Once upon a time — assuming you didn’t want to be a dermatologist — you went to a fine law school, remained sentient in class, and got a job as an associate at a large law firm in a big city. You didn’t know how to take a deposition or do a deal, but no matter: Plenty of corporations retained firms to do gobs of document searching and contract drafting; and that meant you, to the mellifluous tune of $160,000, plus perks, got hired to do it.

Then came the 2008 worldwide economic collapse. Jobs that seemed automatic were no longer. The hiring squeeze meant fewer prized spots for law students, whose ranks have grown over the past decade. At the non-elite law schools, the chances of getting hired on Wall Street or on Sand Hill Road have especially dwindled. A wave of hyperbolic media stories inevitably followed: Young law graduates were becoming baristas at Starbucks, moving back in with their parents, or both. Anti-law-school screeds have become a growth industry. A popular blog is called Inside the Law School Scam. Its author: a law professor at the University of Colorado (who doesn’t appear to appreciate irony).

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Law graduates, being law graduates, have chosen to litigate, arguing in Gomez-Jimenez v. New York Law School that they were duped into attending law school by robust employment statistics published by institutions that failed to distinguish between working in a Cravath conference room and behind a Chipotle counter. Those litigants lost their first round in court in March after a New York state judge ruled the students were “sophisticated” enough to know the risks, and that “issues posed by this case exemplify the adage that not every ailment afflicting society may be redressed by a lawsuit.” The court, too, might have emphasized, as outgoing dean Larry Kramer of Stanford Law School points out, that virtually every industry has had a downturn since 2008. Investment banks and private equity firms have cut back too. Employment is always cyclical — law-firm hiring had another valley in the ’80s before the boom of the ’90s.

The larger problem with the brief against law schools is that it ignores what’s happening in the marketplace. Competition for jobs is lessening, since not as many folks apparently now want to go to law school. Administrations of the LSAT admissions test are down 16% from last year, the largest decrease ever. New technology has further hurt employment prospects: Software is now capable of drafting basic real estate documents, and you don’t need to provide benefits to a piece of software. Some simple work is being outsourced overseas. Might this signal a cultural shift among corporations? Or is it simply a realization that a trained monkey might be just as good at making photocopies as a $300-an-hour 25-year-old fresh out of Yale? A career in dermatology may yet beckon.

This story is from the April 30, 2012 issue of Fortune.

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