It’s long been my sense that a lot of the people who go to law school are making a pretty ill-advised decision. Many of them don’t have any particular desire to be lawyers, and their vague sense that it’s a financially smart decision doesn’t hold up to real scrutiny when you consider the debt and the opportunity cost. As Daniel Luzer writes for The Washington Monthly we just seem to be producing more law school graduates than there’s any really robust demand for:
The basic problem is that people rack up an average $92,000 in debt (for private law schools) because of the implied promise of a high-paying job at the end. Except that industry predications indicate that there are likely to be less than 30,000 legal jobs available per year. Some 45,000 people graduate from law school every year.
That said, this LA Times article that Luzer linked to gave me the willies:
The problem can be traced to the American Bar Assn., which continues to allow unneeded new schools to open and refuses to properly regulate the schools, many of which release numbers that paint an overly rosy picture of employment prospects for their recent graduates. There is a finite number of jobs for lawyers, and this continual flood of graduates only suppresses wages. Because the ABA has repeatedly signaled its unwillingness to adapt to this changing reality, the federal government should consider taking steps to stop the rapid flow of attorneys into a marketplace that cannot sustain them.
It’s definitely true that it would be good for incumbent lawyers for the federal
government to step in and shield them from competition from large numbers of new law school graduates. But at the same time a “continual flood of graduates” that “only suppresses wages” actually does a lot more than suppress wages, it reduces the cost of legal advice. You could say that the flood of new smart phones like the Palm Pre and the Nexus One suppresses profits at Apple, but it would be foolish to say that it only suppresses profits at Apple. It also creates new opportunities for consumers.
Whether or not we have too many lawyers in the United States, we definitely have too many labor cartels seeking to limit competition. In particular in the health care arena, the United States has famously high per unit costs for treatment. This speaks to a lack of competition among health care providers—doctors and hospitals—and also a lack of competition across modes—nurses competing with doctors, and lower-cost clinics competing with hospitals. And part of the issue is simply that America’s medical schools don’t generate enough new general practitioners in any given year.
But beyond medicine, the point is quite general. An oversupply of skilled professionals is annoying for skilled professionals. But it’s a boon to the rest of the population. We generally accept the idea that putting low-skill laborers in competition with Chinese factories and Mexican immigrants ultimately makes a larger pie for everyone. It’s just the same with putting lawyers in competition with lots of new law school graduates. The only difference is that one set of pie-growing measures also tends to exacerbate inequality, whereas expanding the number of lawyers is good for less-educated people.