I recently wrote in my LawBiz Tips Ezine about how law schools continue to churn out new graduates even as demand for them drops, and cited a New York Times article on this issue that concluded:  “Today, American law schools are like factories that no force has the power to slow down – not even the timeless dictates of supply and demand.”

Now it appears that the law of supply and demand has not been repealed after all.  The Wall Street Journal reports numbers from the Law School Admissions Council showing that the number of law-school applicants this year is down 11.5% from a year ago to 66,876. The figure, which is a tally of applications for the fall 2011 class, is the lowest since 2001 at this stage of the process, which is almost 90% completed.  

The reasons aren’t hard to understand.  Firms increasingly prefer to hire lateral attorneys who have already had on-the-job training and books of business, rather than new graduates who don’t understand “The Business of Law®” and will take years to begin returning a profit on the investment made in them.  And from the student side, the realization that going six figures into debt to get a J.D. degree that offers no assurance of gainful employment is not exactly a smart idea – especially for those whose main motivation to attend law school was to make the supposed “big bucks” available rather than to pursue a legal career.

So who is hurt most if the law school bubble does burst?  We can only hope it will be the law schools themselves, who continue to pour huge resources into “gaming” the law school rankings so that they can move up from number 19 to number 17 and thereby (they presume) entice more students to enroll.  When the housing bubble burst, it was – and continues to be – the financial geniuses at the banks who were left holding the bag.  Are law school administrators any smarter?

Doctors outreach for management training demonstrates a recent shift in thinking: "...we are much more similar to other businesses that we are different." Taking the business side of medicine more seriously can benefit not only doctors, but also patients, a fact slowly being understood in the medical profession.

Why is it that doctors are ahead of lawyers in this understanding? Why is it that medical schools are incorporating management principles into their teaching and few, if any, law schools do? Why is it that lawyers continue to be reactive, rather than be proactive? Worse still, why is it that lawyers fail to react to their clients wishes?  Bar disciplinary proceedings continue to show that more than 50% of clients' complaints relate to poor management practices. Why?

And how does this phenomenon impact the recruiting of lateral associates/partners to smaller law firms?