Law grad employment rate hits lowest mark in 15 years

Employment for recent law school grads is at its lowest rate in fifteen years, and employment at jobs requiring bar passage is at its lowest rate ever, according to the NALP Employment Report and Salary Survey for the class of 2010 released on June 1. The survey also reported data on part-time, temporary, and non-legal jobs figures that cast the overall employment rate in an even more negative light.

The overall employment rate for the Class of 2010 is 87.6 percent, a low that hasn’t been seen in the legal market since the Class of 1996 faced a rate of 87.4 percent. In a span of four years, the employment rate dropped from a 20-year high of 91.9 percent in 2007 to its present state. Employment numbers under 87.6 percent in the last twenty years were rare, only coming in the aftermath of the 1990-91 recession.

For anyone who’s been following the legal job market over the last few years, these latest figures are not terribly surprising, said James Leipold, Executive Director of NALP. Leipold said the overall employment rate for the Class of 2010 reflects a group who had to tackle fall recruiting during the worst of the recession in 2008, when many firms cancelled summer programs altogether, had much smaller programs, or didn’t make offers to summer associates they did have in their programs.

Some results were surprising to Leipold, however, particularly the number of graduates employed in private practice, which fell to 50.9 percent. This year’s private practice employment rate is a dramatic 5 percent drop over the numbers for the Class of 2009, and indicates the huge loss of jobs and job opportunities at big firms, Leipold said.

“The shift in overall private practice numbers to just over 50 percent is a big historic shift, he said. “That number had been tightly ranging between 55 to 58 percent for almost thirty years.”

It’s common in economic hard times to see a shift from employment at large firms to small firms and from small firms to solo practitioners.That shift has occurred over the last few years, with 59 percent of private practice jobs at firms of 50 employees or smaller. But according to Leipold, the actual erosion of jobs in private practice as a whole is something the market hasn’t seen before.

“Part of the question is, will big law firms ever go back to hiring large classes?” Leipold asked. “That’s certainly a trend we’ll be watching.”

Also underpinning the overall employment rate of 87.4 percent are other survey findings that paint a stark picture about employment realities for the Class of 2010.

For example, only 68.5 percent of respondents were employed at jobs that required bar passage, the lowest percent since NALP started tracking that figure. Leipold said the figure is a pretty good proxy for determining how many graduates are actually practicing law.

In addition, almost 11 percent of respondents were in part-time jobs, and over 27 percent of jobs taken by members of the class were reported as temporary. More than 8 percent of jobs were both part time and temporary.

One difference in the employment rate during this economic recession, as opposed to recessions in the past, Leipold said, is that over three percent of jobs were created and funded by law schools.

“It’s different this time around because schools have been much more active to try to mitigate the impact of the market, and create those opportunities for [the students], often at [the school’s] own expense,” Leipold said.

Although he doesn’t want to speculate too heavily on where the employment rates will go from here, Leipold said the past two years’ recruitment data does foreshadow what prospects are to come for the class of 2011.

NALP’s recruitment statistics show some increase in hiring volume, and more firms going back to hire 3Ls after the end of their summer programs in 2011. But Leipold doesn’t see much hope for improvement until the Class of 2012 graduates, as the recession continues to works its way through the economy.

 

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