ARTICLE

Glut of lawyers has many graduates saddled with debt

When the auto industry finds it has a surplus of product on its dealership lots, due to overcapacity or slack demand, production is reduced. Plants are idled or temporarily closed.

And yet, while roughly 44,000 new lawyers graduating each year from law schools in the United States are vying for an average 30,000 new positions, the American Bar Association has accredited more than 50 new law schools since 1970.

Stephen Bainbridge, William D. Warren Distinguished Professor of Law at the UCLA School of Law, contends in his blog that if law schools continue to grow in number and size at their current rate, the gap between demand and supply for new lawyers will continue to rise every year.

“The solution is obvious, although how we can find the ability and the will to do it is not. We have to reduce the number of law schools,” writes Bainbridge at ProfessorBainbridge.com. “Just like GM has to close plants because of overcapacity, we in the law have to close some of our ‘factories.’

“Don’t get me wrong. Society still needs lawyers and we still need law schools. We just don’t need as many as the American legal academy now produces.”

In Iowa, more than 340 new lawyers graduated in 2009 with 140 positions available in the state for lawyers, according to the American Bar Association. That may be part of the reason why only 28.3 percent of the 2009 University of Iowa College of Law graduates found employment in Iowa, and 71.7 percent left the state to find a job in other parts of the United States.

Another factor may be the escalating cost of law school tuition. The average law school graduate left school in 2009 with $100,000 in debt, according to “Forbes” magazine, leading to a student loan default rate in excess of 70 percent.

Since the early 1970s, there has been a steep and persistent rise in the tuition law schools charge students, the ABA reported. During the period from 1992 to 2002, the cost of living in this country has risen 28 percent, while the cost of tuition for public law schools has risen 134 percent (for residents) and 100 percent (for non-residents). Private law school tuition has increased 76 percent.

The UI College of Law says 97.1 percent of its 2009 graduates were employed in some form of legal work within nine months of graduation, including 54.9 percent who found private law practice employment. The remainder work in:

  • Business, 13.6 percent

  • Government, 10.3 percent

  • Public interest, 8.2 percent

  • Judicial clerkship, 7.6 percent

  • Academic positions, 5.4 percent.

In response, the UI College of Law has reduced its class size in recent years, said Eric Andersen, associate academic dean.

“Four or five years ago, we discontinued admitting a group of students at the beginning of summer, which we had done for some time, and that reduced the number of students entering in a given year,” he said. “We admit students only in the fall, and the total number that we let in is 200.

“That’s down from about 235 with the summer admissions.”

Drake Law School reported that 94.7 percent of its 2009 graduates were employed, with 58 percent finding jobs in private law practice. The remainder are employed in:

  • Business, 16 percent

  • Public interest, 9 percent

  • Government, 8 percent

  • Judicial clerkship, 7 percent

  • Academic positions, 2 percent.

UI Law School graduates who found employment in private practice were able to make their average $1,100 monthly student loan payment with a median annual salary of $120,000. For those working in public interest or advocacy positions, the monthly payment was much more difficult to make on a median annual salary of $39,250.

Gary Streit, president of Shuttleworth & Ingersoll, one of the largest and oldest law firms in Cedar Rapids, said the oversupply of lawyers is having an unusual ripple effect.

“Law firms in the large metropolitan areas are not hiring as many lawyers,” Streit said. “Consequently newly-minted lawyers who would go to Chicago, New York and similar cities are applying for jobs in Cedar Rapids and Des Moines.

“We’ve seen it in terms of the qualifications of applicants who would never have put Cedar Rapids on their radar screen.”

Frank Carroll of Des Moines, president of the Iowa State Bar Association, agreed there’s an oversupply of lawyers nationwide, but is hesitant to say that’s the case in Iowa.

“I think the primary issue (of a glut of lawyers) is related to the East Coast and the West Coast,” Carroll said. “I think the law schools keep pretty good statistics as far as what percentage of their graduates get jobs, but those need to be looked at pretty carefully because ‘employment’ could mean a job at Burger King.

“It’s difficult for law schools to track who has obtained employment related to the practice of law because most of the people responding have jobs with law firms. Law schools don’t have an absolute positive way of tracking all their graduates.”

Carroll said many graduates of the UI College of Law and Drake Law School leave Iowa for higher salaries on the coasts to pay off their student loans.

“We lost two people from our firm (Davis, Brown, Koehn, Shors & Roberts) who started here and left to go to Washington and New York because they wanted to make enough money to pay their debt off more quickly,” Carroll said. “We’ve also had two people join our law firm this year who have gotten their debt under control or paid off and wanted to move back to Iowa to raise their children.”

Carroll said many students who go to law school have a grandiose idea of how much money they can make as lawyers.

“They watch ‘Boston Legal’ or whatever on television and they all sort of think, ‘It’s just a question of how far I want to be in six figures when I get out of law school.’ Unfortunately they quickly learn the truth, but they’ve already incurred significant debt,” Carroll said.

Sen. Barbara Boxer, D-Calif., on March 31 called on the American Bar Association to improve its oversight of post-graduation information reported by law schools.

“Most students reasonably expect to obtain post-graduation employment that will allow them to pay off their student loan debts, and rely on this information — which may be false at worst and misleading at best — to inform their decision,” Boxer wrote the ABA.

“The ABA allows law schools to report salary information of the highest earning graduates as if it were representative of the entire class. Also, when reporting critical post-graduation employment information, law schools are not distinguishing between graduates practicing law full-time from those working part-time or in non-legal fields.”“Law firms really don’t have an incentive to do anything to reduce the number of new lawyers because they’re getting the best applicants,” said Streit, a 1975 graduate of the UI College of Law. “It’s a real problem that must be addressed or we will have a lot of disillusioned young people wondering why they have $100,000 of student loan debt and little or nothing to show for it.”

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