For the first time since the 1970's, first year law school enrollment has declined to an all time low. "The recession woke us up to broader trends occurring in the legal market," says William Henderson, Professor at Indiana University's Maurer School of Law.
To that end, Henderson says there are two contributing factors. We have finally reached a point where large corporate clients are beginning to question the value they're getting from large law firms, probably because there hasn't been big technological advances in this area and they're still paying for legal solutions without productivity advancements that's occurring in other fields. The corporations can no longer afford to pay for this conservative business model, Henderson says. The second factor is that ordinary citizens have been priced out of the market for legal services. It is very difficult for the average citizen to afford the time of a lawyer, says Henderson, adding that instead, they're using vehicles like Legal Zoom to solve their own legal issues without a lawyer. This combination has caused the uptake of legal graduates to slow, which has in turn, caused law school applications to slow as well.
The debt load carried by students is very high, which is enabled by a system of finance provided by the U.S. government. Additionally, Henderson says that law schools are ranked higher when extra funds are put towards staff or school enhancements, rather than scholarships. The U.S. News and World Report formula may change their ranking system because the data on direct expenditures will no longer be collected by the ABA, says Henderson.
Large law firms have substantially stopped hiring young lawyers, which is a trend that Henderson thinks can only continue in the short-term. It cannot continue much longer with the ABA threatening their franchise as a whole, Henderson notes. He also thinks that eventually, law firms might have to start experimenting by hiring at a lower pay scale and that a lot of students would probably forgo a 6-figure salary common in the early 2000's in exchange for a stronger foothold in training to get them going in their careers.
Henderson is confident that in the next 5-10 years, the legal profession will come out better. "We're exiting the trough and better days are coming," Henderson says.
William Henderson is a legal professor at Indiana University's Maurer School of Law. For more information about him, click here. He spoke with The Legal Broadcast Network, providing online, on-demand, legal video content. The Legal Broadcast Network is a featured network of the Sequence Media Group.