The Legal Job Market for New Graduates Looks a Lot Like It Did 15 Years Ago (Only Worse)

June 2011

Commentary and Analysis on Class of 2010 Selected Findings
by James Leipold, Executive Director

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Read the full report: Employment of the Class of 2010 — Selected Findings (PDF)

The tail of the "Great Recession" is long and there are few bright spots in the employment profile for the Class of 2010. As noted above, most of the structural weaknesses in the job market faced by the Class of 2009 intensified for the Class of 2010, and new high- and low-water statistical marks have been set. And, in most cases, the changes that have occurred over two years' time, from 2008 to 2010, are the most dramatic.

Consider that a lower percentage of law school graduates reported having a job for which bar passage was required than ever before (68.4% for the Class of 2010 compared to 74.7% for the class of 2008). Even more startling, perhaps, is the fact that only 50.9% reported working in private practice. You have to go back to 1975 and 1976 to find comparable figures. Since 1993 the percentage of graduates reporting jobs in private practice has varied only between 55% and 58%. And, within the private practice ranks, the kinds of firms where graduates found jobs changed dramatically. The percentage of private practice jobs with large law firms of 501 attorneys or more fell more than five percentage points in a single year to 20.5% for the Class of 2010 compared to 25.6% for the Class of 2009. On the other end of the scale, jobs with firms of two to ten lawyers represented 39.1% of all private practice jobs taken by members of this class, a rise of seven and a half percentage points in two years, up from 31.6% for the Class of 2008. And, the number of graduates reporting that they are working as solo practitioners has similarly soared over two years from 3.3% of all private practice jobs for the Class of 2008 to 5.7% for the Class of 2010. Taken together, jobs at firms of 50 or fewer lawyers accounted for 59% of all private practice jobs.

Consider that law school jobs programs of all sorts made up an estimated 2.7% of all jobs for the Class of 2010, and that without these jobs, the overall employment rate would be about 85%, a number that is comparable to the overall employment rates reported in the early 1990s in the aftermath of the last significant recession to affect the U.S. legal economy. Law schools created a variety of employment opportunities for their graduates, and not all of them were on-campus or can be counted in the academic category. Through a variety of bridge programs, fellowships, and grant programs for public interest work, in addition to true on-campus jobs, many schools have created "jobs programs" of some sort for new graduates. While some of these predate the recession, the number of schools offering these programs has grown explosively. For the Class of 2010, it is estimated that these programs provided about 1,200 jobs, and these jobs programs can account for 50, 60, or even 70 jobs on a single campus.

Consider that for the Class of 2010, only 71% of the jobs reported were both full-time and permanent. Overall, nearly 27% of all jobs taken by members of this class were classified as temporary (a figure that includes clerkships, though clerkships accounted for only 9.3% of all jobs taken; note that 10% of all private practice jobs were reported as temporary, and an astonishing 63% of all jobs reported in the academic setting were reported as temporary jobs). Eleven percent of all jobs taken were classified as part-time, a figure that has jumped five percentage points in two years from 6% for the Class of 2008. The overlap of these two categories is significant: 8% of all jobs were both temporary and part-time, 18% were temporary and full-time, and 2% were permanent and part-time.

Another marker of the weakness of the job market is that a much higher percentage of this class reported that even though they were employed, they were still looking for work (23% reported that they were still seeking work even though employed, compared with 16% for the Class of 2008), suggesting that graduates took jobs they may not have been satisfied with simply to be able to earn some money to offset their living expenses and begin paying on their student debt.

Consider finally that the overall number of jobs taken by the Class of 2010 was almost identical to the number of jobs taken by the Class of 2009 (36,043 compared to 36,046), but the number of law school graduates was greater.

For the Class of 2010, fewer graduates were working as lawyers and more were working in business and industry (a record 15.1%). Employment in public interest was up, a surprising fact given the widespread reports of the economic difficulties still faced by this sector, but explained at least in part by the growing number of law school jobs programs that pay public interest employers to hire their graduates. And employment in academia continued to rise (from 2.3% of all jobs for the Class of 2008 to 3.7% of all jobs for the Class of 2010) as graduates sought refuge from a very tough job market in on-campus jobs. Nine months after graduation, 9.4% of the Class of 2010 reported that they were still unemployed (6.2% of the class reported that they were still seeking work, and 3.2% of the class reported that they were not seeking work).

To the extent that there is a bright spot in the employment profile for this class it is that there were fewer graduates who had their start dates deferred. While some law firms are still deferring associate start dates, separate research from NALP concluded that the number of deferrals for the Class of 2010 was roughly half of what it was for the Class of 2009, an estimated 1,600 to 1,800, compared with 3,400 to 3,700 for the Class of 2009. (See NALP's Perspectives on Fall 2010 Law Student Recruiting.

And there is likely more bad news to come. Given the scope of the constriction in the legal employment market, and the marked shift out of private practice generally and out of large law firms specifically, it is expected that aggregate starting salaries for this class will be shown to be down when that data becomes available later this summer. We can also expect the "Great Recession" to continue to have an impact on the employment experiences of the classes that will follow this one. Just as the biggest impact of the last significant recession was felt in the national economy in 1991, the legal employment market for new law school graduates did not hit its nadir until 1993, and the overall employment rate did not crest 89% until 1997, we can expect that the overall employment rate for new law school graduates will continue to be stagnant or decline further for the Class of 2011, with the curve probably not trending upward before the employment statistics become available for the Class of 2012.

National Association for Law Placement, Inc.® (NALP®), 1220 19th Street NW, Suite 401, Washington, DC 20036-2405, (202) 835-1001 info@nalp.org, © Copyright 2019 NALP

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