When McGeorge School of Law announced July 5 that it would be reducing the size of its staff and student body by 40 percent, it was acknowledging a harsh new reality for law schools: Demand for their diplomas has dropped.
Across the country, the number of law school applicants has dwindled along with the job prospects for newly minted lawyers. With fewer people consulting attorneys for routine legal matters and demand from business clients dropping over the recession, many law firms have reduced hiring and even let experienced lawyers go.
That contraction, in turn, has discouraged prospective students from choosing to go to law school, whose steep price tag often means borrowing more than $100,000.
"It's a ripple effect," said Kevin O'Brien, managing partner of Downey Brand, a Sacramento law firm that last month laid off nearly a dozen administrative and support staff.
As of early July, 58,000 people nationwide had applied to enter law school in the fall, according to the Law School Admission Council. At the same point in 2010, more than 87,000 students had submitted applications. The way it's shaping up, 2013 will likely be the first year in at least three decades that fewer than 60,000 people apply to law schools.
The Sacramento region's two big law schools, McGeorge and UC Davis, are both attracting fewer applicants these days. In 2012, about 3,500 students applied to the UC Davis School of Law, 500 fewer than in 2010. Even though the number of students accepted went up, UC Davis now the most expensive public law school in the country saw its freshman enrollment drop by one student.
Earlier this month, McGeorge announced that it would scale back its enrollment to 600 students over the next three years. In the fall of 2010, McGeorge had 1,036 students. The size of the staff also would be similarly reduced, the school said.
Francis J. Mootz III, McGeorge's dean, issued a statement saying the cuts were being made "in response to an unprecedented drop in applications to law schools across the country."
Unlike McGeorge and some other law schools, UC Davis doesn't intend to allow its student body to shrink or to cut jobs, said Dean Kevin Johnson. He said enough qualified applicants are still applying to fill the classrooms.
"The people who are dropping out of our pool are those with the lower GPAs and the lower LSAT scores," he said. "They're being more realistic about their chances of getting admitted."
"I think when the jobs come back, we'll see the students coming back."
Right now, though, the job market is a significant concern for law students. Nationally, the American Bar Association reports that 56 percent of law school graduates had full-time, long-term jobs nine months after graduation. UC Davis slightly overperformed, with 62 percent of graduates meeting that cutoff. At McGeorge, only 41 percent did, and 18 percent were unemployed.
Those numbers have given some potential students pause, considering the steep price of that JD degree. The annual in-state tuition at UC Davis Law School is $49,564; at McGeorge, it's $43,045 for the full-time program, according to the 2013 numbers from U.S. News & World Report.
Law students interviewed by The Bee were mostly upbeat, but cautious.
"If you're open to more options, finding a job will be less difficult," said Chelsea Tibbs, a student at McGeorge. Still, she said, "I don't think I have to make that compromise. I feel like I'll be able to work doing what I want to do right after graduation."
Amanda Massimini, a rising third-year McGeorge student, is working her second internship in a California public defender's office, and she thinks the experience she's gaining will set her apart.
"They get hundreds off applications for a handful of positions," she said. "They're looking for people they don't have to train."
Like many students, Massimini has used scholarships to reduce her borrowing. She said that going into public service will allow her to take advantage of a debt-forgiveness program that wipes the slate clean after 10 years of work. She currently owes $90,000 and has a year of law school remaining.
Kathryn Bilder, president of the UC Davis Law Student Association, said the need to make payments on student debt has prompted many students to opt for a job in the private sector, where the pay is higher and applying is easier.
Getting a public sector job "can be quite a long and arduous process," Bilder said, requiring students to pass the bar exam before they even apply. "There are many students that go into private sector out of necessity, not because that's what they want to do."
Yet competition is fierce in the private sector, too. When the recession hit, some of the nation's largest law firms stopped hiring or laid off employees. Orrick, Herrington & Sutcliffe, a San Francisco-based global law firm with an office in Sacramento, laid off hundreds of employees and has pared back its hiring. Smaller firms have also cut back.
"Turned out we were a little oversized when the economy melted down," said Jim Moose, senior partner in the Sacramento firm of Remy Moose Manley. "We've started rehiring pretty gradually, because we're through the worst of it."
Law firm executives say the shrinking pool of graduates isn't hurting them. On the contrary, partners say that increased competition for the jobs that remain allow them to find top-notch talent.
"Frankly, it's a buyer's market for young lawyers," said O'Brien of Downey Brand. "There's somewhat less hiring demand, so the pool of candidates we are seeing now vs., say, five to seven years ago is an extremely high-caliber pool."
With the number of law school applicants dropping, the reduced supply may eventually take the pressure off fresh graduates. Until then, rising tuition costs and fewer prospects are squeezing young attorneys and leaving their schools scrambling to adapt.
"We're just experiencing the perfect storm," Bilder said.
Call The Bee's Jack Newsham, (916) 321-1100. Follow him in Twitter @TheNewsHam.