The past 15 years have witnessed the onset of a technological and commercial revolution in the delivery of legal services that is inflaming cost-containment pressures from clients, transforming the reach of legal technology into everyday practice, and refiguring in basic ways the number and nature of lawyering jobs available.
The last point is perhaps the most immediately felt today, particularly for newer members of the profession. Any discussion of the dramatic changes in the lawyer employment market since 2000 necessarily starts with the fact that the legal profession, following an unprecedented, generation-plus-long jobs boom that saw it triple in size from 1970 to 2000, has grown much more slowly since that time, and is slowing down even further as you read this.
No one seems to have made much of the advent of this slowdown in the early 2000s, if anyone noticed it at all. In retrospect, however, this abrupt change underlies many of the other changes that are now becoming more obvious.
To older lawyers like me, many of these changes were occurring off-radar. But every lawyer who joined the profession after the year 2000 literally had to be aware of what was going on, because it was written all over the job market.
A Flattening Growth Rate
In 2000, there were plenty of developments and issues to talk about relative to the practice of law, but the ongoing growth of the legal profession was not one of them. Growth had been constant, and continued growth was taken for granted. What was not clear at all in 2000 was the fact that the legal profession was approaching (or had reached) market saturation—and, to complicate matters further, was approaching a time of intense economic and technological pressures that augured against stable growth in employment.
Statistics concerning lawyers are necessarily (and characteristically) caveat-laden. There are two primary sources of information about the number of lawyers in the U.S.: the ABA, which puts total licensed lawyer population in 2014 at 1.3 million,1 and the U.S. Bureau of Labor Statistics (BLS),2 which counts jobs, not people, and concludes that there were 778,000 lawyers in full and part-time legal employment positions in 2014. Apples and oranges, apparently; the BLS looks at reports from employers,
while the ABA gathers information from state licensing authorities. To the best of my knowledge, no one has ever tried to reconcile these figures, and I am not going to be the first.3 Unless otherwise noted, I am relying on ABA figures.
Nationally, the profession grew threefold between 1970 and 2000—from about 325,000 U.S. lawyers in 1970 to 1.02 million in 2000.4 The growth curve flattened dramatically after 2000. From 2001 through 2015, ABA’s count of the profession grew from about 1.05 million to about 1.3 million nationally, an increase of roughly 250,000 lawyers over 15 years that amounts to an average annual increase of about 16,700 lawyers, or 1.4 percent.
But in the same 15 years, National Conference of Bar Examiners reports reliably establish that a total of 784,000 new lawyers were admitted to practice in the U.S.,5 which works out to an average of slightly more than 52,000 new practice-eligible lawyers per year. But there is unquantified duplication here: An undocumented percentage of those 52,000 were admitted to practice by more than one state, and thus are double-counted. I have found no reliable source as to the size of this group, so I will arbitrarily assume 5 percent are double-admitted, or 2,600 per year. So let’s say 50,000 new lawyers are coming on-stream annually. Given the ABA’s count of an average of 16,700 new lawyers per year, very large numbers of the new lawyers joining the profession’s ranks after 2000 obviously found either no legal employment or very short-lived legal employment.
An unknown factor here is what we might call the churn rate; that is, in addition to new jobs created, how many lawyers retired or permanently left the profession during each of these years? The Bureau of Labor Statistics is of little help here, having estimated that figure at 10,000-15,000, 40,000 and 20,000 at differing times.6 If we assume the near-midpoint range of 20,000 retirements per year, and add that to the average ABA increase of 16,700, we would have just under 37,000 total possible job openings for about 50,000 newly admitted lawyers each year. Basic back-of-envelope math would suggest, then, that about one-quarter of all lawyers who passed the bar from 2001 through 2015 found no ongoing employment that required licensing as a lawyer. Coincidentally or not, that is roughly the share of the national class of 2000 bar entrants that reported it was not practicing law in 2012, according to a landmark longitudinal study by the ABA called “After the JD.”7 (Much more about this study, below.)
In Minnesota, there were roughly 5000 lawyers in 1970 and over 20,000 as of 2000, a 400 percent increase. During the 15 years from 2001 to 2015, the number grew to 24,522, a 15-year increase of 23 percent, meaning an average annual increase of about 1.4 percent.
If the ABA’s numbers are to be trusted, the number of Minnesota lawyers dropped by 3 percent between 2014 and 2015.8 Several states lost lawyers that year, but Minnesota’s 2015 decrease from 25,272 to 24,522—a drop of 750 lawyers—was not matched by any other state, and most states stayed flat or saw small gains that year. To date, I have seen nothing that explains why Minnesota’s lawyer population in particular dropped so perceptibly from 2014 to 2015; the decrease is even more dramatic when you consider that 752 new lawyers were admitted to practice in Minnesota in 2014.9
In this context, it is relevant that Minnesota has a surprisingly high ratio of lawyers to population. As of 2014, our state ranked fifth highest in the U.S. (behind New York, Massachusetts, Connecticut and Illinois) in what might be called lawyer density, weighing in at 46.3 lawyers for every 10,000 Minnesota residents.10 That’s one lawyer for every 215 Minnesota residents. Minnesota’s economic and legal status in the national economy is certainly healthy, but it hardly approaches fifth highest in the nation. (According to federal Department of Commerce state GDP figures from the second quarter of 2015, Minnesota’s is the 16th largest state economy in the U.S.11 And even though some very large national firms have Twin Cities offices, no Minnesota-based firm yet ranks among the 50 largest law firms in the nation.)
Even as this dramatic employment slowdown has been happening locally and nationally, little attention has been paid to the fact that during these same 15 years, approximately 15 new U.S. law schools—including one in Minnesota—opened their doors to new would-be lawyers, while no law school in any state closed its doors. The continued outpouring of lawyers from over 200 law schools vastly complicates the lawyering market and is explored in the next section of this issue.
Looking to the longer term, then, the future of legal services is unlikely to look like John Grisham or Rumpole of the Bailey. More probably, our research suggests that traditional lawyers will in large part be “replaced by advanced systems, or by less costly workers supported by technology or standard processes, or by lay people armed with online
– Richard Susskind and Daniel Susskind, The Future of the Professions (Oxford University Press 2015), p. 71
The Shameful Demographics of Diversity
When it comes to diversity—both gender and ethnic—in lawyer hiring, the legal profession has bogged down. Overall progress has slowed markedly over the last several years; the “good” news on this front is that at least we do not seem to be moving backward.
Since 2000, the percentage of women in the profession has increased from 28 percent to 35 percent of all lawyers, while lawyers of color, including Hispanics and Asian-Americans, made up 12 percent of U.S. lawyer population in 2010—a mild improvement over the 9 percent recorded by the ABA in 2000.12
According to U.S. Census data, the median pay for women working as full-time lawyers in 2014 was 77.4 percent of the pay earned by their male counterparts; worse yet, in all law-related jobs, median pay for female workers in 2014 was 51.6 percent of the pay received by male workers, according to the same census data.13 If you are a lawyer and you are not embarrassed by this information, you should be.
In theory, and by aspiration, the legal profession should be leading by example —creating and implementing laws that encourage and enforce equal opportunity as well as setting the example for other professions and businesses. In reality, we lag well behind any level of diversity implementation of which we could possibly say we were proud.14
After the JD
Charting the bar class of 2000’s professional journey
|Percentage of year 2000 bar admittees working in…||2003||2012|
|Private practice (all)||68.6%||44.3%|
|Not practicing law||14.7%||24.1%|
*Share of graduates from Top 10 law schools employed by firms of 250+ lawyers
Shortly after the turn of this century, the American Bar Foundation launched a major study on the employment experiences of thousands of young lawyers across the country who passed the bar in 2000. The study uncovered interesting and relevant demographic information on many of the changes I am describing. Titled After the JD, the study initially surveyed more than 3,000 brand-new JDs from the national law school “class of 2000,” and has re-surveyed all of them three more times to date—in 2002-03, 2007-08, and 2012. The survey quantified what was happening to that generation of lawyers (most of whom are now about 40 years of age), and the results are very helpful in understanding recent employment trends in law.
- As noted above, 24.1 percent of the group—now 11 or 12 years out of school—were not practicing law in any setting by 2012. This was a dramatic increase from the 14.7 percent who were not practicing in any sector in 2003.15
- Three years after graduation, 8.4 percent of the respondents were working in the business sector, but by their twelfth year out (in 2012), fully 27 percent of those same respondents reported that they worked in the business sector.
- The percentage of 2000 graduates engaged in private practice of any kind had decreased from 68.6 percent in 2003 to 44.1 percent by 2012.
- Of the 2000 graduates who had attended a law school in the Top 10 nationally, over half (55.3 percent) were working in firms of 250+ lawyers in 2003. By 2012, fewer than one in five (16.8 percent) were still toiling in that sector. This reduction seems likely to be related to the large firm practice of hiring many more associates than will eventually be elevated to partner status; that culling process normally happens within the first 12 years of BigLaw employment.
- Job satisfaction was in the 80 percent-plus range (moderate or high satisfaction) for respondents in public interest law, legal services/public defender positions, megafirms (250+) and state or local government; job satisfaction was lowest for those no longer practicing as lawyers.16
The After the JD study is the most comprehensive of its kind, but it is not the only examination of employment among recently minted JDs. An enterprising study of all 1,214 lawyers who were admitted to Ohio practice in 2010, thoroughly researched (literally lawyer-by-lawyer, where possible) by an Ohio State law professor, sheds additional light on the current situation.17 As of 2015, author Deborah J. Merritt found,
- 93.7 percent were employed in some capacity;
- of those, only three-quarters held jobs that required bar
- there was no evidence (such as a practice website) that half of the 10 percent who reported themselves “sole practitioners” were in fact actually practicing at all;
- two-thirds of the class had changed jobs once or more, averaging 2.7 job changes in the four years since bar admission; and
- only 40 percent worked in a law firm of any size.
There really can be no doubt that it has been a rough ride for lawyers graduating from law school since 2000. The findings of the two studies I’ve just described, coupled with issues of law school class size and bar passage rates that I’ll be discussing in the next section, add up to an unflattering picture of why so many young lawyers are finding it so hard to get the kind of start in their chosen profession that older lawyers like me were able to take for granted during the last half of the twentieth century.
A Disturbing Projection
The continued growth in the ranks of licensed lawyers is occurring even as the demand for legal services in general and new lawyers in particular appears to be contracting—or at least shrinking mightily in its rate of growth. As of December 2015, the Bureau of Labor Statistics estimated that during the decade ending in 2024, the U.S. economy will create only 43,800 new lawyer positions. That is not an annual figure: It covers the whole decade.18 That’s 4,380 new jobs per year.
What does this mean? We’ve established that roughly 50,000 successful bar examinees continue to be admitted to practice every year. Allowing for the fact that some new lawyers are admitted in more than one state—I used an admittedly arbitrary 5 percent figure earlier—that’s roughly 475,000 new lawyers over 10 years. To be sure, some older lawyers will retire and some lawyers will move into other occupations, thereby creating additional openings. The BLS currently estimates that retirements and other turnover will create an additional 113,900 openings over the coming decade, but those reductions plus BLS’s projected 43,800 new positions—about 158,000 positions in all—will, if BLS is right, create job openings for about one-third of the 475,000 newly admitted lawyers who will likely emerge from our law schools during that same 10 years.
But even the relatively meager job growth projections offered by the BLS may be profoundly impacted by the current explosion of new legal technologies and the pace at which they will be taken up by the legal marketplace. While lawyering as we have known it will not disappear anytime soon, there is conversely little reason to suppose that ongoing technological breakthroughs will create new legal sector jobs; the record to date is quite the opposite. Even Richard Susskind, the British lawyer and legal tech expert who is known for his sometimes-apocalyptic pronouncements about the legal profession, isn’t ready to bury the legal profession just yet: “Our expectation is that, over time—by which we mean decades, rather than overnight—there will be technological unemployment in the professions…. We cannot emphasize strongly enough that we are not predicting that the professions will disappear over the next few years.”19
But technology will almost certainly continue to change the current paradigm of legal service delivery, and eventually new technologies will probably displace lawyers from some (and possibly many) traditional roles. In a recent ABA Journal column entitled “The End of Lawyers, Period,” legal technology commentator Casey Flaherty conjures a hypothetical legal tech executive’s message to lawyers about the future:
“Yes, [we are talking about] something that sound[s] a lot like technological unemployment. But, while there might be some temporary dislocation, the historical data gives us good reason to believe that the dislocated resources will be redeployed to higher-value activities and that improved technology will increase the demand for lawyers….
“U.S. lawyers are probably going to be fine for the foreseeable future. But we don’t need to swear a loyalty oath to protecting their livelihoods. Lawyers don’t warrant special protection from progress. And it is naïve to think that information technology is going to radically transform every information-intensive industry on the planet, save legal. It is not our role to keep lawyers relevant by slowing innovation to a pace that makes them comfortable. It is our mission to give lawyers the tools they need to stay relevant in a broader economy that shows no signs of slowing down for anyone.”20
In view of the flattened job market and all the uncertainty about future job creation, why do law schools continue to turn out close to 50,000 new lawyers per year (plus thousands of others who never pass a bar exam)? And why do students continue to apply to law schools? We will look closely at this messy quandary in the next section.
ABOUT THE AUTHOR
Wood R. Foster, Jr. practiced law in Minneapolis from 1968 through 2013, most of it as a litigator with the firm now known as Siegel Brill. He served as HCBA president in 1992-1993 and as MSBA president in 1999-2000. He conceived and edited “For the Record: 150 Years of Law and Lawyers in Minnesota,” which was distributed to all lawyers and libraries in Minnesota in 1999. Wood served as a member of the Lawyers Professional Responsibility Board for eight years beginning in 2001. He was a founder, 1993 president and 30-year board member of the Advocates for Human Rights. As a retiree, he works one day each week with the “St. Paul Regulars,” a Habitat for Humanity crew.
1 ABA National Lawyer Population Survey 1878 – 2016 http://www.americanbar.org/content/dam/aba/administrative/market_research/total-national-lawyer-population-1878-2016.authcheckdam.pdf
2 Occupational employment, job openings and worker characteristics, U.S. Dept. of Labor, Bureau of Labor Statistics http://www.bls.gov/emp/ep_table_107.htm
3 In an effort to reconcile the two disparate figures, I have conferred with—and received substantial guidance from—Minneapolis lawyer/blogger (“The Last GEN X American”) Matthew Leichter, who writes often about law-related statistics and who often relies on the BLS numbers in his commentaries. His analyses of those reports have been recirculated by websites like AmLaw Daily. See, e.g., https://lawschooltuitionbubble.wordpress.com/original-research-updated/lawyer-overproduction/. Leichter does not trust the ABA’s lawyer counts (in part) because historically, they show a preposterously large jump in lawyer population between 1977 and 1981, during which years the ABA total grows from 432,000 to 613,000 (rounded), reflecting an impossible-to-swallow growth spurt of more than 40 percent in four years.
4 Supra note 1.
5 “Admissions to the Bar by Jurisdiction,” National Conference of Bar Examiners Annual Report archives, http://www.ncbex.org/publications/statistics/statistics-archives/
6 The afterword to the most recent edition of Steven Harper’s The Lawyer Bubble: A Profession in Crisis (Basic Books, 2016) discusses the BLS’s adjustments to this number over time.
7 “10 Interesting Stats from the After the JD Study,” ABA News 2/10/2014 http://www.americanbar.org/news/abanews/aba-news-archives/2014/02/10_interesting_stats.html
8 ABA 2015 National Lawyer Population Survey, 10-Year Trend by State. http://www.americanbar.org/content/dam/aba/administrative/market_research/national-lawyer-population-by-state-2005-2015.authcheckdam.pdf. It should be noted that Minnesota was one of six states whose reporting data for this period covered more than one calendar year (roughly 1 year and nine months). Of those states, only Minnesota posted a year-over-year differential of more than +/- 1 percent.
9 Supra note 5.
10 “Lawyers per capita by state,” Matt Leichter, The Last Gen X American, https://lawschooltuitionbubble.wordpress.com/original-research-updated/lawyers-per-capita-by-state/
11 U.S. Department of Commerce. Bureau of Economic Activity, cited at https://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP
12 ABA Lawyer Demographics 2015 http://www.americanbar.org/content/dam/aba/administrative/market_research/lawyer-demographics-tables-2015.authcheckdam.pdf These percentages are generally consistent with BLS survey figures from 2002 (http://www.bls.gov/cps/aa2002/aat11.txt) and 2015 (http://www.bls.gov/cps/cpsaat11.htm).
13 “Full-time female lawyers earn 77 percent male lawyer pay,” Debra Cassens Weiss, ABA Journal News 3/17/2016 http://www.abajournal.com/news/article/pay_gap_is_greatest_in_legal_occupations/
14 “From Platitudes to Priorities: Diversity and Gender Equity in Law Firms,” Deborah H. Rhode, http://www.americanbar.org/content/dam/aba/marketing/women/gender_equity_task_force/rhode.authcheckdam.pdf
15 Supra note 7.
16 “Review of After the JD III, A Law Professor’s Take,” D. Benjamin Barros, Assn. of American Law Schools http://aals.org/wp-content/uploads/2014/09/AJD-III-summary.pdf
17 “What Happened to the Class of 2010?” by Deborah J. Merritt 03/14/2015, Law School Café / http://www.lawschoolcafe.org/2015/03/14/what-happened-to-the-class-of-2010/
18 “The Government’s Dismal Job Outlook for Lawyers,” Matt Leichter, The Am Law Daily, 1/27/2016; http://www.americanlawyer.com/id=1202748112958/The-Governments-Dismal-Job-Outlook-for-Lawyers?slreturn=20160319153210; see also BLS figures at http://www.bls.gov/emp/ep_table_107.htm and http://www.bls.gov/ooh/legal/lawyers.htm#tab-6
19 The Future of the Professions, Richard and Daniel Susskind (Oxford University Press 2015), pp.291-292.
20 “The End of Lawyers, Period,” Casey Flaherty, ABA Journal Legal Rebels column 3/3/2016 http://www.abajournal.com/legalrebels/article/the_end_of_lawyers_period/