July is the cruelest month for recent law school graduates. State bar exams next week are make-or-break affairs, determining how many will be allowed to practice law. Those exams once set a graduate on the path to a lifelong career. Not anymore. A huge number of new graduates, if lucky enough to find work, will not be employed in legal jobs that require passing the bar.

Only 55 percent of 43,735 graduates in 2011 had a law-related job nine months after graduation, said William Henderson of the Indiana University Maurer School of Law, who analyzed recent data from the American Bar Association. Twenty-eight percent were unemployed or underemployed. And at the 20 law schools with the highest employment, 83 percent of graduates were working as lawyers. At the bottom 20, it was a dismal 31 percent.

These numbers are far worse than jobs data going back a generation and should be a deep embarrassment to law schools, which have been churning out more graduates than the economy can employ, indulging themselves in copious revenues that higher tuitions and bigger classes bring in. A growing list of deans acknowledge that legal education is facing an existential crisis, but the transformation to a more sustainable model will be difficult and messy.

The number of law office jobs began to decline in 2004, well before the recession. And demand for new lawyers isn’t expected to grow much even when the economy recovers. Outsourcing of legal work to places like India and greater efficiencies made possible by smarter software to search documents for evidence, for example, are allowing firms to cut the positions of multitudes of low-end lawyers. In 2009, twice as many people passed bar exams as there were legal openings — a level of oversupply that may hold up for years. There is, of course, tremendous need for lawyers to serve the poor and middle class, but scant dollars to pay them.

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Law schools have hustled to compensate for these shifts by trying to make it look as if their graduates are more marketable, even hiring them as research assistants to offer temporary employment. But those strategies won’t fix legal education, particularly when students are starting to see that a high-priced degree, financed by mountains of loans, may never pay off. The number of people taking law school admissions tests fell 24 percent in the last two years, to the lowest level in a decade. Law schools will be crushed if they don’t remake themselves, said Frank Wu, dean of Hastings College of the Law at the University of California in San Francisco. “This is Detroit in the 1970s: change or die.”