Why there will be more jobs than graduates in 2016

It may be the best time to apply to law school in years. 

With law school enrollment dropping, some say it is only a matter of time before the number of graduates exceeds the number of full-time legal jobs. It is basic economics, they argue. When there are more jobs than graduates, employers will increase salalries to compete for the scarce reseources. And while it would seem to be a simple math equation to figure out when that will occur, different law professors can’t agree on the date.

Paula Young, a law professor at Appalachian School of Law in Virginia, predicts that full-time legal jobs will exceed the number of law school graduates in 2017. But Deborah Jones Merritt, a law professor at Ohio State University, did her own mathematical analysis and suggests the date is closer to 2021.

The National Jurist did its own analysis and found the date in either 2018 or 2019, but that the market will reach its historical equilibrium with the Class of 2015, and the job prospects for the Class of 2016 will be better than any class in the last 20 years. 

The disparities between the three studies make a big difference for pre-law students deciding whether to apply this year or not. Today’s applicants will graduate in 2017.

Young, who published her analysis on a blog titled The Red Velvet Lawyer, assumed that first-year enrollment would decline by eight percent each year through the 2015 entering class. It has declined by an average of 8.7 percent per year since 2010.

She also assumed a 12 percent attrition rate for each class, based on a historical analysis. The attrition rate for the last ten years averaged 12 percent. Given this, the 2015 entering class would graduate approximately 28,000 students, or 18,000 less than the class of 2013, which graduated 46,478.

Finally, she assumed new full-time jobs would remain steady at 33,759, of which 31,000 were jobs that required bar passage, placed graduates at an advantage because of their law degree or was another form of professional employment.

Young used data provided by the Law School Admission Counsel and data provided by the National Association for Law Placement.

Jones Merritt, however, disagrees with the interpretation of employment.

“The Class of 2012 found only 30,453 full-time, long-term jobs that drew upon their law degrees (either by requiring bar admission or offering a JD advantage),” she wrote. “That number of jobs won’t satisfy even a very slimmed-down Class of 2018. Even if law school enrollment continues to drop 8% per year, a daunting prospect for law school budgets, we won’t be able to celebrate a match between graduates and jobs until the spring of 2020, when the Class of 2019 registers its employment results.”

Even then, she argued, that calculation assumes law graduates are satisfied with JD advantage jobs.

“That seems like a dubious assumption,” she wrote. “We know that recent graduates have not been satisfied with those jobs. Among 2011 graduates, 46.8 percent of those with JD Advantage jobs reported that they were seeking other work. Graduates have been taking JD Advantage jobs to survive, but they are not satisfied with those positions.”

She said the Class of 2012 found only 26,066 full-time legal jobs, and that would mean balance would not be reached until 2021.

The analysis by both assumes that the number of jobs remains flat and that the balance point between supply and demand is 100 percent full-time legal employment by graduates within nine months of graduation.

But since NALP began tracking data in 1985, the percent of recent graduates who were employed in full-time legal jobs has never exceeded 84.5 percent. In fact, from 1998 to 2008, it averaged 75 percent. That is because many graduates get jobs after the nine-month mark, and others choose not to pursue full-time or legal employment.

Based on this, the Class of 2016 will reach the historical equilibrium point (75 percent employed in full-time legal jobs), assuming the number of jobs remains flat. If there is modest growth in job numbers, the Class of 2015 could reach the historical equilibrium point.

During the past 15 years, an average of 30,080 law school graduates had full-time legal employment within nine months of graduation. That is 4.5 percent higher than the current figures.

Last June, Ted Seto, a law professor at Loyola Law School, Los Angeles, made the case that demand would exceed supply as soon as 2016 based on a modest rate of growth for legal jobs.

“By 2016, the per capita supply of law grads for entry-level jobs will be down by more than 25 percent from 2013 and more than 16 percent below America’s modern historic low in 2001,” he wrote. “Unless something truly extraordinary has happened to non-cyclical demand, a degrees-awarded-per-capita analysis suggests that beginning in fall 2015 and intensifying into 2016 employers are likely to experience an undersupply of law grads, provided that the economic recovery continues.”

If the current trends in employment and enrollment continue, data supports Seto’s conclusion that there will be an undersupply of lawyers with the Class of 2016. The Class of 2017 would enjoy a market where job demand was far better than any previous class since NALP began tracking data.

The National Jurist will include a chart with all data in the January issue.