Law school admissions expert sees ‘dangerous one-two punch’ as Gen Z seeks shelter from the AI hiring storm in 6-figure debt and law-degree lifeboat
It’s been nearly three years since ChatGPT successfully passed the bar exam, a feat that sent a wave of career existential dread through the legal profession. Yet the demise of the legal profession hasn’t materialized just yet, and Gen Z appears to be flocking to law school as a hideout hole from the stormy entry-level hiring market.
Just like in 2008 and 2020, interest in law school is surging again, with the number of applicants up more than 40% over the last two years, according to the American Bar Associated data compiled by the Law School Admissions Council. The quasi-official white-collar recession indicator of crammed study halls fall of aspiring litigators had a reckoning of sorts in 2011, as documented in the blog “Inside the Law School Scam,” at first published anonymously and later revealed to be the work of Paul Campos, a law professor himself at the University of Colorado. (Campos later published a book, Don’t Go to Law School (Unless).)
Of course, Campos was writing as millions of millennials revived their career prospects amid the Great Recession, but applications surged again among the oldest Gen Zers in 2020. The New York Times noted that job prospects for lawyers are better than critics like Campos might charge, with over 80% of graduates in 2023 and 2024 working in jobs that require their legal credentials within a year, according to the ABA. In 2024, the National Association for Law Placement claimed the highest employment rate ever for law school grads, at more than 93%.
Yet law school admissions experts are warning that what goes up must come down. “We’ve been on a good run, so the pendulum swings back,” Mike Spivey, CEO of Spivey Consulting Group, a law school admissions consultancy, told Fortune. “When you get an oversaturation of law school students, law firms can be pickier. They tend to then slow down the hiring or slow down the salary increases.”
Though because the question is not “if” but “when” law firms will pump the brakes on hiring, college grads enrolling in law school today could find themselves in a tough situation because of the sheer volume of students entering the profession, not to mention the “low-hire, low-fire” economy that sees Gen Z unemployment rates at roughly double the national average. The confluence of a potential hiring slowdown and record-breaking enrollment numbers could set these students on a dangerous course, according to Spivey.
“You have more people going to law school and the possibility of law firms not hiring as much,” Spivey said. “That’s a dangerous one-two punch.”
Waning demand for legal professionals
The looming threat of AI automation could compound the risk of job loss, especially following a recession. Jen Leonard, founder of Creative Lawyers—an organization assisting leaders in the legal profession—said that an economic downturn could wipe out junior associate roles. Yet unlike in past recessions, those entry-level jobs wouldn’t rebound as firms would seek AI adoption to maintain a competitive edge. “The firms and the clients will figure out how to use AI to some degree [to] replace that labor,” Leonard told Fortune. “When the economy rebounds, I don’t know that you would see a rebound in entry-level hiring the way you normally would.”
The irony here is that interest in law school often spikes during recessions. LSAC historical data shows that in the wake of the 2008 financial crisis the number of people taking the LSAT rose over 15%. That trend is similar for other economic downturns. While the economy is not technically shrinking at the moment, many college grads are finding themselves in the bottom half of the K-shaped economy as the unemployment rate for recent college graduates has surpassed the unemployment rate for all workers for the first time since data became available, according to the Federal Reserve Bank of New York.
While Spivey said that student’s concerns with the rule of law under the Trump administration account for some of the uptick in law school applicants, he said the overwhelming majority of that trend can be attributed to hiring woes. “While we’re not in an economic recession, we’re in a hiring recession, ” Spivey said. “And that’s 90% of it.”
That comes as firms are turning to AI for greater productivity. Some law firms have adopted AI to take on grunt work and to optimize workflows. Firms such as A&O Shearman and Macfarlanes have integrated Harvey AI, an AI legal assistant, into their core operations. Other firms are seizing upon Thomson Reuters’s CoCounsel, like DLA Piper and Fisher & Phillips. And one AI startup, the Palo Alto-based Eudia, has vowed to kill the billable hour, describing itself as “the first AI-native law firm.”
Yet Spivey said that AI adoption hasn’t yet had an impact on hiring processes, mainly due to the overly cautious nature of law firms. “They are trained to be risk averse, so they put their little pinky toe in the pool,” Spivey said. “Every time there’s a horrible media story about AI failing in the legal profession, they take it out of the pool.” But he said that is set to change over time.
“Every time they put [their toe] back in, they put it in deeper.”
This story was originally featured on Fortune.com