Entry-Level Hiring Starts Long Crawl Out Of The Abyss

Entry-level hiring is up. FWIW.

Justinian I of the Byzantine Empire almost reconquered the Western Roman Empire. Then, everybody got the plague. Then, he got the plague. Justinian survived the plague, but neither he, nor his empire, were ever quite the same. Western Europe remained a terrible place to live for centuries.

Listening to NALP Director Jim Leipold talk about the entry-level hiring market at the recent NALP conference made me think about Europe in the Dark Ages. Things have stabilized. Things are recovering even. We might be living in the time of Charlemagne. But it’s nothing like it was before. Biglaw firms are like feudal lords: They have castles and lands and don’t give a haystack about the common folk. Biglaw associates are like knights — an elite fighting class who are the only ones that can afford their own armor. Everybody else is trying to scrape a living off of the land. And the only positive is that there are fewer people left after the plague to compete for the scarce resources. We live in a world where population deflation is a positive.

The class of 2013 was the largest on record, and thus suffered an embarrassingly low employment rate. The final numbers for the class of 2014 are not in yet, but the class is smaller, and so their employment rate is better — even though the absolute number of jobs has not increased by much. We’re cruising around 37,000 – 38,000 legal jobs available. That’s debilitating when nearly 50,000 people graduate from law school. But the class of 2014 will be closer to 40,000 people. So that’s better.

Projecting into the future, classes are also going to be smaller. According to NALP, there were only 37,924 1Ls enrolled in ABA-accredited law schools for the 2014-2015 academic year. So, 38K or so law students, 38K or so jobs, I’ll pause for IDIOT, F**KING LAW PROFESSORS to “declare victory” and tell everybody that now is a great time to go to law school.

It’s not a great time to go to law school. Leipold noted that law firms — who are notoriously late adopters — are just at the beginning of the technology curve. Also, those 38,000 jobs are not distributed evenly: Leipold noted that there is actually an uptick in demand for legal services (yay), but that demand is mostly transactional work. And the darkest cloud might be that realization rates are near historic lows. (Dear law profs, read Joe’s post about how law firms actually work before selling the next crop of students on law schools.)

And of course there is still the MOST IMPORTANT GRAPH IN LEGAL EDUCATION.

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That is the bimodal salary distribution curve for the class of 2013. As usual, it shows a spike around $160,000 — which is the Biglaw starting salary. Those are the knights. The serfs are on the left, making between $45,000 and $60,000, turning tricks and selling their hair to keep up with their loan repayments.

Despite all the storm clouds, there is a lot of good news in the numbers this year. Easily it was the most positive “entry-level clusterf**k” panel in my six years of NALP. Biglaw hiring is picking up slightly. Summer programs are growing. High offer rates are back.

Whether you are optimistic or pessimistic about the future probably has a lot to do with how you interpret the “brain drain” data. Leipold noted that while LSAT takers are down across the board, the biggest drop off has been among high LSAT scorers. LSAT takers who score below 145 are actually up, as freaking terrifying as that is. I asked Leipold directly if we were seeing greater stratification in the market: Biglaw firms sticking to the top-14 and ignoring the rest of the schools. Leipold said that they were mainly going to elite schools for their hiring needs, but they might not be able to continue. Actual top talent is harder to come by, and to fill their seats, Biglaw firms might have to start reaching into the top ten percent of the class at a wider range of schools.

A reasonable optimist would say that this is a great time to go to law school if you are throwing down 170s on the LSAT and finishing in the top ten percent of your class. A realistic pessimist would point out that this is a ruinous time to go to law school for all but the academically elite. A law professor would say: “Kneel before Law School and you shall be rewarded, in this life or the next! Now place your loans in the collection basket.”

I say: we’re in a recovery, but what we need is a Renaissance.

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(Image of my visit to Cooley Law School, courtesy of Shutterstock.)