In today’s column I write from my perspective as a law school dean more than my vantage point as a law professor. There have been several important pieces of data bearing on the health of legal education generally that have come to light in recent weeks and months, and I want to touch on a few of them in the space below.
First is the just-reported employment outcome data for America’s ABA-accredited law schools. By April 15, each ABA-approved school was required to post on its website detailed data for the Class of 2016 (the one that graduated last summer). Almost all schools have by now put their reports up on their sites in highly visible locations, and while the ABA’s website has not yet (as of two days ago) compiled and presented aggregate national statistics for easy comprehensive analysis, my own review of several dozen schools leads me to believe that—especially for schools considered in the top quartile of the nation’s 200 or so law schools—the overall percentage of recent graduates who were employed in full-time, long-term, non-university-funded law jobs (that is, jobs that either require a license or for which a JD is preferred) moved up a few percentage points this year compared to the Class of 2015.
I use that metric because some evaluators of law schools (like US News) consider it their gold standard, but I should quickly note that this measure has deep problems. One is that this measure does not remove from the denominator individual graduates who are not seeking a job right after law school graduation because, say, they are pursuing a full-time graduate degree. Some schools (often stronger schools, ironically enough) have a larger group of such students, and they are disadvantaged on this measure because of it. Another flaw is that all law jobs—those that are high-paying and ultra-competitive and others that are much less so—are counted equally. And we all obviously know that it is harder for a school whose students seek more competitive jobs to fare as well on this metric. Despite these significant shortcomings, this measure does allow easy comparison of year-to-year results, so I use it for these purposes.
When all the numbers are crunched, I do expect the Class of 2016’s aggregate number to be a few percentage points higher than the Class of 2015’s, but I hasten to add that—like so much else in the modern economy and modern society—the improvement seems to be concentrated among the schools that are already performing the best. Just as one indicator, consider that only one school in the US News’ top 18 schools (on their rankings released a few months ago) saw a decrease in their Class of 2016 number compared to the Class of 2015 (and even then it was a two percent drop), whereas among the schools ranked 80 to 99, at least six schools saw declines, a few as large as nine or ten percent. (The sole top school that saw a drop was Yale, and it will be interesting to see whether Yale’s two-percent drop, combined with three-percent increases by Stanford and Harvard, will end Yale’s quarter-century-plus reign alone atop the US News rankings when they next come out in March of 2018; Yale usually swamps other schools in the “resource” and “percent of applicants admitted” categories of US News, but relatively small ups and downs in the ten-month employment figure often account for significant changes in a school’s US News overall score, especially because of the way US News standardizes data for each category across the national mean.)
A big part of the reason for the progress at many schools this year may be that the size of graduating classes has shrunk, so that even if the number of new hires out there is staying roughly the same (or even shrinking a tad), the percentage of new graduates who are employed has increased. But there are also schools (and I know this because we at Illinois are one of them) that saw the absolute number of graduates employed increase quite significantly in the Class of 2016 compared to the Class of 2015.
Another consideration is that BigLaw hiring seems to be holding its own; the percentage of recent graduates employed at firms with 100 or more lawyers went up this year at several law schools I looked at. Some of these increases were small, but others were larger. At Illinois, we saw the percentage of law grads from the Class of 2016 employed at firms of 100 or more lawyers move up significantly, to about 34 percent, which is higher than it’s been in at least six years. And while our numbers may not be representative of other types of schools that feed different markets, our experience is consistent with the finding that the National Association for Law Placement (NALP) made for the previous year (the Class of 2015) that the only sector in which the absolute number of new jobs increased from the previous year was very large law firms.
Once more, it’s important to note that the trends I am noting are certainly not true for all law schools. Indeed, many schools whose employment rates have been under the most severe stress in recent years probably experienced much more uneven progress or even further slippage in the Class of 2016. But I feel pretty comfortable in saying that the employment landscape is, on the whole, somewhat more favorable than it was just two years ago.
This improvement in job outcomes has not yet led to an increase in the number of people applying to law schools. The number of LSAT takers in the 2015-2016 cycle edged up (for the first time in several years), but as of a few days ago the number of applicants to American law schools is off about 0.6 percent from the early May 2016 number, which itself was down a very small amount from the previous year. Given the steep slide in application volume over the past half dozen years, perhaps flatness over the past two years is progress. And I should note that the number of LSAT takers in the last two years is higher than it was in the late 1990s (1997-98), a time when people weren’t talking about general weakness in the legal industry. But prospective applicants—especially those competitive for the stronger schools—should appreciate that, with the number of graduates and jobs coming into alignment and with financial aid packages still quite generous, in many respects this is a particularly good time to go to law school.
Bar Passage Rates
One thing that will have to improve for employment rates to continue to move up and for applicants to return to law schools in larger numbers is performance on the bar exam. Although most practicing lawyers don’t focus much on this fact, bar passage rates in many states and at many law schools have fallen significantly over the past handful of years (and not just at the lower-ranked law schools, although their pass rates have taken the biggest hits). In California—to cite just one prominent example—the overall pass rate for first-time takers in July 2016 who were graduates of ABA-approved schools in California fell to 62 percent, off from a number in the high 70s just three or four years earlier. The 2016 number means nearly 40 percent of recent law school grads who studied and took the bar exam in California failed. That’s truly noteworthy. (And consider that more than half—11 of 21—of California’s ABA-approved schools had a pass rate below that 62% number!)
There has been a lot of ink the past few weeks about the announcement by university officials of the closure of Whittier Law School in Orange County, California. While the prospect of a fully ABA-accredited law school closing its doors is quite extraordinary, consider that Whittier’s first-time bar pass success rate on the California bar exam (where most of its graduates sit for the bar), went from an already troublingly low 43 percent in July 2014 to 38 percent in July 2015, to an almost hard-to-believe rate of 22 percent in July 2016. While, as I have written before, the California bar examiners may be setting their passing score threshold at too high a level, these shockingly low pass rates at Whittier go a long way to explaining the decision by university officials to wind the school down. Even with the prospect of better aggregate times for legal education ahead, all law schools must figure out how better to enable their graduating classes to pass the bar. The academic strength of the students coming in is of course a factor, but I am aware of no comprehensive study that indicates that incoming credentials can by themselves explain the lower recent pass rates. Indeed, my sense is that some of the studies done thus far suggest there must be other large factors at work too. There is an urgent need for additional studies here. And if changes in legal education (which, though gradual, might have reached some tipping points) are contributing to the low pass rates, law schools need to deal with them promptly and forcefully.