How Should We Think About Record-Breaking Employment for Law School Graduates?

By James Leipold

At the end of July, the National Association for Law Placement (NALP) released its annual analyses of the most recently reported law school graduate employment and salary outcomes, announcing record-breaking numbers for both employment and salaries.

I have followed these important numbers for years and have made it my business to comment on them and to try to help everyone involved in legal education and legal employment understand what the numbers mean and what they don’t mean.

For sure it does not take much expertise to be able to conclude that these numbers are very, very good. According to NALP’s press release, graduates of the class of 2024 earned “the highest overall employment rate as well as the highest employment rate in bar admission required jobs NALP has ever recorded.” The press release goes on to note that “the national median salary for the Class of 2024 grew to a new record high of $95,000, up 5.6% compared to the median of $90,000 for the previous class.”

NALP Executive Director Nikia Gray posits that many pundits in the industry predicted that employment outcomes for this class were likely to be somewhat lower because the class of 2024 was measurably larger than the classes that immediately preceded it. I was among those naysaying pundits. So was Jerry Organ, the Bakken Professor of Law and co-director of the Holloran Center for Ethical Leadership in the Professions at the University of St. Thomas School of Law. In January of this year, based on the American Bar Association’s release of preliminary employment data for the class of 2024, Jerry used his blog to call out the record employment numbers and backtrack on his predictions saying, “Was I ever wrong!” Now, with NALP’s more detailed analyses available, it’s my turn to publicly say I was wrong as well. It turns out that a sudden jump of almost 10% in first-year law school enrollment in the fall of 2021 did not in fact result in lower overall employment for that class when it graduated three years later, even though that is what I foresaw at the time.

How should we as legal educators, managers, and administrators at law schools think about what this might mean for the future? Understand that at this moment I am particularly gun shy about prognosticating what might happen in the future. I have always been more comfortable analyzing and describing what has happened in the past than peering into a crystal ball, but I do know a few things that are true that might help us understand these truly remarkable employment numbers.

The first is that the legal employment market (much like the law school admission market) is one of supply and demand, of peaks and valleys, and the employment figures for the class of 2024 almost certainly represent a peak that resulted from great demand. The entry-level legal employment market, like the market for lateral legal talent, is one of cycles of boom and bust, and though the cycles are irregular and hard to foresee, it is all but certain that this peak will eventually be followed by a valley or bust of sorts. Adam Smith was clear that boom markets cannot last forever.

The second is that the legal job market has almost always followed the national economy and the overall national employment patterns, though historically there has been a lag between the time when the U.S. economy and jobs figures dip and when the legal employment figures dip. That mostly has to do with the way that corporate legal work comes to law firms and the time and staffing it takes to complete that work. As indicators grow that the U.S. economy is experiencing some stress, some of that negative and downward pressure will eventually express itself in the legal job market.

The third is that the COVID pandemic disrupted the flow of legal work to law firms in ways that took some time to understand, with a great deal of work coming suddenly to an end in the spring of 2020 and then surging as public health restrictions were lifted. As a result, there was a release of a backlog of work that had accumulated during the shutdown. This singular see-saw in the volume of legal work that law firms saw coming in the front door complicated the foreseeability of legal market supply and demand for a period of years. Members of the class of 2024 may well be among the last of the beneficiaries of that post-COVID surge of corporate work.

A fourth and final important point, and this is ground we have covered together before, is that U.S. law schools have struggled with the supply and demand part of entry-level legal employment, and they have done so in the not too distant past. Arguably law schools overenrolled during the period 2008-2010, with disastrous employment outcomes for the classes of 2011-2013. There were a lot of moving parts at that moment, including the arrival of the Great Recession, but the class that entered U.S. law schools in the fall of 2010 was the largest class ever to enter the American legal education pipeline, clocking in at 52,488, considerably larger than all the classes that had preceded it. When that large class graduated, they struggled mightily to find work. This previous cycle certainly informed my fear that the larger class of 2024 might also struggle in the job market. Clearly, they did not.

Some highlights from the most recent employment data underscore that point:

1. The employment rate for the class of 2024 reached a record high of 93.4% among graduates for whom employment status was known, a 0.8% increase over the previous year, and the highest number ever recorded since NALP began tracking this data in 1982.
2. The unemployment rate for the class of 2024 was 5.1%, a new all-time low.
3. The percentage of graduates obtaining jobs for which bar admission is required or anticipated (attorney positions) improved 2.2% to 84.3% for the class of 2024, the highest level recorded since NALP introduced the job classification in 2001.
4. Among employed graduates, 58.9% secured positions in private practice – a 0.7 percentage point increase and the highest percentage since 1992.
5. Public service jobs, including military and other government jobs, judicial clerkships, and public interest positions, accounted for 32.7% of jobs, a level surpassed only by the class of 1975.
6. Only 6.8% of employed graduates were seeking a different job than the one they are currently employed in, a record low.

(NALP’s website includes these details and all their information and analyses of the employment and salary outcome for the class of 2024.)

So, what conclusions can we draw from these exceedingly good employment outcomes results? You can probably guess where I am going with this. I am an exceedingly risk-averse person both personally and professionally, and I have been accused of seeing the glass half-empty rather than half-full. Here, where others see exceptional boom, I see the threat of bust. I see the risks in the economy around us, risks not yet priced by the marketplace, and if I were the dean of a law school (fortunately, I am not) I would be making conservative decisions about the size of the entering class, despite the booming law school application market.  

The lesson from the Great Recession is that we must have jobs for law school graduates, and when we don’t, the entire enterprise of legal education is easily tarnished. At a time when there are applications aplenty and other law school revenue streams are threatened, it can be tempting to grow the JD class. Decisions for this cycle have been made and orientation for 1Ls is imminent, but as we look ahead to the next cycle, we should always keep in mind that employment results like these cannot be sustained over time and will eventually be interrupted by inevitable economic cycles. Celebrate these remarkable employment outcomes and cast a wary eye forward. I will not go so far as to predict that the class of 2025 will notch somewhat lower employment outcomes, but I will absolutely commit to the truth of the fact that good times like these cannot last forever.