The Job Market for New Law Grads Has Always Been About Supply and Demand
The employment outcomes for the law school class of 2025 tell a nuanced story, as the National Association for Law Placement (NALP)’s recent analysis of this data in its annual Selected Findings (PDF) report makes clear.
One the one hand, the overall employment rate for this class was the second highest ever, trailing only the class of 2024. Additionally, the number of graduates securing jobs that require passing the bar exam set a record high. And yet, the class reported 2,700 fewer jobs than the class that preceded it.
How is that possible? It’s because the size of the graduating class was smaller than the one before it, declining by more than the decline in the number of jobs. As has always been the case, enrollment and employment outcomes are tightly linked. Had this been a larger graduating class, the employment outcomes would have been considerably weaker.
Why were fewer overall jobs secured?
The report from NALP identifies three contributing factors:
- The number of graduates employed by the federal government, excluding judicial clerkships, fell from nearly 1,100 class of 2024 graduates to approximately 690 class of 2025 graduates, a decline of 37%.
- Public interest hiring also declined. The share of public interest jobs declined from 9.7% of all jobs to just 9% of all jobs. The sector hired more than 475 fewer graduates than the previous year, a decline of 13.9%.
- Law firms hired approximately 940 fewer class of 2025 graduates compared with the larger class of 2024, with the largest decline measured in firms of more than 500 lawyers, which hired about 540 fewer graduates this year.
NALP provides cogent explanations for each of these three areas of decline in entry-level jobs. The reason for the decline in federal government jobs is perhaps the most obvious. According to Nikia Gray, NALP’s executive director, “the federal hiring freeze implemented in January 2025 reverberated across the legal profession, as students who had accepted federal positions — including through highly competitive Honors Programs — saw those offers rescinded only months before graduation.”
Gray goes on to explain the declines in public interest hiring in similar terms: “The shift in federal priorities also extended into the public interest sector. As funding priorities changed and DOGE [Department of Government Efficiency] terminated direct contracts with hundreds of nongovernmental organizations, many public interest employers reduced hiring or ceased operations altogether.”
The explanation for what happened in private sector hiring, particularly in the large law firm arena, is much more nuanced. On the one hand, the new employment data document that 60.9% of employed graduates obtained positions in private practice — a 2.0% increase from the previous year and the highest share of graduates working in this sector since the class of 1990. But, according to the NALP report, “although private practice employed a larger share of graduates than it did one year earlier, the sector itself lost more than 940 entry-level positions.”
As noted above, the largest decrease in hiring occurred in the largest firms. This is particularly significant because as NALP makes clear, “firms of more than 500 lawyers have firmly established themselves as the single largest employer of new law graduates, accounting for more than one in five employed graduates of the class of 2025.” There’s more bad news: NALP reports that “the number of law students participating in summer associate programs has fallen sharply over the past two years, which is likely to impact employment outcomes for the class of 2026.”
What does this mean?
In simple terms, the overall entry-level job market for new law school graduates remains fundamentally healthy, as evidenced by the strong job numbers for the class of 2025, but, and this is a big but, economic and political uncertainty are threatening the strength and stability of this market. Federal policy and funding changes have compromised two important and historically stable parts of the entry-level job market, with federal government hiring and public interest hiring both showing sharp declines.
Perhaps more significantly, and the real takeaway from this year’s job numbers, is that post-pandemic, Big Law hiring has emerged as the largest and most important piece of the entry-level job market for new law school graduates, but the uncertainty caused by generative AI and its unknown impact to the business model for law firms has caused a significant contraction in recruiting and hiring in this now all-important sector. The strongest part of the job market for new grads for several years running has been the largest law firms, and a slowdown in this area could have a profound impact on overall job success for the entire class.
As NALP’s Gray explains, “the critical question now is whether this represents a temporary market correction following several extraordinary hiring years or the beginning of another structural shift in entry-level hiring.” In any event, she warns, “this data should serve as a caution against continued expansion of law school class sizes until longer-term market trends become clearer.”
With early (early!) law firm recruiting here to stay, admission professionals need to be masters of the entry-level law grad job market as never before. Here are some key numbers from the NALP report to put in your pocket:
- The overall employment rate for the class of 2025 was 92.8%, down 0.6% from the class of 2024’s record high of 93.4%.
- The percentage of graduates securing jobs for which bar passage is required improved by 0.3% to 84.6%, the highest level ever recorded by NALP.
- Just 6.7% of employed class of 2025 graduates were seeking a different job than the one in which they were employed, a record low and an indication that most employed graduates were satisfied with the job they obtained.
- Most employed graduates (65.6%) found employment in the same state in which they attended law school.
- Washington, D.C. saw a steeper decline in hiring (-13.2%) compared with the national market for the class of 2025 (-7.7%). This decrease was driven primarily by reduced federal government and Big Law hiring in the nation’s capital.
James Leipold is a senior advisor with LSAC's Legal Education Consulting team. Prior to joining LSAC, he worked as the executive director of the National Association for Law Placement in Washington, D.C., for more than 18 years.