The Seventeen Percent

June 23rd, 2016 / By Deborah J. Merritt

In a recent column, Professor Stephen Davidoff Solomon observes that the legal job market “is a world of haves and have-nots.” With BigLaw firms raising entry-level salaries from $160,000 to $180,000, he concludes, “[t]op law graduates are doing better than ever.” Conversely, “it is clear that it is harder out there for the lower-tier law schools and their graduates.”

I agree with Professor Solomon about the divided nature of our profession; that reality has haunted American lawyers for decades. Solomon, however, significantly overstates the percentage of law graduates who fall within his world of “haves” (those whose salaries recently climbed from $160,000 to $180,000).

He begins by accurately declaring that these salaries “represented only about 17 percent of the reported salaries [for new lawyers] in 2014, according to data from the National Association for Law Placement.” That 17 percent of “reported salaries,” however, quickly morphs into 17 percent of all law graduates. Later in the column, for example, Professor Solomon refers to “the lucky 17 percent of graduates” earning the highest salaries.

In making this transition, Professor Solomon forgets that the pool of reported salaries is quite different from the pool of all law graduates. In 2104, the year that Professor Solomon discusses, only half of all law graduates (50.4%) had “reported” salaries.

Who Doesn’t Report?

Why don’t more graduates report their salaries? Some (11.0% in the Class of 2014) don’t have salaries to report because they’re unemployed. Another group (about 10.6% in that class) are working part-time, in temporary positions, or both. Even when those graduates tell their law schools what they earn, NALP excludes the salaries from “reported” ones. The reported salaries reflect only wages earned in full-time jobs that will last a year or more.

And, of course, some graduates neglect to share salary data with their law schools. Some are embarrassed, some forget, and some protect their salaries as private information. There is one group of salaries, however, that are always “reported” to law schools: those are the top salaries that Professor Solomon discusses.

It’s not that every graduate who earned $160,000 in 2014 rushed to share that information with her law school’s career services office. The office already knew that salary through NALP’s directory of legal employers. Indeed, anyone can see that information in the online directory. If a high-paying law firm didn’t appear in that directory, and the graduate didn’t supply her salary, the career services office would have gotten the salary from the firm’s HR department.

In today’s world, with deans pushing their career services departments to report the highest possible employment figures and salary statistics, it is inconceivable that a significant number of top law firm salaries go undetected. Those undetected salaries (if any) are about as rare as a male calico cat.

To estimate the percentage of law graduates earning BigLaw’s “going rate,” therefore, we should take the number of reported salaries in that category and divide by the total number of graduates. In 2014, the year that Professor Solomon discusses, the “lucky . . . percent of graduates” is 8.6%, not 17%. The highest that percentage ever climbed was to 11.8% during the boom year of 2008. Conversely, it dipped to 5.9% for the Class of 2011. [See the notes at the end of this post for references and calculations.]

Does It Matter?

Does it matter what percentage of law graduates earn BigLaw salaries, as long as we agree that the group is a minority of all graduates? I think it does: There is a sizable psychic difference between 17% and 8.6%. The former is almost one in five, the latter is less than one in ten. I don’t want 91.4% of graduates to feel that one-fifth of their peers are earning $180,000 per year. Why make them suffer that false comparison? And why tell potential law students that 17% of them will earn $180,000 when the figure is really 8.6%?

It’s sobering, in fact, to realize that more members of the Class of 2014 were un- or under-employed than earning a BigLaw associate’s salary ten months after graduation. Eleven percent of those graduates were unemployed at that point, while 7.5% were working part-time. Another 3.1% were working in temporary full-time positions. That’s more than one fifth of the class (21.6%) either un- or underemployed–without even considering the nature of their jobs or size of their paychecks.

The Best Advice

Professor Solomon concludes his column by advising prospective students to look at job outcomes for specific schools so “they can choose which outcome suits them best.” I agree with that advice. In fact, that’s exactly why Law School Transparency (LST) launched its website more than five years ago. Prospective students can easily examine job outcomes and other statistics for every ABA-accredited law school. The site stresses the local nature of most job markets and allows users to compare schools on different metrics.

To complement that information, LST has recorded more than 40 podcast interviews with law graduates working in a wide range of jobs. The interviews help both prospective and students identify the roles that might appeal to them. The information is especially important for the “have-nots,” the law graduates who won’t earn $180,000 in BigLaw firms; they need to know what other types of work are available.

Now that’s factual information students can really use.

Notes

Here are the references and calculations for the percentage of graduates earning $160,000 in the years identified above. For the Class of 2014, NALP reports that 17% of “reported” salaries were $160,000. That’s from a pool of 22,095 reported salaries. About 3,756 graduates, therefore, received the $160,000 salary. This is 8.6% of the 43,832 JDs who graduated that year.

For the Class of 2008, NALP reports that 23% of “reported” salaries were for $160,000. A total of 22,305 salaries were reported that year, so the number of $160,000 salaries was about 5,130. That’s 11.8% of the full class of 43,587 graduates.

For that Class of 2011, finally, NALP reports that salaries of $160,000 made up 14% of “reported” salaries. Schools reported salaries for just 18,630 graduates that year, so the number of $160,000 salaries was about 2,608. That number is 5.9% of the full class of 44,495 graduates.