This year - just like last year, and the year before - Law school is a "buyers' market." Applications for the Fall 2014 entering class were down 37 percent since 2010, and - according to figures just released by the American Bar Association - the incoming class in 2014 stood at less than 38,000, the smallest in over 40 years. What about the 2015 applications? While it's too early to tell, LSAC reports that there are 88,926 fall 2015 applications submitted by 13,816 applicants as of 12/12/14, a drop of 9.1% from 2014. If you're one of these applicants, congratulations! Chances are, you're part of the least competitive applicant pool in 40 years.
Excited? You should be (especially if you have a high LSAT score). Close study of LSAC data reveals that the number of applicants with higher LSAT scores (above 170) has declined significantly more than the number of applicants with lower scores, suggesting that some students with exceptionally high LSAT scores do not apply to law school at all. Those who do apply, however, will have a better shot of getting into the most selective institutions, and even secure a more generous merit-based financial aid package. A “buyers’ market” indeed.
While law school applications continue to fall, they are falling at a slower rate than in 2012 and 2013. The decrease in applications this year will likely be the smallest since 2010. Furthermore, competition at the top is still intense: just because Northwestern’s median LSAT score dropped by 2 points doesn’t mean that it’s significantly easier to get in. In fact, many law schools have responded to the shrinking applicant pool by cutting down their entering class rather than digging deeper into the applicant pool.
Ultimately, the main reason for the decline in law school applications is the job market: as long as employment prospects for newly-minted lawyers continue to be grim, most people will understandably think twice before borrowing hundreds of thousands of dollars to attend law school. But, the labor market is finally looking up. Unemployment is below 6% for the first time since 2008, and the strongest job gains are registered in the professional and business services – a high-paying sector. The legal market is still a challenging environment with modest demand growth, but it is notoriously slow to respond to outside market pressures. We are already seeing increased demand for legal services in the financial sector, as well as in bioengineering and health care. While firms are still hiring fewer lawyers than before the recession, they hired more in 2014 than in 2013. In fact, a recent report issued by Citi Private Bank and Hildebrandt Consulting shows that large law firms are in a better position for steady revenue growth from 2014 into next year, with growth in demand among the Am Law 50 firms much stronger than that of first in other tiers. According to The American Lawyer, “the stratification in growth becomes clearer when one looks at the 10 most profitable firms, which enjoyed 6.5 percent growth compared to the industry average of 1.2%.”
What’s the take-home for you, as an aspiring lawyer? Go to the best school you can get into, and pay as little as possible for the privilege of doing so.