Big Law, We Have a Problem
- Nov 16, 2009
- Admissions, Legal Life, Number of LSAT Takers
The numbers are out, and they are huge. On September 26th, more students took the Law School Admissions Test (LSAT) than have ever taken a single administration of the LSAT in the history of the exam. Chalk it up to the recession, the economy, or the sudden increase in all things vampire. Whatever the reason, over 60,000 students lined up to take the first step to becoming a lawyer on September 26th. This turnout continues a sudden increase in LSAT administrations that began roughly in 2007. Prior to that, total LSAT administrations peaked in 1990-91, fell through 1997-98, and jumped to modern numbers (approximately 143,000 test takers) from 2001, onward. For the full graph from the Law School Admission Council, see below.
Except previously, there were law firm jobs to absorb the effluence of law students. As the economy foundered, the number of LSAT takers began to increase again, with June 2009 constituting the single largest June administration in the history of the LSAT. June and September 2009 combined represent 13,681 more tests administered over the previous year, or an increase of 17%. If this increase stays constant for the rest of the testing cycle, that would mean there will be 177,136 LSATs administered this year, the largest percentage increase in eight years.
Which could be a real problem.
It might not be news that Big Law is foundering, but it’s still scary. Powerhouse law firms such as Kirland & Ellis and Baker Botts are laying off attorneys while others are cutting back on new hires and decreasing the number of on-campus interviews. With law jobs shrinking, it’s hard not to wonder where all of the students taking the LSAT and applying to law school are going to go.
The answer will probably entail a change in the old conception of learning and practicing the law. In order to survive, big law firms will have to rethink their billing models, law schools will need to retool their career placements options, and law school graduates are going to have to change their expectations of what a law degree means in the marketplace.
Law Firm Changes
At the beginning of the year, The New York Times reported that more big law firms are considering alternatives to the long-criticized billable hour. Our own, albeit anecdotal, research confirms that more firms are moving away from the decades old model of charging hourly rates. One associate we spoke with at a Big Law firm in Texas reports that her firm is accepting work for a flat rate per project. Instead of charging $350 per hour, for example, the firm charges a fee of $500 to draft a particular document. While Jeremy Rosen, partner at uber-prestigious appellate firm Horvitz & Levy, would not agree that the billable hour is dead, he does admit that “…our firm has accommodated client’s requests for flat fee or other alternative billing arrangements when they are mutually beneficial to both sides.” As clients search for ways to fulfill their legal needs and maintain their bottom line, such flexibility will surely continue.
Law School Changes
On the other side of the spectrum law schools, cognizant of the looming problem, are taking steps. Matt DeGrushe, Dean for Career Services at USC Law School told us that that the Career Services Office “…has been actively identifying smaller and mid-sized firms in Southern California” for their students to apply for positions. The office also launched the Career Management Program this fall that oversees student job searches in a much more comprehensive manner.
Other schools are also experiencing additional interest in their externship programs. The National Law Journal reports that at UCLA Law School, annual externship participation jumped from 41 students in 2007 to 74 in 2009. At Arizona State Law School, participation in summer externships rose from 46 in 2004 to 75 this year.
Still other schools are increasing their loan repayment options to encourage students to go into other areas of the law. At UC Berkeley School of Law, the Loan Repayment Assistance Program has been significantly enhanced. According to their web site, “The program is designed to ease the financial burden faced by alumni who pursue public interest or government work, where salaries are significantly lower than in the private sector.”
Law Student Changes
Gone are the days when law school is an automatic back-up plan for History/English/Communication majors who don’t know what else to do with their degree. With law school tuition soaring, students need to know that they can pay off their degrees. They also need to be more inventive about what their legal career can look like.
A second year law student we spoke with decided to go to a lower-ranked law school that gave scholarship money. The student reports that “I could have gone to a higher-ranked school, but it was more important for me to graduate without too much debt.” She also recognizes that her legal career may not look like she thought it would. “There was very little on campus recruiting at my school this year, so I know I’m going to have to be flexible when it comes to the type of legal job I’ll take.”
We spoke with a second year law student at NYU who explained that the changed economic climate meant an opportunity to work at the Commodity Futures Trading Commission (CFTC). The CFTC protects market users against fraud and abusive practices related to commodity sales. While our 2L ultimately desires a job in Big Law, he felt that working at the CFTC would give him a different resume to help him stand out in the crowd. So far, his plan appears to be working as he explains that “I got a relatively high degree of responsibility on a number of cases ranging from complex litigation against sophisticated defendants to nickel and dime (e.g. <$20M) Ponzi schemes. At the end of the day I got exactly what I was hoping for—direct experience litigating cases and some wonderful insight into the financial markets.”
What to Do
The confluence of more LSAT takers and an economic downturn means that law students need to be savvier consumers. The larger applicant pool might allow law schools to be more selective, so record low acceptance rates may be on the horizon. Or law schools, seeing the increase in applications, might increase their entering class size. While this might seem to be a more favorable response from an applicant’s perspective, it could well result in starker job prospects three years hence. Or perhaps much of the present economic tumult will have passed by then. The future of Big Law remains unclear, but law firms and law schools are doing their best to respond to the new economic climate. Hopefully, the 60,746 September LSAT takers will follow suit.
Article by Jodi Triplett of Blueprint LSAT Preparation.
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