Schafer: Law schools finally get realistic

With significantly smaller classes starting this fall at Twin Cities law schools, it looks like the regional market for legal education is finally in correction mode.

Seems overdue, given the dismal news from the legal employment market so far this summer.

The darkest point of the Great Recession is well behind us, but 2011 law school graduates are living in a Great Depression of their own. They had a little better than 50-50 shot at a full-time legal job, based upon employment data released recently by the American Bar Association.

A year ago, the market for 2010 grads was characterized as the worst since 1996, and now it's "arguably the worst" entry-level market in more than 30 years. The market is particularly bleak for those seeking jobs at firms of more than 100 lawyers.

Here are the grim facts, nine months after 2011 graduation: Out of 134 graduates at the University of St. Thomas School of Law, just five found their way into full-time jobs at firms of 101 lawyers or more. Hamline University School of Law placed three out of 205 in that category. Even the University of Minnesota Law School, way up the food chain with a top 20 national ranking, placed just 32 out of 261 grads at big firms.

The schools point out that the data also show that the vast bulk of the rest of their 2011 graduates are working, in part-time or temporary jobs, businesses or nonprofits, or maybe state and local government. But if you spent three years and incurred $100,000 in debt for a career at a downtown private practice, you would have to say the model is broken.

So the local schools are finally responding. Dean Donald Lewis said the Hamline class entering in September will be "at least a third smaller" than the previous class of just over 200. The William Mitchell College of Law is planning for 240 to 255 students, down from 309 last year. At the University of Minnesota, the reduction is from 245 last year to about 220 this year.

When the dean of the University of California's Hastings College of Law announced his "voluntary" admissions reduction earlier this year, he was mocked coast-to-coast by bloggers who said it was roughly akin to Best Buy Co. Inc.'s management attributing a decline in same-store sales to a voluntary action.

Total law school applicants in the current cycle were around 66,500, a level last seen in the mid-1980s. As recently as 2004, there were more than 100,000. So while St. Thomas is planning once again for a fall class of around 150, its applications were about 1,050 in the current cycle, down from a peak of about 1,800.

"I am not sure it will ever return to the levels of growth we saw," said David Wippman of the University of Minnesota's law school. He hasn't concluded that this shrinking market reflects a significant structural change. His colleagues at the other schools are planning otherwise.

"We are contemplating a period of years where demand for legal education is down from where it had been," Janus said.

The schools are making other adjustments as well, putting greater emphasis on work skills. Hamilton just completed a study that polled 14 big law firms in Minnesota. He concluded that students need to be better at time management, relationship building and client service.

"If you are talking about a job at a 500-person law firm in midtown Manhattan, our numbers do not look too good," said Hamline's Lewis. "Neither do anybody else's. ... No one has made a persuasive case to me that the need for legal knowledge has declined."

But what are the incremental returns for job candidates in human resources or health care administration on the whopping personal investment a law degree represents?

First-year students this fall at St. Thomas will face a total cost of $58,989 for the nine-month academic year, and other schools have comparable costs. Now, all the schools offer aid, but it is hardly a mystery why an average Hamline graduate leaves school with debt of about $100,000 or a Minnesota grad averages more than $90,000.

Checking with local firms, it can at least be said that hiring has not gotten any worse, but you won't hear a rosy long-term forecast, either.

At Dorsey & Whitney, the 88th-largest firm in the country, the 2012 new hire count is actually up by one -- at 16. A few years back, however, the hiring class was 44. At another good-sized Minneapolis firm, Gray Plant Mooty, Managing Officer David C. Bahls said next year the firm planned to add five new hires, which would be up from 2012, but down from the peak several years ago.