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Compared to What?
April 7th, 2015 / By Deborah J. Merritt
Some legal educators have a New Yorker’s view of the world. Like the parochial Manhattanite in Saul Steinberg’s famous illustration, these educators don’t see much beyond their own fiefdom. They see law graduates out there in the world, practicing their profession or working in related fields. And there are doctors, who (regrettably) make more money than lawyers do. But really, what else is there? What do people do if they don’t go to law school?
Michael Simkovic takes this position in a recent post, declaring (in bold) that: “The question everyone who decides not to go to law school . . . must answer is–what else out there is better?” In a footnote, Simkovic concedes that “[a]nother graduate degree might be better than law school for a particular individual,” but he clearly doesn’t think much of the idea.
People, of course, work in hundreds of occupations other than law. Some of them even enjoy their work. Simkovic’s concern lies primarily with the financial return on college and graduate degrees. Even here, though, the contemporary options are much broader than many legal educators realize.
Time Was: The 1990s
Financially, the late twentieth century was a good time to be a lawyer. When the Bureau of Labor Statistics (BLS) published its first Occupational Employment Statistics (OES) in 1997, the four occupations with the highest salaries were medicine, dentistry, podiatry, and law. Those four occupations topped the salary list (in that order) whether sorted by mean or median salary. [Note that OES collects data only on salaries; it does not include self-employed individuals like solo practitioners or partners–whether in law or medicine. For more on that point, see the end of this post.]
Law was a pretty good deal in those days. The graduate program was just three years, rather than four. There were no college prerequisites and no post-graduate internships. Knowledge of math was optional, and exposure to bodily fluids minimal. Imagine earning a median salary of $109,987 (in 2014 dollars) without having to examine feet! Although a willingness to spend four years of graduate school studying feet, along with a lifetime of treating them, would have netted you a 28% increase in median salary.
But let’s not dally any longer in the twentieth century.
Time Is: 2014
BLS just released its latest survey of occupational wages, and the results show how much the economy has changed. Law practice has slipped to twenty-second place in a listing of occupations by mean salary, and twenty-sixth place when ranked by median. One subset of lawyers, judges and magistrates, holds twenty-fifth place on the list of median salaries, but practicing lawyers have slipped a notch lower.
About half the slippage in law’s salary prominence stems from the splintering of medical occupations, both in the real world and as measured by BLS. We no longer visit “doctors,” we see pediatricians, general practitioners, internists, obstetricians, anesthesiologists, surgeons, and psychiatrists–often in that order. These medical specialists, along with the dentists and podiatrists, all enjoy a higher median salary than lawyers.
There are two other health-related professions, meanwhile, that have moved ahead of lawyers in wages: nurse anesthetists and pharmacists. Both of these fields require substantial graduate education: at least two years for nurse anesthetists and two to four years for pharmacists. But the training pays off with a median salary of $153,780 for nurse anesthetists and $120,950 for pharmacists.
Today’s college graduates, furthermore, don’t have to deal with teeth, airways, or medications to earn more than lawyers do. The latest BLS survey includes nine other occupations that top lawyers’ median salary: financial managers, airline pilots, natural sciences managers, air traffic controllers, marketing managers, computer and information systems managers, petroleum engineers, architectural and engineering managers, and chief executives.
How much do salaried lawyers earn in their more humble berth on the OES list? They collected a median salary of $114,970 in 2014. That’s good, but it’s only 4.5% higher (in inflation-controlled dollars) than the median salary in 1997. Pharmacists enjoyed a whopping 28% increase in median real wages to reach $120,950 in 2014. And the average nurse anesthetist earned a full third more than the average lawyer that year.
If you’re a college student willing to set your financial sights just a bit lower than the median salary in law practice, there are lots of other options. Here are some of the occupations with a 2014 median salary falling between $100,000 and $114,970: sales manager, physicist, computer hardware engineer, computer and information research scientist, compensation and benefits manager, purchasing manager, astronomer, aerospace engineer, political scientist, mathematician, software developer for systems software, human resources manager, training and development manager, public relations and fundraising manager, optometrist, nuclear engineer, and prosthodontist (those are the folks who will soon be fitting baby boomers for their false teeth).
Law graduates could apply their education to some of these jobs; with a few more years of graduate education, a savvy lawyer could offer the aging boomers a package deal on a will and a new pair of choppers. But the most common themes in these salary-leading occupations do not revolve around law. Instead, the themes are math, science, and management–none of which we teach very well in law school.
Twenty-first Century Humility
Lawyers will not disappear. Even Richard Susskind, who asked about “The End of Lawyers?” in a provocative book title, doesn’t think lawyers are done for. We still need lawyers to fill both traditional roles and new ones. Lawyers, however, will not have the same economic and social dominance that they enjoyed in the late twentieth century.
Some lawyers will still make a lot of money. As the American Lawyer proclaimed last year, the “super rich” are getting richer. But the prospects for other lawyers are less certain, and the appeal of competing fields has increased.
If law schools want to understand their decline in talented applicants, they need to look more closely at the competition. What do today’s high school students and middle schoolers think about law? Those students will choose their majors soon after arriving at college. Once they choose engineering, computer science, business, or health-related courses, a legal career will seem even less appealing. If we want potential students to find law attractive, we need to know more about their alternatives and preferences.
We also need to be realistic about how many students ultimately will–or should–pursue a law degree. As citizens of a healthy economy, we need doctors, nurse anesthetists, pharmacists, managers, and software developers. We even need the odd astronomer or two. Law is just one of the many occupations that make a society thrive. The twenty-first century is a time of interdependence that should bring a sense of humility.
Notes
Here are some key points about the method behind the OES survey. For more information, see this FAQ page, which includes the information I summarize here:
1. OES obtains wage data directly from establishments. This method eliminates bias that may occur when individuals report their own wages. The survey, however, includes only wage data for salaried employees. Solo practitioners (in any field) are excluded, as are individuals who draw their income entirely from partnerships or other forms of profit sharing.
2. “Wages” include production bonuses and tips, but not end-of-year bonuses, profit-sharing, or benefits.
3. Although BLS publishes OES data every year, the data are gathered on a rolling basis. Income for “1997” or “2014” reflects data gathered over three years, including the reference year. BLS adjusts wage figures for the two older years, using the Employment Cost Index, so the reported wages appear in then “current” dollars. The three-year collection period, however, can mask sudden shifts in employment trends.
4. BLS cautions against using OES data to compare changes in employment data over time, unless the user offers necessary context. In particular, it is important for readers to understand that short-term comparisons are difficult (because of the point in the previous paragraph) and that occupational categories change frequently. For those reasons, I have limited my cross-time comparisons and have noted the splintering of occupational categories. The limited comparison offered here, however, seems helpful in understanding the relationship of law practice to other high-paying occupations.
5. For the data used in this post, follow this link and download the spreadsheets. The HTML versions are prettier, but they do not include all of the data.
The Ethics of Academia
April 2nd, 2015 / By Deborah J. Merritt
What obligations, if any, do academic institutions owe potential students? When soliciting these “customers,” how candid should schools be in discussing graduation rates, scholarship conditions, or the employment outcomes of recent graduates? Do the obligations differ for a professional school that will teach students about the ethics of communicating with their own future customers?
New Marketing/New Concerns
Once upon a time, we marketed law schools with a printed brochure or two. That changed with the advent of the new century and the internet. Now marketing is pervasive: web pages, emails, blog posts, and forums.
With increased marketing, some educators began to worry about how we presented ourselves to students. As a sometime social scientist, I was particularly concerned about the way in which some law schools reported median salaries without disclosing the number of graduates supplying that information. A school could report that it had employment information from 99% of its graduates, that 60% were in private practice, and that the median salary for those private practitioners was $120,000. Nowhere did the reader learn that only 45% of the graduates reported salary information. [This is a hypothetical example; it does not represent any particular law school.]
I also noticed that, although law schools know only the average “amount borrowed” by their students, schools and the media began to represent that figure as the average “debt owed.” Interest, unfortunately, accumulates while a student is in law school, so the “amount borrowed” significantly understates the “debt owed” when loans fall due.
Other educators worried about a lack of candor when schools offered scholarships to students. A school might offer an attractive three-year scholarship to an applicant, with the seemingly easy condition that the student maintain a B average. The school knew that it tightly controlled curves in first-year courses, so that a predictable number of awardees would fail that condition, but the applicants didn’t understand that. This isn’t just a matter of optimism bias; undergraduates literally do not understand law school curves. A few years ago, one law school hopeful said to me: “What’s the big deal about grade competition in law school? It’s not like there’s a limit on the number of A’s or anything.” When I explained the facts of law school life, she went off to pursue a Ph.D. in botany.
And then there was the matter of nested statistics. Schools would report the number of employed graduates, then identify percentages of those graduates working in particular job categories. Categories spawned sub-categories, and readers began to lose sight of the denominator. Even respected scholars like Steven Solomon get befuddled by these statistics. Yesterday, Solomon misinterpreted Georgetown’s 2013 employment statistics due to this type of nesting: he mistook 60% of employed graduates for 60% of the graduating class. (Georgetown, to its credit, provides clearer statistics on a different page than the one Solomon used.)
Educators, of course, weren’t the only ones who noticed these problems. We were slow–much too slow–to address our lapses, and we suffered legitimate criticism from the media and organizations like Law School Transparency. Indeed, the criticisms continue, as professors persist in making misleading statements.
For me, these are ethical issues. I believe that educators do have a special obligation to prospective students; they are not just “customers,” they are people who depend upon us for instruction and wise counsel. At law schools, prospective students are also future colleagues in the legal profession; even while we teach, we are an integral part of the profession.
With that in mind, I communicate with prospective students as I would talk to a colleague asking about an entry-level teaching position or a potential move to another school. I tell students what I would want to know if I were in their position. And, consistent with my role as a teacher and scholar, I try to present the information in a manner that is straightforward and easy to understand. For the last few years, most law schools have followed the same golden rules–albeit with considerable prodding from Law School Transparency, the ABA, and the media.
Revisionist History
Now that law schools have become more careful in their communications with potential students, revisionist history has appeared. Ignoring all of the concerns discussed above (although they appear in sources he cites), Michael Simkovic concludes that “The moral critique against law schools comes down to this: The law schools used the same standard method of reporting data as the U.S. Government.”
Huh? When the government publishes salaries in SIPP, a primary source for Simkovic’s scholarship, I’m pretty sure they disclose how many respondents refused to provide that information. Reports on the national debt, likewise, include interest accrued rather than just the original amounts borrowed–although I will concede that there’s plenty of monkey business in that reporting. I’ll also concede that welfare recipients probably don’t fully understand the conditions in the contracts they sign.
Simkovic, of course, doesn’t mean to set the government up as a model on these latter points. Instead, he ignores those issues and pretends that the ethical critique of law schools focused on just one point: calculation of the overall employment rate. On this, Simkovic has good news for law schools: they can ethically count a graduate as employed as long as the graduate was paid for a single hour of work during the reporting week–because that’s the way the government does it.
I don’t think any law school has ever been quite that audacious, and the ABA certainly would not approve. The implications of Simkovic’s argument, however, illuminate a key point: law schools communicate for a different purpose, and to a different audience, than the Bureau of Labor Statistics. The primary consumers of our employment statistics are current and potential students. We draft our employment statistics for that audience, and the information should be tailored to them.
As for scholarship, I will acknowledge that the U.S. government owns the word “unemployment.” I used a non-standard definition of that concept in a recent paper, and clearly designated it as such. But this seems to distract some readers, so I’ll refer to those graduates as “not working.” I suspect it’s all the same to them.
What Use Is the BLS?
March 28th, 2015 / By Deborah J. Merritt
What is the Bureau of Labor Statistics (BLS), and what can it do for you? The BLS is an independent statistical agency that measures “labor market activity, working conditions, and price changes in the economy.” You’ve sampled BLS wares if you’ve relied upon the Consumer Price Index, unemmployment rates, or average wages.
One program within BLS tries to project employment growth for hundreds of different occupations. The Bureau issues these forecasts every two years, with each projection spanning a decade. The most recent projections, released in December 2013, attempt to forecast occupational growth between 2012 and 2022.
Why does BLS spend your tax dollars trying to do this? Most parents can’t predict what their teenagers will do next week. How does the BLS think it can predict the behavior of an entire economy, including growth rates in so many different occupations?
The truth is that it can’t, at least not with the level of accuracy that some users would like. There are just too many variables, not to mention acts of god and war. The latest evaluation of BLS’s occupational projections found that, when BLS projected occupational growth rates between 1996 and 2006, it failed to foresee the following:
* Immigration would be higher than the Census Bureau predicted
* Women’s labor force participation would decline
* Terrorists would hijack 4 jets, level the WTC, and damage the Pentagon
* The United States would go to war with both Afganistan and Iraq
* A housing bubble would double home prices over the decade
* Internet-based services would cut the number of travel agents by a third
It was a tumultuous decade, but so are most decades. Given the twists and turns of human history, which affect the type of work that humans do, why does BLS even bother with occupational projections?
Better Than the Alternatives
Like democracy, BLS’s projections seem to be better than the alternatives. In particular, these forecasts are better than ones that rely solely on historical trends. In 2010, the Bureau tested its model against four different “naive models” that drew solely on historical data. A common naive model (and one that the Bureau tested) predicts each occupation’s growth rate based on that occupation’s rate of growth during the previous 10 years. Another variation, also tested by the Bureau, uses the most recent five years to project future growth.
On three out of four measures, the Bureau’s predictions outperformed all of the naive models. Predicting the future is difficult, especially when that future includes human actions. The Bureau’s experience, however, suggests that past performance is not the best guide to occupational growth; adding other ingredients to the forecast improves information.
Who Needs It?
Even if BLS predictions are better than naive models, who needs these predictions? Why engage in such an imprecise exercise? BLS began projecting occupational growth after World War II in order to help returning veterans identify promising career paths. The program persisted as a way to serve “individuals seeking career guidance,” as well as “policymakers, community planners, and educational authorities who need information for long-term policy planning purposes.”
If BLS wants students to use its occupational projections for “career guidance,” then why does it warn against using the projections to predict labor shortages or surpluses? Don’t students examine these projections precisely to determine which occupations are growing and which ones are declining? How is occupational “growth” different from a labor “shortage” in that occupation?
The two concepts are related, yet different. Remember that BLS projects (however imperfectly) the number of people who will actually fill an occupation a decade later. The Bureau doesn’t estimate how many people will want to work in that field or how many will prepare to do so; that’s not its task. The Bureau also assumes that the labor market will “clear.” In other words, if demand falls for workers in a particular field, those workers will go elsewhere. They won’t simply hang around the edges of the occupation, constituting a surplus labor supply.
This doesn’t mean, however, that the number of workers preparing to enter an occupation is irrelevant to predicting job and salary prospects for that occupation. If the pipeline of aspiring workers is easy to quantify, and if the occupation itself is tightly defined, then comparing the worker supply to job projections can yield useful information. If labor supply greatly exceeds likely job openings, then one of three things are likely to happen: (1) some of the workers will take other jobs; (2) wages in the occupation will decline; or (3) both.
What About Law?
The worker pipeline is relatively easy to specify in law. Almost no one becomes a lawyer without obtaining a JD, and there is evidence (p. 72) that most law graduates want to practice law at least for a while. The occupation itself is also well defined. Law graduates can apply their education to a range of law-related jobs, but there is widespread consensus on which jobs are “lawyering” jobs that require bar admission. These are the same jobs that graduates, on the whole, prefer.
Under those conditions, it is useful to compare the number of law school graduates to projected job openings for lawyers. That is what I did several years ago. At that time, the number of students progressing through the law school pipeline greatly exceeded the number of lawyering positions that BLS projected. A substantial number of those graduates, I predicted, would have to find work outside of law practice. Wages for entry-level lawyers might also fall.
That is, in fact, what happened. My recent study of new lawyers admitted to the Ohio bar confirms that, four and a half years after graduation, one quarter of licensed lawyers were working in jobs that did not require a law degree. After accounting for graduates who didn’t take or pass the bar exam, it appears that a full third of recent law school graduates are not practicing as lawyers.
The good news is that my study suggests there may be more job openings for lawyers than BLS projected. Not enough to satisfy all of the graduates who want those jobs, but more than BLS estimated.
Meanwhile, there is also evidence that wages have declined for entry-level lawyers. The median starting salary reported to NALP for the Class of 2008 was $72,000; five years later, the median reported salary for the Class of 2013 was $62,467. The comparison looks even worse after adjusting for inflation: If the median wage had remained at the 2008 level, it would have reached almost $78,000 by 2013. The real median wage for new lawyers fell by 19.8% over those five years.
Will law graduates who were unable to find a lawyering job find satisfaction in other jobs? They might; probably some will and some won’t. Will they prosper financially from their law degree, regardless of occupation? They might, if historical patterns hold. To the extent their wage losses represent effects of the recession, will they make up those differences later in their careers? Again, they might if historical patterns hold. But for students investing more than $100,000 in a legal education, it’s worth considering as much information as possible. That includes BLS projections for their desired occupation.
These projections are also useful–when combined with other available information–for legal educators to consider. The career prospects of our graduates should inform the educational programs we design, as well as the information we offer potential applicants. BLS projections represent only a small piece of this puzzle, but they offer one perspective on how the labor market for lawyers is performing.
What About Those New Projections?
The BLS recently changed the way in which it measures occupational “separations.” That’s an estimate of the number of people who will leave a particular occupation. This measure, in turn, affects the projection of job openings; when a worker leaves an occupation, that departure often creates a job opening. Under this new method, BLS will project more lawyering jobs than it did in the past. That sounds like good news for aspiring lawyers, and it is–in part. The change also reveals some unsettling trends in our profession, which I’ll explore in a future post.
How Many Lawyers?
March 20th, 2015 / By Deborah J. Merritt
A few years ago, I used employment projections from the Bureau of Labor Statistics to project the number of job openings for licensed lawyers during the current decade. At the time, BLS was the best available source for that type of projection; it remains a useful resource today. The BLS makes these predictions precisely to help workers, employers, and policymakers understand the likely demand for workers in particular occupations.
Why should law schools care about these predictions? As Michael Simkovic and Frank McIntyre show in two recent papers, a JD historically has conferred financial advantage (compared to entering the workforce with just a BA) even if graduates did not work as practicing lawyers. If law graduates reap financial returns from their degrees, regardless of the jobs they take, does it matter how many jobs they find as practicing lawyers?
Some scholars (including me) wonder whether financial returns to a law degree will remain as high as they have been. But let’s leave that debate aside for now. Let’s consider, instead, why law schools should care about the number of grads who will find jobs as licensed lawyers–and what that number might be.
Who Cares?
Law graduates, students, and prospective students seem to care. Several sources indicates that, although some graduates enjoy work that does not require bar admission, graduates overall prefer to practice law. Every year, for example, NALP publishes a table showing how many graduates are employed but still seeking work. These tables consistently show that grads in jobs that require bar admission are far less likely than other grads to be seeking new jobs. In 2010, for example, just 15.1% of the graduates in “bar required” work were seeking other employment, while 48.1% of those in “JD preferred” jobs and 49.0% of grads in “other professional positions” were doing so. [Sorry, source not available online]
Similar preferences emerge later in the career. The After the JD longitudinal study found that law grads working in non-lawyering jobs were less satisfied than those in lawyering positions. The distinction held both seven and twelve years after law school graduation. [No online link for that one either, I’m afraid, but check p. 70 of the AJD II and AJD III reports.]
If graduates care, I suspect that students and prospective students care as well. And if only out of self interest, law schools should care too. We can tell students that a law degree offers many options, and that historically those options have paid off financially compared to a BA alone, but the current crop of students isn’t buying that pitch. If they want to practice law, they’re still coming to law school. But if they’re looking for intellectual stimulation, a degree with diverse options, or other benefits, they seem to be going elsewhere.
This is partly why I think law schools should examine the way we package the education we offer. We’re good at teaching close reading, careful writing, and critical thinking–and we could teach those skills to undergraduates. Talented undergrads want those skills, and employers will pay a premium for them. At the same time, we’re good (and could be better) at teaching advanced legal doctrine and other intellectual skills essential for law practice. We can keep providing that education to a more focused group of JD students who primarily will become lawyers.
So How Many Lawyers?
This brings me back to the question I started with: If prospective law students care about whether they will get jobs as licensed attorneys, and if law schools should care about that question (if only to attract students), about how many law graduates are able to get jobs that require bar admission?
My recent study of law graduates in the State of Ohio gave me some numbers to work with. I tracked job outcomes for all 1,214 new lawyers who passed the Ohio bar exam in 2010. In December 2014, about 75% of them held jobs that required a law license. Most of the rest were employed, but in other types of work.
My population included only licensed lawyers, not law graduates who didn’t take or pass a bar exam. One thing we know about the latter group is that they can’t be practicing law. So, after performing some calculations to account for that group, I estimated that about two-thirds of 2010 graduates were practicing law four and a half years after graduation.
Will the same percentage hold for graduates from other years and in other states? I don’t know; we often have to deal with limited data and isolated points of reference in making real-world plans. I explain in the paper why I think Ohio offers a useful perspective, and why I think the annual number of new bar-required jobs will remain stable in coming years. I’ll write more about both of those issues here soon.
The Good News
The good news for both law schools and prospective students is that my estimate is higher than the BLS’s historic projections. I estimate that, four and a half years after graduation, about 29,250 members of the Class of 2010 are practicing law. Some of the jobs are dubious solo practices; some undoubtedly are part-time, temporary, and/or low paid. Some of them are jobs that a graduate secured only after failing and re-taking the bar exam. Prospective students need to take those factors into account, not simply consider whether they’ll be able to find a job practicing law.
When all is said and done, though, graduates are finding more “lawyering” jobs than BLS once predicted–although not as many as BLS predicts through a proposed revision to its forecasting method. I’ll comment on the latter in another post.
The other piece of good news is that, if my calculations are correct, and if law school attrition rates remain constant, then about 84.5% of the current 1L class will find lawyering jobs within a few years after graduation. That level of job placement may be sufficiently attractive to maintain enrollment at current rates.
The Bad News
I couched that last sentence carefully: “to maintain enrollment at current rates.” Better placement in lawyering jobs will reassure prospective law students, but I doubt it will draw them back to law school in droves. Law schools, meanwhile, will need to worry about bar passage rates as they enroll students with lower credentials. Declining bar passage rates will discourage potential applicants both directly and indirectly, as they depress the percentage of graduates working in jobs that require bar passage.
Schools will also vary in the percentage of graduates they place in jobs requiring bar admission. Some will place more than 85% in those positions; others will place much less. If I’m right that potential students care about getting jobs that require a law license, enrollment declines will continue at the latter schools.
Summing Up
In making predictions, both here and in my paper, I offer some very specific numbers. I do that to offer a point of reference for debate; I can’t say exactly how many members of the Class of 2017 will find lawyering jobs, or how many students will apply to law school in 2018. I do think, though, that JD students care about their odds of securing a job that requires a law license and that law schools need to account for that preference. To do that, it helps to know as much as we can about operation of the legal market.
Bankruptcy Petitions
March 17th, 2015 / By Deborah J. Merritt
Michael Sousa has written a thoughtful paper about the issue of non-lawyers preparing bankruptcy petitions for consumer debtors. As Sousa acknowledges, some of these preparers urge their clients to commit fraud; others serve their clients incompetently. But then again, the same is true of some bankruptcy lawyers–and the lawyers charge more than many consumers can afford.
After reviewing the field, Sousa proposes creation of a cadre of licensed petition preparers for no-asset Chapter 7 bankruptcy filings. The United States Trustee’s Office could regulate these practitioners, requiring them to demonstrate adequate knowledge of the law and adherence to appropriate ethical standards. The practitioners, however, would not need JD’s or law licenses.
Sousa’s proposal makes sense to me. I note it here because he has identified yet another area in which non-lawyers may be able to handle the law-related needs of clients who cannot afford an attorney’s fee. As Sousa details, the federal government already allows qualified non-lawyers to represent clients before the IRS, US Patent and Trademark Office, and (in immigration matters) the Department of Homeland Security. The transfer of law-related business to non-lawyers has been slow but steady.
What Happened to the Class of 2010?
March 14th, 2015 / By Deborah J. Merritt
It has been almost five years since the Class of 2010 walked across the stage to pick up their JDs. Since then, we’ve debated whether the weak job outcomes for that class stemmed solely from the recession or represented structural changes within the profession itself. We’ve also wondered whether the graduates would improve their employment status as they moved into the workforce and the economy picked up. I decided to find out.
1,214 New Lawyers
In a paper just posted to SSRN, I tracked job outcomes for all 1,214 new lawyers who passed the Ohio bar exam in 2010 and then joined the bar. The study doesn’t focus on the graduates of a particular school, as some analyses do. I included all bar-passers, regardless of the school they attended (although note that Ohio only allows graduates of ABA-accredited schools to take the exam). I also followed successful examinees even if they left Ohio.
My focus on bar admittees parallels the approach taken in several earlier studies of the legal profession, including the recent After the JD (AJD) surveys. As I note in the paper, that means I can’t say very much about the approximately 12% of law school graduates who never gain bar admission. It also means that I overstate the percentage of jobs that require bar admission, although I offer some corrections for this in the paper.
I also explain in the paper why Ohio offers a useful perspective on trends nationally. The state’s 9-month outcomes, as reported by NALP, are similar to national averages. Ohio is the ninth largest state for both number of practicing lawyers and number of jobs taken by new law graduates. It’s also home to the nation’s largest law firm and several other BigLaw shops. And the state has a healthy economy, with an overall unemployment rate (4.8% in December 2014) that is lower than in states with the largest legal markets. During the same month, New York’s unemployment rate was 5.8%; Illinois, 6.2%; California, 7.0%; and DC, 7.3%.
1,137 Jobs
For each of the 1,214 lawyers in my study, I searched for the job held in December 2014. I didn’t use surveys; I relied entirely on public online sources. This turned out to be much easier than I thought it would be–and produced a much more complete dataset than surveys do. With Ohio’s bar directory, employer websites, directories like LinkedIn, and other sources (e.g., alumni stories published online by law schools), I found a December 2014 job for 1,137 graduates or 93.7% of the population. I explain in the paper why the remaining 6.3% are most likely unemployed (for some, I found direct evidence of that) or serve as a proxy for the percentage unemployed.
Enough of the preliminaries. What did I find? First, it’s hard to read the job histories without feeling great sadness for the Class of 2010. Sure, many of them have ended up in decent jobs. Some may even hold their dream job. But they’ve had (and are still having) a very tough time. Almost a tenth bill themselves as “solo practitioners,” although I found no evidence of an active practice (such as a website) for half of them. At best, these solos are struggling to establish themselves at an early stage of their careers. At worst, they’re unemployed job seekers doing occasional legal work for friends.
Meanwhile, two-thirds of the graduates have switched jobs at least once in four years–that’s twice the rate of turnover that AJD reported for the Class of 2000 during their early careers. Among those who changed jobs, the average number of jobs was 2.7–almost three jobs in just four years. Before you shake your head over those peripatetic millennials, note that median job tenure for 25-34-year-olds nationally is 3.0 years; the millennials actually stick to their jobs somewhat longer than young adults did before 2010.
It’s easy to talk about the job market from the comfort of well paid, tenured positions. It’s a lot harder to be out there in the trenches. Before we talk more about numbers, let’s recognize the fortitude (and ongoing struggles) of the people in the Class of 2010 and other recent classes.
Structural Change
I will write a series of posts highlighting different parts of my findings, but here’s the bottom line: I found strong evidence of structural changes in the employment market. Here are the top indicators:
1. The Class of 2010 graduated almost five years ago, a year after the Great Recession officially ended. It has been a slow and jobless recovery, but there have been signs of growth for quite some time now. There are certainly clients hiring lawyers: the top-earning lawyers are doing very nicely, and a wide range of alternative-service providers are prospering. Yet recent grads are lagging in job outcomes when compared to earlier classes at a similar career point.
2. Only three-quarters of the licensed lawyers hold jobs that require a law license. After adjusting for graduates who never took or passed the bar, I estimate that no more than two-thirds of 2010 graduates work in jobs that require bar admission. We can argue about whether future students will be willing to invest in law school for early-career jobs that don’t use their full education and licensing (I don’t believe they will). It’s clear, however, that the percentage of recent law graduates practicing law has been declining for some time. Whether that makes you smile or weep, it’s a shift in the market.
3. Only 40.4% of the licensed graduates work in law firms, a barely perceptible increase over the 39.5% of the class who reported those jobs nine months after graduation. In fact, the 40.4% almost certainly masks a decrease in law firm employment, because I obtained data only on licensed lawyers; the 9-month figure includes all law school graduates. Even at 40.4%, this is a striking figure. Despite four years of experience and economic recovery, the Class of 2010 made no headway in securing law firm jobs.
4. The low level of law firm employment is even more remarkable when compared to outcomes for the Class of 2000, which was tracked by the AJD study. That class graduated into relatively good economic times, but weathered a recession and jobless recovery during their first years in the profession. When the class reported their three-year outcomes to AJD in late 2002 and 2003, national unemployment levels were actually higher than when I identified jobs held by the Class of 2010 in December 2014. Yet 62.1% of the Class of 2000 practiced law with a firm three years after graduation–compared to just 40.4% of the Class of 2010 four years out. That’s a phenomenal drop of almost twenty-two percentage points.
5. The shift in law firm employment was not due solely (or perhaps even primarily) to changes in BigLaw employment patterns. Ohio, like most states, is not home to a law school ranked among the US Not-News top twenty. Yet we have all of those tasty BigLaw offices and all types of other employers. After the crash, did elite law school graduates jump to Ohio, taking our best jobs and creating a market cascade? I once thought that might be the case, but the evidence says otherwise. The number of elite school graduates passing the Ohio bar actually peaked in 2007–and was low even then. The changes we are seeing in lawyer employment are systemic; they arise from shifts at many levels of the job market.
There’s More
Much more, but I’ll save those data for another day. Meanwhile, you’ll find the full paper here.
Timing Law School
March 10th, 2015 / By Deborah J. Merritt
Michael Simkovic and Frank McIntyre have a new paper analyzing historic income data for law school graduates. In this article, a supplement to their earlier paper on the lifetime value of a law degree, Simkovic and McIntyre conclude that graduates reap most of the value of a JD whether they graduate in good economic times or poor ones. (Simkovic, by the way, just won an ALI Young Scholar Medal. Congratulations, Mike!)
Simkovic and McIntyre’s latest analyses, they hope, will reassure graduates who earned their degrees in recent years. If history repeats, then these JDs will reap as much financial benefit over their lifetimes as those in previous generations. Simkovic and McIntyre also warn prospective students against trying to “time” law school. It’s difficult to estimate business cycles several years in advance, when a 0L must decide whether to take the plunge. And, again according to historical data, timing won’t make much difference. Under most circumstances, delay will cost more financially than any reward that successful timing could confer.
But Is This Time Different?
History does repeat, at least in the sense of economic conditions that cycle from good to bad and back again. There’s no doubt that recent law school graduates have suffered poor job outcomes partly because of the Great Recession and slow recovery. It’s good to know that graduates may be able to recover financially from the business-cycle component of their post-graduation woes. Although even here, Simkovic and McIntyre acknowledge that past results cannot guarantee future performance. The Great Recession may produce aftershocks that differ from earlier recessions.
All of this, though, edges around the elephant in the room: Have shifts occurred in the legal profession that will make that work less remunerative or less satisfying to law graduates? And/or have changes occurred that will make remunerative, satisfying work available to a smaller percentage of law graduates?
Simkovic and McIntyre have limited data on those questions. Their primary dataset does not yet include anyone who earned a JD after 2008. A supplemental analysis seems to encompass some post-2008 degree holders, but the results are limited. Simkovic and McIntyre remain confident that any structural change will help, rather than hurt, law graduates–but their evidence speaks to that issue only in historical terms at best. What is actually happening in the workplace today?
The Class of 2010
Five years ago, the Class of 2010 was sitting in our classrooms, anticipating graduation, dreading the bar exam, and worrying about finding a job. Did they find jobs? What kind of work are they doing?
I decided to find out by tracking employment results for more than 1,200 graduates from that year. I’ll be releasing that paper later this week, but here’s a preview: the class’s employment pattern has not improved much from where it stood nine months after graduation. The results are strikingly low compared to the Class of 2000 (the one followed by the massive After the JD study). The decline in law firm employment is particularly marked: just 40% of the group I followed works in a law firm of any size, compared to 62.3% for the Class of 2000 at a similar point in their careers.
A change of that magnitude, in the primary sector (law firms) that hires new law graduates, smacks of structural change. I’m not talking just about BigLaw; these changes pervaded the employment landscape. Stay tuned.
I Am the Law
January 28th, 2015 / By Deborah J. Merritt
My colleague Kyle McEntee has a new project that you’ll want to check out. “I Am the Law” is a series of podcasts exploring a wide range of law practice jobs. These aren’t typical attorney interviews: the lawyers offer more detail about their practices than I’ve heard on other broadcasts or career panels.
The podcasts are rich in detail, but free for all listeners. Law students will find a wealth of information on practice areas, work settings, and the paths that individual attorneys followed in their careers. I hope that career services offices will recommend the podcasts to their students.
Prospective law students will also appreciate these podcasts. The discussions can take them well beyond the media stereotypes of BigLaw associates and aggressive courtroom lawyers. What’s it like to practice as a family or patent law attorney? How about real estate, immigration, nonprofit management, and transactional work? Can you believe that there is still room for a “writs attorney” in the twenty-first century? These 20-30 minute podcasts are perfect for listening while working out, riding the bus, or walking across campus.
I’m intrigued, finally, about the possibility of using these podcasts to complement doctrinal courses. I wish that when I taught first-year Torts, I could have asked my students to listen to the podcast with personal injury attorney Tricia Dennis. (Disclosure: I’m the host who interviewed Tricia, and I serve as an ongoing host for I Am the Law.) We forget how much of our law school curriculum focuses on appellate lawyering. Even when we ask students to imagine how they would apply a rule to a client’s problem, it’s hard for them to see the world through a practitioner’s eyes.
We should do much more in law school to help students understand their future roles as problem solvers for real people and organizations. But as we explore those avenues, the I Am the Law podcasts are an easy, cost-free way to give students a small taste of law practice related to the subject areas you teach.
Have a listen. I think you’ll be impressed, as I was, by the thoughtfulness of these lawyers in explaining both their current work and their personal paths in the law.
How Deans Should Game the Above the Law Rankings
May 1st, 2014 / By Kyle McEntee
The popular legal news website Above the Law just announced its 2014 Top 50 Law School Rankings. ATL’s methodology focuses exclusively on outcomes: only jobs, total cost, and alumni satisfaction matter.
I generally disfavor rankings. Ranking systems appeal to a desire for clear answers even when clear answers don’t exist. Through a simple list format, rankings project the appearance of authority and value even when they provide neither.
Inherent issues aside, ATL’s rankings at least focus on elements that should and do matter to prospective students. As a result, the ATL rankings incentivize schools to act in ways that measurably help students. That’s a welcome change.
If you’re a law school dean that wants to increase its standing in the ATL rankings, here are the two most critical steps:
1. Lower Tuition
The ATL rankings factor in total educational cost, which combines living expenses, tuition, inflation, and the interest accumulated during law school. Unless a law school moves across the country, student living expenses are relatively inflexible. To compete on the education cost metric schools must either lower tuition or convince ATL to use net price instead of sticker price.
In using sticker price, ATL penalizes schools that use a high tuition, high discount model. That’s basically every school (but maybe changing). Schools that shift to a more transparent pricing model will benefit in next year’s rankings without taking in less tuition revenue.
2. Maintain or Reduce Class Size
Although class sizes are not directly measured by the ATL rankings, each employment metric either controls for graduating class size (SCOTUS clerkships; Article III judges) or relies on an employment percentage for which graduating class size is the denominator. Graduating class size is a function of incoming class size, net transfers, and students dropping out or taking longer to finish school than anticipated.
Smaller incoming classes demonstrate a modicum of social and professional responsibility in a visible manner. This buys trust from incoming students. But the urge to take more transfers to generate more revenue must be appealing these days as schools try to make up for lost 1L revenue. After all, transfers pay more, do not impact LSAT or GPA medians, have low marginal cost, and integrate rather silently. Large transfer classes also seem appealing if you believe that enrollment cuts have been too deep—an increasingly common, yet disturbing belief.
Due to ATL’s methodology, schools cannot hide from enrollment levels that adversely affect employment outcomes. Neither can schools make up for over-enrollment by funding jobs for graduates. As such, resisting the temptation to grow enrollment will benefit schools on rankings that unapologetically penalize schools for graduating too many students into a crowded entry-level market.
Schools game rankings. That’s just a basic fact about modern higher education. At least with ATL’s rankings, gaming the rankings produces measurable, positive results for students and the profession. It sure beats an incentive to burn money on blackacre to secure a higher ranking.
Unhappy Lawyers and Unmet Legal Needs
April 27th, 2014 / By Deborah J. Merritt
Lawrence Krieger and Kennon Sheldon recently posted an important paper about the factors associated with lawyer happiness. The paper includes a number of intriguing findings–I recommend it to all members of the legal profession. I focus here on a worrisome finding that Krieger and Sheldon discuss only briefly: The majority of lawyers, those who provide legal services to middle-income individuals, are the unhappiest.
These general practitioners, family lawyers, and others of their ilk are less satisfied than both those who work in prestige positions (serving primarily corporations) and those who work for the public interest (including government). Yet these “lawyers in the middle” make up the bulk of our profession–and are essential to address unmet legal needs. What are we going to about this?
Four Groups of Lawyers
To gather data for their study, Krieger and Sheldon surveyed bar members in four geographically diverse states. They divided the respondents into four groups:
Prestige lawyers are those who (a) work in law firms of 100 lawyers or more, or (b) practice tort/malpractice law; corporate, commercial, or transactional law; international business/commercial transactions; securities or partnership law; and tax, estate planning, or patent/copyright law. Krieger and Sheldon identified 1434 prestige lawyers in their sample.
Service lawyers work as public defenders, criminal prosecutors, other government lawyers, legal aid lawyers, or in-house counsel for a nonprofit organization. 1091 sample members fell in this category.
Judges include both judges and hearing officers. This group accounted for 141 sample members.
Other lawyers work in “general practice, family law, private criminal defense, and many [other areas] not typically associated with either very high earnings or primary public service.” This group constituted the largest slice of the sample, with 2852 members.
[Note that Krieger and Sheldon excluded “teachers, bar administrators, mediators/arbitrators, and clerks or support staff for judges or lawyers” from these groupings, so they could focus exclusively on more traditional practitioners. The “other” lawyers group, therefore, does not include attorneys in these positions.]
Who’s the Happiest?
Judges reported higher well-being than any other group studied by Krieger and Sheldon. Service lawyers were the next happiest, despite their low incomes. Prestige lawyers ranked third, and “other lawyers” brought up the rear.
Krieger and Sheldon focus on the difference between prestige and service lawyers: although the former earn more, the latter report greater well-being. To my mind, though, the more important result involves the “other” lawyers–those in general practice. These lawyers constitute the single greatest group of practicing lawyers; they also serve the needs for which Americans have the greatest unmet demand. Yet these are the unhappiest lawyers. This is a critical problem, one that legal education has ignored for too long.
The Invisible Majority
As I read Krieger and Sheldon’s very thoughtful study, I realized how much of our law school culture revolves around the prestige/service dichotomy. Both before and during law school, law students imagine that they will choose between high-paying prestige positions and modest-paying (but personally satisfying) service ones.
Our law school culture tacitly supports this dichotomy. Students quickly learn about the prestige positions and yearn for both their status and compensation. Prestige employers are well represented on campus, in the media, and in student gossip.
Schools counter the dominance of “prestige law” with talk of service careers. We sponsor public interest fellowships, job fairs, and other service programs. Faculty and career counselors encourage students to weigh the personal satisfactions of a service career against the monetary rewards of a “prestige” one.
At most law schools, however, a majority of graduates will work in neither of these fields: the dichotomy is a false one for them. Instead, they will become “other” lawyers serving the needs of small businesses and moderate-income individuals. The fact that service lawyers are happier, while prestige lawyers are wealthier, is irrelevant to them. They, according to Krieger and Sheldon’s study, will experience neither the high incomes of prestige lawyers nor the well-being of service ones.
Out of the Shadows
Is the plight of general-practice lawyers inevitable? I don’t know. Some of them manage very stressful work for clients of modest means. Family law tops that list; many lawyers shudder at the prospect of handling divorce or child custody cases, although courthouses teem with people seeking lawyers to represent them in those matters.
It may not be possible to give these “other” lawyers the high salaries of prestige lawyers or the civic satisfaction of service ones. But we might improve their well-being by recognizing the importance of their work. Rather than relegating them to the shadows of “other” lawyers, as law schools currently do, let’s celebrate the work of these every day lawyers.
Many of our graduates will handle divorce and child custody cases. They will represent criminal defendants for pay. They will handle small personal injury and commercial disputes. None of this is glamorous; much of it is stressful and modestly paid. But this is what lawyers do. This is what brings justice to most Americans.
Let’s embrace this legal work in our law school curricula. Let’s feature it in our placement programs. Let’s help our “other” graduates find satisfaction in their practices. I know some general practitioners who find substantial psychic rewards in their work. Although we don’t recognize them as “public service” lawyers, they are the professionals who help people through the traumatic days of a divorce, criminal charge, custody dispute, or probate contest.
We can do more to prepare these lawyers, celebrate their work, support their well-being, and offer their services to more of the clients who need them.
About Law School Cafe
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Deborah J. Merritt
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