As discussed in this New York Times article by Catherine Rampell, survey data show that in every state except Wisconsin and Nebraska (plus D.C.) more lawyers are passing the bar exam each year than there are "annual job openings" for lawyers in those states. In many states, the lawyer surpluses are large (click on the chart to enlarge):
There's at least a couple things screwy here. First, the D.C. statistics tell us nothing. Few people take (and pass) the D.C. bar because it makes more sense to be barred somewhere else and then waive into D.C. (in light of D.C.'s very liberal rule on waiving in). So, the number of jobs in D.C. will always exceed the number of people who pass the D.C. bar exam regardless of the health of the legal job market in D.C. This same phenomenon may screw up the stats in other states as well.
Second, what does the survey mean by "annual job openings" for lawyers? Does it mean jobs at private law firms and goverment? What about jobs for lawyers in businesses? Does the survey include "openings" for lawyers who pass the bar and go into law practice for themselves? The system of law school accreditation, law schools' decisions to limit the size of their classes, and the requirement that lawyers pass a bar exam before being licensed to practice law -- all of which are signifcant anti-free-market barriers to entry -- artificially keep the supply of lawyers lower than it would otherwise be. So, why is there a surplus of lawyers at all? Shouldn't there be a shortage of lawyers?
In any event, if there is a substantial surplus, that's bad news for law graduates saddled with large debts who cannot find jobs. But it may be good news for consumers who should be able to hire lawyers at lower prices. Are legal fees declining?