The law-school bubble may have just burst.

According to data from the Law School Admission Council, first reported by the Wall Street Journal, the number of applicants to law school has dropped a whopping 11.5 percent year-to-year—to the lowest level since 2001 at this point in the application cycle. Some schools are still accepting applications, so the numbers will change in the coming weeks, says the council’s Wendy Margolis. But about 90 percent of applications are in, and the pattern is clear.

It is a remarkable turnaround. The number of applicants to law school has waxed and waned over the course of the past decade, but the general trend has been up. And applications took a further turn skyward when the recession hit. Between 2007 and 2009, the number of LSAT takers jumped 20 percent, and the number of applicants swelled 6.3 percent. (Between 2001 and 2002, after the dot-com bubble burst, the number of applicants actually jumped more, by nearly 20 percent.)

Over the past decade, the number of law-school students has also steadily increased, as universities have opened or expanded their schools. Law schools tend to be moneymakers: They’re cheap to set up, and tuition runs high, even at poorly rated programs. Thus, universities have added them on with relish, and the list of approved law schools has increased 9 percent in the past decade, to 200. That means that the number of new lawyers minted every year has not stopped growing, either: Law schools awarded 44,004 degrees last year, up 13 percent in a decade.

But the prospects for those legions of new lawyers have been grim, a fact hardly unbeknownst to them. As I reported this fall, in the past few years, young lawyers faced a glut of competition from other legal professionals; plummeting wages; a reduction in openings in and offers at big law firms; and cripplingly high student-loan debts. When the recession hit, thousands of young lawyers suddenly found themselves trying to work off six figures of debt in pay-per-hour assistant gigs. Granted, things are looking better. But the National Association of Legal-Career Professionals still cautions that “entry-level recruiting volumes have not returned to anything like the levels measured before the recession.”

The tide seems to be turning. Fewer applicants and applications do not translate into fewer lawyers, of course—and falling demand for legal services is the ultimate root of the problem. But the drop in applicants does seem to mean that young folks considering the legal profession are getting savvier.

So what explains the drop in applications? First, the job market is getting better, if slowly. When the economy turns around, in general, people tend to enter the workforce rather than head for graduate school. According to the Bureau of Labor Statistics, in the past year, the unemployment rate has declined from 14.9 percent to 14.6 percent for 20- to 24-year olds, and from 9.9 percent to 9.6 percent for 25- to 34-year-olds. (More than 80 percent of law-school applicants fall in that age range.) For people with a college degree of all ages, the rate has fallen from 5.0 to 4.4 percent in the past year. The labor market has not gotten remarkably better, but it has improved, translating into fewer graduate-school applications.

But the biggest reason may be cultural, not economic. In the past year or two, scads of blogs have committed themselves to exposing law school as a “scam,” and the NewYork Timesand Wall Street Journalhave devoted thousands of words to telling readers why law school is a bad, bad idea if you do not actuallywant to be a lawyer. Look to any of a dozen blogs or news sites to explain how wages for legal workers might continue to fall, as automation takes over rote tasks and businesses increasingly refuse to pay obscenely high per-hour fees. Wandering further into the realm of anecdata, virtually every young lawyer or law student I know would love to talk my ear off about the worrisome employment prospects for new legal professionals.

Once the conventional wisdom has spotted a bubble—whether in housing or gold or anything else—it tends to burst. That will come as cold comfort to the thousands of young lawyers struggling to pay their debts. But it may be something to consider for anyone willing to pay the law school of her choice six figures to extend her academic career for another three years. Maybe by then the recovery will actually be genuine.