It appears that the critical focus on law school admissions data and their reports of graduate employment won’t go away.
One reason is that even though the legal job market has improve slightly since the depths of 2008 and 2009, it is still very difficult for young graduates to get jobs. And the high paying jobs at big firms that justified high tuitions, and students taking out big loans to pay them, are in especially short supply.
Sen. Charles Grassley, the Iowa Republican, prairie populist, and scourge of pharmaceutical companies and defense contractors, is now querying the American Bar Association about its accreditation process. He’s sent two letters to the ABA in recent weeks asking to what extent the ABA figures employment data into its evaluation.
His main focus is the impact of graduate employment statistics on default rates on student loans. Many law students say they chose the law as a career based in part on law school employment statistics. The National Association for Law Placement, a professional association that focuses on the training and recruitment of lawyers, says that as of February the overall employment rate for new law school graduates was 87.6 percent, the lowest it has been since 1996.
Actually, the real number is lower. Those statistics include jobs created by law schools to help some of their graduates in a tough legal market. They also include employment in non legal jobs. The concern raised by Grassley and others is this: Law students have been taking on loans of $100,000 or more on the assumption that they will obtain lucrative employment once they graduate. And that was a reasonable assumption until 2008, when big firms in New York were starting first year lawyers at $160,000; the going rate in Philadelphia was $145,000.
But big firms are not hiring at the rate that they were in 2007. Moreover some firms, under pressure from clients, have reduced their starting salaries.
And it doesn’t seem as if those jobs or salaries are going to come back soon. Big law has been substantially restructured. The principle of leverage, throwing scads of associates at cases, and charging clients handsomely for their time, has been if not discredited, certainly deemphasized.
So the economic model of law school is under pressure. High law school tuitions – a profit center for many universities – simply can’t be supported by the legal marketplace any longer. That is why Grassley and others are concerned. If the jobs aren’t there, then default rates on student loans could easily go up.