The Coming Crunch for Law Schools

Brian Tamanaha

The New York Times released a chart yesterday showing that law schools are churning out far more lawyers than the number of available legal positions. That is old news, of course. What's worse is that the oversupply promises to continue. In 2010, Georgetown enrolled 591 first year JD students, Harvard enrolled 531, Fordham enrolled 477, and NYU enrolled 476. Large classes are not limited to top schools: New York Law School took in 641, John Marshall (Chicago) enrolled 539, and Suffolk enrolled 531. (Let's not talk about the 808 first year students taken by Florida Coastal and 1,583 by Cooley.) Law schools now pump out about 45,000 graduates annually at a time when the Bureau of Labor Statistics projects about 28,000 new lawyer positions per year.

Why are law schools enrolling so many students when employment prospects for graduates are so poor? Because they must. In the past two decades law faculties have gotten bigger. AALS tallied 7,421 full time faculty in 1990, and 10,965 in 2008. Some of this overall increase comes from newly accredited schools, but most of it is faculty expansion: student-faculty ratios have been cut almost by half during this period.

Bigger faculties must be paid for through some combination of more bodies (J.D. and LL.M) and higher tuition. Tuition already goes up every year as it is, so the number of revenue paying students cannot be reduced substantially. It's that basic. (Administrations have also gotten bigger, but I focus on faculties because faculty expenses typically comprise more than half of the total budget and are hard to trim owing to tenure and long term contracts.)

Law schools will soon suffer the consequences of this expansion. The chart below tracks the number of applicants against the number of first year students from 1990 to the present. As it shows, law schools exhibit a one-way ratchet: when applications drop, enrollment remains steady; when applications rise, enrollment goes up.


This pattern--explained by our need for revenue to fund our operation--portends tough times ahead for law schools.

In 1991, the number of law school applicants peaked at nearly 100,000, then fell every year until it reached a low of about 71,000 (in 1997), before turning up again. A second peak of 100,000 was reached in 2004, followed by another decline. (Notice in the chart that neither drop in applicants is matched by a drop in enrollment.) Law schools enjoyed a two year boost in applicants in 2009 and 2010 owing to the economic recession--with jobless graduates flocking to law schools hoping to improve their situation--but the number turned down again this past spring by eleven percent.

Here's where things get sticky. In the nineties law schools enrolled about 42 thousand students, which provided a margin of thirty thousand applicants at the low. This year the number of applicants was roughly 79,000, with law schools enrolling 51,000-plus students, leaving us at about the same margin of thirty thousand applicants over seats.

With tuition high and job prospects low, it seems likely that the number of law school applicants will continue to fall--although it's hard to say how far or for how long. One concrete indication of a continued drop is the google trend line for LSAT searches (check it out here), which shows a steady downward trajectory since the peak in 2004. (Tellingly, the applicant uptick in 2009 and 2010 barely disrupts the overall trend.)

If the drop in applicants continues, while enrollment stays up, schools will reach deeper in the pool to fill their classes, bringing in students with lower qualifications. A significant decline like this has happened before, in the early eighties and the nineties. The consequences for each school will depend upon its standing in the overall law school hierarchy and in the local legal market. But every school will feel it (although much less at the top). Schools would be prudent to anticipate a cumulative drop in applications of perhaps a third from their high. (Even if the reduction does not go that far, the number will be misleading because prospective students now apply to more schools than in the past.)

The 2010 acceptance numbers suggest that many law schools are already in a worrisome spot. That year, twenty schools accepted between 45% and 49% of the students who applied; twenty-two schools accepted between 50% and 59% of applicants; and seven schools has an acceptance rate of 60% or higher (Cooley was the highest at 83.3%). Added together, nearly a quarter of law schools in the country accepted close to half or more of their applicants—and this was before the latest decline in the number of applicants.

Law schools have enjoyed flush times for more than a decade. Tough times are ahead.
Posted 3:00 PM by Brian Tamanaha [link]