Professor Bill Henderson
The short answer is jobs. Applications are down (in all groups of applications, not just 160+ LSAT students focusing on differing proportions is a fool's errand) because entry level jobs are down and starting salaries are flat. Entry level jobs have stagnated because of the shifting economics of modern law practice, particularly clients' ability to pay. Thus, traditional legal services jobs are unlikely to come back.
A recent study by the National Conference of State Courts reveals why this is true. The study compiled data from over 925,000 cases disposed of in state courts in 10 large counties that encompass major U.S. cities. The sample was constructed so that it would be representative of the nation based on geography and mixture of general and limited jurisdiction courts. Remarkably, more that 75 percent of all case had either an unrepresented plaintiff or defendant. Further, among the 228,000 cases that resulted in a judgment greater than zero, the median judgment was $2,441; the 75th percentile was $5,154; the average amount (obviously skewed by a few large cases) was $9,267. In short, traditional law practice has become uneconomical for both lawyers and clients.
Legal education's comeback, if we have one, will involve institutional redesign of how legal problems get solved. The spittoons and elevator operators at the U.S. Supreme Court are nothing to be proud of.
Law Schools Are Losing Smart Applicants. How Do They Lure Them Back?