Following up on yesterday’s news that the legal sector gained 1,000 jobs in September, I have done some research to look at the jobs gap in the legal market to give some context to the gain of 1,000 jobs. A “jobs gap” is traditionally thought of as the number of jobs it would take to get back to pre-recession levels. In this case, though, the number of lawyer jobs has significantly increased since 2003, so what we need to look at instead is the number of jobs in light of the number of new graduates entering the market. The resulting jobs gap number is mind-blowing.

Methodology for Determining the Numbers

Just so we are clear up front, I’m not a statistician, an employment expert, or anyone who claims to know anything about the undoubtedly complex formulae that comprise job estimate numbers. I simply relied on what seemed to be pretty reliable numbers from pretty standard sources of data.

The numbers on current lawyer jobs came from yearly estimates for 2003–2011 made by the United States Bureau of Labor Statistics. They have a general snapshot of the legal employment market as of May of 2011, and links to various breakdowns of occupational employment and wage data for the years at which I looked. I limited my search to the years 2003–2011 because those were the years for which the National Sector NAICS Industry Specific Estimates were consistently available. (Prior years only used variations of X-digit NAICS or SIC industry number identifiers, and I wanted to ensure I was using consistent data for comparisons.)

Figures for total law graduates per year were taken from the yearly summaries of Recent Graduates produced by NALPthe National Association for Law Placement. Each year’s Total New Law Grads number was based solely on that year’s “Selected Findings from Employment Report and Salary Survey.” The 2011 Selected Findings can be found here [PDF], and other reports can be found by looking under the specific year listed on NALP’s website.

I pulled the numbers solely for those employed as lawyers from the Bureau of Labor Statistics information—which are broken down by industry (e.g., construction, utilities, health care, professional services, etc.)—listed them by year, and totaled the numbers for total estimated lawyers employed per year. The Bureau of Labor Statistics’ data do not include self-employed lawyers (so solo practitioners are out, but solo practitioners likely only account for around 4% of lawyers since 1999), and the numbers are rounded to the nearest 10. This also means that non-lawyer legal sector jobs (e.g., judges, judicial law clerks, arbitrators, paralegals, etc.) are not included in the estimates.

The Results

After pulling and totaling the numbers for employed lawyers per year and the number of law grads, I produced a spreadsheet with all the relevant lawyer employment data. The employment numbers are listed by year on each tab, and a “Yearly Totals” tab lists the results for legal employment per year, the rate of change in legal jobs by year, and the number of law school graduates per year. Here are the important numbers:

The number of lawyers employed since 2003 has actually increased every year except for 2008, when approximately 4,290 jobs were lost. Here is a chart outlining the growth between 2003 and 2011.

The net gain in lawyer jobs since 2003 has been approximately 51,540.

However, since 2003 the total number of graduates of law school has been 376,201—that’s 67% of the total number of lawyers employed in 2011 (563,520).

To determine the size of the jobs gap that currently exists for lawyers, we just need to subtract the net job gain since 2003 from the total number of law graduates since 2003, giving us a grand total of 324,661 law school grads who are not currently employed as lawyers. That is the number of jobs the legal industry would need to add to employ every law school graduate as of the end of 2011.

Given the increase in 2011 of 2,180 jobs, and the number of law school graduates in 2011 being 41,623, the legal market would need to add 39,433 jobs just to catch up for that single year.

The Solution?

Well, there’s your problem. There is no immediately evident way to suddenly add another 67% of total lawyer jobs to the market, causing an amazing glut of unemployed or underemployed lawyers in the market. Some law schools have begun limiting their class sizes, but with the rate of increase of lawyer jobs in the past few years, law schools would need to shrink their class sizes by around 90% to even out the supply and demand.

The first part of solving a problem is recognizing that there is a problem. That has been pretty clear for a number of years. But what do we do about it now?

(photo: Shutterstock: 101835361)

(See the latest installment in this ongoing story.)

16 responses to “Lawyer Jobs Account for Only 10% of New Law School Grads Per Year”

  1. Alex says:

    I don’t perceive that this is a problem. Attorney fees and services are certainly outsized compared to what the profession actually does, which for the most part is transactional. As the supply of lawyers goes up, the cost of legal services will go down, perhaps to the point that legal services really will be affordable to most everyone who needs it. The superstars and litigators who generate a positive return on investment will of course continue to make larger than life salaries, but for most of the fresh faced graduates and transactional lawyers? There really is no reason they should be billing more than say, a CPA, and perhaps the ridiculous cost of legal materials, treatises, and services such as LexisNexis and Westlaw will finally come down to compensate.

    • Sam Glover says:

      The “supply” of law school grads may be going up fast, but the “supply” of lawyers isn’t moving very much. That’s why the cost of legal services isn’t changing much — and probably won’t, at least not quickly.

    • Graham Martin says:

      Hi, Alex. I agree with you generally that the legal sector needs to correct itself with regard to expectations on costs and fees, but disagree that the unemployment situation is not a problem. Any segment that is routinely pumping out ten times more graduates than there are available jobs in the marketplace has something fundamentally flawed with its model, and hopefully something will change.

      I suspect that the immense discrepancy between available legal jobs and available lawyers will help shape a change in the industry, with more law grads becoming either solo practitioners, or not going into practice at all. Those who take the former road will need to adjust their expectations about what form their jobs will take. I’m inclined to think that more people will find themselves in positions similar to mine, where I am charging far less than firm-bound attorneys to help individuals address legal problems that are still significant to them, but for which they do not have unlimited funds. I love my work and take very seriously my clients’ issues, but know that they are not Scrooge McDuck, with a vast vault of gold coins with which to buy legal services.

      It is likely we are in the middle of a market correction, and the number of law school students will begin to drop to levels more commensurate with what the market will bear. But I’ll be hard-pressed to think that having nearly 325,000 people in the country who are unable to practice the profession for which they trained is not a problem. It still sucks for each and every one of them, which I think is a huge problem.

  2. Timothy Cover says:

    Don’t these numbers fail to account for lawyers who retire? To more accurately calculate the jobs gap, shouldn’t one combine both the jobs added and the jobs vacated voluntarily, and subtract that number from the number of new graduates? Retirement data might be hard to find, though, and I’m not too hopeful that it would make an encouraging difference.

    • Graham Martin says:

      Good question, Timothy.

      My understanding from the data provided by the Bureau of Labor Statistics is that those are the numbers for employed lawyers for a given year, so it wouldn’t matter if lawyers retired. Their jobs would be taken over by others AND more jobs would have been produced as well to come up with the growth numbers laid out on my spreadsheet. Presumably lawyer attrition is taken into account with the job estimates, but the number of jobs are still growing.

      That said, it doesn’t seem to matter much since the job growth is so small relative to the number of new law grads entering the market each year. Sure—some new grads are getting jobs that were vacated by retiring lawyers, and so the numbers might be slightly off, but I doubt the number of retiring lawyers is so significant as to make up for the number of excess graduates each year. We would need a massive number of practicing lawyers to retire simultaneously to make a dent in the number of unemployed law school graduates.

      Does that make sense?

      • If 5% of the bar retired, died, decided to stay home with kids, etc., each year, that could be somewhere in the neighborhood of 225k jobs since 2003, which is a pretty big number. Plus, some percentage of new lawyers do not practice by choice because they go into business, politics, merchant marines, etc. So although there clearly are more new law grads than there are jobs, it is not clear to me that the situation is quite as bleak as you have painted it.

        • Graham Martin says:

          That seems right, Eric. I did some calculations, and the number at 5% attrition per year would be 244,757. So if that is subtracted from the original jobs gap figure I came up with, we would only have 79,905 unemployed lawyers in the country. That is far fewer, for sure—but still a pretty bad number.

          Where did you come up with the 5% number? Many of the practitioners I have spoken to about practicing law tell me that they never really plan to stop practicing, which makes me wonder just how much attrition there actually is. Clearly people die (and probably stop doing things like practicing law and voting), but I would be interested to see what that number really is.

  3. Pat says:

    Graham: you use the number of law school graduates to compare with the number of lawyer jobs. You really should use the number of persons/graduates who pass the bar. Only those who pass the bar may practice law. I believe that those who do not take the bar and those who fail the bar would reduce the number the job gap. I do not know if that number would significantly reduce the gap, but it is the more appropriate number to use for your comparison.

    • Graham Martin says:

      Hi, Pat.

      That’s probably true, although I was unclear whether there was any reasonably circumspect way to gather those numbers for all the years at which I was looking. NALP does publish some of those statistics in some of its yearly reports, but it’s not entirely clear from their reports how many people passed the bar. I thought about possibly doing a bar passage analysis for all 50 states, but (a) I wasn’t sure that all the data would be immediately accessible, and (b) individually pulling numbers for all 50 states for 9 years might be impractical.

      I agree with your assertion generally; it makes sense. I’m just not sure that there is any easy way to access that data. If you or someone else has access to those numbers, I would be happy to revise my numbers.

  4. Jeff Buckner says:

    I agree with Pat, how many of the law school grads actually passed the bar? Better yet, how many of these law school grads passed the bar and chose not to practice? I personally know several law grads who are now professors, politicians, business owners, etc who never used their law degree to practice law. How would taking these variables into account effect the number within the gap?

    • Graham Martin says:

      Like I said to Pat, I am happy to re-figure the numbers based on updated data. If anyone has reliable, consistent access to figures that would modify my analysis, I would be interested to see them and investigate their impact.

      As a lawyer who would like to practice with a firm myself, I have no vested interest in keeping the situation looking more dire than it needs to be. But it’s important to me that I use only numbers that come from reliable sources and which are consistent across time and place.

  5. Phil Cali says:

    I think Eric is correct that the situation may not be as bleak as it seems at first glance. Since the increase in lawyers assumes a stable baseline of practicing lawyers, and since there is likely a fairly consistent percentage of lawyers who retire, die, etc., that would open up a significant number of slots for the new lawyers(having passed the bar) to move into. The various state bars might have data related to that question.

    I’m curious, not being a lawyer myself, as to the experience you have regarding unemployed or under-employed new lawyers. Do you meet or hear about a large number of new law school grads, or lawyers having just passed the bar, having a hard time finding full-time, lawyer positions?

    • Sam Glover says:

      Oh, the situation is absolutely bleak. It’s just a question of how bleak.

      Of course, everyone should be equally worried that all those unemployed grads will find something to do with their degrees.

  6. Mario A. Reed V.V.G. says:

    As a 2011 May graduate, I can personally speak to the bleak job market. What consistently seems to be the case is that there are no entry-level positions available for a recent graduate to obtain the necessary experience to learn the practice of law.

    I have pretty much determined that private practice as a solo practitioner is my only alternative, and once I am officially sworn-in I will be hanging out my own shingle. However, after clerking for the local Public Defender’s Office for a year, I am certain that the reason why there are not enough legal jobs is because of the tumultuous economy.

    In Cook County, I personally clerked for attorneys who have case loads of 60 to 70 clients at a time, which is hardly the ideal situation. However, budget windfalls, lack of property tax revenue flooding in, and an overall lack of money in the system (for whatever reason) creates a scenario where there is a gargantuan need for attorneys, but no money to pay them.

    Such a situation spills over to the private sector as well, as in order for me to be a private attorney and pay student loans back I have to charge a certain rate, but there are not many criminals who can afford such a rate, so I am then in a perpetual cycle of catch-up, thanks in large part to the job market for attorneys being bleak. Thus, I can assure you and everyone else reading the article, that the market is in fact bleak.

    • John Smith says:

      As a 1L, my school is preaching to us that to be competitive, before graduation you should have 400 hours of legal work completed. Anyone who I have spoken to about future employment, the number one thing they are looking for is legal experience. They do not want to waste time training new grads.

      As for the original post, there are more grads each year than new jobs created. At the same time there are multiple variables that are not accounted, such as: alternative careers, bar acceptance, and attrition. At the end, I think only doctors do not worry whether they will get a job post graduation.

      Personally, I am starting to question whether I want to be a lawyer but I also know that having a law degree will not hurt me in the future.

  7. Spencer says:

    You are ridiculous. Your numbers do not account for retiring lawyers by comparing the growth of the sector simply to law graduates is no way to do a statistical analysis. or attorneys who move to a different field. There is significant movement within any employment industry that you simply discount. Don’t quit your day job.

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