by Erik White
October 2016
Mark Twain, renowned American author and humorist, once wrote, "To succeed in other trades, capacity must be shown: in the law, concealment of it will do." Despite this commonly exaggerated perception about those who practice law, attorneys play a pivotal role in society as they help to interpret and apply the law and act as intermediaries for the complex legal system. What follows is an examination of this profession as it responds to changing labor market conditions here in Minnesota.
First things first. This being an article about attorneys, there is a need to define the occupation precisely. "Lawyers" and "attorneys" are often used interchangeably but there is a difference between the two. Simply put, lawyers have completed law school. Attorneys have completed law school but also passed the bar exam to allow them practice law within a specific jurisdiction. They are allowed to act as legal representatives for their clients. This article refers to attorneys, lawyers who have passed the bar exam.
According to the American Bar Association's National Lawyer Population Survey, there are 24,952 active attorneys in the state of Minnesota in 2016. This is an increase of 4,775 attorneys since 2006, a 23.7 percent increase, which is greater than the 17.8 percent increase in attorneys nationally during this time frame. Despite the gains of attorneys, most recently the state of Minnesota has seen the number of practicing attorneys drop from its apex of 25,272 in 2014 with a slight rebound in 2015 (see Figure 1).
While the number of attorneys in Minnesota has increased, the number of law firms where they work has decreased in number. Based on DEED's Quarterly Census of Employment and Wages (QCEW) data program, there are 2,204 law firms in the state of Minnesota. The vast majority of these law firms, 1,437, are in the Twin Cities metro, while the other planning regions have more than 100 law firms but less than 200.
In the last year there has been a decline of 83 law firms throughout the state, a 3.6 percent drop in law offices. The Twin Cities metro has had a decrease of 60 law firms and Northeast, Northwest, and Southeast Minnesota have also seen a decline in law offices in the past year. Since 2006 the number of law firms has declined even more, despite the nearly 25 percent increase in resident active attorneys (see Table 1).
| Table 1. Number of Offices of Lawyer Establishments (NAICS 541110), 2006-2015 | |||||||
|---|---|---|---|---|---|---|---|
| Number of Legal Offices | 2014-2015 Change | 2006-2015 Change | |||||
| 2015 | 2014 | 2006 | Change in Firms | Percent | Change in Firms | Percent | |
| Central Minnesota | 160 | 160 | 159 | +0 | +0.0% | +1 | +0.6% |
| Northeast Minnesota | 110 | 117 | 119 | -7 | -6.0% | -9 | -7.6% |
| Northwest Minnesota | 162 | 171 | 169 | -9 | -5.3% | -7 | -4.1% |
| Seven County Twin Cities Metro | 1,437 | 1,497 | 1,579 | -60 | -4.0% | -142 | -9.0% |
| Southeast Minnesota | 128 | 137 | 148 | -9 | -6.6% | -20 | -13.5% |
| Southwest Minnesota | 125 | 120 | 129 | +5 | +4.2% | -4 | -3.1% |
| Minnesota | 2,204 | 2,287 | 2,318 | -83 | -3.6% | -114 | -4.9% |
| Source: DEED's Quarterly Census of Employment and Wages Data Program | |||||||
Despite the title of the NAICS code, not all attorneys are catalogued in the Office of Lawyers industry classification. The Bureau of Labor Statistics' National Employment Matrix, which lists the industries in which particular occupations are employed, shows only about 50 percent of all attorneys classified in this industry sector. A considerable number of attorneys are self-employed and thus are not captured in the QCEW data program, which covers only those establishments that participate in the state's unemployment insurance program, a condition that is not met by non-employers or the self-employed.
However, the Census Bureau and its Nonemployer Statistics data program, which originates its data from IRS filings, provides estimates of the number of attorneys in the state who operate their own business. In 2014, the most recently available data, there were 3,835 self-employed businesses under the Legal Services (5411) industry classification, and they generated sales receipts of $208,349,000. The number of nonemployers operating legal services has increased by 466 establishments since 2006, even though the number of covered employment establishments has decreased.
Another employer of lawyers is government at the local, state, and federal levels. From prosecutors to public defenders, governments rely on the services of lawyers for representation in civil and criminal cases. Classified under the NAICS code of Legal Counsel and Prosecution (92213), there are 2,412 jobs in the various levels of government that are mostly held by attorneys. All levels of government have seen an increase in the employment of legal counsel and prosecution, and local government have increased by 202 jobs since 2006 (see Table 2).
| Table 2. Legal Counsel and Prosecution Industry Employment Statistics in Minnesota, 2006-2015 | |||||||
|---|---|---|---|---|---|---|---|
| NAICS Code 92213 | 2014-2015 | 2006-2015 | |||||
| Government Type | Number of Jobs | Total Payroll | Average Annual Wage | Change in Jobs | Percent Change | Change in Jobs | Percent Change |
| Total Government | 2,412 | $179,625,297 | $74,464 | +71 | +3.0% | +185 | +8.3% |
| Federal Government | 136 | $14,400,977 | $106,028 | +2 | +1.5% | +12 | +9.7% |
| State Government | 982 | $61,369,553 | $62,452 | +36 | +3.8% | -28 | -2.8% |
| Local Government | 1,294 | $103,854,767 | $80,236 | +35 | +2.8% | +202 | +18.5% |
| Source: DEED's QCEW Data Program | |||||||
The state of Minnesota has established a standard procedure to be followed by aspiring attorneys. The first step is to graduate with a bachelor's degree and take the Law School Admission Test (LSAT) test, a six hour standardized test. These are needed in order to apply to law school, a competitive process that takes into account the score of the LSAT test and the undergraduate GPA. After being accepted, students must complete their law degree, also known as a J.D. degree, which allows them to sit for the Minnesota state bar exam. In Minnesota only those with a J.D. degree from an American Bar Association accredited law school may take the Minnesota Bar Exam, unless the lawyer is already licensed as an attorney in another jurisdiction. All three of Minnesota's law schools are ABA accredited: University of Minnesota, Mitchell Hamline School of Law, and University of St. Thomas. A lawyer who passes the Minnesota Bar Exam is then officially an attorney in the state.
Because of this process, law schools play an essential role in the supply of this occupation as they act as a screen and filter potential attorney candidates. Not only is it competitive to get into law school, but completing the degree is an arduous undertaking, with long nights of studying at the library a requisite and not an elective activity. Analyzing the trends of law school enrollment and the graduate's employment outcome in the state gives a sense of a changing labor market for lawyers in the state.
There are three law schools in the state of Minnesota, down from four, because of the recent merger of William Mitchell School of Law and Hamline Law School in the winter of 2015 to create the Mitchell Hamline School of Law. Seen as a move to counter the declining enrollment at these two institutions, data show declining enrollment at law schools to be widespread throughout the nation and in Minnesota and not just impacting the law schools in St. Paul.
In 2011 2,856 law school students were enrolled in the four different institutions, but by 2015 there were only 1,983 law school students, a decrease of 873 students or a 30.6 percent decline. All four law schools in the state experienced significant decreases in enrollment ranging from a 14.8 percent decline at the University of Minnesota Law School to a 58.0 percent decline at Hamline. The number of first year students in Minnesota law schools has also decreased considerably with 263 fewer matriculates in 2015 than in 2011, a 28.2 percent decrease (see Figure 2).
An important aspect for law students, or any college student for that matter, is what kind of job prospects await after graduation. DEED's Graduate Employment Outcome (GEO) data tool shows how recent Minnesota law school graduates are faring in the labor market by matching postsecondary graduation records from the Minnesota Office of Higher Education with wage records from Minnesota employers subject to the state's Unemployment Insurance program. Those law school graduates who move to a different state or start their own private practice would not be captured in the wage records.
There were 874 graduates from Minnesota law schools in the 2013-2014 academic year and of those, 577 had reported wages in Minnesota with a median hourly wage of $25.37. This was a slight increase in median hourly wages from previously graduating cohorts. Analyzing these earlier law graduate cohorts, the wages increase the more time spent in the field as the median wage was $32.69 four years after graduation for the 2010-2011 cohort (see Table 3).
| Table 3. Graduate Employment Outcomes for Graduate Degrees in Law Instructional Programs | |||||||
|---|---|---|---|---|---|---|---|
| Cohort | Number of Graduates | 1 Year After Graduation | 2 Years After Graduation | 4 Years After Graduation | |||
| Grads with Reported Wages in MN | Median Hourly Wage | Grads with Reported Wages in MN | Median Hourly Wage | Grads with Reported Wages in MN | Median Hourly Wage | ||
| 2013-2014 | 874 | 577 | $25.37 | N/A | N/A | N/A | N/A |
| 2012-2013 | 949 | 644 | $23.09 | 623 | $28.07 | N/A | N/A |
| 2011-2012 | 884 | 601 | $24.58 | 582 | $27.54 | N/A | N/A |
| 2010-2011 | 874 | 537 | $25.26 | 548 | $27.09 | 518 | $32.69 |
| Source: DEED's GEO Data Program | |||||||
Current indicators show considerable demand for attorneys. In DEED's Occupation in Demand data tool the occupation is rated as a four star occupation indicating strong current demand relative to all other occupations in the state. DEED's most recent Job Vacancy Survey found 132 job vacancies for Lawyers, Judges, and Related Workers throughout the state. Plus, the attorney profession is not immune to the demographic challenges that much of Minnesota's economy is dealing with as the baby boom generation begins to shift out of the labor force creating replacement openings.
Data from the Census Bureau's Quarterly Workforce Indicators data program show that 26.5 percent of the Legal Services industry (5411) sector is 55 or older. Employment projections from DEED's Employment Outlook data tool indicate significant openings in the next 10 years to replace those lawyers who leave the occupation - whether from retirement or change of career as well as a 5.5 percent growth in the total number of attorneys in the state.
Minnesota has seen the number of its attorneys increase in the past 10 years, especially those who practice in a government or self-employment setting. Despite the growth, recent enrollment has dropped considerably at law schools in Minnesota and throughout the nation, which will impact the profession's ability to replace those expected to retire in the near future. Law schools will continue to be pressured to supply the needs of the profession while ensuring that recent graduates are finding work in a career that compensates for their educational pursuits. However, even with these labor market changes, the attorney occupation will continue to play an important role in society as it has since the Roman Cicero.
