Legal Sector Continues Countercyclical Employment Decline for Second Straight Month with Small Job Loss

The Bureau of Labor Statistics estimates that the U.S. legal sector lost about 500 jobs in March.  In itself, that wouldn’t be cause for too much concern.  But it means that for the second consecutive month, the legal sector has lost jobs while the U.S. economy has been adding jobs at a fairly rapid pace, and unemployment has fallen to 8.8%.   

Of course, there have been months over the past year when the legal sector has added jobs, and February’s estimated loss of 2,900 jobs was revised by the BLS to a net loss of 2,000 jobs.  That isn’t terribly comforting.  Another way of looking at the data is that as the larger economy’s unemployment rate has dropped to its lowest level in over 2 years, falling by a full percentage point since last fall, legal employment has remained stagnant for the past year; indeed, it’s posted a net loss of 800 jobs, and that already incorporated the significantly depressed 2009 legal employment market.  In addition, significant underemployment is not captured in the data.

Moreover, a cloudy employment picture in a market segment that requires significant front-end investment is worse than for other sectors.  While a decline in the market for many service jobs, for example, leaves job candidates without income (bad enough), a poor market in legal jobs means that those who can’t find employment not only lose income but still have to pay the educational debt they incurred to qualify them to be, well, not employed.  You don’t invest $100,000-$300,000 at Hamburger U. to be a McDonald’s fry cook.  You do invest that much in law school (not even including the opportunity cost of other income that a law student might have had in the three years spent attending law school instead).  True, some law schools have good debt deferral or debt forgiveness programs that help graduates in trouble, but that’s cold comfort—presumably, no one went to law school just so they could not pay debt while unemployed or underemployed.

The last year’s legal employment data, as a whole, show three things.  First, you can’t rely on a generally better economy to lift the legal sector.  A rising tide, so far, has not lifted all boats.  Second, it’s more important than it’s ever been to project various post-law school employment scenarios before you make your law school decision.

Third, prospective law students and their advisors should be exacting and persistent in—and feel no qualms about—asking law schools for specific employment data that would be helpful for a particular prospective student’s decision.  (We and others have emphasized the pathetic and unhelpful nature of the data the ABA currently requires law schools to disclose and the relatively anemic reforms that are being contemplated.)  You are about to drop a significant amount of money into law schools’ laps—and you have a right to know how those have gone before you have fared.

You should not be deterred by law schools’ occasional unwillingness to provide such data.  That’s their problem—don’t let them make it yours.  I was talking with a young woman last week, who said that she had tried to get some pretty basic data from a law school at which she was accepted.  The law school told her that such data was not “public” and couldn’t be disclosed to her.  The young woman’s reaction was exactly the right one—she’s thinking about an investment decision, and refusal to disclose information material to making that decision disqualified the law school from her consideration.

The reason we have securities regulation is that investors are entitled to material information.  Law schools, in particular, should understand that and should act accordingly (or perhaps they should send their admissions personnel to their securities law or corporations classes for a crash course on investor protection).  If they don’t, it’s a reasonable guess that the—I’ll emphasize again—basic data this young woman was looking for would not reflect favorably on the law school and on her long-term employment prospects as a graduate of that school.

Law schools don’t (perhaps they should) have a legal obligation to disclose employment data that’s important to potential students.  I won’t get involved in whether they have a moral obligation.  But if you’re on the other side of the exchange—that is, you’re about to give them a lot of money—you have an obligation to yourself to think through the information you need and to press law schools for it.  Your law school admissions advisor should help you with developing and presenting the right questions at the right times.  If law schools refuse to provide information that’s important to your six-figure decision, you should understand that accepting their offer involves your taking a significant financial risk, especially in view of the persistently murky, if not grim, condition of the U.S. legal employment market.  Ultimately, you should probably do what the young woman I spoke to did–just say no to a law school that hides the ball on important information.

~ by Kyle Pasewark at Advise-in Solutions on April 4, 2011.

2 Responses to “Legal Sector Continues Countercyclical Employment Decline for Second Straight Month with Small Job Loss”

  1. […] seen declines in the overall legal employment numbers in the last couple of months and, of course, reported increases in lateral hires don’t change that bad news.  So, do […]

  2. […] legal employment numbers signaled the first increase in legal employment in several months, and the decline in legal employment in February and March was actually countercyclical, i.e., overall employment numbers were better, while legal industry […]

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