Allison Linn

Law degree loses luster amid weak economy, globalization

June 14, 2012 at 5:44 PM ET

Steven Senne / AP file /
These 2012 Harvard law school graduates likely face solid prospects, but that is not as true for many newly minted lawyers.

Lawyers have sometimes taken a ribbing for what they do, but until recently few questioned why they do it: For the good pay and job security.

You can’t necessarily count on either of those things anymore.

The weak economy, globalization and technological advances have dramatically changed the legal industry, and experts say that's leaving a glut of lawyers coming out of school with massive student loans, high hopes and few job prospects.

“There’s kind of an over-optimism that feeds the law school market,” said William Henderson, director of the Center on the Global Legal Profession at Indiana University’s Maurer School of Law.

The National Association of Law Professionals reported last week the overall employment rate for class of 2011 law school graduates was the worst since 1994, with 85.6 percent of the 41,623 graduates holding a job nine months after graduation.

That may seem like a lot, but it turns out that many of those people don’t have the type of job that might expect after spending so much time and money on a law degree.

A year after getting their degrees only about 65 percent of last year’s law school graduates had a job that required them to have passed the bar, the association found. What’s more, nearly 10 percent were still looking for any job at all.

The longer-term prognosis isn’t so great, either. The Bureau of Labor Statistics projects that employment of lawyers will grow by only 10 percent between 2010 and 2020, while overall jobs are expected to grow by 14 percent.

The declining prospects come as more and more law firms, and their corporate clients, discover what manufacturers figured out a long time ago: Sometimes it’s cheaper to outsource your work. Experts say many companies now rely on cheaper legal minds in India, the Philippines and elsewhere.

Related: Storied law firm folds after partners flee

“Simple tasks like document review … can now be done in these offshore markets at much lower price points,” said James Leipold, executive director of the National Association of Law Professionals.

Some companies and law firms also are using more contract or temporary workers who cost a lot less than young associates and have little chance of being hired permanently.

The weak economy also has played a role. When companies started to see profits decline at the start of the recession, many took a hard look at their legal expenses and found areas where they could trim fat. Among other things, they told law firms they were no longer willing to pay high hourly rates for the work of young, inexperienced associates.

Henderson, the law professor, said there is also a crop of new legal entrepreneurs who are using technology to do legal work that was once done by hand, at higher cost and with more mistakes.

Those changes mean that big law firms don’t need as many young law school grads. That’s leaving a lot of young lawyers stuck in dead-end, entry-level or less lucrative jobs, or not practicing law at all.

Stephanie Tricomi graduated from Roger Williams University’s law school in 2006 with high hopes that she and her husband, also a law school graduate, would use their degrees for long and lucrative legal careers.

The couple moved from Rhode Island to Florida, she passed the bar exam and was quickly hired as a clerk for trial court judges.

She figured she would do that for a couple years and then move on to a big firm or her own practice, and a fatter paycheck.

“I thought, OK, well, this is a great starting point,” said Tricomi, now 31.

Her husband, meanwhile, thought he would start a career in real estate law, but then the housing market went bust. He ended up deciding to teach high school literature.

In late 2008, Tricomi began looking for a new job but found that few were available. Then, in early 2009, her husband was diagnosed with a rare form of cancer. After a long and costly battle, he died in May 2011.

Six years after graduating from law school, Tricomi is still working as a law clerk, earning about $45,000 a year. She hasn’t had a raise since she started because of a pay freeze, and her own office hasn’t hired anyone since they brought her on.

Tricomi likes her job but she’d like to advance her career. So far, however, she hasn’t had luck finding another job.

Meanwhile, she’s grappling with about $80,000 in student loan debt. She said she gave little thought to the debt she was taking on when she started law school, thinking at the time that her lucrative career would make the loans more than worthwhile.

“You think, oh, well, that’s not that bad. When I come out, I’ll be making $100,000 at least,” she said.

Between regular bills and student loan payments, Tricomi is living paycheck to paycheck. That’s not what most people think when they hear what she does.

“Even now, when I tell people I’m an attorney they say, ‘Oh, you must be rich,’” Tricomi said. “That’s the assumption.”

Some critics blame law schools for the glut of lawyers, arguing they paint too rosy of a picture of life after law school to recruit more students.

The American Bar Association recently made changes aimed at giving a more accurate picture of the market for law school graduates, and how many are really taking home fat paychecks.

The changes come in the wake of harsh criticism from groups such as Law School Transparency. They have argued that law schools have distorted the numbers by hiring grads for a short period of time to bulk up employment numbers, for example, or only including the small sample who responded when reporting stellar average starting salaries.

“Everyone is saying, ‘Oh, law school is a great investment. It’ll be a way to make a lot of money,’” said Kyle McEntee, executive director of Law School Transparency. “It turns out that wasn’t actually true.”

McEntee, who graduated from Vanderbilt Law School in 2011, actually started the project before it became apparent just how tight the job market was going to get for lawyers. He says he doesn’t want to keep people from going to law school; he just wants them to go in with their eyes open.

“My goal is not to scare people away,” he said. “I just so happen to think that the informed decision is, don’t go.”

Leipold, of the lawyer’s association, thinks it’s possible that the class of 2011 represented the worst of things, and that job prospects will slowly start to improve. But he also said that some of the changes in the legal profession are likely permanent.

“I don’t expect a dramatic turnaround,” he said.

Already, there are signs that some are souring on the prospect of going to law school.

The number of people taking the LSAT, the test required for law school admission, has fallen sharply in each of the past two academic years. A total of 129,958 people took the LSAT in the 2011-2012 academic year, according to the Law School Admission Council.

That’s the lowest number in a decade.

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