From where I sit, the market has not really improved at all, and it isn't going to change anytime soon. Demand for legal services is basically flat, while law schools are continuing to churn out thousands of new graduates every year. If you are not attending a top tier law school, or are not in the top 10% or so of your graduating class, it is tough out there. I see so many law students we hire come and go with no plan for the future. Many of them are not working as lawyers. I have also had several people here who are licensed attorneys working as law clerks for $20 an hour. This is a student job, but good for me if I can get a licensed atty for $20 an hour. These guys are taking it on the chin just to get some experience. Most are average students from Rutgers and Seton Hall, some of whom are quite bright. And there is nothing out there for them. If they are committed to legal work, most are looking at government jobs or insurance jobs that may pay $60,000 - $70,000 to start.
No one should be deterred if being a lawyer is what they really want to do. But I try to discourage anyone from pursuing this profession for monetary gain. The legal marketplace for the run of the mill candidate has shifted significantly. The law firms have a significant advantage. They don't need new lawyers, because they can get guys with 5 years experience for the same price. This has driven down not only the number of opportunities out there, but also the available pay.
While the picture is bleak, however, there is always opportunity. If you can establish yourself as an attorney, you will still earn a very nice living. You just have to get from law school to 5 years experience. There are jobs out there, but they are tough to find. You need to work every angle, professors, family friends, anyone you know who is an attorney. Many law firms that are small or midsized are never "hiring." But if the right person comes in the door (especially with the right referral or connection), they may take you on. All you need is a foot in the door. Then it is up to you and your work product.
I would also stress that no matter how difficult it is to find work, do NOT seek or take a job at a firm that practices a type of law you find unbearable. You WILL get pigeonholed, and it will take extraordinary good fortune and hard work to switch practice areas. There are no general practitioners anymore. You need to specialize to survive, and most stuff will take about 5 years to learn with any degree of proficiency. Once you are working an area of the law you are highly likely to be practicing that kind of law for the rest of your career.