The job market for lawyers is terrible, full stop--and that hits young lawyers, without professional track records and in need of training, worst. Though the National Association for Law Placement, an industry nonprofit group, reports that employment for the class of 2009 was 88.3 percent, about a quarter of those jobs were temporary gigs, without the salaries needed by most new lawyers to pay off crushing debts. Another 10 percent were part-time. And thousands of jobs were actually fellowships or grants provided by the new lawyers' law schools.
Anecdotally, I hear of law schools pulling all sorts of tricks to artificially raise their placement rates. Giving the student a free fourth year to pursue a more advanced degree is one.
Of course, one could argue that the problem is just low aggregate demand. Perhaps employment of lawyers goes up and down directly with output. Or perhaps the supply of law school students goes up when there is low aggregate demand elsewhere.