Finance, Law Schools

Law Schools Are Building Another Giant Lawyer Bubble Destined To Burst In The Legal Job Market

If you’re in law school, best of luck.

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It is a hot time to be a lawyer with a little experience (at least if you have the right kind of experience). Salaries are up, and top firms are enticing laterals with perks that would have sounded comedic 10 years ago, including huge signing bonuses and indefinite work-from-home.

But the key phrase there is “with a little experience.” As I explain a bit more thoroughly in my book about going to law school without incurring a forever debt, an absence in the higher echelons of the profession does not mean an employer is ready to warmly embrace a recent law school graduate. And arguably the percolating lateral job market is in part a function of the massive chunk the most recent law student bubble took out of the swathe of human beings now available to fill midlevel legal roles.

It sure looks to me like the law schools are presently creating another giant bubble in the entry-level legal job market. We can look at the most recent time this happened in the wake of the Great Recession to get a pretty good sense of what seems to be taking place again right now. The Great Recession officially lasted from 2007 to 2009. The overall legal job market wasn’t doing well, along with most other American job markets, following the recession. But did that mean aspiring lawyers saw the potentially disastrous results of getting their JDs and eschewed law school altogether? Absolutely not. It was exactly the opposite.

Students flocked to law school, in what I would say in retrospect was an extremely misguided attempt to wait out the terrible job market in graduate school (I was among them, so I’m leveling this criticism from a place of love). JD enrollment went up from 2007 to 2008. It went up again from 2008 to 2009. It finally peaked in 2010, when 52,404 1Ls enrolled in law school.

Then, slowly, painfully, the realization sank in that the United States does not need anywhere close to 52,404 new lawyers every year. JD enrollment cratered after 2010, as that first recession law school class graduated. Even as the job market slowly recovered, it was nowhere near ready to absorb the huge bubble of lawyers who went into law school during the recession. Everyone then saw that a great many of these new graduates could not get jobs, and even those who did get jobs faced lower pay and worse conditions in a marketplace where employers held all the power. Many potential law students finally realized that law school wasn’t the recipe for an economically robust life that they once thought it would be.

Things didn’t get better, they got worse. The worst year for new graduates in the legal job market seemed to be 2011, the year that I, myself, graduated. I did fine. I got a job that I liked right away (although it wasn’t particularly well-paying or prestigious, and I had a big advantage over many of my peers because I didn’t have any debt to contend with). However, I know (or knew) a lot of others who weren’t so fortunate. Two of my law school classmates (that I know of) eventually took their own lives, which I can’t totally blame on law school debt and zero job prospects, but I’m sure those factors didn’t help. A bunch of my other classmates are now out of the law entirely or still in the law but wrangling six-figure debt loads and careers that never really took off after big stumbles out of the gate. It was not a good time.

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Now I fear we’re doing it all again. Rather than going down during the onset of the pandemic, as should happen during and following an economic downturn, total JD enrollment in ABA approved schools went up from 112,882 in 2019 to 114,520 in 2020. 1L enrollment was down just slightly in 2020 — by 81 students, to 38,202. But we’re seeing 2021 enrollment set to jump again, with law school applications up by 30 percent nationwide, and many law schools taking measures to combat overenrollment.

Rather than going up or staying relatively stable during the pandemic, law school enrollment should have gone down. At 38,202 new JD students, we’re still nowhere near the hog-high 52,404 1Ls who started in 2010. Even so, 38,202 is way more new lawyers than the legal job market is likely going to be able to absorb in three years, and it looks like even more people are going to start law school this fall. The Bureau of Labor Statistics puts it pretty bluntly: “Competition for jobs over the next 10 years is expected to be strong because more students graduate from law school each year than there are jobs available.”

Even though I wish it wasn’t so, it looks like new lawyers are going to have an especially hard time of it in a few years here. It wasn’t pretty last time, and it probably won’t be this time either. If you’re in law school, best of luck. And if you’re considering law school, maybe weigh out whether some of your other options might be better than competing for jobs within a crowded field of too many new lawyers.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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