First-year law school enrollment has declined for the third straight year. Applications are down 20 percent over that period, and administrators are scrambling to avert faculty layoffs and school closings.

The graduate law program, which tripled in size in the last 25 years while taking its pick of some of the brightest undergraduates, does not face a promising future, law school officials said recently.

"We might well see some law schools closing in the next 10 years," said Prof. James P. White of the Indiana University School of Law. One school in California has laid off some faculty members, he said, and other schools, especially newer, smaller ones, are likely to do so soon.

"A number of law school deans are worried about maintaining the quality of their students, about schools shrinking in size, even about closing," said White, the American Bar Association's consultant on legal education.

What caused the drop in applications is somewhat of a mystery.

Analysts generally agree that the precipitous decline that is affecting 85 percent of the nation's 174 ABA-approved law schools cannot be explained as simply a decline in the college-age population now that the baby-boom generation is graduating.

Some experts, such as R. Paul Richard, deputy executive director of the Law School Admission Council, say that a shift in undergraduate majors away from pre-law fields may be the result of an improved economy, a perceived glut of lawyers and, perhaps, a general feeling that legal training is no longer a ticket to a better life and social mobility. Tuition approaching $12,000 a year also may play a part.

The dramatic drop in applicants, however, does not necessarily mean fewer lawyers. It may mean large numbers of unqualified lawyers, some legal specialists fear.

Total enrollment in the 174 ABA-approved law schools was 125,698 last fall, down 3.3 percent over the last three years after rising steadily for decades.

Total applicants for about 41,000 openings fell from 72,946 in 1982, to 64,078 in 1984 and to a preliminary estimate of about 58,400 for next fall, according to the Law School Admission Council.

"Somebody is clearly taking someone they wouldn't have taken before," said John C. Roberts, dean of Wayne State University Law school in Detroit.

"Survival is a pretty powerful force," Roberts said, adding that schools "may not admit it," but "there are some schools already at or near open admissions."

Andy Cornblatt, assistant dean of admissions at Georgetown University Law Center, agreed.

"Schools will be very reluctant to contract," he said. "That will mean a glut of people who have no business being in law school" and will lead to some schools graduating lawyers far less qualified than a decade ago.

Law School Admission Council officials predict that as many as 50 law schools will resort to open-admissions policies to stay afloat.

Georgetown, like most prestigious, established schools, is barely feeling the changes. Applicants there are down from a peak of 8,200 in 1982 to about 6,500 this year. But Georgetown enrolls only 625 students a year, Cornblatt said, and the quality of this year's applicants, judged by their grade averages and test scores, is 6 percent higher than last year.

"We are simply losing people at the bottom of the pool," he said.

Smaller state or regional schools, such as Wayne State, however, have to make difficult choices between high admission standards and shrinking, Roberts said.

Wayne State chose not to lower its standards when applicants declined. Instead, it reduced first-year enrollment from 300 to 250 last year and to 200 this year, Roberts said.

"Our student quality is the same," he said, "but you have to have tremendous support from the university administration to have a loss of revenue of one-third."

The school recently had plans to hire five new faculty members. Now it will not be hiring new staff for the next several years.

Smaller law schools will be even more hard-pressed.

"There is only so far you can contract," Roberts said.

In the meantime, school officials are casting about for some way to reverse the decline. Many have resorted to aggressive recruitment. But the effort, if undertaken by a lot of schools, probably will "cancel itself out," Roberts said.

"Placement," White said, "was something no one even worried about 10 years ago." Now law schools are expanding their placement efforts and are making sure prospective students know it.

That would help alleviate what some specialists see as a perception that legal careers don't lead to jobs, a perception that seems to be part of the reason for the decline in interest in the law.

The perception exists despite surveys by the National Association for Law Placement that show the percentage of graduates finding law-related jobs has remained virtually unchanged, at about 80 percent, for the last 10 years.

Some observers predicted several years ago that demographic trends would lead to an easing of the demand for legal education. Still, the number of people earning undergraduate degrees peaked in 1983 and 1984, the same years that law school applicants fell 12 percent, according to a Law School Admission Council study.

The problem for the law schools, the study concluded, is a significant shift in undergraduate interests. The number of undergraduate degrees has been increasing, the study noted, but the number of liberal arts majors -- the traditional fodder for law schools -- has dropped.

While 53 percent of freshmen in 1977 wanted to obtain liberal arts degrees, that number dropped to37 percent in the early 1980s, the study found.

Other professions also are experiencing hard times. Applications for medical, dental and veterinary schools have declined sharply in recent years, studies show, but the admissions council is not sure what connection there may be, if any.

One factor cited in the study is the economic upturn from 1982 to 1984, which created jobs that took people away from law school and other graduate professions.

Many college graduates have heavy financial debts, and law schools now cost as much as $12,000 a year in tuition, White noted. A perception that the market is glutted might be dissuading more marginal students, who know that they won't be hired by the top firms, he said.

"If the decline continues, we probably will have some hard choices," White said. "The days of law schools supporting universities are over. Smaller, newer law schools probably will not support themselves."

"People are scared, real scared," Cornblatt said of his colleagues in the law school admissions field. "There is a lot of fear out there."