You are currently browsing archives for the Jobs category.
The People’s Law School
March 3rd, 2013 / By Deborah J. Merritt
Richard Alderman is the man behind the People’s Law School at the University of Houston Law Center. Twice a year, the People’s Law School offers a morning of instruction to non-lawyers about basic legal issues.
A Houston Chronicle columnist raves about the free instruction, which more than 50,000 people have now attended. To get a taste of the sessions, you can view some materials from former classes here.
Alderman doesn’t limit his outreach to the People’s Law School. He also maintains a website, The People’s Lawyer, where members of the public can find information about the legal system and legal rights, ask questions, and find links to other materials. Both the People’s Lawyer and the People’s Law School are initiatives of the Center for Consumer Law at Houston’s Law Center.
In today’s challenging economy, programs like the People’s Law School or People’s Lawyer may seem like unnecessary luxuries at a law school. But I think just the opposite is true: more law schools should consider establishing “people’s” law programs for two reasons.
First, if there is an untapped market for legal services, it lies in people’s law. Legal jobs serving corporations are contracting due to improvements in technology, management, and outsourcing. Law graduates will continue to counsel corporate clients, but that sector will not absorb nearly all of the students that law schools graduate. If there is hope for supporting those lawyers, it lies in tapping the market for middle-income clients.
It is not clear how deep that middle-income market is, but innovators like Rocketlawyer and Legalzoom are finding out. If law schools want to keep up with those companies, and to place their graduates in jobs serving middle-income clients, they need to understand more about people’s law. It’s not enough to tell students, “go draft wills for middle-class clients,” we need to understand how that market works and whether it’s feasible for lawyers to support themselves through that work.
Second, we need to explore the role that lawyers actually play in people’s law. How much legal work can consumers do on their own, with just basic instruction? How much can they do with well prepared forms or computer software? Can third-year students or new lawyers provide cost-effective service to these clients, with just the right amount of supervision from higher priced lawyers?
Answering these questions is key to probing the future of law practice for our graduates. The answers may be sobering: it may turn out that online services, staffed by a limited number of lawyers, address most of the legal needs of ordinary people. It may be that very few of our graduates can make a living in people’s law. On the other hand, law schools may be able to help map new, profitable, and satisfying practice routes in these areas. We won’t know until we try, and we owe it to our students to find out.
Alderman has just become Interim Dean at Houston, so he will have plenty of balls to juggle in addition to People’s Law. I’m curious, however, how this initiative might fit with the future of the University of Houston Law Center–as well as with other law schools around the country.
Patton Boggs and BigLaw
March 2nd, 2013 / By Deborah J. Merritt
The BigLaw firm Patton Boggs announced yesterday that it was laying off 30 attorneys and 35 other staff members. The laid off lawyers were all associates or staff attorneys, but about eighteen partners have been notified that they should improve performance or find other work. With 485 lawyers on board, the lay-offs amounted to 6.2% of the firm’s legal talent. If the eighteen partners also depart, that would be a cutback of 9.9%.
According to the firm’s managing partner, Edward Newberry, the staff gave him a standing ovation after he announced the cuts. Those staff agreed that the firm was taking the right steps to make it “a great competitor in a very difficult legal market place.” Indeed, even as it cuts some attorneys and staff, the firm will move forward in other ways. It is opening an office in Dubai, moving support functions to a less expensive office in Northern Virginia, refurbishing the DC office, and looking to open an office in Houston.
The Patton Boggs announcement seems to mirror predictions published in a January report from Georgetown’s Center for the Study of the Legal Profession. The report was written by James W. Jones, a Senior Fellow at Georgetown who previously served as managing partner at Arnold & Porter, Vice President and General Counsel of APCO Worldwide, and Managing Director of Hildebrandt International. Georgetown’s Mitt Regan, the McDevitt Professor of Jurisprudence and well known expert on the legal profession, contributed. Jones, Regan, and the rest of their team know a lot about the legal profession–and they built this report on real data collected from firms.
The sobering conclusion of this report, presented in the opening lines, is: “At this point, it is becoming increasingly apparent that the market for legal services in the United States and throughout the world has changed in fundamental ways and that, even as we work our way out of the economic doldrums, the practice of law going forward is likely to be starkly different than in the pre-2008 era.” The authors are so confident of these differences that they urge law firms to “burn the ships,” to force themselves to adopt new, more profitable ways of doing business. (p. 1)
Does “burning the ships” mean laying off lawyers and staff, as Patton Boggs did? Indeed it does. The Georgetown report warns that, despite “several rounds of lay-offs” since 2008, many firms still suffer from “overcapacity in terms of the number of lawyers available to perform the work at hand.” Indeed, “the overcapacity problem has become even more serious” over the last four years. (p. 16) The solution, for firms that want to maintain high levels of profitability, is to continue cutting both associates and partners.
In addition to trimming lawyers, law firms are learning to hire new lawyers in lower-paid and more contingent positions. As the Georgetown report recognizes: “Firms have . . . begun to move toward more flexible staffing models, expanding their use of non-partner track associates, staff attorneys, and contract lawyers. Going forward, it is likely that firms will remain conservative in their hiring policies, even as demand begins to grow. As a result, firms probably will be relatively smaller in terms of the number of partners and traditional partner-track associates and relatively larger in terms of the number of other lawyers and non-lawyer professionals.” (p. 16)
Firms have been able to pursue this course because the legal market is flooded with law school graduates eager to work on almost any terms. The Georgetown report is quite candid on this point: “While excess capacity in the [legal] market is certainly not good news for young lawyers or, for that matter, law schools, it provides an environment in which law firms should have the flexibility to redesign their staffing models to respond to client demands. By embracing alternative approaches to staffing–including increased use of staff attorneys and non-partner track associates, contract lawyers, and part-time attorneys–firms can create more efficient and cost effective ways to deliver legal services.” (p. 17)
The Patton Boggs layoffs, in other words, are likely to be the first of many further contractions in BigLaw. Other firms may not lay off lawyers; they may reduce further the number of associates they hire, or quietly shift toward hiring staff attorneys and contract lawyers rather than partner-track associates. One way or another, however, firms will remedy the “overcapacity” identified in the Georgetown report.
For those who have been waiting for the golden days of BigLaw to return, the wait is over. There will still be golden times for some lawyers in BigLaw, but the opportunities are narrowing. Four years after the recession hit the legal market, structural changes continue to reduce BigLaw prospects for lawyers of all ages.
Sequester
March 1st, 2013 / By Deborah J. Merritt
What does the sequester mean for law school graduates? Those who work for the federal government may have already received notice of upcoming furloughs. The Department of Justice, for example, has notified Assistant U.S. Attorneys that they will be furloughed for up to fourteen days. That doesn’t sound like much, but there are only 260 weekdays in a year. Fourteen days of furlough add up to a 5.4% pay cut.
Add to that the special nature of professional work. Furloughed prosecutors cannot offer to work free on their furlough days, and they must stay away from the workplace on those days. But their cases won’t go away. US Attorney’s offices, like all other offices affected by the sequester, will face an unpalatable choice: Do the attorneys maintain their current workload, working harder on the days they’re at work–for less pay? Or do they cut back on prosecutions?
The same cuts will affect our graduates who work as FBI agents, policy analysts, IRS employees, and any other type of federal government worker. As the cuts affect state budgets, particularly in states that rely upon defense spending, JDs who work for state and local governments will suffer as well.
That’s just the first chapter. With current employees furloughed and the budget future so uncertain, government agencies are likely to cut back hiring–even more than they have done already. We also have to worry about indirect effects on lawyering jobs, as furloughs and other cutbacks ripple through the economy. Fewer FBI agents, US attorneys, and government regulators means fewer investigations and prosecutions. That’s less work for the lawyers who defend the accused (from small-time drug dealers to big-time corporate fraudsters) or who advise companies on complying with government regulation.
We can hope that Congress will come to its senses quickly, once the effects of sequestration sink in. But even then, there will be sobering news for our graduates. The sequester reflects a period of profound political and cultural malaise over government spending. Opposition to that spending occurs on top of the economic forces that already threaten information-heavy professional jobs like lawyering.
Don’t get me wrong: The harshest effects of anti-government attitudes fall upon the poor. We should care passionately about how our economy and government are leaving so many people behind. But, since this blog focuses on legal education, we also need to ask what all of this means for our graduates–and for what we do as law schools. At one time, government jobs were a first choice for some law graduates and a satisfying fallback for others. Those jobs are more in doubt now than they have been for more than fifty years. How does that affect our work as law schools?
UTX
February 28th, 2013 / By Robert Rhee
UTX was my moment of epiphany, the “oh my” moment when cogent thought on the legal profession came in a flash. Admittedly, prior to learning of UTX (not that long ago), I didn’t really know much about the economics of the legal profession other than the obvious fact that the financial crisis of 2008-2009 must have inflicted significant pain on the industry, thus my prior assumption of only a cyclical downturn. I write this blog post for the benefit of those colleagues in the academy who may have a sense that the legal profession is having difficulties but can’t quite see the larger picture beyond anecdotes of layoffs and a very difficult hiring market. I hope to provide a concrete example of the economic stress on the legal profession, which obviously has trickle down effects on the economics of law schools and the value of the law degree. (more…)
Unemployed Lawyers
February 20th, 2013 / By Deborah J. Merritt
The Bureau of Labor Statistics (BLS) reports that only 1.4% of lawyers were unemployed in 2012. That’s an impressive figure, especially when compared to an overall unemployment rate of 7.8%. Some law schools point to our profession’s low unemployment rate as a positive reason to embrace law school. Is that a valid way to use the BLS statistic?
No, the statistic is quite misleading when recited without further context. Here is the information schools need to know–and should convey–if they want to use this statistic. First, the statistic includes only people who held a lawyering job before becoming unemployed. That’s why the BLS titles this data series a measure of “experienced unemployed persons.” The statistic does not include people who have passed the bar and are eager to work as lawyers, but who have not yet held a lawyering job. They may be unemployed, but they’re not unemployed lawyers.
Second, the statistic does not include anyone who worked for a single hour during the survey week. The occupational unemployment rates derive from the Current Population Survey (CPS), which surveys 60,000 households each month. The CPS uses a very liberal definition of “employed.” Anyone who receives pay or profit from at least an hour of work during the week is “employed.” A lawyer who was paid for a single hour of document review during the survey week may be strapped for cash and woefully under-employed, but that person is still an “employed lawyer.”
Third, the statistic does not include lawyers who have been unable to find satisfactory legal work and have taken jobs in other fields. An hour of paid work in any job counts as employment for the CPS. A laid-off law firm associate who takes a retail sales job to pay the bills is an “employed retail salesperson” not an “unemployed lawyer.” Ditto for the laid-off lawyers who have taken jobs as high school teachers, realtors, paralegals, or other workers. Even if these employees want to be lawyers, have the training to be lawyers, and would eagerly leave their jobs for a lawyering position, they don’t count as “unemployed lawyers.”
This point is particularly important because job seekers can work down, but not up, the training scale. A worker with just a high school diploma can’t practice law, but a lawyer can do many of the jobs that the high school graduate performs. Similarly, the lawyer can take many of the positions open to other college grads. This is an important part of the reason why people with advanced degrees have low unemployment rates; they usually can return to occupations that were open to them before obtaining the degree. The advanced degree may have little relevance to their employment, but they are not unemployed.
Finally, the BLS count of “unemployed lawyers” includes only individuals who have actively looked for work during the preceding four weeks. Checking newspaper ads or attending training classes doesn’t count as an active job search. This caveat is important because of the number of unemployed lawyers who become discouraged and leave the workforce entirely.
Women are a barometer of this phenomenon; if paid work is difficult to find, they may choose to care for children or other family members instead of pursuing their profession. Unfortunately for the diversity of our profession, BLS statistics show just this trend among female lawyers. In 2000, women constituted 29.8% of all employed lawyers. By 2003, despite more women graduating from law school (and disproportionately male senior lawyers departing the workforce), only 27.6% of employed lawyers were women. The 2001-03 recession pushed more female lawyers than male ones out of the workplace.
Similarly, both the percentage and absolute number of women lawyers has declined recently. After hitting an all-time high of 34.4% of the profession in 2008, the percentage of female lawyers declined to 31.1% in 2012. More than 100,000 women graduated from law school during the last five years, but there are 19,000 fewer women lawyers today than there were in 2008. I don’t know if those women have moved into other fields or out of the workforce, but they don’t show up as unemployed lawyers in the BLS statistic.
In sum, it is technically true that the unemployment rate for lawyers, according to the BLS, is just 1.4%. But that statistic is likely to give prospective law students and others a distorted view of the legal job market. The bare statistic suggests that 98.6% of people who want to practice law, and who have law licenses, are employed as lawyers. That’s clearly not the case. In fact, the same BLS data series suggests that the number of practicing lawyers declined between 2011 and 2012: There were about 1,085,000 respondents working as lawyers in 2011, but just 1,061,000 in 2012.
There are responsible ways to discuss both positive and negative aspects of the legal job market with prospective students. A responsible approach, however, gives context to statistics; it also includes both positive and negative figures that appear in the same data series.
Note: The BLS does not publish the occupational unemployment statistics on its website; that’s one indicator that the Bureau sees limited utility in these figures. But for those who want to see the data for the last ten years, I have PDF copies of the tables.
Risk
January 29th, 2013 / By Deborah J. Merritt
Education is an investment. Until recently, Americans considered that investment close to fool-proof; almost every degree from a reputable institution seemed to pay off in the job market. With rising tuition and a turbulent economy, however, an increasing number of students understand that education today is like other investments: it has downside risk.
Legal educators often note that law isn’t the only field experiencing high tuition and uncertain job prospects; other graduate programs show the same trends. That’s true, but the question isn’t whether other programs are risky. The question is whether prospective students now perceive law school as more risky than other programs. It’s like the old story about the two campers and the bear. Other graduate programs don’t have to out-run the bear; they just need to out-run us.
The Risks
Here are some of the features that make legal education risky for today’s students. First, we maintain a three-year program. Students can obtain a wide range of master’s degrees in just two years–sometimes less with summer study. Master’s degrees in public affairs, public administration, public health, economics, social work, accounting, international relations, education, computer science, environmental science, and business are just some of the programs that might appeal to students interested in law.
Second, most of our programs are full-time. Part-time programs are much easier to find in many master’s fields, as well as in some doctoral programs. Full-time law students have limited options to earn money while pursuing their degrees; this increases the degree’s cost. Full-time enrollment may also discourage established workers from entering law school. In today’s volatile market, employees may be reluctant to cut ties as thoroughly as law school demands. Three years is a long gap in any employment history.
Third, our tuition is high. Law school costs substantially more than most master’s degrees, even without accounting for the third year. We also cost more than most PhD programs, especially since many doctoral students receive fellowship support or teach while earning their degrees. Medicine and dentistry cost more than law school, but they have much more secure job outcomes.
Fourth, our job outcomes are uncertain. For a worrisome number of graduates, there are no jobs practicing law. This reality emerges, not only from the 9-month employment statistics compiled by NALP, but also from Bureau of Labor Statistics projections. The Bureau estimates that, even if the economy returns to full strength, it will provide legal jobs for just half the number of students that law schools have been graduating.
It is true that some law graduates find satisfying work in fields other than law practice, but graduates of other programs fill those same jobs. Unless one wants to practice law, why pursue a degree that is more expensive and time-intensive than almost any other?
The job uncertainty, furthermore, extends to the type of law that a particular graduate may be able to practice. JDs practice many types of law, but that doesn’t mean that every JD can choose among all those paths. A top student at a top school probably can choose almost any route in law. The options, however, diminish steadily as one goes down the law school and class rank ladder. At least 80% of law students, for example, have no option to practice for an NLJ 250 firm; that’s simply not a choice for these students. The minority who can exercise that option aren’t necessarily the top graduates from the highest ranked schools–although they dominate this group. Some other students have this option because of special talents or background. My point here is that, for the large majority of students, this career path turns out not to be an option.
The same is true of many other legal positions. As the job market has contracted, and as high loans have made public service loan forgiveness very attractive, students can no longer count on careers as prosecutors, public defenders, or other government and public interest lawyers. I have seen excellent students compete desperately for these positions without success.
It’s one thing to choose law school knowing that you’ll accept a modest salary, and repay substantial loans, while doing work you love as a prosecutor. It’s another thing to choose law school knowing that you’ll have high debt combined with an uncertain menu of job choices. What if you invest all that time and money only to discover that your only options are small-firm family law practice or document review? Some graduates might enjoy those types of work but, if you went to law school wanting to be a prosecutor or other trial attorney, the pay off is disappointing compared to the investment.
These risks are particularly severe when put in the context of the overall job market. I recently discussed the changes that technology is unleashing on our economy. Given the accelerating impact of technology, it is hard to predict the parameters or income of any profession ten years from now. Certainly the economy will still support lawyers, but how many will it support? What will most of them do? And what will most of them be paid?
Against that backdrop, a rational college graduate might invest in a shorter, cheaper graduate degree than law. We are accustomed to thinking of the JD as flexible, but that may not be true in today’s economy. High debt alone reduces a graduate’s options. Today’s prospective applicant might think, “I’ll get a master’s degree in X and work in that field for a while. Maybe later I’ll see if law still makes sense.”
It’s hard to think of the JD as a risky degree; in earlier times, it seemed like one of the safest options for a college graduate wanting a professional career. But, if we want to address the dramatic decline in law school applicants, we need to put ourselves in the minds of those applicants. How do the risks of attending law school line up against the risks of other degree programs?
Remedies
Reducing the JD’s riskiness will be difficult, and it will require challenging steps for law schools. The best ways to reduce risk for law students are some combination of smaller class sizes, lower tuition, more part-time options, a shorter degree program, up-front commitments from employers (similar to medical residencies), or “stepped” programs that allow students to obtain a series of degrees enabling them to perform different types of legal work.
I don’t underestimate the difficulty, from a law school’s perspective, of making these changes. It seems, though, that recognizing the riskiness of a JD–compared to other graduate programs and workplace options–is an important step towards reshaping legal education in a way that will continue to attract talented future lawyers. We need to outrun those other campers.
AP Study of the Economy
January 27th, 2013 / By Deborah J. Merritt
As we plan for the future, law schools wonder about general economic trends. Is the economy recovering? If so, will it create more jobs for lawyers? How soon? The Associated Press recently published a three-part series with troubling answers to those questions. You can find the three articles here:
The bottom line from this series: The economy is recovering in some ways, but technology is wiping out middle-class jobs–and is starting to chip away at higher paying jobs as well. Here are some of the facts that the AP researchers cite to support these conclusions:
** 7.5 million American jobs were lost in the Great Recession, and less than half of them have been restored. The figures, however, are even starker for middle-class jobs. Half of the jobs lost during the recession (about 3.75 million) were middle-class ones. Only 70,000 middle-class jobs have been restored.
** Technology has been cutting jobs for more than three decades. The losses started in manufacturing, but have moved aggressively into office, retail, and other service occupations.
** Top companies (those in Standard & Poor’s 500 stock index) earned one-third more profit in 2012 than they did the year before the Great Recession. But by relying on technology, those companies employ a half million fewer workers today than they did in 2007.
** Start-ups are launching with one-third fewer employees than they needed in the 1990s. Technology combined with outsourcing (which is, in turn, supported by technology) allows these companies to thrive with fewer workers. Since start-ups are a major source of new jobs in our economy, this trend is particularly disturbing.
** We are on the brink of even more dramatic workplace changes prompted by technology. Google’s self-driving cars have now logged 300,000 road miles without a single accident. What happens to the middle class when driver-less cars replace truck drivers, bus drivers, and cab drivers? What ripple effects will that technology have on commuters, insurance companies, and countless of other industries? One hint: It may be much easier to resolve insurance claims from driver-less cars because all of the data will be stored.
** Although technology creates new jobs, computers have been eliminating many more jobs than they create. For one measure of this, consider these facts: Three software giants (Apple, Google, and Facebook) together employ only 138,300 people worldwide. That’s less than a quarter of the workers (600,000) that General Motors employed during the 1970s. And GM itself produces many more cars today with only a third of its former workforce.
What do these trends mean for the future of legal employment? I explore some possibilities below.
Direct Client Loss
When we talk about demand for legal services, we often focus on large corporate clients. Those are the ones who pay the highest fees and support the most lucrative jobs for law graduates. But those clients have never supported the bulk of our graduates. According to analyses done by Harvard Law School’s Program on the Legal Profession, only 15% of U.S. lawyers worked in the 250 largest law firms–serving the biggest corporate clients–in 2007. Since 2007, of course, large law firms have downsized; the percentage of attorneys practicing for BigLaw today probably is less than 15%.
Where do other lawyers go? Some work for mid-sized firms, corporations, government, or public-interest groups, but a substantial number work alone or as members of very small firms. According to the Harvard analysis, more than a third (35%) of all lawyers work in solo practice. Those attorneys, as well as many of those practicing in the smallest firms, devote much of their effort to individual clients and small businesses.
The middle class and small businesses once sustained these lawyers–more than a third of our graduates–by paying them to handle home closings, divorces, child custody disputes, criminal defense, consumer issues, wills, probate, business formation, contract issues, small claims, and workplace disputes. That work has already diminished. Middle-class clients and small businesses have balked at the high cost of legal services, turning to pro se representation and online companies like Rocket Lawyer and LegalZoom.
Further shrinkage of the middle class may decimate that group’s demand for legal services. At the same time, start-up businesses that use technology (rather than new workers) for their accounting, human resources, and other support staff, will be increasingly comfortable with online legal advice. The trends identified by the AP study bode very ill for the lawyers who serve middle-class and small-business clients.
Some of these lawyers will find work in the online companies that are seizing this sector. The genius of those companies, however, is that they are able to provide legal services with many fewer attorneys; that is why they cost less. With the middle class contracting, it is very unlikely that this client base will grow sufficiently to support even the lawyers currently serving them–much less new lawyers in the future.
Larger Economic Upheaval
Law schools and their graduates might hope that large corporate clients will take the place of middle-class and small-business clients who no longer want our services. But the experts cited by the AP study suggest that we are in the early stages of a wrenching economic shift. Our largest economic challenge isn’t housing, banks, foreign competition, or the deficit; it’s computers that replace human workers. The accelerating capacity of information technology will displace an untold number of jobs during the next decade. Consider just the dislocation that will occur from driver-less cars, a technology that may secure significant success during the next decade.
The economists interviewed by the AP researchers offered three possible scenarios for evolution of the U.S. economy in the face of continuing technological change. The most positive of these, provided by Nobel Prize winner Joseph Stiglitz, is that information technology will cause the same dramatic upheavals that the industrial revolution generated in the nineteenth and early twentieth centuries. Those dislocations could culminate in a cataclysmic collapse similar to the Great Depression. Stiglitz’s forecast is optimistic only because he sees the economy eventually returning to health, just as the U.S. and other advanced economies did after World War II. He’s clear, though, that we may remain in the current “doldrums for half a decade, for a decade, or for longer.”
Andrew McAfee, a principal research scientist at MIT’s Sloan School of Management, offers a gloomier prediction. McAfee suggests that technology will fuel the growing gap between top-paying jobs and low-skilled ones. Technology will allow a small number of workers to reap greater returns, but it will relegate an increasing number to low-paid jobs or unemployment. That’s bad for the bulk of workers, and it’s bad for the economy as well. Without a large, prosperous middle class, how will the economy keep growing?
The gloomiest prediction comes from former Treasury Secretary Lawrence Summers and software entrepreneur Martin Ford. They envision a future in which a majority of citizens cannot find productive work. Technology will produce wonderful benefits, but humans won’t be able to earn enough to consume those fruits.
Whichever scenario you prefer, the next five to ten years offer lots of economic risk. Some parts of the economy may rebound, but there is likely to be significant economic turmoil. That turmoil will keep corporate employers cautious, pushing all parts of their workforce for greater productivity at less cost. Lawyers are part of that workforce, so we’re unlikely to see any return to the boom times of corporate spending.
Legal Work
The AP series doesn’t focus on lawyers, but technology is affecting our workplaces as much as any other. A lawyer equipped with a computer, internet, electronic databases, and cell phone can work much more quickly than one with yellow pads and a row of hard bound books. For a while, lawyers were able to retain the extra profit generated by those increases in productivity. We could charge our clients more for the same minutes, because we did so much more during those minutes.
But market competition, especially the intense competition spurred by the forces outlined above, has shifted the technology bonus to the consumers of legal services. We now produce much of our legal work more quickly and efficiently–but we must offer it at the same or lower prices. With lawyers doing more in less time, we don’t need as many lawyers. The oversupply of lawyers has further pushed price competition, reinforcing the cycle.
The changes we’ve seen so far, furthermore, are just the beginning. Predictive coding is poised to replace armies of lawyers who now conduct document review. Document automation makes drafting legal instruments quicker and smarter–while requiring fewer attorneys. Richard Susskind’s latest book outlines many of the other changes that technology will bring to the legal community during the next decade.
Conclusion
General economic trends offer little refuge for lawyers or legal educators hoping for a rebound in our own job market. Middle-class clients and small businesses are likely to support fewer lawyers during the coming years. The economy as a whole faces great challenges, so corporate clients will continue to demand more value for money. And technology will do an increasing variety of legal work, displacing more lawyers.
If a computer can make a left turn against oncoming traffic, what other feats can it accomplish? You may think that it’s harder to think like a lawyer than like a driver, but consider the number of datapoints a computer must weigh to make that left-hand turn. Legal judgments depend on identifying data and recognizing patterns; computers have shown their skill at both of those tasks.
I’m not a Luddite: I love computers and all that they have done for us. I wouldn’t halt the march of technology for a minute, and I can’t wait to get one of those driver-less cars. But if we want to plan seriously for the future of law schools and the legal profession, we have to consider the trends documented in the AP study. Through the lens of history, it’s easy to see all of the changes that the industrial revolution wrought. It may be harder to see broad socio-economic forces as we live through them.
Take This Job and Count It
January 19th, 2013 / By Deborah J. Merritt
In an article in the Journal of Legal Metrics, two Law School Transparency team members outline LST’s methodology for the LST Score Reports, an online tool designed to improve decisions by prospective law students. LST uses employment outcomes, projected costs, and admissions stats to help prospective students navigate their law school options.
Kyle McEntee and Derek Tokaz, the authors of both this paper and the online tool, resist the urge to rank schools on a national scale. Instead, they sort schools by where their graduates work post-graduation, allowing applicants to consider schools by geographic profile. The reports then use reader-friendly terms, like the percentage of graduates who secured full-time legal jobs, to help prospective students make educated decisions about which schools, if any, can meet their needs.
McEntee and Tokaz designed the reports to help prospective law students, but this article has important information for legal educators as well. The U.S. News rankings won’t disappear any time soon, but I think prospective students will begin looking at LST’s Score Reports in addition to the rankings. The reports contain more nuanced information, which prospective applicants will value; they also try to direct applicants into deeper exploration of their law school options.
As McEntee and Tokaz show, employment scores correlate imperfectly with U.S. News rank. As applicants begin to consider these scores, together with more transparent employment information on the schools’ websites, some schools will benefit while others suffer. Schools that under-perform their U.S. News score in job placement may want to explore why. Prospective students certainly will.
The other lesson for educators is that the vast majority of legal hiring is local. Students tend to stay in the city, state, and general region where they earned their law degree. As employers increasingly demand internships and unpaid apprenticeships, this trend may become even more dominant. It is hard to work part-time for a firm in one city while attending class in another. It’s far from impossible these days, with internet commuting, but students who lack face-time with prospective employers will be at a disadvantage. It’s also daunting to relocate after law school without a job in hand.
Law schools may find this information discouraging; most schools cherish their “national reputation” and want to extend it. It’s important to recognize, however, that the best job opportunities for graduates may be local ones. Time that a school spends promoting its national brand may deliver less return for graduates than time spent at local bar meetings.
On the bright side, schools should understand that a “national reputation” can co-exist with primarily local placement rates. That, in fact, is the reality for a vast number of law schools today. People around the country have heard about many law schools, even when those schools place most of their graduates locally. National reputation takes many forms and can pay off in many ways–even for graduates in later years. One lesson that I take from McEntee and Tokaz’s paper, however, is that schools should focus more diligently on their local, state, and regional reputations. That’s where the majority of job opportunities for graduates will lie.
Business Education in Law School
January 18th, 2013 / By Deborah J. Merritt
Robert Rhee, the Marbury Research Professor of Law at the University of Maryland’s law school, is well qualified to write about the relationship of legal and business education. Rhee holds both a JD and an MBA; he has worked as a government lawyer, a law firm partner, and an investment banker; he co-directs Maryland’s Business Law Program; and he authored a book (Essential Concepts of Business for Lawyers) that introduces law students to key business principles.
Rhee’s most recent paper on legal education proposes creation of a “JD/MBL” curriculum. The “MBL” stands for “Masters of Business Law” but, as Rhee quickly explains, this is simply an “idea tag.” The name reflects a focused, interdisciplinary group of business courses pursued as part of the JD program. Candidates completing this work might receive a certificate, but they would not necessarily qualify for a separate master’s degree. Rhee uses the “MBL” name as a handy reference for the program he proposes.
The Program
Rhee’s proposed “MBL” includes (1) most of the traditional first-year courses; (2) Administrative Law, Evidence, and Professional Responsibility; (3) a full range of business-related law courses (Corporations; Partnerships; Income Tax; Securities Regulation; Corporate Finance Law; Partnership or Corporate Tax; Intellectual Property); (4) a set of business courses taught either at the business school or law school (Math & Excel Camp; Management; Financial Accounting; Corporate Finance; Business Communication; Litigation & Management; Managerial Economics; Early Stage Business Advising: Mature Stage Business Advising; Entrepreneurship; Leadership & Teamwork; Strategy); and (5) a few electives.
The curriculum is intense. In fact, my first response was “wow, no wonder business people are disappointed with their lawyers. There’s a lot we don’t know.” I still don’t know enough about practicing or teaching business law to comment on the specifics of Rhee’s proposed curriculum. But as Rhee explores his proposal, he offers a number of other insights that legal educators may find interesting. I summarize those, as well as some of my own reactions, below. Law schools considering the integration of law and business perspectives may find Rhee’s insights useful even if his specific proposal fails to serve their needs.
Integrating Business and Law: Insights
1. Rhee harpoons the notion that a standard JD prepares graduates for careers as corporate executives, investment bankers, management consultants, entrepreneurs, or other “business” people. Some JDs transition into those positions, Rhee acknowledges, but those outcomes stem from very adaptive lawyers who capitalize on unusual circumstances. If law school really prepared students for careers in business, why wouldn’t corporations, investment banks, and management consulting firms regularly recruit at law schools for their business positions? And why wouldn’t more BigLaw associates move into business (rather than in-house legal) positions when winnowed from their firms?
These points sound persuasive to me. A standard law degree might be useful for a student who planned to return to his family business–although, even there, it seems to provide more law and less business training than optimal. But why would a generalist law degree prepare students particularly to work in corporate management or investment banking positions? Those professionals make complex decisions based on bodies of knowledge as specialized as (but different from) the material we teach in law school.
If you have any doubts about Rhee’s argument on this score, take a look at his business-proficiency quiz on pp. 11-12. Answering these questions correctly wouldn’t qualify a student to work as an investment banker or management consultant; a good score would merely make a new lawyer conversant with business terms. Yet a large proportion of law graduates, I suspect, would fail even this basic quiz. Rhee’s rejection of law as a general-purpose degree that prepares graduates for today’s business world is an informed, and useful, counterpoint to generous claims about the versatility of the JD.
2. Rhee, notably, also rejects the utility of a joint JD/MBA for most graduates. The joint degree, he argues, offers too much business for a student who will practice law and too much law for one who will pursue business. A joint degree program can preserve options for a student who isn’t sure which path she will pursue, but it is an expensive option-saver. It is more efficient to develop programs that deliver useful business concepts to future business lawyers, without requiring those students to obtain a full MBA.
Rhee, by the way, notes that he did not obtain his two degrees in a joint program. He first earned his JD, clerked for a federal appellate judge, and worked in the Justice Department Honors Program. He left government for an MBA program precisely because he could not transition into business with a JD alone. Having changed his career goals, he needed a different degree.
3. The most effective way to train business lawyers, Rhee suggests, is through a three-year JD program that includes a heavy dose of business courses. That is his “MBL” model outlined above. This “Goldilocks” model aims to give business lawyers just the amount of business education that they need to gain an advantage in the workplace.
4. Rhee’s article is refreshingly candid in acknowledging that a specialized business program–no matter how artfully designed–cannot trump all other hiring considerations. He acknowledges that his proposal is not the silver bullet that will guarantee business law employment for all graduates. A BigLaw firm’s corporate department probably will hire a Harvard Law graduate over a Maryland one, even if the latter student has more focused business coursework. The proposal, Rhee suggests, will improve education, and may improve initial job placement at the margins. The student who completes an MBL-like program may win an entry-level job away from a peer at a similarly ranked school without such a program; an MBL school should not expect (or promise) more.
5. Rhee notes, however, that MBL courses may prepare a student to outperform peers after securing that first job. A JD with focused business preparation may impress clients and bosses, and may find a more secure workplace niche. This advantage could be useful in today’s workplace, where employers more frequently use apprentices, interns, and fellows; the MBL graduate may stand out in that type of position–as well as in more traditional associate jobs that rely upon the survival of the fittest.
Equally important, the MBL will give the graduate more ability to jump to business positions. The standard JD, in Rhee’s opinion, does not confer the type of business versatility that law schools claim. But a JD that incorporates a significant portion of the MBA curriculum may serve that purpose.
These points strike me as important in evaluating curricular changes at law schools. The job market will be volatile for the foreseeable future; volatility may be a constant for our future graduates. Rather than claim that the conventional JD is versatile, schools could explore how they can make their degree more versatile. No degree can be all things to all people in today’s world. But a JD with a business focus might give graduates options that neither the JD nor MBA alone can deliver.
6. Even for schools with no interest in developing an MBL-like program, Rhee’s review of the potential courses in that program is quite informative. As Rhee points out, most law students have little business, management, or financial competence. Those skills apply to many areas of law practice, not just to serving corporate clients. Almost any lawyer today, furthermore, will benefit from basic competence in these areas just to manage her own practice–or to understand how her organization is managed. Educational reformers of all types may find some of Rhee’s proposed courses useful.
Final Thoughts
There is more in Rhee’s article than the points I’ve outlined here. He discusses, for example, different ways of financing MBL courses, as well as some of the “sacred JD cows” that might have to be sacrificed for students taking part in his program. On the sacred cow side, I’ll note that although I currently teach Evidence (which Rhee would keep for his MBL students) rather than Constitutional Law (which he jettisons), I’m troubled by the idea of students earning a law degree with no knowledge of Constitutional Law. I understand that some schools overdo the Marbury stuff for future business lawyers, but surely we could find 2 credits for some basic constitutional principles?
On the grander scale, Rhee’s paper is useful for law school innovators because of the approach it adopts. Rhee takes a hard look at what the current JD curriculum delivers and what it doesn’t offer. He draws upon his experiences in law practice and business to formulate a specific proposal about how schools might educate students more effectively for careers that span business and law. He’s not afraid to get concrete, even about the elimination of Constitutional Law. And he doesn’t over promise what an MBL track could achieve.
I’d like to see similar proposals for other areas of law practice. What would a JD with a labor/employment, intellectual property, or other focus look like?
Useful Data: JD Starting Salaries Over Time
January 17th, 2013 / By Deborah J. Merritt
The National Association for Law Placement (NALP) has just published two graphs illustrating the progression of starting salaries for JD graduates over the last twenty-six years.
First some background information for readers who have not used NALP data: NALP gathers employment and salary information from all ABA-accredited law schools. Schools report the jobs and salaries that their graduates hold nine months after graduation. Salaries reported by 2011 graduates, therefore, were their salaries in February 2012. NALP publishes salary data only for graduates employed full-time in jobs that will last for at least one year; salary figures do not include unemployed graduates, part-time workers, or temporary job-holders.
NALP and the law schools rely primarily upon self-reported salary information from graduates. Schools, however, may supplement reported salaries with ones that are publicly available. In general, the publicly available salaries are from large law firms and federal government positions. Those salaries (especially the ones from large firms) represent the high end of entry-level law salaries. For that reason, NALP cautions that its reported salaries skew high.
Those caveats, however, are less important when comparing salaries over time. Although the median reported salary may be higher than the true median each year, that distortion probably doesn’t change much over time. That’s one reason that NALP’s graphs of salary trends are so interesting.
As the second graph on this page shows, median reported salaries have fluctuated over the last twenty-five years when recorded in constant dollars (i.e., after controlling for inflation). The dotted line, which represents the median for all salaries, peaked in 2002 and–after a slight dip–again in 2009. But the current median is virtually the same as the median back in 1985.
Analyzing median salary by sector is also instructive. The solid black line, at the top of the graph, represents private practice jobs. That median rose sharply between 1996 and 2001, receded somewhat between 2001 and 2004, and rose again to its all-time peak in 2009. The latter rise was so steep that the median reported salary for graduates in private practice almost doubled–in constant dollars–between 1996 and 2009. That heady rise undoubtedly fueled the assumption that law was a golden career with high salaries.
Even during that period, of course, the median masked a great deal of variation. 2009 was the peak year for entry-level salaries, with graduates at firms of 251+ lawyers reporting a median salary of $160,000. But only 6,624 graduates (15.1% of the class) obtained those jobs. A similar number of graduates (6,749) joined firms of 2-10 lawyers. Less than 40% of those graduates reported their salaries, and the ones who did generated a median of just $50,000. (These facts all appear in the chart linked earlier in this paragraph.)
Returning to the graphs showing median salary over time, median reported salaries in private practice have dropped sharply since 2009. The median in private practice, when measured in real dollars, has fallen closer to 1985 levels than to its 2009 peak.
Meanwhile, the same graph shows that median reported salaries for public interest, clerkship, and government jobs have been flat since 1985 in real dollars. The trend line for business jobs is more uneven, but median salaries there have also returned to close to 1985 levels (after controlling for inflation).
Stagnant entry-level salaries might not be surprising in a stable industry. New workers contribute a set value, which doesn’t shift much over time. The pattern is more surprising in an industry like law, which has experienced significant increases in productivity due to technology. Why aren’t new lawyers today, armed with laptops and smart phones, worth more than they were twenty-five years ago?
One answer is that either supervisors or clients are taking that value for themselves. Another is that the new lawyers actually aren’t more valuable: technology and outsourcing have eliminated some of the jobs that new lawyers used to do while they learned more sophisticated skills on the job. If that’s true, and I think there is evidence to support that, then new lawyers are worth less to employers today than they were twenty-five years ago. Those lawyers need to be trained, which costs money, are there aren’t enough profitable tasks for them to do until they are trained.
Whatever the reasons for these salary trends, the marketplace is telling us that today’s law graduates are worth no more than graduates were twenty-five years ago. That’s a sobering message for law schools. We are charging students much more today than we did in 1985. The resulting gap between educational investment and workplace return is driving much of the recent disenchantment with law schools.
he NALP graphs, furthermore, suggest that the gap does not stem solely from the recent recession. For some areas of law practice, salaries for new lawyers have been flat over the full twenty-six years. For most others, salaries have varied modestly and returned to 1985 levels. Only at the largest firms, which provide a declining percentage of jobs, did salaries rise sharply–and, even there, salaries are dropping back toward 1985 levels. Can we figure out how to address this gap between students’ investment and return?
I have posted a permanent link to the NALP graphs on our Useful Data page.
About Law School Cafe
Cafe Manager & Co-Moderator
Deborah J. Merritt
Cafe Designer & Co-Moderator
Kyle McEntee
Law School Cafe is a resource for anyone interested in changes in legal education and the legal profession.
Around the Cafe
Subscribe
Categories
Recent Comments
- on Scholarship Advice
- on ExamSoft: New Evidence from NCBE
- on COVID-19 and the Bar Exam
- on Women Law Students: Still Not Equal
- on Ranking Academic Impact
Recent Posts
- The Bot Takes a Bow
- Fundamental Legal Concepts and Principles
- Lay Down the Law
- The Bot Updates the Bar Exam
- GPT-4 Beats the Bar Exam
Monthly Archives
Participate
Have something you think our audience would like to hear about? Interested in writing one or more guest posts? Send an email to the cafe manager at merritt52@gmail.com. We are interested in publishing posts from practitioners, students, faculty, and industry professionals.