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Needed: Lawyers Who Are Economic Drivers


By Nelson P. Miller
Associate Dean, Grand Rapids Campus
Nelson P. Miller, along with co-editors James D. Robb and John D. Crane, has just published a book called Lawyers as Economic Drivers: The Business Case for Legal Services (Vandeplas Publishing, 2012).  The book presents essays by practitioners from across the nation containing insightful descriptions of  how lawyers promote prosperity in the United States and beyond its borders through their legal services.  Those essays provide a spirited and detailed defense against the recent, uninformed and short-sighted attacks against legal education from politicians, gadflies, media “talking heads,” journalists, anonymous scam bloggers, some members of our own profession and even, perhaps inexplicably, members of the academy.  The post below is an edited excerpt from Dean Miller’s chapter, called “Data and Scholarship on Lawyer Economic Activity.” 
So, esteemed law scholar Brian Tamanaha of Washington University Law School publishes a book arguing that there are too many new lawyers.  We should respect Professor Tamanaha’s sensitive view that law schools need to teach more practically while keeping tuition low.  Those commitments are Cooley’s mission.  Where we disagree is with Professor Tamanaha’s view that there are too many new lawyers.  While the too-many view is fine to teach at some law schools, especially those schools that market themselves as producing and preserving an elite profession, Cooley has a far more robust vision for lawyers.  Every well-trained, responsible, and committed lawyer has a greater productive capacity than a non-lawyer.  Lawyers are wealth creators.  There is not a finite need for law services.  Law practice is not a zero-sum game.  Law services make it possible to grow larger economies.
A few decades ago, some were predicting over capacity for automotive production because nearly every American household had a vehicle.  Now, every American has one, and the Chinese buy more vehicles than Americans in an enormous new market.  We are also far more productive because of that added transportation.  A while ago, some were saying that we had enough computers.  Then Apple invented the iPod, iPhone, and iPad.  Everyone has them, and we are far more productive.
Just when the law profession should be seeing its best business case as a value creator and adder, Professor Tamanaha’s view sounds more like traditional zero-sum thinking.  Under that thinking, accountants would form limited liability companies and corporations, real estate agents would prepare leases and sales contracts, and non-lawyer title services would draft deeds–all without adequately advising their clients of important rights and obligations.  Are medical schools advertising that there are too many healers?  Are engineering schools advertising that there are too many builders?
Cooley is doing a better job of teaching new lawyers that they have something sound, fundamental, and creative to offer, as value creators and value adders.  Not all new lawyers will be prosecutors and trial lawyers.  Some will start new businesses or grow old businesses using their practical knowledge of how to organize, capitalize, comply, and manage.  Others will create new public charities using their skills and living their passion.  Still others will fill the huge gaps in legal services to the urban and rural under-served by creating visionary new law products and delivery systems.
Professor Tamanaha’s view is fine for some schools and lawyers.  It is not the vision that my clients wanted to hear from me.  They wanted to know a more profound truth, that the rule and productive capacity of law with which I could help them was a wealth creator.  What we need is a supply of lawyers who hold that productive vision.  I agree with Professor Tamanaha that we need fewer lawyers who fail to see their role in wealth creation.  I disagree that we need fewer lawyers.

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Aging of Michigan’s Lawyer Base Portends Job Growth

Cooley President and Dean, Don LeDuc

The Graying of Michigan’s Lawyers

By Don LeDuc

President and Dean

Thomas M. Cooley Law School

Most students entering law school in 2012 will graduate in 2015.  By then, a significant demographic factor will come into play regarding the job market.  That factor is the aging Michigan lawyer.

  • More than half of Michigan’s active resident lawyers are 50 years old or older.  And Michigan data show that more lawyers are leaving the practice of law in Michigan than the law schools produce.

  • The result is that, starting very soon, Michigan will not produce the number of law school graduates sufficient to replace the number now leaving the profession through retirement, death, and other employment.

  • This portends well for job growth in Michigan.

The Premise for This Analysis         

The premise of the following analysis is fairly simple: Michigan will not produce the number of law school graduates sufficient to replace the number now leaving the profession through retirement, death, and other employment.  A good way to think about this globally is to consider it the reverse of the much-discussed coming social security crisis brought on by the burgeoning retirement of the aging baby boomers.  They are beginning to retire in large numbers, and while each retiree becomes a social security burden, each one leaves a job and contributes to a growing demand for replacement employees.  Some of those needed replacement employees, of course, will have to be lawyers.

The Source of the Data

This analysis will focus on Michigan and is based on data taken from a 2011 three-part demographics report issued by the State Bar of Michigan using 2010 data.  The report looks at the Michigan lawyer membership by age-group, with the demographics in the report based upon the age profile in 2010.  According to the report, in 2010 there were 33,492 active Michigan resident members of the Michigan bar.  The members of the bar are now one year older, but this analysis will not take that into effect except as specifically noted.

More Than Half of Michigan’s Lawyers Are 50 Years Old or Older 

Among active Michigan resident members, 11.1% were born before 1944 (these 3,716 lawyers are called “traditionalists” in the bar report).  Another 42.3% were born in 1944-60 (the 14,155 so-called “boomers”), meaning that a combined 53.4% were born before 1961.  The youngest of the traditionalists will be 69 in 2012. The youngest of the boomers will be 52. 

According to a more detailed breakdown of the age cohorts elsewhere in the State Bar report, 55.6% of the active Michigan resident members were 50 years old or older in 2010.  The Bar reports that 9,918 members are 60 or over, which is 29.6% of its active members.  Another 8,724 active members are in the 50 to 59 age group, constituting another 26.0% of the active membership in Michigan.       

The implications of this aging membership for the job market are significant, if not alarming.  Over the next twenty years, most of these lawyers will be gone from practice.  And, presumably, most of those who were 60 or older at the time of the State Bar’s report will retire in the next ten years. 

That means that as many as 9,918 lawyer replacements will be needed within a decade (this presumes that the number who will not retire will be balanced by about the same number of those in younger age categories who will leave membership).  For the 60 and over group, the assumption is that about one-tenth will retire each year beginning in 2011.  So, on average, about 992 lawyers will be needed each year in the next decade, just to replace these older lawyers.

Another 8,724 lawyers were age 50 to 59 at the time of the survey in 2010.  Assuming that these lawyers are evenly spread within this ten-year cohort, about 872 are in each year’s group.  Further assuming that each group will retire at age 67, the first of this group will reach retirement in 2018, adding about 872 lawyers per year to the 992 lawyers from the older group for approximately a three-year period, meaning that the demand will grow to 1,864 for the years 2018 to 2020.

An alternative calculation would be that over the next 20 years, we will need 18,642 new lawyers just to replace the current members leaving practice due to age.  That is an average of 932 per year.  

Another study established that Michigan experienced its heaviest periods of bar admissions in the years between 1975 and 1994.  In that twenty-year period, new admissions by examination totaled 22,409, with 11,746 in the first ten-year period and 10,663 in the second.  The first of these increased admissions reaches its 40th anniversary in 2015.  Given that the average age of lawyers passing the bar is approximately 27, heavy retirement numbers can be expected from this group.  Needed replacements will average 1,175 for the first ten years and 1,066 for the second ten years.  On average over the twenty years after 2015, Michigan will need 1,120 new lawyers to replace those admitted in between 1974 and 1994. 

More Lawyers Are Leaving the Practice Than the Schools Produce 

Under either alternative, more lawyers will be leaving active practice than the schools currently produce or have produced over the past fifteen years.  The aging Michigan lawyer population leaves a legacy of jobs for those about to enter law school.  The opportunities are widespread with 65 of Michigan’s 83 counties showing a lawyer population of 50 years or older that is above the state average, and with 55 of the counties having 60% or more of their lawyers who are at least 50 years old.

Contrary to the assertion that there are too many lawyers because the law schools are now producing too many graduates, and consistent with the fact that new admissions by examination in Michigan have declined significantly throughout the past fifteen years, Michigan’s active resident lawyer population consists of lawyers who are 40 and over and is dominated by those who are 50 or older.  The current Michigan resident member population includes only 21.8% who are under 40 years of age, and those under 30 are only 4.6% of the Michigan lawyers.  Even in the counties with law schools, the percentage of lawyers under 40 is low:  Ingham with two law schools is at 25.0%, Kent with one law school is at 24.8%, Oakland with one law school is 22.7%, Washtenaw with two law schools is at 19.6%, and Wayne with two law schools is at 22.6%.

These demographics, and others to be discussed in later blog posts, portend job growth for lawyers in Michigan.

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Shortage of Lawyers In Michigan Predicted

Cooley President and Dean, Don LeDuc

Does a Shortage of Lawyers Loom?

By Don LeDuc

President and Dean

Thomas M. Cooley Law School

Second of a Two-Part Series

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 1975-1984Admitted 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 Ave                  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 Ave                  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 Ave                     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 Ave                     993


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