Following up on yesterday’s post, NY Times — The Lawyer Surplus, State by State: The Coming Crunch for Law Schools, by Brian Tamanaha (Washington U.):

The New York Times released a chart yesterday showing that law schools are churning out far more lawyers than the number of available legal positions. … Law schools now pump out about 45,000 graduates annually at a time when the Bureau of Labor Statistics projects about 28,000 new lawyer positions per year.

Why are law schools enrolling so many students when employment prospects for graduates are so poor? Because they must. In the past two decades law faculties have gotten bigger. AALS tallied 7,421 full time faculty in 1990, and 10,965 in 2008. Some of this overall increase comes from newly accredited schools, but most of it is faculty expansion: student-faculty ratios have been cut almost by half during this period.

Bigger faculties must be paid for through some combination of more bodies (J.D. and LL.M) and higher tuition. Tuition already goes up every year as it is, so the number of revenue paying students cannot be reduced substantially. It’s that basic. …

Law schools will soon suffer the consequences of this expansion. The chart below tracks the number of applicants against the number of first year students from 1990 to the present. As it shows, law schools exhibit a one-way ratchet: when applications drop, enrollment remains steady; when applications rise, enrollment goes up.

This pattern–explained by our need for revenue to fund our operation–portends tough times ahead for law schools. … If the drop in applicants continues, while enrollment stays up, schools will reach deeper in the pool to fill their classes, bringing in students with lower qualifications. … Law schools have enjoyed flush times for more than a decade. Tough times are ahead.

Update #1: Stephen Bainbridge (UCLA), Consolidation in the Law School Industry:

Unless law schools voluntarily start consolidating and downsizing, which seems about as likely as yours truly winning the Miss America pageant, we face a long-term prospect of ever increasing competition for fewer and fewer applicants. Long before the day comes that there are fewer applicants than available seats, we will be in very big trouble. Budgets will have to be slashed to pay financial aid to attract students. Admission standards will have to go down. Relations between deans, faculty, and students will be increasingly fraught. What we have here is a classic collective action problem. Unfortunately, what we don’t have is a market in which to develop solutions to that problem.

Update #2: Reader Loren R. Thacker provided this chart, using the NY Times data to rank the states by the number of law jobs available per law grad passing the bar: