The Proposed New BLS Lawyer Replacement Projections

By Professor Theodore P. Seto

This piece originally appeared on TaxProf Blog.

Commentators who believe that the end of the world is near for legal education often point to Bureau of Labor Statistics estimates of replacement needs in the legal profession and compare those estimates to the number of projected law school graduates.

On May 16, 2014, the BLS issued a notice proposing a new method for measuring what it calls “occupational separations” – that is, workers leaving a particular occupation who need to be replaced. The BLS explains that the current method indirectly measures leavers by measuring employment change by age group, relying on an assumption that workers enter at a young age, work in their field until they are old, and then retire, creating opportunities for the next generation of young workers. In this framework, occupation is fixed throughout a worker’s career. The BLS notes: “However true this may have been in the past, it does not apply to many workers today.”

The new method, by contrast, directly measures workers who leave an occupation, "taking advantage of the longitudinal aspects of the CPS monthly survey and supplements."

BLS states that it believes that the current method fails to capture a large number of separations that result in openings for new entrants and that the new method is a more accurate measure. Specifically, the current method undercounts openings because it only accurately measures workers who follow a traditional career path—entering an occupation at a young age, working in the same occupation for many years, then retiring—which is not the case for many workers in most occupations.

It has tested the relative validity of the two methods against historical data from selected professions – among them, lawyers. As to projected lawyer replacement rates, the notice states:

External data is available on historical new entrants for lawyers. Not all law school graduates become lawyers, but the American Bar Association (ABA) conducts a census of employment outcomes for all law school graduates in order to count the number who find employment in positions that require bar passage (effectively, lawyers). Since ABA began collecting this data in 2011, the number of graduates finding employment in such positions has averaged 29,000 per year. Because some graduates who don’t immediately find such positions may become lawyers later in their career (for example, many graduates become law clerks, a position that does not require bar passage, for a few years before becoming lawyers), this number should be less than the total number of new entrants into the occupation.

Under the current method, BLS projects an average of 19,650 job openings per year, while the new method projects 41,460 openings per year. Again, no direct comparison between the ABA number and the BLS numbers is possible due to conceptual differences, but the results under the current method are significantly below the actual number of new graduates finding work in the occupation. (emphasis supplied) The new method projects a higher number of openings, which allows for additional entrants not immediately after completion of a law degree.

Based on 2012 and 2013 matriculation rates and historical drop-out rates, we should expect 40,082 ABA-accredited law school graduates in 2015 and 35,954 in 2016. If the new BLS projections are accurate, we should see demand and supply in relative equilibrium in 2015 and a significant excess of demand over supply beginning in 2016. (These estimates only take into account JD-required jobs. Demand from JD-advantage employers is not included.)