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The Paper Chase

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Law school enrollment dips; other professional study remains strong.

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Law school applications have declined since 2005 and appear to be headed for another drop this year.

However, demand for new attorneys remains strong, and given their high profile in society, there's no danger that lawyer jokes will vanish.

"In general, when the economy isn't doing well, people put off joining the job market by Minyanville's Tips for June Grads going to graduate or professional school," says Wendy Margolis, spokeswoman for the Law School Admission Council in Newtown, Pennsylvania. "But there's a lag and it's hard to know if it's happening now."

Law school applications have fallen since 2005 after steady increases for the previous seven years, including a 17.1% jump in 2002 from 2001. That spike in applications may be a reaction to the recession and dim job prospects that followed the September 11th, 2001, terrorist attacks in New York and Washington.

Students seeking admission to law schools accredited by the American Bar Association declined to 83,500 in fall 2007 from the peak of 98,700 in the fall of 2004. Through April 18th, the most recent date available for this year's count, applications are down about 0.9% from 2007, the Law School Admission Council reports.

The median starting salary for a first-year associate in a private law firm is $113,000 and $145,000 at firms with more than 501 attorneys. After eight years, the median salary for lawyers at large firms is $204,175 while the median salary for firms of all sizes is $156,675. The good money is almost certain to mean a steady, if slightly diminished, stream of applications to the nation's law schools in the years ahead.

Some students enter law school planning to work with the poor, but the starting salary for a public interest lawyer is about $36,000 and that makes student loan repayment and eating difficult.

The decline in law school applications isn't severe, and there's no indication that schools are easing admission standards to fill the seats. Competition for admission to the top schools remains fierce.

"Students appear to be applying to more schools so there may actually be a larger pool of applicants for schools to choose from," says Margolis. "The more popular schools get top-notch applicants and are every bit as competitive as before."

The National Association for Law Placement reports that hiring new attorneys and summer internships has remained strong during the last four years, suggesting steady demand - even in the current sour economy. However, the association notes that recruitment hasn't reached the peak demand seen eight to ten years ago. Still, more than half of the nation's law schools say the number of employers conducting on-campus interviews increased 5% last year.

Reasons for the decline in law school applications are unclear. The average undergraduate debt for the class of 2007 was $19,000, the University of Minnesota reports, and continues to increase. Many advisors recommend holding debt at 10% to 15% of what you earn in your first job out of school. This is difficult if you're an English major looking for a job in publishing or reporting. Large and growing debt may deter an increasing number of students from pursuing a J.D. degree and going further into hock, but no one knows for sure. Nevertheless, enrollment remains strong in MBA, M.D. and graduate engineering programs - and those degrees aren't cheap.

It's impossible to say if students who decide not to apply to law school are going into other fields of study or entering the job market. Law school emphasizes reading and writing, but generally doesn't demand the strong quantitative skills required by a tough Masters of Business Administration program. However, some schools offer a combined MBA-J.D. program.

Using the Graduate Management Admission Test, the entrance exam required by the nation's top schools, as a proxy, interest in the MBA is growing. A total of 149,908 U.S. students took the exam in 2007, up 8.6% from the 138,053 in 2006. The number of U.S. students taking the exam peaked at 162,502 in 2002. Not all schools require the GMAT, but competitive schools that select from top students require the test.

Similar numbers for engineering schools are hard to come by because unlike dental, optometry or veterinary school, there's no single admission test in the United States. (India uses the Graduate Aptitude Test in Engineering, known as GATE. Many schools require the Graduate Record Exam, but it's also used for non-engineering graduate programs.) But using the Massachusetts Institute of Technology as a proxy, the number of students applying to the engineering college increased to 6,186 in 2007 from 4,693 in 1998, an increase of 31.8%. The difference: MIT and top engineering schools draw from a worldwide talent pool, but most U.S. law schools do not.

The number of applicants to the nation's medical schools has increased since 1998. In 2007, 42,315 students applied, up from 39,108 in 2006, an increase of 8.2%.

June graduates with a bachelor's or graduate degree have many choices, despite the downbeat economy. A survey by WetFeet, a Universum company, found that those planning to begin a career in banking like the looks of Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC). Google (GOOG) is a top choice of many students with a range of degrees. Those interested in consumer goods are thinking about Procter & Gamble (PG), PepsiCo (PEP), and Nike (NKE). In manufacturing, General Electric (GE), Toyota (TM) and Apple (AAPL) grab graduates' attention.

There are many Web sites devoted to lawyer jokes, but there's no need to fret about the long-term survival of lawyers. Typically, the websites are a curious mix of yuks, "how to" tips, including suggestions for writing a killer essay for a law school application, and employment ads for... lawyers.
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