The Legal Job Market and What To Blog About It

A commentator to another thread chided me for our blog’s relative lack of focus on the rapidly imploding law employment market. We have given sporadic attention to this topic since the pace of law firm layoffs has accelerated. Instead, as the commentator noted, we’ve been generally focused on our usual concerns: writing, the legal academic job market, privacy, cyberlaw, etc. That’s about par for the course for most law professor blogs, from Volokh to Prawfs to the Conglomerate.

You might be tempted to think that this absence is evidence of us being insulated fat cats, who don’t know or care about what’s happening with our students. But I think you’d be wrong.

For me, the reason is simple: comparative advantage. I read Above the Law daily, but I don’t have much to add to their terrific coverage. The underlying economics of the great recession are similarly not something I have much new to add to, though we’ve tried (on the blog) to talk about different ways the law could respond to systemic failure. I assume most readers of this blog have read Bill Henderson’s work on law firm economics and Ribstein’s stuff on leverage, which is a reason that the job market is freezing up. (Though not a complete reason.) A minor point that I have thought about is the role of law schools in making the system worse: I’ve written that law school should be cheaper and shorter, and that the only way to really make that happen is to set schools free of certain ABA-accreditation constraints.

Given all that, I honestly don’t know what more I’ve to add about the effects of the recession on the market for lawyers. If, like every downturn since the 1930s, the economy rebounds in the near-term, I hope that the effect won’t be Generation OMG, JD. If we see structural changes – – the permanent loss of domestic finance transactional work in response to outsourcing, a movement toward Britain’s model of less exclusive attorney licensing, etc. – – then things will be different. It would strike me that any really drastic change in the economics of the legal profession would be more likely to harm expensive private institutions than cheaper public ones, assuming that state funding is somewhat stable (when compared to endowment returns). But I’ve got no crystal ball, and it strikes me as sort of a waste of time to pontificate about wicked things this way coming.

I’d rather stick to things I know about, plodding away, trying to make legal rules and their relationship to individual behavior more clear. It’s a way to stay sane.

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9 Responses

  1. Dave says:

    On the point of law school costs making it worse: ABA accreditation standards are not the problem, or at least not the only problem. The real problem is using student tuition to subsidize scholarship. That seems to be an aspect of the law school/law practice relationship that the academics always seem to miss!

    To the extent that the demand that law schools in all tiers be research institutions can be attributed to ABA accreditation standards, perhaps that might be true. But my guess is that it has more to do with US News rankings and the desires of both faculty and students to rise within them.

    Right now the students that are hurting the most are those at lower tier schools. Those schools have aggressively upped tuition as they sought to play the rankings game. The schools have been engaged in borderline fraud by advertising their average one-year-out salary as the mean average, when the median is significantly lower. Now, even the top students at those schools are getting hosed as firms skip interviewing at those schools in favor of the top tier schools.

    Perhaps the answer is to stop subsidizing scholarship with tuition. Force prawfs to obtain grants to subsidize research, and reduce tuition by putting it towards supporting instruction only. If only we could get a law professor to sign on with that agenda!

  2. Orin Kerr says:

    The moral depravity of this blog is conclusively proved by the fact that you never blog about beer or jazz.

  3. Orinisnotasfunnyashethinksheis says:

    Thanks, David, for the post. Sorry about the blurb earlier … it happens.

  4. A.J. Sutter says:

    FWIW, I enjoyed Orin’s 10:43.

    I don’t take issue with David H.’s defense about not shifting the blog’s attention the impact of the recession. Especially because neither the legal profession nor the study of law are exclusively, nor even primarily, in the service of the private economic sector, where many law students hope to get employed. Nor do I think that in general profs should take the blame for their law schools’ PR. And there is the option of skipping law school and “reading in” in several large-population states, including CA, NY and VA, as well as in some smaller ones. Which isn’t at all to say I’m unsympathetic to everyone who’s incurred big debts from going to law school and now is out of a job; it’s just that law profs in general don’t seem to be the appropriate targets for blame.

    What I do hope will happen at the prof level, though, is that some people will think more critically about their enthusiasm for law and economics and its arguments favoring the benefits of “efficiency” for society and individuals. It’s arguably “efficient” for profit-maximizing law firms to put hundreds of people out onto the street because profits per partner have dropped from $1.X million to $1.Y million. After all, when a firm’s PPP drops 21%, from $2.27M to $1.8M, that’s “nothing to be proud of.” Another firm let go of 200 attorneys yesterday (plus 200 staff), and 70 other attorneys during the few months prior to that, but its 2008 revenues were up 7%. That’s a logical outcome of the economistic (and predominantly capitalistic) ideology promoted by L&E profs, notwithstanding that they are not alone in doing so. “Plodding away,” hiding Fish-like behind the pretence of non-engagement, ignores that politics and ethics are unavoidably intertwined with the subject of law, and that L&E is in fact a form of advocacy for a very destructive amorality.

  5. JP says:

    I also enjoyed Orin’s comment.

    A.J.: Are you suggesting there is no distinction between positive and normative law & econ scholarship, or are you just criticizing normative scholarship (i.e., anything that promotes efficiency)?

    Of course, another view is that a rigorous economic review of the biglaw business model might have shown that the model is inefficient, with the certain result of unjust outcomes (mostly for clients during good times; for associates during bad times). As an example, the billable hour is often immoral and inefficient. And in fact, immoral because of its inefficiencies.

  6. dave hoffman says:

    Orin,

    How wrong you are.

  7. Daniel M says:

    I agree with JP- the billable hour is immoral because it is inefficient. My hope is that the current job market will drive that point home to some astute employers.

    I was watching a video on newsy.com where they brought up the point that the economic crunch may cause companies to tend more towards independent contractor, which I think would be more efficient and better for everyone.

  8. A.J. Sutter says:

    Thanks, JP, for your good question. Actually, I’m not a fan of either type of L&E scholarship, at least as usually conducted in the Anglo-American tradition, i.e. based on neoclassical economics (NCE). My objections to the positive research rest on several principles that I’ve mentioned from time to time in comments to other posts on this blog during the past year or so; unfortunately the blog’s search engine seems to search posts only, not comments, so it’s not feasible for me to dig up any links. These are based not only on the scientistic trappings of NCE — reliance on proofs and unlabeled graphs, fallacies of composition (see the Sonnenschein-Mantel-Debreu theorem), etc. — but on the political and social assumptions implicit in NCE’s categories — e.g. indifference to distribution, reductivism to utility, false presentation of markets as being natural phenomena, etc. Somehow, I kinda have a hunch that making a moral virtue of economic efficiency wouldn’t resolve my issues.

    Daniel, I speak as someone who was an IC at a Biglaw firm during the height of the dot-com era, and who’s had a solo practice on and off for the past 5 or 6 years (just opening a new one in Japan now). During the late 1990s, no question: it was fun and profitable for me and a bargain for the firm (though therefore maybe not so economically efficient for me, even though I was satisfied). Of course, a lot of ICs are out on the street now, too, and their independence doesn’t guarantee that they’ll find paying work so easily. This is still a relationships business, not one based on an anonymous market. And while it’s relatively easy to find people who want to use your services, it’s much harder to find people who are able and willing to pay you for them. Moreover, you’ll probably find that trying to get, say, health insurance as an IC when you’re past 50 years old is not “better for everyone”. At least, it wasn’t in the States.

  9. A.J. Sutter says:

    PS on the IC point, as for employment outside the law industry: here in Japan, the 2004 liberalization of labor laws, making it easier for companies to hire contract workers, is now regarded as a national tragedy. Contracts are usually very short, less than a year and often only 3 months. Many companies required workers to live in company dorms, for which they were charged. Of the >100,000 who have been let go, many are now homeless. Yet the PM (now ex-PM) who pushed this “reform,” Koizumi, remains highly regarded in the US because of his free-market attitude. There is a very dark side to independent contracting.