Survey: Jobless rate rises for new law school grads

Despite two years of growth in the number of jobs obtained by law school graduates, a new report shows the overall employment rate for new law school graduates fell slightly for the sixth year in a row.

The Employment Report and Salary Survey for the Class of 2013, released recently by the National Association for Legal Career Professionals, showed the employment rate for the Class of 2013 stood at 84.5 percent compared with 87.5 for the class of 2012.

Even though the total number of jobs obtained by the 2013 grads was somewhat higher than the previous class, and the number of employment opportunities funded by law schools increased, the Class of 2013 was bigger, resulting in a slight employment rate decline.

“Law graduates must enter law school with the understanding that the jobs picture, while strengthening, is one that will continue to evolve, and in the course of that evolution it is almost certain that new opportunities will present themselves, just as it is certain that some traditional opportunities that law school graduates have long counted on will continue to erode,” said NALP Executive Director James Leipold.

“It is not true that there are too many lawyers,” he said. “Indeed even today most Americans do not have adequate access to affordable legal services — but the traditional market for large numbers of law graduates by large law firms seeking equity-track new associates is not likely to ever return to what it was in 2006 or 2007, and thus aggregate earning opportunities for the class as a whole are not likely to return to what they were before the recession.”

NALP measures the employment rate of law graduates as of February 15, or nine months after a typical May graduation.

Analyses of these data, he said, reveals that the employment rate that has fallen 7.4 percentage points since reaching a 24-year high of 91.9 percent in 2007 and that marks the lowest employment rate since the aftermath of the last significant recession to affect the U.S. legal economy.

Since 1985 there have only been two classes with an overall employment rate below 84.5 percent, and both of those occurred in the aftermath of the 1990-1991 recession: 83.5 percent for 1992 and 83.4 percent for 1993.

Despite signs of modest improvement, the survey showed there were still signs of weakness in the entry-level job market, as some of the improvements that started in 2012 continued in 2013, but not always at a similar rate.

For instance, Leipold said, of those graduates for whom employment status was known, only 64.4 percent obtained a job for which bar passage is required, unchanged from 2012.

From 2008 to 2012 this figure fell over 10 percentage points — from 74.7 percent to 64.4 percent — and for the second year in a row is the lowest percentage NALP has measured.

Leipold said the entry-level legal employment market “is a complex labor market that defies easy analysis or simple summation.”

“In the best of times law school graduates have entered the labor force by taking many different kinds of jobs, not all of which can be described as actually practicing law or even law-related,” he said. “As the legal services market continues to change at a rapid pace following the dramatic downsizing during the recession, the variety and diversity of jobs that law grads take now is greater than ever.”

In general, Leipold said, the picture that emerges “is one of slow growth, and growth that is a blend of continued shrinkage and downsizing in some areas offset by growth in other areas.”

The legal sector is best described as mostly flat in the Spring of 2014, he said, with overall sector headcount still off by more than 40,000 jobs from its pre-recession high according to data from the U.S. Bureau of Labor Statistics.

The entry-level job market reflects that mostly flat business environment for the legal sector generally,” Leipold said.

More than half of employed grads found jobs in private practice

Additional analyses of the jobs data for the Class of 2013 reveal that just more than half (51.1 percent) of employed graduates obtained a job in private practice, up from 50.7 percent for the Class of 2012 and the highest since 2010.

However, that figure for the Class of 2010 represented a full five percentage point decline from 2009.

For most of the 40 years for which NALP has collected employment information, the percentage of jobs in law firms has been in the 55-58 percent range and has been below 55 percent only before 1981 and since 2010.

The combination of a slightly larger number of jobs overall and a higher percentage of jobs in law firms means that the number of law firm jobs increased, but by just over one percent, compared with an almost eight percent increase from 2011 to 2012, and is the largest number since 2009.

Additionally, jobs in the largest firms — those with more than 500 lawyers — continued to rebound from their low point in 2011, and accounted for 20.6 percent of jobs taken in law firms, compared with only 16.2 percent in 2011 and 19.1 percent in 2012.

Other findings include:

• The national median salary for the Class of 2013 was $62,467, compared with $61,245 for the Class of 2012.

• Part-time jobs were found in all employment sectors, but were especially prevalent in academic settings, at 39 percent followed by business at 14 percent.

About 12 percent of public interest jobs were reported as part-time, compared with 18 percent in 2012.

• Both the number and percentage of jobs reported as funded by the graduate’s law school were up compared with the Class of 2012, at 4.5 percent and over

• Employment in business reached a historic high of 18.4 percent in 2013, and has exceeded 15 percent since 2010.

• Public service jobs, including military and other government jobs, judicial clerkships, and public interest positions, accounted for 27.6 percent of jobs taken by employed graduates, compared with 28.2 percent in 2012.

• Government jobs including those in the military fell from 12.1 percent of jobs in 2012 to 11.5 percent in 2013, a drop that translates to about 200 fewer jobs.

• Of employed graduates from the Class of 2013, about 22 percent were seeking a different job, a second year of decline from the record high of 24.6 percent for the Class of 2011.

• Although slightly fewer graduates from the Class of 2013 are setting up their own solo law practice after law school compared with 2012, they accounted for 4.8 percent of law firm jobs and 2.5 percent of all jobs.

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