Shrinking Law Schools Face Financial Devastation
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Shrinking Law Schools Face Financial Devastation

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Maybe we should ease up on the lawyer jokes. 

The depressing state of the legal job market has caused applications to law schools to decline precipitously, resulting in a shortage of attorneys providing services to low-income clients and a glut of attorneys elsewhere. The situation will improve in the coming years as classes at law schools shrink class sizes to their lowest levels in decades, but the pain for lawyers is far from over. 

Data released recently by the American Bar Association and cited by the National Law Journal showed that 132 of the 199 ABA-accredited law schools saw declines in the number of first-year students in 2013. Thirteen saw declines of 30 percent or more. Graduates from prestigious colleges such as Harvard, Yale and Stanford also are increasingly taking a pass on law school. Applications from alumni of these schools plunged 26 percent between 2008 and 2012, according to the Associate’s Mind, citing data from the Law School Admissions Council. Nationwide, applications to law school fell 17.9 percent from 2012 to 2013. 

Employment of lawyers is expected to increase about 10 percent between 2012 and 2022, according to the Bureau of Labor Statistics. Still, as that agency and other sources have noted, there have been more students graduating with law degrees than there are jobs available. And a law degree isn’t the golden ticket to prosperity that it was in years past. Though lawyers earn median pay of $113,500, many carry high debt loads, averaging about $125,000. For new graduates who earn about $60,000, that puts them in a fiscal bind. 

To lure more applicants, some law schools have slashed tuition and many have ratcheted up the numbers of scholarships they are offering. That will help some future lawyers avoid the same debt load that has hobbled recent graduates. 

Related: How to Nab Free Money for College 

The existing glut of lawyers will take time to dissipate, though. “Because far fewer students are enrolling — from 52,000 in 2010 down to 40,000 in 2013, and even lower for 2014 — the oversupply will lessen when they graduate in a few years,” writes Brian Tamanaha, a professor at the Washington University of St. Louis School of Law and the author of Failing Law Schools, in an email. 

The pain for law schools could last longer. “The decline in applicants will devastate the financial position of many law schools, and it remains to be seen how they will manage,” Tamanaha wrote. “The number of entering students in 2014 will go down to a level not seen in three decades, when there were 50 fewer law schools.” 

As a result, some law schools have laid off faculty while schools like the University of Dayton and Widener University have offered professors early retirement packages. The survival of some schools is in jeopardy, according to published reports

Law schools are also trying to get graduates to consider other careers paths, such as government. Hiring at big law firms has tumbled as corporate America increasingly does its legal work in house. Thanks to services such as Legal Zoom, some legal services like drawing up simple wills, have become commoditized. 

Meanwhile, poor people who need lawyers often can’t find them. Funding for these types of legal services, subsidized by the government, is not sufficient, according to the ABA. More than 1,000 positions have been eliminated over the past two years at the Legal Services Corp., a federal agency. Thirty offices have been closed, which has forced these attorneys to make some hard choices. For instance, some LSC offices will only take family law cases if they involve claims of domestic violence. 

Some residents of rural communities also have a tough time finding a lawyer when they need one. In Nebraska, 12 counties have no lawyer. Others have only a handful of practitioners. People wind up paying for lawyers to travel to their county or windup representing themselves, according Nebraska Bar executive director Liz Neeley. For those in need of legal advice, that’s no joke.

Clarficiation: This article has been updated to clarify action taken by the University of Dayton's School of Law and Widener University. The schools have offered early retirement packages to professors. They have not laid off faculty.

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