## Monday, July 5, 2010

### 40 Years of Lawyer Overproduction, a Data Table, and 2 Charts

In my last two posts I explored the rate of new lawyer production in terms of the inverse number of attorneys per capita that could be sustained by graduation rates (expressed in terms of one lawyer for every X-amount of people) using the assumption that a new lawyer would want to practice for 40 years.  Let's call this number the Sustained Inverse Lawyers Per Capita, or SILPC.

I was curious about the historical trend, so I conducted a study and was surprised to discover that the law schools have been overproducing lawyers for almost 40 years!  In other words, the rate of production in terms of SLPC has averaged one lawyer for every 171.9 people since 1973.  I knew that lawyer overproduction had been a problem for decades, but I had never imagined that it was this bad!  I had previously assumed that the SILPC had decreased steadily over time, but apparently this is not the case.

I calculated this data using U.S. Census Data for the U.S. population and ABA statistics for the number of JDs awarded each year since 1963.

Assuming that, on average, a lawyer would want to practice for 40 years, SILPC = Population / (JDs Awarded * 40)

 Year JDs Awarded US Population Inverse Lawyers Per Capita (SILPC) 1963 9,638 189,242,000 490.9 1964 10,491 191,889,000 457.3 1965 11,507 194,303,000 422.1 1966 13,115 196,560,000 374.7 1967 14,738 198,712,000 337.1 1968 16,007 200,706,000 313.5 1969 16,733 202,677,000 302.8 1970 17,477 205,052,000 293.3 1971 17,006 207,661,000 305.3 1972 22,342 209,896,000 234.9 1973 27,756 211,909,000 190.9 1974 28,729 213,854,000 186.1 1975 29,961 215,973,000 180.2 1976 32,597 218,035,000 167.2 1977 33,640 220,239,000 163.7 1978 33,317 222,585,000 167.0 1979 34,590 225,055,000 162.7 1980 35,059 227,726,000 162.4 1981 35,604 229,966,000 161.5 1982 34,847 232,188,000 166.6 1983 36,390 234,307,000 161.0 1984 36,688 236,348,000 161.1 1985 36,830 238,466,000 161.9 1986 36,122 240,651,000 166.6 1987 35,479 242,804,000 171.1 1988 35,702 245,021,000 171.6 1989 35,521 247,342,000 174.1 1990 36,386 250,132,000 171.9 1991 38,801 253,493,000 163.3 1992 39,082 256,894,000 164.3 1993 39,915 260,255,000 163.0 1994 39,711 263,436,000 165.8 1995 39,355 266,557,000 169.3 1996 39,921 269,667,000 168.9 1997 41,115 272,912,000 165.9 1998 39,456 276,115,000 175.0 1999 39,072 279,295,000 178.7 2000 38,158 282,434,000 185.0 2001 37,910 285,545,000 188.3 2002 38,606 288,600,000 186.9 2003 38,875 291,221,000 187.3 2004 40,024 293,842,000 183.5 2005 42,672 296,463,000 173.7 2006 43,883 299,084,000 170.4 2007 43,518 301,705,000 173.3 2008 43,588 304,326,000 174.5 2009 44,000 306,947,000 174.4 2010 309,565,000

From 1963 to 1970 the SILPC decreased steadily until a huge jump occurred between 1971 and 1973.  The worst year was 1983 when the rate bottomed out at 161.0.  Perhaps the market was able to comfortably absorb this amount of lawyer overproduction in the Sixties and Seventies.  Presumably, new attorneys have suffered difficulty finding career-building entry-level jobs and earning a living practicing law since the late Seventies or early Eighties, but the Internet was not available to chronicle it.  It is also possible that lawyers were more easily able to obtain upwardly mobile white collar jobs in those decades at a time before hordes of people went to college.  In other words, the Law School Scam took root 40 years ago.

If I can obtain the data, I would like to plot the number of attorneys who maintained licenses every year since 1963.  A plot of the data shows that JD production has outpaced U.S. population growth by a tremendous margin since 1963:

The red data in the chart above is SILPC.  It has remained fairly steady since 1973 with an average SILPC of 171.9.

This last chart expresses U.S. population growth and the growth in the amount of JDs awarded as a percentage since 1963.  So, a data point of 50% population growth would mean that the population had increased by 50% since 1963.  A data point of 300% JDs awarded means that the number of JDs awarded that year was four times the number awarded in 1963.  (A number of 0% would mean that the number is the same as it was in 1963, and a number of 100% would mean that it was double the amount in 1963.)

------- EDITOR'S NOTE -------

March 11, 2011.  I want to clarify that the 40 year average lawyer-to-population ratio that new JD production can sustain (which I eventually calculated to be 1 lawyer for every 171.9 people) is NOT the same thing as the actual lawyer-to-population ratio.  The number I calculated for a given year of new JD production would only reflect the actual lawyer-to-population ratio if the U.S. population remained the same for the following 40 years.  This is because while the U.S. population continues to increase, the number of JDs produced in a given prior year is static and cannot increase proportionally with population growth.

Consequently, Using ABA and BLS stats, the actual lawyer-to-population ratio is about 1 lawyer for every 215 people (only counting JDs minted over the past 40 years).

BL1Y said...

While lawyers per capita certainly is a useful stat, it's not the full picture of lawyer job market sustainability. Increases in government regulation mean more lawyers, both in the government, and in private practice either at firms or in house. Basically, they create more demand for lawyers.

What I find more interesting about this is that government regulations or not, most of what lawyers do does not build the economy. Doing work on contracts arguably helps build the economy (as much as the underlying deal does), but regulatory work does not, law suits do not, wills do not.

The increase in lawyers per capita shows that we have a lot of highly paid people who don't contribute to the economy. That's a recipe for economic disaster. I bet if you looked at the number of HR personnel and middle managers, you'd see a similar increase.

A Law School Victim said...

I hope you and Nando jump on this: http://www.bls.gov/k12/law02.htm, look at what it says: "How much does this job pay? Back to Top

Lawyers are some of the highest paid workers. Although some lawyers work for themselves, many other lawyers work for governments, law firms, and corporations. In May 2008, the average yearly wages for lawyers were \$124,750.

Lawyers held about 759,200 jobs in 2008. Most lawyers worked for themselves or in law firms. Some lawyers worked for other businesses or for government." I wanted to smack the screen when I say this.

Frank the Underemployed Professional said...

I'm sure that the average income statistic conveniently or perhaps naively only counts lawyers who work in the field and not unemployed and underemployed lawyers. Those types of career summary pages are normally worthless wastes of space written by laymen who know nothing about the field they're describing.

Nice find with the 759,200 stat.

"Lawyers held about 759,200 jobs in 2008."

It doesn't say what kinds of jobs or if they were legal jobs. If you take the data and add up the number of JDs produced in the 40 years from 1969 to 2008, then 1,412,328 lawyers should be in the job market, assuming that a lawyer would want to work for 40 years on average. According to the ABA licensure stats for 2008, there were 1,162,124 "resident and active attorneys".

I think I'll make a blog post to hash out some data from those numbers.

Frank the Underemployed Professional said...
This comment has been removed by the author.
C. Cryn Johannsen said...

Anonymous said...

I graduated from Law School at the University of Denver in 1983. The economy was terrible then,particularly in boom or bust states, but not as bad as now. When I was a first year, I bought running shoes from a guy who had just graduated from law school in Kansas and moved to Denver to live with his wife's family and look for work in the "big city." One of my friend's husbands went to Harvard Law but decided to move out west for the "quality of life." I recall being one of a few people who had job offers after my second year. I ended up being moved to New York City by Mobil Oil Company. I moved from there to an associate at a big law firm. Many of my friends struggled for years to get careers going. Many of them never made it, I was lucky.

The big difference was that my law school tuition, which I worked to pay for while in school, was about \$8,000 or so a year - less with scholarships.

My student loan payment was less than \$300 a month. (I went to a local state university and lived at home so I wouldn't incur debt because I knew I wanted to go to graduate school.)

Honestly, I was so financially conservative and worried about debt - because my parents, products of the depression, had no money to help me out- I don't think I would have gone to law school if the price tag meant I had to accumulate a staggering amount of debt.

Also, I grew up in a small town in the Midwest and never really thought about making staggering amounts of money. We had just been through a serious recession and oil crises. People where I lived didn't have access to, or real knowledge of, big law. I didn't even know about big firms until I was moved to New York.

I would never let my son go to law school unless we worked out a way to pay for it in cash and scholarships. No one should take on \$200,000 in debt they can't walk away from if things don't work out right.

I didn't realize how bad life was for many law students until I read some of these scam blogs.

Anonymous said...

I wanted to add that you should do a chart that shows how the cost of law school has gone up and the amount of debt needed to pay for it since 1983, or any other date you choose.

I also neglected to mention that in 1983, there were jobs to be had that you could support yourself on, even selling shoes. And people were hiring for jobs, though as I said, the economy was in a recession then as well.

A third point, when I went to law school it was the first time the class had been half women. When I graduated, companies were under government pressure to show they had women in highly paid, managerial positions. Hiring women lawyers was one of the fastest ways to improve their standing.

Finally, many companies then had the idea of building a great in-house law firm instead of using outside lawyers all the time.

JeffM said...

I tried to use the same reasoning as the author and found out I was wrong to use statistics that way. You can't compare new lawyers to overall population. You have to compare ALL lawyers to overall population.