12 Fall 2015 Columbus Bar Lawyers Quarterly

The New NarrativeAlthough it took years too long during which tens of

thousands of law students - encouraged by law schools to borrow, borrow, borrow - undertook suffocating law school debt, a new narrative has now taken hold with a vengeance: a law school education is overpriced and a risky return on investment, with employment opportunities for law grads limited into the foreseeable future. Just like the old (false) narratives that a J.D. was “a multipurpose degree” and that “you can do anything” with a law degree endured for years beyond reason, the new narrative has taken root and appears poised to enjoy a good long run in the popular mind. The difference, of course, is that the new narrative is true while the old narrative was law school sales fluff.

As Applications Continue to Drop...As the new narrative settles in, law school applications

continue their multi-year drop.1 And with good reason. In general, nationally the employment prospects of law graduates continue to remain bleak and in Ohio, they’ve actually gotten worse. An in-depth study by The Ohio State University Moritz College of Law Professor Deborah Merritt of the current employment situations for those who passed the Ohio bar in 2010 shows that due to systemic changes in the legal job market, those 2010 graduates are still struggling five years after graduation.2 Those systemic employment-reducing changes are here for the long haul. Belatedly, many debt-laden, underemployed law graduates have learned the ugly truth that the financial interests of their law schools (in

LAW SCHOOLS: THE REAL EMPLOYMENT NUMBERS FOR THE LAW CLASS OF 2014By Jason M. Dolin

Fall 2015 Columbus Bar Lawyers Quarterly 13

filling classes and cranking out more and more graduates) were in conflict with their interests in finding work in an already saturated market. To add insult to injury, their law schools’ solicitation letters just keep on coming.

...So Do Admissions StandardsBut there is another ugly truth; this one for the law

schools themselves. Not only are fewer people applying to law school, but those that apply include a shrinking number with high LSAT scores. They are being replaced with lower scoring applicants who wouldn’t have been accepted even a few years ago. A report from the National Conference of Bar Examiners shows that since 2010, 95 percent of ABA-accredited law schools have lowered their admissions standards for students in the bottom of the applicant pool.3 According to one law professor who analyzed the data, “The top is eroding and the bottom is growing.” Because higher LSAT scores generally correlate with success in the first year of law school and with subsequent bar passage4, our law schools, in the interest of taking in tuition dollars, may be setting up these less qualified applicants for future bar failure. It may have already started to happen. Nationally,

the scores on the multistate portion of the July 2014 bar exam experienced the single largest year-over-year decline in four decades.5

Some law schools have started to panic. As fewer bright college graduates are choosing law school, the competition for the best students has turned ugly amongst law schools competing for a shrinking pool of good applicants. The cutthroat competition is no longer about getting into law school. If you have a pulse, there’s a law school for you. No, the cutthroating is now by law schools, against each other, for the best students. The competition for strong applicants was described by Northwestern’s law dean as “... insane. We’re in hand-to-hand combat with other schools.”6

Employment Drives the Applicant BusUltimately, what drives law school enrollment is law

graduate employment. If the legal economy was in a strong hiring mode, law schools would still be packed. But that’s not the case. The most recent national employment numbers for the Law Class of 2014, although on the surface appearing to be marginally better than those for the 2013 class, give law schools little reason to cheer. Indeed, it appears that the modest national uptick of 2.9 percent in full-time/permanent-JD-required (FTPJD) jobs was a “phantom increase” and did not result from an expanding legal market.7 On the other hand, Ohio’s law schools can’t even claim a phantom increase in employment. Instead, in the aggregate the 2014 graduates of Ohio’s law schools had employment results that were actually worse than the 2013 results.

Continued on Page 14

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14 Fall 2015 Columbus Bar Lawyers Quarterly

Continued from Page 13

National Employment Results for 2014’s ClassOn the surface, the 2.9 percent nationwide increase over

the 2013’s class in FTPJD employment may seem like good news, but a closer look at the numbers indicates that 2014 showed little, if any, actual improvement over 2013. Two factors unique to the 2014 class, and not found in the 2013 class, had been expected to boost 2014’s results. First, the “employed as of” reporting date in 2014 was 30 days later than the “employed as of” reporting date in 2013. The data collected for the 2013 class and all prior classes reported employment as of February 15. As a sop to the law schools fighting bad employment numbers, the ABA increased the length of the “employed as of” reporting period to March 15. Given those additional 30 days, one would expect a higher employment number. Second, the national Class of 2014 was 6.5 percent smaller than the Class of 2013, so, all other factors remaining constant, one would expect an employment increase to mirror that smaller class size (fewer job applicants for the same number of jobs). Even with a 6.5 percent smaller class size, the “increase” in employment was only 2.9 percent.8 Had the legal economy been growing, at a minimum one would expect the increase in FTPJD employment to have more closely mirrored the 6.5 percent in reduced class size. In absolute numbers, nationally the ABA reported that the total number of FTPJD jobs obtained by the Class of 2014 was actually less than the total number of FTPJD jobs for the 2013 class.9

In Ohio Unemployment Grows....While the national Law Class of 2014 shrank 6.5 percent

from 2013, the number of graduates from Ohio law schools shrank from 1,476 in 2013 to 1,297 in 2014, a 12 percent decrease. Apparently, it wasn’t enough. Even with less competition through smaller class size, the chart included tells the sad story. The unemployment rate for 2014 Ohio grads - not employed at any job of any kind - increased to 13 percent from 9.7 percent in 2013. In Columbus, it was the best of times, it was the worst of times. Capital University’s Class of 2014 had the highest unemployment rate in the state at an eye-popping 31 percent, more than triple its 2013 rate. Capital also had the state’s lowest FTPJD employment rate at 38.8 percent. In an employment Tale of Two Law Schools, Ohio State had the state’s highest FTPJD employment rate at 73.8 percent and the lowest unemployed rate at 1.4 percent In 2013, three of Ohio’s law schools had unemployment rates worse than the national average. In 2014, that number doubled to six.

...As Employment ShrinksOverall in Ohio, the 2014 employment numbers were

worse than those in 2013. In absolute numbers, 2014’s Ohio law graduates had 119 fewer FTPJD jobs on March 15, 2015 than the Class of 2013 had on Feb. 15, 2014, a reduction of 15 percent despite a longer reporting period. That reduction translated to a decrease in FTPJD jobs from 55.5 percent in 2013 to 54 percent in 2014, continuing a multi-year trend in which Ohio’s law schools underperformed the important FTPJD national average. In 2013, four of Ohio’s law schools had FTPJD employment above the FTPJD national average. In 2014, that number dropped to two. Further, the size of that underperformance increased in 2014. In 2013, Ohio’s law schools underperformed the national FTPJD average

by 1.5 percent. In 2014, they underperformed the national FTPJD average by almost 6 percent.

Employment projections by Ohio’s Bureau of Labor Management Information (BLMI) are not encouraging. BLMI’s most recent predictions actually show Ohio’s legal sector losing jobs through 2016. Long-term predictions through the year 2022 show the number of Ohio law graduates being probably double or more of the projected job openings.10 These numbers tell us that the legal job market in Ohio is not growing and is unlikely to do so in a manner that can sustain the projected output of new attorneys by Ohio’s law schools. Further downsizing is still needed in the form of fewer Ohio law schools and/or fewer law students in order to get future Ohio law classes to a reasonable level of employment.

...But the “Debt-inator” Keeps On GrowingBut if there’s a certainty in this uncertain hiring story, it’s

law school debt, and in 2014 the law school debt machine kept rolling. The average law school debt for 2014 law graduates increased over 2013 at seven out of Ohio’s nine law schools, although several of those increases were marginal. Case Western had both the highest average law school debt at $131,724 and the highest percentage year-over-year debt increase at 16.1 percent. Overall, Ohio’s Law Class of 2014 graduated with law school debt totaling $113,298,425. Using that overall figure, the average debt per FTPJD job obtained for the Class of 2014 (700 total) was $161,854, running from a high of $275,168 of debt per FTPJD job at Capital to a low of $105,532 of debt per FTPJD job at Cincinnati. All in nondischargable debt. Somewhere, America’s bankers are smiling.

1. http://www.bloomberg.com/news/articles/2015-03-19/law-school-applications-will-hit-their-lowest-point-in-15-years

2. http://www.lawschoolcafe.org/thread/what-happened-to-the-class-of-2010/

3. http://www.bloomberg.com/bw/articles/2015-01-06/getting-into-law-school-is-easier-than-it-used-to-be-and-thats-not-good

4. http://www.bloomberg.com/news/articles/2015-04-15/the-smartest-people-are-opting-out-of-law-school

5. Id.6. http://dealbook.nytimes.com/2014/12/01/law-school-

becomes-buyers-market-as-competition-for-best-students-increases/

7. http://www.bloomberg.com/news/articles/2015-03-19/law-school-applications-will-hit-their-lowest-point-in-15-years

8. ht tp : / /www.amer icanbar.org /content /dam/aba/administrative/legal_education_and_admiss ions_to_the_bar/statistics/enrollment_degrees_awarded.authcheckdam.pdf

9. h t t p : / / w w w. a m e r i c a n b a r.org/news/abanews/aba-news-archives/2015/04/american_bar_associa0.html

10. BLMI data on file with the author.

Jason M. Dolin, Esq.jmdolin@sbcglobal.net