Does a Shortage of Lawyers Loom?

Commentary

Don LeDuc, President and Dean | February 15, 2012

 

Given all the gloom, doom, and negativity that inhabits the blogs and to a lesser extent the mainstream media, it seems curious that someone might assert that there is a possibility that there will be too few lawyers in the years ahead.  But, at least in Michigan, there will be.


This conclusion is based on Michigan bar admission data reported by the National Conference of Bar Examiners in its annual publication The Bar Examiner, which each year includes a comprehensive and detailed summary of national bar admissions data.

 

The Premises for This Analysis

No attempt has yet been made to consider the same proposition in the national context, nor is any effort made to fit the data into any economic analysis. 

The focus is strictly demographic and specific, reviewing the number of lawyers admitted to practice by examination in Michigan since 1967. 

The major premise is simple:  all lawyers admitted to practice eventually quit, retire, or die.  When they do, they at least presumptively create a job vacancy.

This analysis also relies on a second premise:  that the typical lawyer will have a career lasting about 40 years after admission to the bar.

Bar Admissions Not Keeping Up With Pace From 40 Years Ago

The great majority of students entering law school in the fall of 2012 will graduate and seek employment in 2015 or later (a substantial number will attend part-time and take more than three years to graduate).  Assuming a 40-year career following admission, each annual cohort will replace the cohort admitted to practice 40 years earlier.  Thus, those in admitted in 2015 replace those admitted in 1975, those in 2016 replace those in 1976, and so forth.  The tables found below review Michigan’s historic annual admissions to practice by examination, the method of admission that accounts for nearly all admission of each year’s recent graduates to the Michigan bar.

Table I shows admissions for the 10-year period from 1975 to 1984, the decade at the start of a 40-year cycle.  For this initial 10-year period, annual admissions by examination in Michigan averaged 1,175 per year.  For purposes of comparison to current numbers, Table I also includes the admissions for the most recent ten years for which reports are available, 2001-2010. Michigan admissions by examination for the most recent years averaged 936 or 239 per year fewer admissions per year than the average for the ten years from 1975 to 1984.  Those admitted in the10-year cycle from 1975 to 1984 will be replaced by the cycle that begins with admissions to practice in 2015 and ends in 2024.  Thus, if the current pattern continues, significantly more lawyers will be leaving than are being admitted.

Table II shows that the pace of admissions by examination fell to an annual average of 1,066 in the second 10-year period, declining by an annual average of 109 per year between 1985 and 1994 compared to 1975 to 1984.  The average annual admission of 1,066 in this 10-year period is 130 fewer than were admitted on average in the past ten years (2001 to 2010).

Table III shows that the pace of annual admissions fell to 935 in the third 10-year period in this replacement cycle, which ran from 1995 to 2004.  Admissions fell by 131 per year, compared to the 10-year cycle from 1985 to 1994.  And this 10-year period averaged 240 fewer admissions to practice than the average in the first 10-year period from 1975 to 1984.

Table IV shows the partial results for the final 10 years of the 40-year cycle beginning in 1975.  For the first five years of this cycle, annual admissions rose to 992, an increase of 57 per year over the 1995-2004 period, but still well below the averages during the first three 10-year cycles.  The admissions for each of the final four years of the 2005 to 2014 cycle are based on estimates.  The 2011 estimate is based on the number of known Michigan bar passers.  The estimates for 2012 and 2013 bar admissions are based on an analysis of law school admissions for the relevant years.  An additional estimate for 2014 is needed, since the official number of admissions at the law schools is not available.  Based on these estimates, Michigan admissions by examination will be relatively flat for years 2012 and 2013, and will fall significantly in 2014.  The estimated average for this 10-year period will be about 993 new admissions by examination, about 182 per year below the first 10-year period in 1975 to 1984.

Data from The Bar Examiner also shows that from 1967 to 1971, Michigan admissions to practice by examination began to grow, increasing from 589 to 641 or 8.8% during that time.  The growth trend sharpened between 1971 and 1974, when admissions reached 929, a further increase of 45%.  In 1973, the annual admission actually got to 1,018, presaging further future increases.

Between 1974 and 1985, Michigan admissions experienced their strongest growth, increasing by 330 to1,259 or 36%, including a record 1,279 in 1979.  In the 25 years since 1985, annual admissions have exceeded 1,100 only three times, only once in the 1980s, once in the 1990s, and once in the past ten years.  As the tables show, the first ten years of this 40-year cycle experienced the highest annual average of admissions to practice by examination.

Improved Employment Opportunities for New Lawyers in Michigan

At least in Michigan, the assertion that law schools are now flooding the lawyer employment market is considerably off-base.  Indeed, to the contrary, the pace of admissions by examination in the past 15 years was significantly below the pace of the previous twenty years.  It appears that in 2015 we will begin to face a sustained period where the number of new admissions will not equal its counterpart in the 40-year admissions cycle.  That will mean improved employment opportunities by then and portends that Michigan will indeed have an increasing shortage of lawyers over the next fifteen to twenty years.  That conclusion is consistent with the recent report of the State Bar of Michigan, which recently reported that 55.6% of Michigan’s resident active bar membership is aged 50 years or more, including 29.6% who are 60 or older.

Table I

40-Year Replacement Cycle
Initial 10 Years vs. Past 10 Years

Admitted by Exam 1975-1984 Admitted by Exam 2001-2010
1975 984 2001 797
1976 1,173 2002 899
1977 1,205 2003 850
1978 1,181 2004 862
1979 1,279 2005 918
1980 1,212 2006 1,131
1981 1,277 2007 950
1982 1,202 2008 938
1983 1,113 2009 1,024
1984 1,120 2010 986
Total 11,746   9,355
10-Year Average 1,175   936

 

Table II

40-Year Replacement Cycle
Second 10 Years 1985-1994

1985 1,259
1986 1,112
1987 1,083
1988 1,045
1989 953
1990 1,041
1991 1,027
1992 1,099
1993 1,083
1994 961
Total 10,663
10-Year Average 1,066

 

Table III

40-Year Replacement Cycle
Third 10 Years 1995-2004

1995 1,029
1996 1,181
1997 993
1998 963
1999 873
2000 905
2001 797
2002 899
2003 850
2004 862
Total 9,352
10-Year Average 935

 

Table IV

40-Year Replacement Cycle
Fourth 10 Years 2005-2014

2005 918
2006 1,131
2007 950
2008 938
2009 1,024
2010 986
2011 1,041 (estimated based on bar passage)
2012 1,040 (estimated based on law school admissions)
2013 1,040 (estimated based on law school admissions)
2014 860 (estimated based on law school admissions)
Total 9,928 (estimated)
10-Year Average 993