Overpromising

April 18th, 2015 / By Deborah J. Merritt

Earlier this week, I wrote about the progress that law schools have made in reporting helpful employment statistics. The National Association for Law Placement (NALP), unfortunately, has not made that type of progress. On Wednesday, NALP issued a press release that will confuse most readers; mislead many; and ultimately hurt law schools, prospective students, and the profession. It’s the muddled, the false, and the damaging.

The Muddled

Much of the press release discusses the status of $160,000 salaries for new lawyers. This discussion vacillates between good news (for the minority of graduates who might get these salaries) and bad news. On the one hand, the $160,000 starting salary still exists. On the other hand, the rate hasn’t increased since 2007, producing a decline of 11.7% in real dollars (although NALP doesn’t spell that out).

On the bright side, the percentage of large firm offices paying this salary has increased from 27% in 2014 to 39% this year. On the down side, that percentage still doesn’t approach the two-thirds of large-firm offices that paid $160,000 in 2009. It also looks like the percentage of offices offering $160,000 to this fall’s associates (“just over one-third”) will be slightly lower than the current percentage.

None of this discussion tells us very much. This NALP survey focused on law firms, not individuals, and it tabulated results by office rather than firm. The fact that 39% of offices associated with the largest law firms are paying $160,000 doesn’t tell us how many individuals are earning that salary (let alone what percentage of law school graduates are doing so). And, since NALP has changed its definition of the largest firms since 2009, it’s hard to know what to make of comparisons with previous years.

In the end, all we know is that some new lawyers are earning $160,000–a fact that has been true since 2007. We also know that this salary must be very, very important because NALP repeats the figure (“$160,000”) thirty-two times in a single press release.

The False

In a bolded heading, NALP tells us that its “Data Represent Broad-Based Reporting.” This is so far off the mark that it’s not even “misleading.” It’s downright false. As the press release notes, only 5% of the firms responding to the survey employed 50 lawyers or fewer. (The accompanying table suggests that the true percentage was just 3.5%, but I won’t quibble over that.)

That’s a laughable representation of small law firms, and NALP knows it. Last year, NALP reported that 57.5% of graduates who took jobs with law firms went to firms of 50 lawyers or less. Smaller firms tend to hire fewer associates than large ones, and they don’t hire at all in some years. The percentage of “small” firms (those with 50 or fewer lawyers) in the United States undoubtedly is greater than 57.5%–and not anywhere near 5%.

NALP’s false statements go beyond a single heading. The press release specifically assures readers that “The report thus sheds light on the breadth of salary differentials among law firms of varying sizes and in a wide range of geographic areas nationwide, from the largest metropolitan areas to much smaller cities.” I don’t know how anyone can make that claim with a straight face, given the lack of response from law firms that make up the majority of firms nationwide.

This would be simply absurd, except NALP also tells readers that “the overall national median first-year salary at firms of all sizes was $135,000,” and that the median for the smallest firms (those with 50 or fewer lawyers) was $121,500. There is some fuzzy language about the median moving up during the last year because of “relatively fewer responses from smaller firms,” but that refers simply to the incremental change. Last year’s survey was almost as distorted as this year’s, with just 9.8% of responses coming from firms with 50 or fewer lawyers.

More worrisome, there’s no caveat at all attached to the representation that the median starting salary in the smallest law firms is $121,500. If you think that the 16 responding firms in this category magically represented salaries of all firms with 50 or fewer lawyers, see below. Presentation of the data in this press release as “broad-based” and “shed[ding] light on the breadth of salary differentials” is just breathtakingly false.

The Damaging

NALP’s false statements damage almost everyone related to the legal profession. The media have reported some of the figures from the press release, and the public response is withering. Clients assume that firms must be bilking them; otherwise, how could so many law firms pay new lawyers so much? Remember that this survey claims a median starting salary of $121,500 even at the smallest firms. Would you approach a law firm to draft your will or handle your divorce if you thought your fees would have to support that type of salary for a brand-new lawyer?

Prospective students will also be hurt if they act on NALP’s misrepresentations. Why shouldn’t they believe an organization called the “National Association for Law Placement,” especially when the organization represents its data as “broad-based”?

Ironically, though, law schools may suffer the most. What happens when prospective students compare NALP’s pumped-up figures with the ones on most of our websites? Nationwide, the median salary for 2013 graduates working in firms of 2-10 lawyers was just $50,000. So far, reports about the Class of 2014 look comparable. (As I’ve explained before, the medians that NALP reports for small firms are probably overstated. But let’s go with the reported median for now.)

When prospective students look at most law school websites, they’re going to see that $50,000 median (or one close to it) for small firms. They’re also going to see that a lot of our graduates work in those small firms of 2-10 lawyers. Nationwide, 8,087 members of the Class of 2013 took a job with one of those firms. That’s twice as many small firm jobs as ones at firms employing 500+ lawyers (which hired 3,980 members of the Class of 2013).

How do we explain the fact that so many of our graduates work at small firms, when NALP claims that these firms represent such a small percentage of practice? And how do we explain that our graduates average only $50,000 in these small-firm jobs, while NALP reports a median of $121,500? And then how do we explain the small number of our graduates who earn this widely discussed salary of $160,000?

With figures like $160,000 and $121,500 dancing in their heads, prospective students will conclude that most law schools are losers. By “most” I mean the 90% of us who fall outside the top twenty schools. Why would a student attend a school that offers outcomes so inferior to ones reported by NALP?

Even if these prospective students have read scholarly analyses showing the historic value of a law degree, they’re going to worry about getting stuck with a lemon school. And compared to the “broad-based” salaries reported by NALP, most of us look pretty sour.

Law schools need to do two things. First, we need to stop NALP from making false statements–or even just badly skewed ones. Each of our institutions pays almost $1,000 per year for this type of reporting. We shouldn’t support an organization that engages in such deceptive statements.

Second, we really do need to stop talking about BigLaw and $160,000 salaries. If Michael Simkovic and Frank McIntyre are correct about the lifetime value of a law degree, then we should be able to illustrate that value with real careers and real salaries. What do prosecutors earn compared to other government workers, both entry-level and after 20 years of experience? How much of a premium do businesses pay for a compliance officer with a JD? We should be able to generate answers to those questions. If the answers are positive, and we can place students in the appropriate jobs, we’ll have no trouble recruiting applicants.

If the answers are negative, we need to know that as well. We need to figure out the value of our degree, for our students. Let’s get real. Stop NALP from disseminating falsehoods, stop talking about $16*,*** salaries, and start talking about outcomes we can deliver.