Thursday, July 30, 2015
This finding is the result of the NALP's survey of 2014 law school grads which notes that this is the first time employment rates have increased from the previous year since pre-recessionary 2007. However, the good news comes with two caveats. First, employment data for the class of 2014 was collected ten months after graduation rather than 9 months due to an ABA rule change making it more difficult to compare 2014 law grad employment rates with those of the previous years. In addition, last year's graduating class was smaller than 2013's which means that even though the overall number of jobs available was less, the employment rate went up because last years's graduating class was smaller. Here are more details from NALP's press release:
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Analyses of the NALP employment data for the Class of 2014 reveal an employment rate that increased for the first time since reaching a 25-year high of 91.9% in 2007.
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According to NALP's Executive Director, James Leipold, "These data present a picture of a complex employment market, and it is virtually impossible to tease apart the twin forces of a shrinking class and an overall job market that continues to improve (albeit modestly), but it is clear that the shrinking class size did indeed have a positive impact on the overall employment rate, and that is a dynamic that will likely continue to be in play for the next three graduating classes, each of which is projected to continue to come down in size in fairly dramatic steps."
Despite the small contraction in the overall number of jobs, there continue to be signs of improvement in the entry-level job market. For instance, of those graduates for whom employment status was known, 66.3% obtained a job for which bar passage is required, the highest percent since 2010. An additional 14.8% of graduates obtained jobs for which a JD provides an advantage in obtaining the job, but for which bar passage is not required. (These are often described as law-related jobs.) This compares with 13.8% for the Class of 2013, and is a figure that has grown steadily since 2007, when it stood at just 7.7%. In addition, the number of graduates who report that they are working in jobs that are short-term and/or part-time also continues to decline, and the overall percentage of graduates who reported jobs that were full-time, long-term, and bar passage required jumped three full percentage points, to 62%, up from an historic low of just 57% for the Class of 2011. Also, the number of graduates who hold jobs but say they are already looking for another job continues to come down, as does the number of graduates who report that they are working as solo practitioners immediately after graduation.
The distribution of jobs among different kinds of employers has remained relatively constant over the last three years, with graduates predictably finding jobs with law firms, government entities, the judiciary, businesses, nonprofit and public interest organizations, and educational institutions. The big loss of private practice jobs that took place between 2009 and 2010 continues to be the one change that really distinguishes the post-recession entry-level legal employment market from the pre-recession entry-level legal employment market. Jobs in private practice accounted for just over half of the jobs obtained for the Class of 2014, while jobs in the public sector and public interest, including government jobs and jobs as judicial clerks, accounted for just under 30% of all jobs, and jobs in business for just under 20% of all jobs. The actual number of jobs, however, fell in every category except government, and within private practice the number of jobs fell in every law firm size category except for firms of 101 to 500 lawyers, where the number rose modestly.
Additionally, starting salaries for the Class of 2014 remained essentially flat in every category, and law firm starting salaries remained absolutely flat, with a median of $95,000 and a mean of $102,600, both of which matched exactly the median and mean measured for the Class of 2013. While aggregate salaries have come up somewhat from the lowest post-recession figures measured in 2011, the earning power of the class as a whole is nowhere near what it was in 2009 when the law firm median starting salary stood at $130,000, the highest figure ever measured.
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What Does This All Mean?
On balance NALP's Leipold is sanguine about the entry-level job market for new law school graduates. "A fair bottom-line reading is that the entry-level job market is basically flat to improving slightly. In parsing this year's numbers it probably doesn't make sense to read too much into the small contraction in the overall number of jobs obtained, as it reflects in part simply a smaller group of job seekers. The good news in terms of the overall employment rate is that graduating class sizes will likely continue to come down at a much faster rate than any continued diminution in the actual number of jobs available to new law school graduates. In fact, some analysts look at the projected size of the graduating Class of 2017, one that will be some 30% or more smaller than the Class of 2013, and suggest that there will not be nearly enough new law school graduates to meet the needs of the entry-level lawyer job market at that time. Tempering those predictions is the understanding that growing efficiencies created by technology and business systems, and increased competition from non-traditional legal services providers, will both likely continue to put downward pressure on overall law firm lawyer headcount in the coming years and even decades."
So what is the bottom line? According to Leipold, "It is clear that the overall jobs profile for the Class of 2014 has improved considerably from that for the Class of 2011, the class that will come to be seen as having faced the worst overall post-recession job market, and we fully expect that the overall employment rate for the Classes of 2015, 2016, and 2017 will continue to improve. Nonetheless the changes facing the industry are enormous, and it is all but certain that the job market will continue to change for new law school graduates in the years ahead."
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Read the entire press release here.