The Lawyer Supply and Demand Paradox
Published for Thomson Reuters Legal Executive Institute on September 1, 2015
“Too Many Law Students, Too Few Legal Jobs,” Steven Harper’s op-ed in the New York Times last week, drew public attention to a serious problem:
40% of 2014 law school graduates are unable to find jobs as lawyers.
Since the average graduate incurs six figures of debt to acquire a law degree, not finding a job puts them in a hole that will be very difficult to climb out of.
Harper writes of the causes of this problem and calls on the American Bar Association (ABA)to address them. While I agree with Harper’s observations, I think they actually present a supply and demand paradox, which, in turn, suggests a course of action for law schools.
Mr. Harper’s Thesis
Author Steven Harper is a clear-eyed observer of the contemporary legal landscape. His book, The Lawyer Bubble, provides a provocative and valuable assessment. In his op-ed, Harper reports that while the total number of law school graduates declined from 52,000 to 38,000 in the last four years, the market doesn’t need even this lower number.
Harper says the imbalance between graduates and jobs persists because student loans are too readily available, law schools are too motivated to generate tuition income, and no one is accountable for the plight of the unemployed students. He concludes that the ABA, as the “national voice of the legal profession,” should speak up, advocating meaningful reforms that would cause law schools to be more responsible.
I agree with Harper’s criticisms and his call for action. I take issue, however, with his conclusion that there isn’t a market demand for unemployed law school graduates.
The Supply and Demand Paradox
I think the data Harper discusses presents, instead, a paradox: unemployed graduates in a market that actually needs more lawyers.
Lawyers are in greater demand in the United States than at any time in our history. Driven by the explosion of both regulation and data, every citizen and every business must navigate often complex legal issues in some way. They need lawyers to help them.
In important segments of the market, we don’t have enough lawyers. The fundamental symptoms are clear: i) ordinary citizens have inadequate access to legal services; and ii) the cost of legal services is higher than it should be. In the most recent World Justice Project report, the United States’ vaunted legal system ranked 21st and 23rd, in the world in access to civil and criminal justice, respectively, behind even Uruguay and Estonia. We need more lawyers serving citizens in the United States.
Lawyers are in greater demand in the United States than at any time in our history. Driven by the explosion of both regulation and data, every citizen and every business must navigate often complex legal issues in some way. They need lawyers to help them.
Nearly everyone complains that lawyer fees are too high. While there are many reasons for this problem, one of them is the relationship between the supply of lawyers to the market demand. Economics 101.
Connecting Law Graduates to the Market Demand
Harper is correct that law schools should be more accountable for the employment of their graduates. They need take responsibility for connecting graduates to the demand that doesexist in the 21st century legal marketplace. Here are some ways law schools can do that:
Help students see the whole picture—Part of the reason so many law students fail to find a job is that they don’t know where to look. Most law students have a relatively vague idea of what they really want to do as a lawyer and inadequate knowledge of the actual positions available to them.
Law schools should make sure they are doing what is necessary to help students understand the full range and nature of careers as lawyers. Help them get beyond the superficial and wishful ideas they may have. This is particularly important in this time of declining opportunities in the most publicized careers, the emergence of new careers in legal tech and other new entrants, and the great need for lawyers in consumer and public interest law.
Teach the skills students need—Law schools need to teach students the skills that are necessary to meet the 21st century legal market demand. Law graduates need to know how to design and manage legal process, how to manage the finances of a law practice, how to build a new practice, and, of course, how to use and collaborate with technology. Teaching skills such as these should be as serious a part of the law school curriculum as teaching evidence and torts.
Help create new opportunities—Law schools can be more proactive in creating career opportunities for their students, especially ones that address the unmet demand of the marketplace. Here are good examples of what some law schools are doing:
Georgetown: collaborated with DLA Piper and Arent Fox to create a “low-bono” law firm targeted toward an underserved segment of the consumer market, providing jobs for new graduates;
Hastings: created Lawyers for America which enables third year law students to spend their final year working in a non-profit or public sector law practice, followed by a job opportunity upon passing the bar exam;
Ohio State, Vanderbilt, Emory, and Miami: collaborated with new entrant UnitedLex to create paid two-year residency programs, with a view to permanent employment thereafter.
Target career placement efforts at the market demand—Law school career placement offices need ambitiously to adapt to the changed legal marketplace. They need to devote adequate resources to identifying the new opportunities that exist in the current market—in legal tech, new entrants, and serving the needs that are going unmet. Unlike the traditional law firm recruiters, most of the new jobs will not come looking for the graduates; the placement office will need to look for them, and be determined and creative in finding matches for their graduates.
A demand for the services of the graduates exists. The placement offices need to find it and facilitate the connection.