
New York	819	967	1,331	3,693	43.8%
North Carolina	185	158	235	632	43.8%
North Dakota	5	16	25	94	45.2%
Ohio	111	-3	299	N/A	N/A
Oklahoma	81	65	139	355	42.9%
Oregon	119	78	121	352	43.0%
Pennsylvania	172	215	458	1,355	42.8%
Puerto Rico	8	-1	62	N/A	N/A
Rhode Island	25	20	65	170	42.0%
South Carolina	45	71	105	349	42.8%
South Dakota	10	10	10	40	41.2%
Tennessee	70	119	130	431	44.6%
Texas	1,172	N/A	748	N/A	N/A
Utah	105	125	75	255	45.9%
Vermont	5	-1	25	N/A	N/A
Virginia	229	213	321	937	43.5%
Washington	165	153	265	677	43.6%
West Virginia	N/A	15	N/A	135	41.8%
Wisconsin	32	47	138	403	42.9%
Wyoming	-3	4	N/A	46	45.1%
U.S.A. (EXCL. P.R.)	4,380	6,500	11,390	34,200	43.2%

(Note: States that predict declines in lawyer counts do not have replacement rates. Also, the U.S.A. totals at the bottom are not the sums of the individual jurisdictions of them.)

The one ray of hope here is the faster rate of new lawyer job growth nationwide. The BLS appears to be predicting it’ll accelerate at about 50 percent. However, most jobs are created by replacement, not growth. Thus, we have a set of ten-year replacement rates that are consistently above 40 percent, which astonishes me, but is still consistent with the national data from last year. I question whether the methodology is producing reliable results. Perhaps law practice is too small an occupation to accurately measure, unlike retail salespeople. Although, it’s necessary to bear in mind that not all lawyer jobs are created equal and some may turnover multiple times in a decade.

Meanwhile, I checked the numbers again, and occupations such as “Dentists, General” and “Physicians and Surgeons, All Other” have ten-year replacement rates below 30 percent. “Paralegals and Legal Assistants” have a staggering ten-year replacement rate of 120 percent.

So yes, the projections don’t inspire me with confidence, but they’re the best, neutral evidence we have about the long-term viability of a law career. If they gave a contrary result (and other evidence backed it up), then I’d arrive at a different conclusion. But today is not that day, so I stand by my opinion that law schools cannot credibly represent good outcomes for their prospective and current students.

Half of States to See Decline in Lawyer Surpluses

In August, the National Association for Law Placement verified a trend that appeared in ABA data several months earlier: Despite the falling supply of law school graduates, demand for their work stubbornly refuses to materialize. In fact, the number of graduates who found work as lawyers fell far more than the number of unemployed graduates, suggesting that either many graduates failed the bar or that new lawyer jobs are much more transitory than they appear.

But if the short term trend indicates fewer lawyers in the future, what about the long-term outlook?

Fortunately, the Bureau of Labor Statistics updated its biennial state-level occupational employment projections. These data include an estimate of the number of lawyer positions (not people who are lawyers) out there in 2014, a prediction of how many there will be in 2024, and the projected number of annual lawyer job openings. This last figure can be compared to the number of new law licenses issued courtesy of the National Conference of Bar Examiners (NCBE) or law school graduates (from the ABA) to give the “lawyer surplus” and the “law graduate surplus,” respectively.

There are a few reasons to calculate two surplus ratios rather than one. For the lawyer surplus, the NCBE’s number of new law licenses includes many duplicates—people who become licensed in more than one jurisdiction—but it helps track people who obtain licenses on motion to places where few people sit for the bar, e.g. Washington D.C. Meanwhile, the law graduate surplus measures discrete individuals, but it excludes people who go to non-ABA-accredited law schools and not everyone who graduates from an ABA law school finds jobs as lawyers.

The two surpluses permit comparisons among states’ legal markets to show which parts of the country might provide better opportunities for new lawyers, but they are not a direct proxy for the typical number of people seeking job openings.

First, here’s a table of the state-level occupational employment information for the 2014-24 period compared to the 2012-22 period. The “STATES” row is the sum of the data from the state-level employment information, including the District of Columbia but excluding Puerto Rico, but the “U.S.A.” row is from the national projections provided by the BLS late last year. The STATES row and the Bureau of Economic Analysis regions below only include jurisdictions that reported in both time periods to ensure relevant comparisons.

STATE/BEA REGION	NO. EMPLOYED LAWYERS		LAWYER EMPLOYMENT PROJECTIONS		ANNUAL LAWYER GROWTH RATE
	2012	2014	2022	2024	2022	2024
Alabama	7,040	7,050	7,710	7,410	180	140
Alaska	1,020	1,070	1,010	1,020	20	20
Arizona	11,740	9,630	14,160	11,870	430	370
Arkansas	4,420	4,720	4,940	5,360	120	130
California	87,400	91,900	97,300	102,700	2,390	2,420
Colorado	15,800	15,800	19,280	19,270	600	600
Connecticut	9,390	12,620	10,080	13,080	220	230
Delaware	3,400	3,540	3,700	3,660	80	60
District of Columbia	33,460	38,920	35,040	41,480	690	830
Florida	51,860	59,400	61,310	68,400	1,930	1,770
Georgia	19,520	18,160	23,220	19,690	680	420
Hawaii	2,460	2,410	2,580	2,500	50	40
Idaho	2,700	N/A	2,820	N/A	60	N/A
Illinois	34,810	35,840	38,400	37,950	920	740
Indiana	7,680	9,450	8,810	10,520	240	250
Iowa	4,450	4,340	5,050	4,880	130	120
Kansas	4,950	5,090	5,610	5,570	150	130
Kentucky	5,600	9,490	6,450	10,640	300	250
Louisiana	9,310	9,180	10,490	9,730	270	190
Maine	2,930	3,170	3,010	3,210	60	50
Maryland	14,800	11,690	16,330	13,370	390	360
Massachusetts	22,640	22,100	24,590	23,080	560	420
Michigan	N/A	17,900	N/A	19,230	N/A	400
Minnesota	12,550	12,640	13,080	13,340	260	260
Mississippi	3,220	3,760	3,460	4,030	80	80
Missouri	12,620	12,470	14,410	13,160	380	250
Montana	2,270	2,550	2,530	2,830	60	70
Nebraska	4,060	3,910	4,430	4,400	100	110
Nevada	5,640	6,030	6,260	7,880	150	270
New Hampshire	2,280	2,010	2,380	2,070	50	40
New Jersey	24,150	24,520	26,390	25,140	610	420
New Mexico	3,830	3,810	3,980	3,830	80	60
New York	82,220	90,830	88,680	99,020	1,960	2,150
North Carolina	14,810	16,020	17,500	17,870	510	420
North Dakota	1,540	1,740	1,680	1,790	40	30
Ohio	21,160	20,180	23,480	21,290	570	410
Oklahoma	9,260	9,480	10,270	10,290	250	220
Oregon	5,070	8,250	5,830	9,440	160	240
Pennsylvania	31,260	31,240	34,700	32,960	840	630
Puerto Rico	4,440	4,420	5,040	4,500	130	70
Rhode Island	N/A	4,210	N/A	4,460	N/A	90
South Carolina	7,140	7,220	7,950	7,670	200	150
South Dakota	1,400	980	1,540	1,080	40	20
Tennessee	8,010	7,990	10,520	8,690	380	200
Texas	49,350	51,420	60,090	63,140	1,800	1,920
Utah	5,890	5,310	7,470	6,360	250	180
Vermont	2,030	1,940	2,150	1,990	40	30
Virginia	20,430	21,860	23,030	24,150	590	550
Washington	16,290	17,290	20,070	18,940	670	430
West Virginia	N/A	N/A	N/A	N/A	N/A	N/A
Wisconsin	9,330	9,620	10,740	9,940	290	170
Wyoming	1,050	1,160	1,170	1,130	30	20
STATES (EXCL. P.R.)	711,540	749,800	802,860	827,820	20,800	18,870
U.S.A. (EXCL. P.R.)	759,800	778,700	834,700	822,500	19,650	15,770
New England	39,270	41,840	42,210	43,430	930	770
Mideast	189,290	200,740	204,840	215,630	4,570	4,450
Great Lakes	72,980	75,090	81,430	79,700	2,020	1,570
Plains	41,570	41,170	45,800	44,220	1,100	920
Southeast	151,360	164,850	176,580	183,640	5,240	4,300
Southwest	74,180	74,340	88,500	89,130	2,560	2,570
Rocky Mountains	25,010	24,820	30,450	29,590	940	870
Far West	117,880	126,950	133,050	142,480	3,440	3,420

Superficially, some states seem to have created many new lawyer jobs between 2012 and 2014. For example, it’s doubtful that Kentucky’s and Oregon’s legal markets grew by more than 60 percent in just two years, or that South Dakota’s contracted by 30 percent. The only state whose large swing may be plausible is Nevada’s. Its lawyer job count grew by about 7 percent since 2012, but its 10-year outlook rose by 25 percent with a corresponding 80 percent surge in projected annual job openings. On average, annual job openings sank by 12 percent among jurisdictions that reported in both periods while excluding Puerto Rico. Only 10 states and the District of Columbia had higher annual job growth rates than in 2012. The rate of decline in annual job growth for all jurisdictions that reported in both years and excluding Puerto Rico is 9 percent, which is less alarming than the BLS’s 20 percent drop for the whole country.

Offsetting the slowdown in lawyer job growth is somewhat greater losses in bar admits and law school graduates, 13 percent and 14 percent, respectively. The result is that 24 states and the District of Columbia have smaller lawyer and law graduate surpluses in 2014 than 2012. Overwhelmingly, the cause in these jurisdictions is modest annual job growth projections coupled with strong losses in new graduates and new lawyers. Here’s the full table.

#	STATE/BEA REGION	NO. ABA LAW SCHOOL GRADS		NO. BAR ADMITS		RATIO ABA GRADS TO ANNUAL LAWYER JOBS		RATIO BAR ADMITS TO ANNUAL LAWYER JOBS
		2013	2015	2013	2015	2013	2015	2013	2015
1	Wyoming	78	73	161	198	2.60	3.65	5.37	9.90
2	North Dakota	75	79	267	219	1.88	2.63	6.68	7.30
3	Alaska	0	0	130	140	0.00	0.00	6.50	7.00
4	New Hampshire	107	70	250	272	2.14	1.75	5.00	6.80
5	Puerto Rico	662	569	491	458	5.09	8.13	3.78	6.54
6	New Jersey	859	585	3,386	2,586	1.41	1.39	5.55	6.16
7	New Mexico	114	112	287	292	1.43	1.87	3.59	4.87
8	Massachusetts	2,391	2,164	2,411	1,981	4.27	5.15	4.31	4.72
9	Hawaii	108	111	206	188	2.16	2.78	4.12	4.70
10	South Dakota	73	63	121	93	1.83	3.15	3.03	4.65
11	Wisconsin	485	447	843	781	1.67	2.63	2.91	4.59
12	Missouri	883	700	1,034	1,051	2.32	2.80	2.72	4.20
13	New York	5,007	4,105	10,251	8,867	2.55	1.91	5.23	4.12
14	Washington	654	579	1,353	1,759	0.98	1.35	2.02	4.09
15	Maryland	600	537	1,742	1,382	1.54	1.49	4.47	3.84
16	Tennessee	501	533	1,011	741	1.32	2.67	2.66	3.71
17	Minnesota	942	723	1,028	939	3.62	2.78	3.95	3.61
18	Vermont	203	163	151	108	5.08	5.43	3.78	3.60
19	Illinois	2,278	2,036	3,184	2,525	2.48	2.75	3.46	3.41
20	Louisiana	936	822	533	630	3.47	4.33	1.97	3.32
21	South Carolina	442	335	598	494	2.21	2.23	2.99	3.29
22	Alabama	427	351	503	454	2.37	2.51	2.79	3.24
23	Pennsylvania	1,703	1,418	2,241	1,927	2.03	2.25	2.67	3.06
24	Utah	292	258	499	548	1.17	1.43	2.00	3.04
25	Iowa	328	263	416	356	2.52	2.19	3.20	2.97
26	Maine	96	78	183	145	1.60	1.56	3.05	2.90
27	Mississippi	377	274	305	232	4.71	3.43	3.81	2.90
28	District of Columbia	2,181	1,916	3,120	2,389	3.16	2.31	4.52	2.88
29	Georgia	1,085	931	1,377	1,205	1.60	2.22	2.03	2.87
30	Ohio	1,474	1,088	1,444	1,172	2.59	2.65	2.53	2.86
31	Michigan	2,206	1,606	1,248	1,082	N/A	4.02	N/A	2.71
32	Kansas	324	255	393	340	2.16	1.96	2.62	2.62
33	Nebraska	249	245	316	285	2.49	2.23	3.16	2.59
34	North Carolina	1,429	1,422	1,091	1,072	2.80	3.39	2.14	2.55
35	California	5,184	4,392	7,008	6,150	2.17	1.81	2.93	2.54
36	Indiana	834	764	675	625	3.48	3.06	2.81	2.50
37	Oregon	527	427	659	574	3.29	1.78	4.12	2.39
38	Connecticut	541	477	680	530	2.46	2.07	3.09	2.30
39	Virginia	1,440	1,277	1,590	1,252	2.44	2.32	2.69	2.28
40	Montana	81	82	204	158	1.35	1.17	3.40	2.26
41	Arizona	640	705	906	835	1.49	1.91	2.11	2.26
42	Arkansas	275	255	302	268	2.29	1.96	2.52	2.06
43	Rhode Island	174	129	201	175	N/A	1.43	N/A	1.94
44	Colorado	437	439	1,217	1,125	0.73	0.73	2.03	1.88
45	Kentucky	422	395	668	463	1.41	1.58	2.23	1.85
46	Florida	3,190	2,718	3,476	3,177	1.65	1.54	1.80	1.79
47	Texas	2,323	2,075	3,836	3,346	1.29	1.08	2.13	1.74
48	Delaware	279	170	148	99	3.49	2.83	1.85	1.65
49	Oklahoma	468	380	463	350	1.87	1.73	1.85	1.59
50	Nevada	132	131	343	321	0.88	0.49	2.29	1.19
N/A	Idaho	117	106	231	212	1.95	N/A	3.85	N/A
N/A	West Virginia	130	125	274	242	N/A	N/A	N/A	N/A
STATES (EXCL. P.R.)		43,474	37,423	63,010	54,644	2.09	1.98	3.03	2.90
U.S.A. (EXCL. P.R.)		46,101	39,389	64,964	56,355	2.35	2.50	3.31	3.57
New England		3,338	2,952	3,675	3,036	3.59	3.83	3.95	3.94
Mideast		10,629	8,731	20,888	17,250	2.33	1.96	4.57	3.88
Great Lakes		5,071	4,335	6,146	5,103	2.51	2.76	3.04	3.25
Plains		2,874	2,328	3,575	3,283	2.61	2.53	3.25	3.57
Southeast		10,524	9,313	11,454	9,988	2.01	2.17	2.19	2.32
Southwest		3,545	3,272	5,492	4,823	1.38	1.27	2.15	1.88
Rocky Mountains		888	852	2,081	2,029	0.94	0.98	2.21	2.33
Far West		6,605	5,640	9,699	9,132	1.92	1.65	2.82	2.67

Of the 22 states that produced higher lawyer surpluses than before, all but three showed steep declines in annual lawyer job creation, nearly all of them over 25 percent. Washington State stands out in particular because it admitted 30 percent more lawyers while its lawyer market is expected to produce 36 percent fewer jobs annually. On the other hand, it has 12 percent fewer graduates in 2015 than 2013 and some growth in lawyer employment, so there are reasons to believe its outlook isn’t so bad. Other states tell similar stories.

The BLS’s methodology distinguishes jobs created by economic growth from those created by replacement of people leaving the occupation. The annual number of positions created by growth is measured by simply taking the difference between the predicted number of employed lawyers in 2024 and 2014, and then dividing that by ten. The annual number of jobs created by replacement can be found by subtracting the number of jobs created by growth from the number of jobs created annually. Consequently, it’s possible to explore which category of jobs states think will (or won’t open up). Consistent with the BLS’s national-level employment projections, state governments predominantly predict jobs created by economic growth will plummet while jobs created by vacancies will fall at a smaller rate.

Notably, among states that reported employment data for 2012 and 2014, the cumulative number of annual openings (18,870) is much higher than the BLS’s more dour prediction (15,770). This suggests that the BLS is much more pessimistic about lawyer job growth than state governments are. Specifically, about 41 percent of lawyer job openings will be created by growth according to the state projections as opposed to 28 percent as reported by the BLS. Hopefully the former will pan out for new graduates who pass the bar.

Overall, it’s good news that lawyer surpluses are falling, even if it isn’t a widespread phenomenon and not due to a bright future for the legal profession. It’s unclear why state governments and the BLS are so pessimistic about lawyer job growth compared to two years ago. The ultimate cause may be due to predictions of slow job growth in general and not lawyer jobs specifically. Although that development is discouraging, the crash in law students is compensating for it, meaning fewer graduates will struggle to find work.

Current Circumstances Cast a Shadow on Past Decisions

Put positively: Current circumstances illuminate past decisions.

I guess it works.

I flipped through Access Group’s and Gallup’s jointly produced report, “Life After Law School” (pdf), which surveyed a panel of 7,000 recent and not-so-recent law-school graduates of some Southeastern law schools. I don’t have much time or interest in picking apart the study, but I observe that the seven schools it chose are a pretty broad range, from older, established Vanderbilt to recent Elon. There aren’t any for-profits though.

I thought I’d illustrate some of “Life After Law School”‘s tables. There are times when tables are helpful, e.g. lists of law schools, and times when we prefer charts, like when we want to see trends. “Life After Law School” is a time for trends.

Here’s how graduates answered, “If I could do it again, I’d still get a law degree.”

“These results could reflect the lack of time more recent graduates have had to realize the value of their law degree or their greater difficulty in finding a good job after graduation.”

You can see growing dissatisfaction with law school among recent graduates.

And here’s, “My degree from LAW SCHOOL was worth the cost.”

Again, growing dissatisfaction over the decades. I’ll not chart the report’s debt table because it doesn’t break the numbers down by approximate graduation year. Time is what we’re talking about.

So here’s a question: Do graduates become more satisfied with law school over time, or is this a phenomenon unique to recent grads? Predictably, Access Group believes the former; it says so in the introduction. “While [metrics of near-term earnings and job placement of recent graduates] have merit, they do not provide a holistic view of graduates’ lives or the broader benefits that legal education provides.” If the long-term picture looks good, then we can discount the experiences of recent graduates.

Alternatively, factors outside law schools and law degrees affect people’s job outcomes and happiness. For example, if demand for legal services stagnates, and universities keep opening law schools, and the costs rise without quantified benefits, then we should expect more people to be dissatisfied with law school.

Thus, “Life After Law School” echoes the After the JD study, whose own authors misinterpreted their results, treating survey responses as evidence of legal education’s value rather than the respondents’ perception of their legal educations’ values. Current circumstances feed into perceptions of past decisions. As always, the question is, were there better alternatives to law school when people chose to attend. Recent graduates’ jaundiced perception of law school indicates they believe there were better alternatives in hindsight. But that’s a question Access Group won’t ask.

A Simple Equation: Huge Debts + IBR = -(-(Default))

Simple, that is, for everyone but the letter-writers responding to the NYT editorial from two Sundays previous.

The objective of today’s outing isn’t to defend the Times as such but rather to draw attention to the sad rebuttals to it.

Argument #1: Law students are less likely to default on their student loans than undergrads.

Law students borrow more than undergrads, but most are able to repay, and do. The graduate student default rate is 7 percent versus 22 percent for undergrads.

…

[O]nly about 1.1 percent of alumni at Florida Coastal are in default.

…

[D]ata shows that law school graduates have lower default rates than other professional degree holders.

Response: It is true that the Times accused law schools of, “sticking taxpayers with the tab for their [students’] loan defaults,” but the line between “default” and “certain IBR/PAYE/REPAYE/PSLF loan cancelation” is hazy. Arithmetic tells us that with $130,000 of debt at current student loan interest rates, law-school debtors earning about $70,000 from day one cannot even dent their student loans’ principal. Because it’s unlikely these debtors will ever find high-paying jobs, it’s all but certain that large portions of their loans will be canceled.

It may not be default, but it’s only “repayment” in the technical sense. Better to call it “not-not-default.”

Argument #2: Thanks to scrupulous admissions practices, law school enrollments have declined.

Many law schools are downsizing to maintain standards. Since 2010, first-year enrollment has dropped from 52,500 to 37,900, a level last seen in 1973.

…

Since 2010, law schools have responded to the changed legal job market by dramatically cutting first-year enrollment by 28 percent.

Response: This is the most astonishing bit of revisionist law-school history I’ve seen. Remember five years ago (!) when Richard Matasar cited record law-school enrollments as evidence that applicants understood their job prospects? Well, surprise, surprise, surprise! Only 53,500 people applied to law school in 2015, down from 87,900 in 2010, and there’s evidence that fewer people applied in 2010 than the number of LSAT takers would’ve predicted. Law school admissions policies are not responsible for prospective applicants’ decision not to go to law school.

(Sources: LSAC, ABA)

Also, law schools are admitting higher proportions of their applicants since 2010.

(Source: Official Guide, author’s calculations)

Argument #3: Declining interest in law school will [create a disastrous attorney shortage/equalize supply and demand for lawyers].

[Due to falling enrollments] the rule of law may begin to fray. Our country needs lawyers, prosecutors, defenders and judges, not only lawyers in big cities and big law firms.

…

[A] law degree continues to be a sound investment over the course of a career. … [Falling enrollments] will bring supply more into line with demand.

Response: I lump these arguments together because they entail the same prediction: Job outcomes and wages for law grads will improve in the near future. Testing this belief with NALP data, it’s clear that law grads are much more likely to find themselves in J.D.-advantage jobs than in the past. If the job market for lawyers tightens, we’ll see graduates shift from these jobs to lawyer jobs. Instead, while the number of unemployed grads fell in 2014, so did the number of grads in 2-10-lawyer firm jobs. Meanwhile J.D.-advantage jobs rose. This doesn’t speak highly to the value of law school.

Additionally, based on various measures, including those provided by the Bureau of Labor Statistics, there are hundreds of thousands more law grads than there are lawyers. Many of these people left law voluntarily, e.g. they didn’t like law practice or they moved on to post-law professional careers (like the judiciary). Alternatively, they didn’t have opportunities for careers at the bar at all. As more lawyer jobs open up, presumably many of these people would come out of the woodwork. However, there are few indicators that demand for lawyers—which is what really matters here—is improving. Moreover, graduates reporting full-time, long-term employment might not stay in the law for long due to the profession’s high attrition rate.

Also, one letter-writer asserted that a law degree is “a sound investment” and that declining enrollments will “bring supply more into line with demand.” These statements contradict each other, albeit mildly. Although it’s possible the 5,000 class of 2013 graduates who were reported as unemployed will embark on professional careers in the future, it can’t be to their advantage if they graduated when supply was higher than demand could absorb.

Argument #4: Capping federal loans restricts the profession to the wealthy.

Capping graduate federal loans as the editors suggest would fall hardest on students from modest circumstances who will not be able to attend law school or will need to resort to private loans, which are typically more expensive, and repayment is not income-contingent.

…

[C]utting federal loans will only narrow the pool of people who can pursue a legal career and decrease the availability of lawyers to serve this need.

Response: Even with unlimited federal loans the legal profession isn’t accessible to the poor, but supposing these consequences are true, state governments could just make it easier for people to become lawyers, e.g. by reducing law to an undergraduate major. We have had lawyers without law schools—good ones even, and we’ve had bad lawyers with law schools.

Argument #5:

[T]aking loan money from law students is both bad economics and bad policy.

Response: No evidence is given to support these claims, but the existence of not-not-defaults discussed above disproves them. Also, we had lawyers with fewer loans to law students and dischargeability for private loans. This isn’t the distant past; it’s pre-2005.

Argument #6: Florida Coastal School of Law’s graduates rocked the February bar exam.

In February 2015 we had a 75 percent first-time bar pass rate, third best out of 11 law schools in the state, and an institutional ultimate pass rate of 87 percent.

Response: Fewer people typically sit for the February bar exam than the July one, so we have a sample problem. Also, don’t let FCSL’s 509 report fool you: Its graduates may pass the Florida bar at about a 75 percent rate, but at least 30 percent of its students don’t report at all. Florida State’s non-report rate is about 15 percent; U of Florida’s is less than 10 percent. Both of those schools have higher pass rates too.

Paul Campos addressed some of the other arguments by Florida Coastal’s dean.

Argument #7: The editorial ignores improvements to legal education, like more clinical courses.

[Law schools have] sharpened academic programs to provide the training employers seek.

…

In recent years, many law schools have been overhauling their programs to provide more hands-on skills training. Clinics cost more than big lectures, but they prepare lawyers for practice and teach them about their professional responsibility to serve people unable to pay for services.

Response:

Better training does not create jobs.

Better training does not create jobs.

Better training does not create jobs (except for the trainers).

…

The one letter I’ll call out specifically is New York City Bar Association president Debra L. Raskin’s because … it leveled a coherent argument.

**********

I’ll not exhaustively nitpick everything here, but by focusing on law school debt the Times editorial is bringing out the kinds of arguments we can expect to see from academics defending the subsidies that ultimately flow to them. Some of the points I read here are novel, so it’s not an opportunity to waste.

Class of 2014 NALP Data: Unemployment, Small Firm Jobs Down

A few weeks back, the National Association for Law Placement (NALP) uploaded its national summary chart that’s the basis for its Employment Report and Salary Survey (ERSS). It’s here (pdf). Two things worth noting: One, this year’s version doesn’t include the total number of graduates or the number who responded to the survey, making it impossible to determine non-responses. I have no idea why the NALP did this.

Since the class of 2013 ERSS appeared to use the same total number of grads as the ABA did that year, I’ll assume it’s 43,832 this year, which includes graduates from the three Puerto Rico law schools. Also, this year the ERSS changed 2-10-lawyer firms to 1-10-lawyer firms. I’m not sure if this is a typo or if it’s meant to separate graduates who work under solo practitioners as non-lawyers from graduates who start their own solo practices.

Okay, some analysis. Obviously this year’s ERSS confirms what’s been widely reported since the ABA’s version of the same data came out several months ago: Unemployment is down, as is the number of grads in bar-passage-required jobs, and with fewer graduates, the percentage of employed grads rose.

Here are charts of the number of graduates by employment status and the percent employed. (These exclude non-responses.)

These charts also illustrate the remarkable growth in J.D. advantage jobs over the years.

Here’s a detailed version graduate employment but with full-time and part-time status and only going back to 2007.

The question that I don’t think has been addressed is what kind of bar-passage-required jobs are responsible for the drop in that category. I won’t show all the math, but the answer is overwhelmingly private-practice, small-law firm jobs: 1/2-10-lawyer practices and solos.

Interestingly, the number and proportion of grads reported as starting their own practices did not change much since 2013 (-175 from 1,378). I draw two conclusions from this: One, small firms looking for new lawyers will need to look harder. I have no idea if that will push up wages in the future (there’s trivial evidence it has this year for full-time, wage-and-salary jobs). On the other hand, these could be eat-what-you-kill arrangements, which wouldn’t cost these firms much. Nominal wages for 1/2-10-lawyer practices are still way down from 2007, but the proportion of grads reporting wages is up, so this is a phenomenon to look for. The better these jobs pay, the better grads do overall: It’s the marginal graduate who matters most.

Speaking of whom, and this is my second thought, grads appear to prefer J.D.-advantage jobs and unemployment to small firm work. Given the definition of J.D. advantage, which is so broad that it likely includes graduates returning to their prior jobs, graduates’ employment “choices” don’t speak highly of small-firm work.

Thus, there is still much slack in the legal labor market, but it is improving. Big law isn’t hiring the way it used to, but fewer grads are working in smaller practices:

 

(Sorry this one is a little unclear.)

To conclude, this ERSS verifies the odd accounting identity explaining law graduate employment: The first people who don’t go to law school are the first ones to not be underemployed after graduating. Small beans for the thousands of unemployed grads though.

Site Update 2015-02-09: Law Graduate Overproduction Page

The update can be found here. (The 2011 edition has been moved here.)

To keep the analysis consistent with previous years, I used the class of 2013 even though data for the class on 2014 are available (and logged by moi). It’s a little problematic given that 2013 was the law graduate high tide, but that’s what happens when law schools enroll people without regard to employment outcomes.

I do not discussed the BLS’s proposed changes to its methodology for measuring occupational replacements. Assuming it’s approved, then for future versions, if the BLS separates annual replacement openings between those created by workers who leave the labor force and workers who move to different occupations, then I’ll use the labor force rate as the measure for “sustainable jobs.” It’s imperfect, but the same can be said of the current methodology.

I’ve also updated the site’s highly popular lawyers per capita by state page to include employed lawyers per capita and idle attorneys using the 2012 employment data. I am waiting on the ABA to update its national lawyer counts for 2014 and 2015. (They do plan on doing that right?)

At this time, I will brag that the Census Bureau’s press relations department cited my work on this topic last August.

BLS: One in Four Lawyers to Switch Occupations by 2022

…And if you know what that means, great, because there’re plenty of caveats I have to lay out for everyone else.

Steven Harper inspires me to check up on how things are going with the BLS’s proposed rule-change for estimating occupational replacement rates; there was an update on January 2^nd. Apparently, the Employment Projections program released a spreadsheet with experimental 2012-2022 replacement and separations data alongside the numbers from the current methodology. I don’t think it was there before, but the BLS says it was. If so I wish I’d noticed it earlier as it’s quite interesting.

For one, my hunch in my American Lawyer article was correct: Under the new methodology between 2012 and 2022, 339,800 out of 759,800 lawyers would be replaced, and the growth rate, which is what we should be caring about because it’s not zero sum, doesn’t get changed. I like getting the numbers right. (Okay, I was off by a thousand.)

For another, the BLS goes further than I expected by separating the total occupational replacement rate into “labor force exits” and “occupational transfers,” which mean as they sound. Labor force exits are certainly going to include most retirements but also people exiting for parental leave and other, less common personal reasons. The labor force exit rate for lawyers is 17.1 percent, which compares strikingly well with the current methodology’s 16 percent replacement rate.

As for occupational transfers, as this post’s title states, it’s 25.5 percent. That’s the concept I’ve been most concerned about all along. These are lawyers who are leaving the profession for different types of jobs. To be clear, some of these transfers are preferable and some not. It includes lawyers who become judges with lawyers who become retail sales clerks. The interesting comparison—and the best I can give you—is with other occupations that require doctoral or professional degrees, sorted by size and occupational transfer rate.

OCCUPATION	SOC CODE	CURRENT METHOD	NEW METHOD
		REPLACEMENT RATE, 2012-22	OCCUPATIONAL TRANSFER RATE, 2012-22	LABOR FORCE EXIT RATE, 2012-22	OCCUPATIONAL SEPARATION RATE, 2012-22
Animal scientists	19-1011	33.3%	54.3%	22.2%	76.4%
Biochemists and biophysicists	19-1021	28.5%	54.1%	18.0%	72.1%
Medical scientists, except epidemiologists	19-1042	21.1%	51.3%	14.5%	65.9%
Computer and information research scientists	15-1111	15.7%	44.9%	11.2%	56.1%
Clinical, counseling, and school psychologists	19-3031	27.2%	42.1%	24.1%	66.3%
Physicists	19-2012	24.5%	38.8%	19.1%	57.9%
Astronomers	19-2011	24.5%	38.8%	19.1%	57.9%
Judicial law clerks	23-1012	16.2%	35.4%	27.5%	62.9%
Postsecondary teachers, all other	25-1199	15.0%	34.1%	32.9%	67.0%
Health specialties teachers, postsecondary	25-1071	15.0%	34.1%	32.9%	67.0%
Business teachers, postsecondary	25-1011	15.0%	34.1%	32.9%	67.0%
English language and literature teachers, postsecondary	25-1123	15.0%	34.1%	32.9%	67.0%
Education teachers, postsecondary	25-1081	15.0%	34.1%	32.9%	67.0%
Biological science teachers, postsecondary	25-1042	15.0%	34.1%	32.9%	67.0%
Mathematical science teachers, postsecondary	25-1022	15.0%	34.1%	32.9%	67.0%
Psychology teachers, postsecondary	25-1066	15.0%	34.1%	32.9%	67.0%
Engineering teachers, postsecondary	25-1032	15.0%	34.1%	32.9%	67.0%
Computer science teachers, postsecondary	25-1021	15.0%	34.1%	32.9%	67.0%
Communications teachers, postsecondary	25-1122	15.0%	34.1%	32.9%	67.0%
Foreign language and literature teachers, postsecondary	25-1124	15.0%	34.1%	32.9%	67.0%
Philosophy and religion teachers, postsecondary	25-1126	15.0%	34.1%	32.9%	67.0%
History teachers, postsecondary	25-1125	15.0%	34.1%	32.9%	67.0%
Chemistry teachers, postsecondary	25-1052	15.0%	34.1%	32.9%	67.0%
Recreation and fitness studies teachers, postsecondary	25-1193	15.0%	34.1%	32.9%	67.0%
Political science teachers, postsecondary	25-1065	15.0%	34.1%	32.9%	67.0%
Sociology teachers, postsecondary	25-1067	15.0%	34.1%	32.9%	67.0%
Law teachers, postsecondary	25-1112	15.0%	34.1%	32.9%	67.0%
Physics teachers, postsecondary	25-1054	15.0%	34.1%	32.9%	67.0%
Economics teachers, postsecondary	25-1063	15.0%	34.1%	32.9%	67.0%
Criminal justice and law enforcement teachers, postsecondary	25-1111	15.0%	34.1%	32.9%	67.0%
Atmospheric, earth, marine, and space sciences teachers, postsecondary	25-1051	15.0%	34.1%	32.9%	67.0%
Agricultural sciences teachers, postsecondary	25-1041	15.0%	34.1%	32.9%	67.0%
Area, ethnic, and cultural studies teachers, postsecondary	25-1062	15.0%	34.1%	32.9%	67.0%
Social sciences teachers, postsecondary, all other	25-1069	15.0%	34.1%	32.9%	67.0%
Social work teachers, postsecondary	25-1113	15.0%	34.1%	32.9%	67.0%
Architecture teachers, postsecondary	25-1031	15.0%	34.1%	32.9%	67.0%
Anthropology and archeology teachers, postsecondary	25-1061	15.0%	34.1%	32.9%	67.0%
Environmental science teachers, postsecondary	25-1053	15.0%	34.1%	32.9%	67.0%
Geography teachers, postsecondary	25-1064	15.0%	34.1%	32.9%	67.0%
Library science teachers, postsecondary	25-1082	15.0%	34.1%	32.9%	67.0%
Forestry and conservation science teachers, postsecondary	25-1043	15.0%	34.1%	32.9%	67.0%
Lawyers	23-1011	16.0%	25.5%	17.1%	42.6%
Judges, magistrate judges, and magistrates	23-1023	16.0%	25.5%	17.1%	42.6%
Administrative law judges, adjudicators, and hearing officers	23-1021	16.0%	25.5%	17.1%	42.6%
Physical therapists	29-1123	24.6%	23.6%	15.2%	38.8%
Pharmacists	29-1051	23.9%	20.5%	16.8%	37.4%
Audiologists	29-1181	20.7%	20.0%	14.5%	34.5%
Veterinarians	29-1131	32.1%	16.6%	14.5%	31.1%
Physicians and surgeons, all other	29-1069	25.0%	14.4%	14.6%	29.0%
Family and general practitioners	29-1062	25.0%	14.4%	14.6%	29.0%
Internists, general	29-1063	25.0%	14.4%	14.6%	29.0%
Surgeons	29-1067	25.0%	14.4%	14.6%	29.0%
Anesthesiologists	29-1061	25.0%	14.4%	14.6%	29.0%
Pediatricians, general	29-1065	25.0%	14.4%	14.6%	29.0%
Psychiatrists	29-1066	25.0%	14.4%	14.6%	29.0%
Obstetricians and gynecologists	29-1064	25.0%	14.4%	14.6%	29.0%
Optometrists	29-1041	29.0%	14.0%	19.6%	33.6%
Chiropractors	29-1011	19.6%	13.6%	13.1%	26.8%
Dentists, general	29-1021	24.4%	12.7%	15.6%	28.3%
Orthodontists	29-1023	24.4%	12.7%	15.6%	28.3%
Oral and maxillofacial surgeons	29-1022	24.4%	12.7%	15.6%	28.3%
Dentists, all other specialists	29-1029	24.4%	12.7%	15.6%	28.3%
Prosthodontists	29-1024	24.4%	12.7%	15.6%	28.3%
Podiatrists	29-1081	20.7%	12.1%	11.1%	23.3%

I didn’t include it, but some of the occupations at the top with high turnover are quite tiny. There are only 2,700 animal scientists, for example, so my guess is there are still problems with the data. You’ll also note that many of the stats tend to clump together by occupation types, e.g. the 33 postsecondary instructor classes, which all have the same replacement rates, for both the new and old methodologies.

But the real money is in comparisons among the professional occupations, which are generally doctors, dentists, and lawyers. Lawyers’ occupational transfer rate is double doctors’ and dentists’. The medical occupations’ replacement rates under the current methodology are only a few percentage points lower than the total occupational separation rate under the new one, but the same can’t be said for attorneys’.

I’m not sure how reliable these experimental data are, but they do tend to show that there’s more turnover for lawyers than the other professions they’re most often compared to. (Ironically there’s even more turnover for postsecondary law instructors.) And I’m not even getting into job quality. I wouldn’t say this is especially strong evidence of a high turnover rate for lawyers, but it’s another piece that fits in that puzzle.

The BLS (still) says it’ll give us another update early this year, but I hope to write on other topics.

10 Ways to Falsify Law Graduate Employment Doomsayers

I begin 2015’s first substantive post by invoking the right of listicle clickbait.

A loose end from December is Loyola Law School, Los Angeles professor Theodore Seto’s response to my American Lawyer article on the Bureau of Labor Statistics’ proposed change to how it measures the replacement rate for lawyers. For Professor Seto, I have good news and better news.

The good news is that when he writes that he’s flattered that I’d respond to his article, he need not be. Of course I was going to write on the topic for The American Lawyer anyway, but his first article usefully illustrated the kind of thinking I cautioned against when I broke the story in early November.

The better news is that his closing line raises an interesting question worthy of further consideration. He writes:

But we should all remember (myself included) that the best legal counselors, when faced with new evidence, adjust their advice accordingly. They do not simply attack the evidence.

Let’s not discuss whether I was attacking new evidence. Readers can compare my article to Seto’s for themselves. Instead, if I interpret Seto fairly here (and he says I didn’t do that for his other article, so I tread lightly), he’s implying that I or perhaps others make unfalsifiable claims about the future of law graduate employment—that we unfairly dismiss any favorable news about graduates’ prospects because it contradicts our dogmatic positions that law school is a poor decision in probably most circumstances.

If so, he’s incorrect. My beliefs are falsifiable, and because the topic of falsifiability arose on this blog two more times in the last month, I’m inspired to write on it. So, here’s a list of events one could point to (and would probably need to) to predict that things will be better for grads in 2016.

(1)  The absolute number of graduates in the classes of 2014 and 2015 employed in full-time, long-term, bar-passage-required, non-school-funded jobs rises. No one disputes that employment percentages will improve on account of there being fewer graduates, but the best way to show that graduates are finding jobs is … showing that graduates are finding jobs. Similarly, I’d like to see evidence that grads are finding better jobs. That could be the NALP reporting that grads are shifting into lawyer jobs at law firms larger than the 2-10 bracket, though 2013 toed in the right direction.

You can slag biglaw all you want, but it tends to pay better. Likewise, wage growth in the 25^th percentile for law grads is absolutely necessary if anyone wants to convince me that law school is better than going back to college for a more lucrative bachelor’s degree, but technically that’s a slightly different issue.

* Note: At this time I’m not too concerned that the ABA’s decision to give law schools a tenth month to report their graduate employment data will substantially impair any comparisons to previous years.

2016 Grads Shouldn’t Take Comfort in New Jobs Projection Approach

…Is up on The American Lawyer.

That should sate your law school bug until I compile the data from the ABA’s 509 reports and see what’s there. Gotta give the ABA credit for putting this info up so much sooner than before.

[Update: One thing that’s popped out: WMU Cooley Law School had only 38 full-time matriculants this fall, down from 387 a decade ago.]

How the Transparency Movement Reinflated the Law School Bubble

Of course I’m click-baiting you! But in place of the vicious criticism you were expecting, you shall receive bitter irony instead. Frankly, I think you’re coming out ahead, so be thankful, you ingrate!

So why did I flag you down?

It appears the Bureau of Labor Statistics is changing its employment projections methodology, specifically its measure of how many workers will be replaced in occupations in its 10-year projection periods—as opposed to the number of positions that the economy will create. Apparently this is a project the BLS has been engaged in for a while, and the comment period is over, so why I didn’t know about it before now escapes and saddens me.

The BLS’s employment projections have long been a go-to source for law school critics. The ~24,000 projected annual lawyer job growth rates they showed every two years contrasted excellently with the ~40,000 law graduates each year (and the even greater number of bar admits). No longer.

Background: Developed in the early 1990s, the BLS’s occupational replacement methodology uses a simple age cohort analysis. For instance if there are fewer employed lawyers in the 55-59 cohort today than there were in the 50-54 cohort five years ago, then you have a rough number of how many people in that age group left the occupation. Do that for all the adjacent cohorts and add together all the negative net changes, and you have the replacement rate. The math behind it is a little bit more complicated and there are some exceptions, like if the occupation is projected to decline overall, but that’s the basic concept.

But the BLS isn’t satisfied with this methodology any more. It suffers from sample bias for occupations with small numbers, and it leans on the assumption that it’s mostly young workers who replace older ones. The bureau is interested in finding the “actual” replacement rate, i.e. one that includes workers transferring to other occupations or leaving the workforce altogether who are concurrently replaced, not just retirees, whom the current methodology tends to capture. This way the projections will include everyone who switches jobs, e.g. fast-food workers for retailer clerks and vice versa, when such changes would otherwise net out under the current methodology. The new methodology is based on Current Population Survey data and regression analysis (which always turns out well) rather than historical trends.

As evidence that the new methodology achieves its purpose of finding more replaced workers where the current one does not, the BLS points to … lawyers because there are external data on employment rates. I’m totally not kidding. It writes (and I editorialize in brackets):

Not all law school graduates become lawyers, but the American Bar Association (ABA) conducts a census of employment outcomes for all law school graduates in order to count the number who find employment in positions that require bar passage (effectively, lawyers). Since ABA began collecting this data in 2011 [Not correct, see below], the number of graduates finding employment in such positions has averaged 29,000 per year. Because some graduates who don’t immediately find such positions may become lawyers later in their career (for example, many graduate become law clerks, a position that does not require bar passage, for a few years before becoming lawyers) [Citation please?], this number [the 29,000 graduates—it’s unclear] should be less than the total number of new entrants into the occupation.

Under the current method, BLS projects an average of 19,650 job openings per year, while the new method projects 41,460 openings per year [!!!!]. Again, no direct comparison between the ABA number and the BLS numbers is possible due to conceptual differences [which, of course, does not rule out indirect comparisons], but the results under the current method are significantly below the actual number of new graduates finding work in the occupation [!]. The new method projects a higher number of openings, which allows for additional entrants not immediately after completion of a law degree.

Okay, data on law graduate unemployment has actually been around for many years, e.g. the NALP and the Official Guide, crude though it was. I’ve written about the strong correlation between falling proportions of graduates finding bar-passage-required jobs and graduates taking JD-advantage jobs or not finding any work. This is evidence of a saturated lawyer market, even if it’s caused in part by slack aggregate demand.

The BLS could also look at lawyer-licensing rates courtesy of the National Conference of Bar Examiners, which it probably should be doing instead of law graduates. So when the BLS says the data are only now available, it’s not doing its homework.

However, the irony—and this is really incredible—is that all those demands for transparency in the employment data, after accusations of misrepresentation and deceit, have perversely led the government to (indirectly) compare the number of graduates in bar-passage-required jobs to its current estimates and use it as evidence that those graduates must be finding bar-passage-required jobs long after graduation.

As arguments from incredulity go, this is a pretty good one. As usual, there are other fallacies.

For one, the BLS is assuming that all occupation changes are positive sum. Everyone who leaves law practice is making the best choice among alternatives (ultimately), so too does everyone who chooses to become lawyers. Thus, departing lawyers need to be replaced. The new methodology automatically rejects the possibility that new entrants force out existing ones and that if more people chose better alternative occupations to law, then fewer lawyers would exit, and everyone would benefit. (Except law professors.) Now, whenever someone leaves the law, there is by definition a shortage, a misallocation of human capital that can only be met by sending more people to law school.

…Especially in light of the eye-exploding 41,460 annual job growth rate, courtesy of the BLS’s new, inscrutable regression approach. It’s certain that some number of lawyers enter practice long after graduation, but assuming 29,000 grads get bar-passage-required jobs, that leaves another 12,500 lawyer jobs each year that must go to earlier graduates despite the swelling numbers of JD-advantaged, unemployed, and other grads who aren’t absorbed earlier.

This leads to an unbelievable replacement rate under the new methodology: If 834,700 projected lawyer jobs in 2022 less 759,800 lawyer positions in 2012 yields 74,900 jobs due to growth, then the cumulative replacement rate (74,900 – (41,460*10 years)) is 339,700 lawyer positions that will “need” replacement over the next decade. If the legal profession has been going through a 44 percent 10-year replacement, then there should never have been a backlog to begin with, and it’s something we should have heard about by now. By contrast the current model shows only a 16 percent 10-year replacement rate.

There’re a few other reasons why the methodology change isn’t a good idea, like aging lawyers, but this post isn’t about that. Rather, it’s a rebuke to everyone who crusaded for transparent employment data based on the rational, debt-guzzling law student assumption. Thanks to them the law schools will soon be saying that the graduate-to-annual-job ratio is (indirectly) in equilibrium right now. The demand for lawyers is there, they’ll say, just after an undetermined period of crippling malemployment … and at a time in their careers when no one is measuring it … except for those After the JD people who found that 24 percent of bar-passers weren’t practicing after 12 years.

Cheekiness aside, it’s likely the BLS (and state governments) will change their projections methodologies accordingly despite law being an unrepresentative occupation with substantial early-career turnover. Be prepared for the dark age of lawyer employment projections.