Wrong Again: The PRISM Report’s Prediction of Too Many Practising Lawyers Again Collides With Reality

• Date: March 22, 2019

In this submission we will again demonstrate that the PRISM Report’s prediction of too many practising lawyers in Ontario badly missed the mark in the first few years that it studied and that it can be expected that it will continue to do so going forward. Indeed, new years of data confirm our view that not only was the PRISM Report incorrect, but it now appears more likely that the number of new practising positions will at least match the number of new lawyers than it is that there will be a surplus of lawyers during the forecasted period of 2015 to 2025.

As a preliminary comment, we would note that to assume that for every year from 2017 to 2025 the increase in practising lawyers will be less than the increase following the 2008 financial crisis, and then use this assumption to estimate the future ratio between “supply and demand” for lawyers, may strike some as a strange exercise.

Nevertheless, in November 2016, the Higher Education Quality Council of Ontario released a study it had commissioned from PRISM Economics and Analysis (the “PRISM Report”)[1] which incorporated the historical and projected supply and demand of lawyers into a proprietary model to estimate the future ratio for lawyers in Ontario over a 10 year period ending in 2025. Its key conclusion was that there would be too many lawyers and that there would be 1.6 lawyers for every new practising position. The PRISM Report’s chapter with respect to the demand for lawyers was included, verbatim and unchallenged, in the Law Society of Ontario (the “LSO”’s -then the LSUC’s) Dialogue on Licensing reference materials which included a recommendation that repeated the 1.6:1 lawyers to new positions reference.

The assumption that demand for practising lawyers would be so low was wrong when the PRISM Report first came out, and it remains wrong today. We felt that the PRISM Report was in error in July, 2017, and together with Hilary Smith, we published a critique (the “Critique”)[2] of the PRISM Report. In it, we demonstrated that this 1.6:1 projection was wrong at the time.

Notwithstanding that the PRISM Report has been proven wrong with respect to its predictions, it is still being cited in the legal profession. For example, in November 2018, the misleading 1.6:1 forecast was cited in the Canadian Lawyer Mag, “[a]n estimate by the Higher Education Quality Council of Ontario projects 1.6 new licensed lawyers for every one practising position in Ontario by 2025.”[3]

The fact that the PRISM Report is still being cited caused us to revisit its projections in light of two more years’ worth of data from the LSO.

By way of a refresher, while there were several variables that went into the PRISM Report’s projections, one stuck out as being far and away the most critical in arriving at its 1.6:1 ratio. As noted by Malcolm Mercer,

It should be clearly understood that the most important variable in the PRISM Report is the projected expansionary demand. The ability to make this sort of macroeconomic projection is highly suspect.[4]

In the Critique, we focused on that projected expansionary demand. It seemed anomalous to us that the projected expansionary demand for lawyers in Ontario would contract so significantly, even to levels far lower than what was seen in the financially-troubled 2008-2009 period.

The chart below,...