Legal Job Market On Life Support
Close to half of all 2012 law school graduates nationwide have been unable to land a law-related job, according to the latest numbers.
Many of them have given up and accepted employment outside of the law.
One reason is an economy that is still struggling.
Another: law firms are trimming associates and support staff and slashing compensation for partners, as reported here and here. This is happening even as the tide of new law graduates keeps rising.
All of which has some experts calling for an overhaul of the way we educate lawyers and prepare them for the workforce.
“Legal education is in crisis,” Hastings College of the Law chancellor Frank Wu told the San Jose Mercury-News. “Nobody has seen anything like this. There are too many lawyers, there are too many law students and there are too many law schools.”
In Wu’s world, only one in four recent law graduates have settled into law jobs.
The Numbers Are Not Encouraging
Here is a snapshot of the legal market through September 2013:
- 46,364 law graduates in 2012
- 56 percent have gotten law jobs
- 11 percent are unemployed or seeking employment
- 29 percent have accepted non-law jobs
- 4 percent have taken law-school funded positions
“The bottom line is that we have a terrible legal job market,” according to Above the Law. “Of the 60,000 legal sector jobs lost in 2008-9, only 10,000 have come back. So the industry is down 50,000 jobs and there is no reason to believe they will ever reappear. If you ignore school-funded positions (5 percent of the total number of jobs), this market is worse than its previous low point of 1993-4.”
This summer, Weil, Gotshal & Manges, one of the nation’s largest, prestigious and most profitable law firms, laid off seven percent of its associates, cut compensation for dozens of partners and fired 110 secretaries and support staff.
“Big corporations, facing pressures of their own, have clamped down on legal expenses,” reports the New York Times. “They have beefed up their in-house legal staffs and perform much of the work themselves. They are demanding that for routine assignments like document discovery, work be sent to outsourcing firms and contract lawyers rather than given to expensive associates. And they ask for discounts or capped fees at places like Weil, which charge more than $1,000 an hour for some partners’ work.”
And Weil was only one of a number of large firms that have wielded the employment scalpel.
Why Jobs Are Scarce
It is no secret that the poor economy is the number one reason for the grim hiring situation . Other reasons, some of which were recited in the Times piece, include:
- Increasing commoditization of legal services
- A rise in legal outsourcing
- Client demands for cost controls
- Erosion of the traditional partnership track
- Waves of new attorneys coming from law schools
This last point has sparked a lively debate among academics, headhunters and hiring partners.
“Once considered a sure bet for a stable, well-compensated career, law has become a riskier gamble,” according to the San Jose Mercury-News. “It’s not only harder to become a lawyer now, it has become much more costly. Law schools are under pressure from all sides. Prospective students balk at the high tuition, while firms assert that graduates leave school unequipped to practice law.”
Even the Commander in Chief has weighed in. In a recent speech, President Obama suggested that law schools cut back to two years instead of three, with the third year being spent getting actual experience as a law firm clerk or intern.
Why should practicing lawyers – especially those who have been out awhile and have already paid their dues – care about the plight of newbie JDs?
Because they are your colleagues and your competitors. And because they are the future of our profession.
Jay Reeves a/k/a The Risk Man is an attorney licensed in North Carolina and South Carolina. Formerly he was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. Contact jay@lawyersmutualnc.com, phone 919-619-2441.
Sources:
- Above the Law http://abovethelaw.com/2013/06/are-the-weil-layoffs-the-start-of-a-biglaw-trend/
- San Jose Mercury-News http://www.mercurynews.com/education/ci_24192739/law-schools-at-crossroads-weak-job-prospects-high
- New York Times http://dealbook.nytimes.com/2013/06/24/big-law-firm-to-cut-lawyers-and-some-partner-pay/?_r=0
