As the destructive effects of the Great Recession on the American economy slowly abate, economic problems continue to roil law schools. Perhaps the clearest manifestation that the law school business model is at a crossroads is the significant decline in overall student applications and enrollment. Among the more sobering figures is a 36% reduction in the size of the entering class of 2013 as compared with that of 2010, according to data from the Law School Admissions Council. In 2014 there were 65,119 applicants to law school, 14% lower than the prior year. The 350 largest U.S. law firms grew by 1.7% in 2011 and 1.1% in 2012, relatively low rates compared with the past 20 years. In addition, around 40% percent of those firms shrank the size of their staff in 2013 as compared to the prior year.
In a market where the supply for legal services well exceeds demand, law firms are seeking competitive advantages through mergers that tend to reduce staff and are seeking other ways to lower costs and operate more efficiently. Increased competition and a progressive shift of control in the power over strategic litigation decisions from outside firms to general counsel have been hallmarks of the post-recessionary environment, leading a Georgetown University study to conclude that the legal industry can expect to see more “sluggish demand growth, persistent challenges of low productivity, ongoing client pushback on rate increases, and a continuing struggle to maintain discipline on expenses.”