NALP Bulletin, December 2016

by James G. Leipold, Executive Director, and Judith N. Collins, Director of Research

With the publication of the employment and salary findings for the Class of 2015, we noted that the class secured a smaller number of jobs in private practice than any law school graduating class since 1996. That observation provoked a number of questions from NALP members and the press, and led us back to the numbers to see what other stories they held.

We often talk about law grad jobs in terms of the percentages of graduates who work in various kinds of jobs or for various employers, but sometimes it is helpful to look at the raw numbers underlying the percentages. The table entitled "Overview of Entry-Level Jobs by Sector, 1994-2015" shows the total number of jobs by sector for each class going back to 1994, and the following observations are drawn from these data. Taken together, they tell stories of both remarkable change and constancy in the entry-level legal employment market.

Private Practice

The sizes of the graduating classes in 1996 and 2015, 20 years apart, were almost identical according to the ABA, the Class of 2015 having only 56 more students than the Class of 1996. Perhaps it is no surprise then that the two classes found a similar number of jobs in private practice. In some ways, the number of jobs secured is related to the size of the class, and a smaller number of graduates will find a smaller number of jobs. So it should not be too surprising that the Class of 2015 found the smallest number of jobs in private practice of any class since the Class of 1996 — except that the Classes of 1998, 1999, 2000, 2001, 2002, and 2003 were all smaller than the Class of 1996, and each of them secured more jobs in private practice than did the Classes of 1996 or 2015. Also, the coverage of NALP's employment data in 1996 was far less robust than it was for the Class of 2015. For 1996, NALP had employment status data on just 84% of all law school graduates, compared with nearly 97% of all law school graduates from the Class of 2015. That means the number of jobs reported overall, and specifically the number of private practice jobs reported for the Class of 1996, is an undercount — there were more jobs obtained than reflected here. That means that the relatively small number of private practice jobs obtained by members of the Class of 2015 is historic, important, and worth paying attention to.

Let's dive in a little deeper, always keeping in mind that lower levels of employment status coverage in the earlier years of this time period deflate numbers compared to what they would have been had the coverage been comparable to the 93% or better coverage since 2007. (See the line labeled "% of Class for which Employment Status was Known" in the table entitled "Overview of Entry-Level Jobs by Sector, 1994-2015.")

Big Law

The number of jobs in Big Law (for our purposes here, we'll call Big Law firms of more than 250 lawyers) grew (mostly) steadily from 1994 to 2008, adding about 5,250 entry-level jobs during that period (with just a slight and temporary contraction for the Classes of 2003 and 2004 following the dot.com collapse). From 2008 to 2011, following the Great Recession, the number of entry-level Big Law jobs collapsed, and more than 3,100 jobs disappeared. Since then, the number of Big Law jobs has steadily risen, increasing by more than 1,300, but for the Class of 2015 there were still more than 1,800 fewer entry-level jobs in large law firms than there were for the Class of 2008.

Small Law

Conversely, the number of jobs in Small Law (for our purposes here we'll call Small Law firms of 1-10 lawyers) was relatively flat from 1994 to 2004, with numbers ranging from about 4,900 - 5,900 jobs, except in 2000. Following the dot.com collapse, the number of jobs in Small Law jumped by over 600 for the Class of 2005, held steady for each of the next classes through 2008, and then grew again for each class, peaking for the Classes of 2012 and 2013 at over 8,000 jobs. The two classes with the overall lowest employment rates (and the two largest classes to ever move through the American legal education pipeline) secured the largest number of jobs in Small Law of any classes ever. Why is that? It was not necessarily because Small Law was thriving in the aftermath of the recession, but faced with a dearth of opportunities at larger law firms, many graduates created opportunities for themselves in small law firms out of necessity. For the Class of 2015, about 1,400 fewer Small Law jobs were secured compared with 2012 and 2013, and the numbers of jobs in the smallest law firms now look very similar to what they were before the recession. As Big Law opportunities increased by about 1,300 over that period, Small Law jobs secured decreased by about 1,400, even as the graduating class size fell somewhat precipitously. That see-saw between Big Law and Small Law is complex, but important.

Mid Law

Meanwhile, Mid Law job opportunities for new law grads have collapsed. For our purposes here we will call firms with between 26-100 lawyers Mid Law. After some modest growth from 1994 to 2008, the Mid Law job market, always a relatively small piece of the private practice pie for new grads, collapsed and has continued to shrink, with members of the Class of 2015 securing just 1,764 jobs in Mid Law, fewer than ever in the history of NALP record keeping. Why is that? Certainly in part it is because there are far fewer firms in this Mid Law category than ever before, as consolidation in this market through mergers and dissolutions continues to feed the growth of ever larger and larger law firms across most markets.

Education

Jobs in education, or academic jobs as they have been called up until recently, more than doubled in the aftermath of the recession, and have now fallen back down to pre-recession levels. The spike began in 2008 and peaked in 2010, with the number of jobs in education growing by over 500 over those three years, topping out at 1,351 for the Class of 2010. At just 646 jobs for the Class of 2015, academic jobs are now back to about where they were before the recession. When lawyer jobs are scarce, graduates take other kinds of jobs. But this spike represents a singular phenomenon, with law schools hiring recent grads for on-campus work of various sorts during the worst of the recession, mostly in jobs as research assistants and other temporary campus jobs.

Public Interest

Jobs in public interest also spiked during the recession, for largely the same reasons that jobs in education did. Law schools implemented large public interest fellowship programs in the years following the recession, programs that paid law grads stipends to work in a variety of settings, but largely for public interest employers, and in particular for civil legal services organizations, not only to gain practical skills, but also to contribute in an area of great need by providing civil legal services to indigent clients. Over the longer arc, the number of public interest jobs, which were well under 1,000 for many years, seemingly spiked with the Class of 2004, but that jump actually represents the year in which NALP began counting public defender jobs as public interest jobs rather than government jobs, as they had previously been counted. For that class, about 600 jobs shifted from the government employer category to public interest. From 2008 until 2013, more than 700 additional public interest jobs were added, largely on the strength of law school funding. In the two years since, as school funding has started to dry up and as the ABA created disincentives for law schools to fund graduate jobs, that number has fallen off by more than 300 and will likely continue to fall further.

Government

The number of government jobs taken by law school graduates has been remarkably steady over the long arc of time. Having said that, the period from 2004 to 2010 was a period of net growth in the number of government jobs taken by graduates. As noted above, the government jobs count lost about 600 jobs in 2004 when public defender jobs were recategorized as public interest jobs. Then, between 2004 and 2010, over 1,000 additional government jobs were added, many of them jobs with the federal government. Federal government job numbers peaked in 2010, and in that year as a percent of all government jobs eclipsed those in both state and local government, a run-up that may be explained by hiring initiatives that came about as the result of greater regulation in a number of areas under the Obama administration. Since then, the actual number of government jobs secured by graduates has fallen, with the Class of 2015 securing nearly 500 fewer government jobs than the Class of 2010.

Judicial Clerkships

The number of judicial clerkship opportunities has remained even steadier, with the market providing just about 3,300 clerkship opportunities in both 1995 and 2015. The percentage of jobs represented by clerkships has varied with the size of the graduating class, but the actual number of jobs has changed very little, rising slightly from 1994 to 2005, and then falling slightly and flat-lining back at 3,300 after the recession.

Business

Finally, the number of jobs captured in the broad business category has changed a great deal over time. For the Class of 1994 there were just about 3,200 jobs taken in the business sector, and for the Class of 2013, there were nearly 7,000 — more than double the number counted 20 years ago. The Class of 2013 is an interesting case study. That is the class that had the lowest overall employment rate, and therefore the highest unemployment rate, of any class since the Class of 1993. And, even as the number of jobs in private practice was recovering after the recession, the number of jobs taken in business also peaked as did the size of the graduating class. This was the class that had the highest number and percentage of graduates working in business. It seems clear that when there are fewer jobs available in private practice, graduates take other kinds of jobs, and many of those end up being in business, which represents all private sector employment that is not in a law firm.

And so…

None of this is startling or even terribly surprising, but it is interesting to see how the numbers play out over time. The two variables that seem to have the most impact on the overall employment picture for a particular graduating class are the size of the graduating class and the relative availability of jobs in Big Law. Many other opportunities are relatively fixed, e.g. jobs in government and judicial clerkships, and others are manufactured or discovered of necessity in hard times, including school-funded jobs, jobs on campus, jobs in Small Law, and jobs with private sector businesses other than law firms. There is no doubt that in the immediate aftermath of the recession there was a one-time structural change in the job market, when over 3,000 Big Law jobs were lost. In many ways, however, over a period of more than 20 years, the entry-level job market for new law school graduates has otherwise remained remarkably steady.

These are some of the stories we see in these numbers. We would be happy to hear from you about other stories you see that these numbers tell us.

Overview of Entry-Level Jobs by Sector, 1994-2015

* These figures are for firms of 251+ lawyers; the 501+ category was not tracked in these years.

Overview of Entry-Level Jobs by Sector, 1994-2015, continued