Sunday, May 1, 2016

Mixed Signals from the Legal Employment Market – Preliminary Results for the Class of 2015

THIS BLOG UPDATES THE EARLIER BLOG POSTING TO INCORPORATE DATA FROM THE ABA's EMPLOYMENT SUMMARY SPREADSHEETS FOR THE CLASS OF 2014 and CLASS OF 2015 AS OF MAY 3, 2016, WITH DOUBLE-COUNTED DATA FOR MITCHELL|HAMLINE IN THE CLASS OF 2015 REMOVED AND WITH ALL LAW-SCHOOL-FUNDED POSITIONS FOR BOTH YEARS REMOVED FROM THE CALCULATIONS.  THE 2015 NUMBERS NOW MATCH THOSE ON THE ABA's 2015 LAW GRADUATE EMPLOYMENT DATA SHEET RELEASED ON MAY 3 WHILE THE 2014 NUMBERS NOW MATCH THOSE FOR 2014 ON THE ABA's 2015 LAW GRADUATE EMPLOYMENT DATA SHEET ONCE LAW-SCHOOL-FUNDED POSITIONS ARE REMOVED.

The Class of 2015 employment summary reports have been posted by all ABA-accredited law schools, resulting in reporting of results for some states or regions.  The ABA Section of Legal Education and Admissions to the Bar released the complete Employment Summary spreadsheet for all law schools on its website yesterday (May 2) and updated it today (May 3) and likely will be updating it again tomorrow (to eliminate the double-counting for Hamline, William-Mitchell and Mitchell|Hamline).

In this initial post I provide a brief summary of the Class of 2015’s employment outcomes compared with the Class of 2014’s employment outcomes based on data from these spreadsheets as of described above.

In a subsequent post (posted on May 2) I provide a summary of changes in the reported number of law-school-funded, bar-passage-required positions between the Class of 2014 and the Class of 2015 as a result of changes in the classification and reporting of such positions.

Changes in the Percentage of Graduates and Number of Graduates in Full-Time, Long-Term Bar-Passage-Required and JD Advantage Jobs

Across all law schools for which the ABA has released employment summary data for the Class of 2015, the percentage of graduates in full-time, long-term bar-passage-required positions and full-time, long-term JD advantage positions increased from 69% for the Class of 2014 to 70.1% for the Class of 2015. This would appear to be modestly good news. When you disaggregate the two categories, the full-time, long-term bar-passage required positions went from 58% to 59.2% while the full-time, long-term JD advantage positions went from 11% to 10.9%.

Because there was a significant decline in the number of graduates across these law schools between 2014 and 2015, however, this modest increase in the percentage of graduates in these positions masks an actual decline in the number of graduates in such positions. There were 39,984 graduates in the Class of 2015 compared with 43,832 graduates in the Class of 2014, a decline of 3,848 graduates, or 8.8%. There were 28,029 graduates in the Class of 2015 with full-time, long-term bar-passage-required or JD advantage positions, compared with 30,234 graduates in the Class of 2014 with such positions, a decline of 2,205, or 7.3%.

When these totals are disaggregated, full-time, long-term bar-passage-required positions declined from 25,417 for the Class of 2014 to 23,687 for the Class of 2015, a decline of 1,730, or 6.8%. For full-time, long term JD advantage positions, the total went from 4,817 to 4,342, a decline of 475, or 9.9%.

(Please note that numbers for both 2014 and 2015 exclude law-school-funded positions from both categories.  The ABA's 2015 Law Graduate Employment Data sheet compares Class of 2014 INCLUDING law-school-funded positions with CLASS of 2015 EXCLUDING law-school-funded positions, which leads to slightly different results showing a more exaggerated decline in the number of graduates in full-time, long-term bar-passage-required and JD advantage jobs that also results in a decline in the percentage of graduates in such positions.)

Comparison of Full-Time, Long-Term Bar-Passage-Required Positions and JD Advantage Positions for the Class of 2014 and Class of 2015

 

Graduates

# FTLT

BPRJDA

% FTLT

BPRJDA

# FTLT

BPR

% FTLT

BPR

# FTLT

JDA

% FTLT

JDA

Class of 2014

43,832

30,234

69%

25,417

58%

4,817

11%

Class of 2015

39,984

28,029

70.1%

23,687

59.2%

4,342

10.9%

Change

(3,848)

(2,205)

 

(1,730)

 

(475)

 

Changes in the Number and Percentage of Graduates Whose Employment Status is Unknown or Who Were Classified as Unemployed Seeking or Unemployed Not Seeking

Looking at the other end of the employment outcomes continuum, however, both the number and percentage of graduates who had unknown employment outcomes, or who classified as unemployed seeking or unemployed not seeking, declined slightly between the Class of 2014 and the Class of 2015. For the Class of 2014, there were 5,778 graduates whose employment status was unknown or who were classified as unemployed seeking or unemployed not seeking. This represented 13.2% of the 43,832 graduates. For the Class of 2015, however, there were only 5,200 graduates whose employment status was unknown or who were classified as unemployed seeking or unemployed not seeking. This represented 13% of the 39,984 graduates.

Searching for Explanations

In the coming weeks and months, there likely will be a number of commentators offering suggestions for why the Class of 2015 might have seen a decline in the number of graduates obtaining full-time, long-term bar-passage-required or JD advantage positions.

Part of the decline likely is attributable to the decline in the number and percentage of graduates passing the July bar exam, as reported by the NCBE in its annual statistics publications for each of the last three years.

Year

First-Time Bar Takers in July from ABA-Accredited Law Schools*

First-Time Bar Passers in July from ABA-Accredited Law Schools

July Pass Rate Among First-Time Takers from ABA-Accredited Law Schools

2013

47,465

38,909

82%

2014

44,282

34,333

78%

2015

39,955

29,772

75%

*Note that the NCBE’s classification of first-time takers is over-inclusive in that it reflects not just graduates from May who are taking the bar exam for the first time in July, but also graduates from a prior year who might be taking the bar exam for the first-time in a given jurisdiction even if they have previously taken the bar exam in another jurisdiction. Thus first-time bar passers includes some people who are not part of the graduating cohort in a given year.

In the two-year period, then, between 2013 and 2015, the number of first-time takers from ABA-accredited law schools taking the July bar exam who passed the exam and became eligible for jobs requiring bar passage declined by roughly 9,100 and by nearly 23.5%. Moreover, the percentage of all first-time bar takers taking the February exam rather than the July exam also increased slightly between 2013 and 2015 from 18.7% to 19.7%, which might mean slightly more May 2015 graduates might not have been positioned to accept a full-time, long-term bar-passage-required or JD advantage position as of March 15, 2016, because they may have been studying for and taking the February 2016 bar exam.

Part of the decline also likely is attributable to market conditions in some parts of the country. For example, a recent story about graduates of Texas law schools noted that the decline in oil prices and tort reform may have impacted hiring in the Texas legal market for graduates of the Class of 2015. Once the full set of employment outcomes is available, it will be easier to assess the extent to which certain states or certain regions might have seen better or worse results than other states or regions.

Part of the decline also may be a manifestation of the impact of technology on the legal services market, with the possibility that the legal services market will have slightly fewer entry level positions over the near term.

One Possible Counterpoint

If this decline in the number of full-time, long-term bar passage required positions is a manifestation of a weakening job market law graduates, then one would expect that salary data also would demonstrate weakness. Once NALP publishes its report on the employment results for the Class of 2015 later this summer, we will have a chance to assess the extent to which salary trends are consistent with a weakening legal services market or suggest that the market remains somewhat competitive. If this decline in graduates taking jobs that are full-time, long-term bar passage required or JD advantage jobs is counterbalanced by a continuation of the year-over-year modest increases in mean and median salaries in recent years for  law graduates, it might suggest that that there is less market weakness than this initial employment summary might indicate.

Concluding Thoughts

For those thinking that the recent news about the improving situation with respect to applicants to law school is the beginning of an upward trend that will gradually return law schools to first-year class sizes in the 45,000 to 46,000 range, this employment outcomes data provides a cautionary tale. The fact that the employment market for law school graduates appears to have stagnated and even declined to some extent over the last two years may mean that risk averse potential law school applicants who focus on post-graduate employment opportunities when assessing whether to invest in a legal education may remain skittish about applying, such that this year’s good news on the applicant front may be somewhat short-lived.

(I am very grateful for the research assistance of Janelle Chambers in gathering data for this blog posting prior to the release of the ABA Employment Summary spreadsheet and for very helpful comments on earlier drafts of this blog posting from Scott Norberg and Bernie Burk and for the helpful insights of Debby Merritt as we worked on reconciling data in the ABA spreadsheets.)

http://lawprofessors.typepad.com/legalwhiteboard/2016/04/mixed-signals-from-the-legal-employment-market-preliminary-results-for-the-class-of-2015.html

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Comments

"If this decline in the number of full-time, long-term bar passage required positions is a manifestation of a weakening job market law graduates, then one would expect that salary data also would demonstrate weakness. Once NALP publishes its report on the employment results for the Class of 2015 later this summer, we will have a chance to assess the extent to which salary trends are consistent with a weakening legal services market or suggest that the market remains somewhat competitive."

Yes, but we already know that the medians for the Class of 2014, $60k for women and $65k for men, are far below the $72k median for the Class of 2008 (nearly $80k in 2016 dollars). Assuming an equal gender split, that's a 2014 median of $62.5k, which is equal to $62.86k in today's dollars. That's a 21% real dollar decline in median starting salary in just six years, during a time when average law school loan debt continued its ascension. Somehow I doubt the Class of 2015 will find itself on par with those salad days...

Posted by: Unemployed Northeastern | May 3, 2016 11:20:15 PM

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