The New York Times reports an almost 25% decline in the number of LSAT tests taken in the last two years. The Times reports:
The decline reflects a spreading view that the legal market in the United States is in terrible shape and will have a hard time absorbing the roughly 45,000 students who are expected to graduate from law school in each of the next three years. And the problem may be deep and systemic.
Many lawyers and law professors have argued in recent years that the legal market will either stagnate or shrink as technology allows more low-end legal work to be handled overseas, and as corporations demand more cost-efficient fee arrangements from their firms.
That argument, and news that so many new lawyers are struggling with immense debt, is changing the way law school is perceived by undergrads. Word is getting through that law school is no longer a safe place to sit out an economic downturn — an article of faith for years — and that strong grades at an above-average school no longer guarantees a six-figure law firm job.
I am far from sure that this is a sad or bad thing. Too many folks have been going to law school because they see it as a ticket to the $$$ than because they are attracted to an access vision. Maybe if law schools looked for and admitted people driven to the law by a sense of the possibility of justice, more of them would find a way to serve, and we’d be better off all round.
Let’s encourage law schools to assess this at admission, and to provide incubators and other tools to help their graduates made the transition to a justice practice, rather than a business one. Something for access to justice commissions to think about!
Richard Zorza's Access to Justice Blog 
Claudia’s comments are accurate, as we see it here in the CA Bay Area trenches. The silver lining to this cloud is that just as staff positions shrink – or at least get frozen – we have an extraordinary number of volunteers from all categories working for BayLegal. Law graduates who can’t get employment but have the means to build their experience as lawyers with public interest practice; Experienced lawyers who would rather donate time to BayLegal than other alternatives; and a just as strong, if not stronger, cadre of Law clerks and non-attorney advocates, are ready to give numbers of hours each week, representing those most in need.
While Richard rightly – as always – focuses on the larger Legal and Self Representation “market”, there will ALWAYS be a HUGE unmet need for Full Legal Representation by experienced Poverty Lawyers. No model that does not include this can hope to reach the vast – and increasing – needs of low and moderate income citizens for essential legal services. More law students coming into the market do not necessarily meet these needs, but there are hundreds of thousands of legal workers and attorneys already in the work force who can devote some of their time to Lawyering for the Indigent.
I think that just as the financial markets are deleveraging so is the legal community–we are going through a period of transition, where the prior model no longer applies because consumer taste is changing and also because there are issues that have not been addressed that need to be addressed now. In the legal non profit community, the crunch in state and federal funding sources, plus a decline in contracts with local governments has led to reductions in staff. Hiring is also down for public interest lawyers–a job market that has always been more competitive in the raw number of public lawyers an urban city can hire than compared to law firms. So for example, if in 2007 there were 5 public interest jobs openning in a city, now there may be none. I hope that those who do go into law school and want to pursue public interest careers are not turned off by the current environment. I hope that Executive Directors read Kelly Karmody’s excellent report on public interest salaries and exist drivers for public interest lawyers 3-5 years from law school.http://www.nlada.org/Civil/Civil_Sections/Loan_Repayment_Pensions
I also hope that law schools and their alumni continue to fund public interest repayment loans and programs for those graduates that commit to a number of years of non-profit practice. An example, Penn Law. At Penn they have been increasing the number of post graduate fellowships for new graduates, they continue to provide public interest law forgiveness, and alumni, like Robert and Jane Toll, have made two large contributions to make this possible.http://www.law.upenn.edu/blogs/news/archives/2011/06/robert_and_jane_toll_give_addi.html
I agree that practicing law is a priviledgea business,yet not everyone will have a vocation to practice in the public interest and that is ok–as long as once they do well they do good by helping the younger generation of attorneys who do want to practice in non profit careers. Lets also help those who make that choice when they apply to law school are able to stay in their vocation for the long run. Loosing them once they have been trained 3-5 years into their career is too expensive.