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lawyer salaries – another superstar market

DistributionCurve2012

From the Association of Legal Career Professionals

About once a semester, I get into an argument about how my students shouldn’t go into law unless they get into a top ranked program. The argument is fairly simple – most lawyers make a modest salary. In the current environment, where one can easily acquire about $200,000 in law school debt, the salary simply doesn’t justify the loan, especially for students from low ranked schools who have very limited job prospects. This semester, one aspiring lawyer said that the average was $78k and then a student raised her hand and said, “sure, but it’s a bimodal distribution!” Indeed, it is. Lesson: Don’t trust law school stats and only go if you get into a top program or you get a free ride.

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Written by fabiorojas

January 20, 2014 at 3:04 am

Posted in fabio, professions

13 Responses

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  1. Is it really bimodal or is that just an illusion of top-coding? In any case, the practical upshot stands that the typical student should ignore the mean and focus on the median. (Or translated for those of you who wanted to go to law school specifically to avoid math — do not go to law school).

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    gabriel rossman

    January 20, 2014 at 3:59 am

  2. IIUC, this is first year post-grad, where you probably see a lot of standardized salaries, esp in big law. But the REAL statistical scandal is censoring – apparently, this does not include folks with non-law jobs.So that Starbucks barista who makes $9.25 an hour and has a JD from the Southern Indiana Academy of Rojasian law is not included. Or, once again, DON’T GO TO LAW SCHOOL.

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    fabiorojas

    January 20, 2014 at 4:02 am

  3. I thought the same thing at first, Gabriel, but it doesn’t look like the line is quite flat above the spike at 160 – it looks like some people did manage to report values above that. Still seems like something weird is going on with the data, though.

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    JD

    January 20, 2014 at 6:02 am

  4. @rossman: It is bimodal. Elite firms “collude” to make same offer to 1st years. This is well known in the field.

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    TR

    January 20, 2014 at 2:22 pm

  5. Are you jumping the gun a bit? Recommending they shouldn’t attend law school based of these starting salaries? How much of the lower range is reflective of the pay of clerkships, legal fellowships, etc? Also, how many schools fit your top-rank requirement? All for pointing out costs vs. benefits, and pointing out some harsh realities, but wonder if sometimes this sounds a bit too harsh.

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    Scott Dolan

    January 20, 2014 at 3:30 pm

  6. Surely you would want to know how the salaries of lawyers rise with time in the job, wouldn’t you? As starting salaries, even the lower mean compares quite favorably with sociology. Question is, how quickly do salaries increase after the first few years, when people move out of associates’ jobs and into partners’ jobs (assuming they make partner). I’ll bet the difference is striking when you compare sociologists who’ve been on the job for 20 years with lawyers who’ve been on the job 20 years.

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    Howard Aldrich

    January 20, 2014 at 5:30 pm

  7. TR,

    Nice try, but if I wanted substantive knowledge of a field I’d be doing qualitative work.

    Like

    gabriel rossman

    January 20, 2014 at 5:41 pm

  8. There are some other problems with this theory. Apart from the fact that the time period is too short and does not take career development into account, the assumption that admission into a top program constitutes a basis for going to law school, but admission into a lower ranked program does not, seems to rest on the grad school model, if only in part. Law students compete with each other for rankings within their schools, though; and even students given scholarships are usually only entitled to keep those scholarships by maintaining a certain ranking (or by GPA, although this is usually calculated to coincide with ranking). Moreover, getting into a top program is not the guarantee of future high end employment in the same way that it once was. You also have to remember that in certain markets regional schools have a stronger reputation than might be reflected in the national rankings. This not only gives students at those schools an edge up in the competition for good entry-level jobs, but it also might create a barrier to entry for students in higher ranked schools from outside the region, or to national schools with no particular regional affiliation. And name recognition is another important factor, along with perception of law school standing. The rankings have fluctuated significantly over time and people charged with hiring may have a very different perception of a school’s relevant status. Moreover, some schools (i.e., Penn State, MSU) have incorporated private law schools and amplified the standing of those schools considerably at the national level. I’d have to guess that the effect in state is less substantial.

    I’d also add that the LSAT is not the only relevant examination and not the primary one for people who want to be attorneys. We have a professional examination that is strongly correlated with law school GPA/ranking, not strongly correlated with LSAT and definitely not undergraduate GPA. That’s not particularly surprising because the high law school GPA presumably reflects substantive knowledge of the law and the ability to engage in legal analysis, while LSAT scores are the measure of some sort of raw analytical ability and is an OK predictor of first year success in law school at least when combined with UGPA.

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    jdsoc28

    January 20, 2014 at 7:07 pm

  9. The real question is: What is the counterfactual? These students who get into low ranked (however that is defined) law schools should not go because they are instead able to…? My point is that a sociology student, from a state school, who can only get into a low ranked law school, let’s say outside the top 50, may have limited earnings potential to begin with. I would guess that, on average, those at the mean of the distribution, even if we cut it off at 100,000, will be better off ten years later than otherwise. Now, I am not advocating for law school in general, and I agree that there should be a floor, in terms of ranking, for every individual; however, it is not as cut and dry as stated by the OP.

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    T. Finch

    February 2, 2014 at 2:07 am

  10. Finch: There are many career tracks and the issue is cost/benefit. If law school were cheap, I’d encourage people to give it a try. But at $200k for total costs, you should only do it if (a) you get a free ride somehow or (b) you get into a top 10 school and thus have a reasonable chance at a job that will allow to pay off the debt in a reasonable amount of time while maintaining a reasonable life style and the ability to save money,

    Like

    Fabio Rojas

    February 2, 2014 at 4:49 am

  11. Rojas: For outside the top 10, if we use Indiana (#25) the in-state tuition is $29,946 per year (latest US News ranking), or $90,000 for the full program (I am only using tuition because most of the other costs would have to be realized by any professional out on their own). I believe that, on average, a sociology major, from Indiana (to capitalize on that in-state tuition), who applied to each of the top 100 law schools (using the outcomes to understand her ability), and #25 was her best choice, is better off in ten years, in terms of earnings, by going to law school instead of joining the work force. Of course, this is assuming a utility function that is maximizing profit.

    Using the out-of-state tuition increases total costs by about $60K, bringing total cost to $150K; however, I still believe the outcome would be more favorable for the law school graduate, on average. Now, if instead they only got into #100 and were paying the $150K, then it gets a bit dicier.

    The main point is we cannot be myopic regarding the decision. Of course, at the end of year four, even if the law school graduate is making $90K, but has $90K-$150K in debt then the counterfactual of making $40K for four years seems more appealing. But, assuming 10% raises for each, and a ten year trajectory, the law school graduate after paying back her debt is $66K ahead (using $150K for debt). Also, the 10% average yearly salary increase is probably very high for the college graduate and low for the lawyer.

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    T. Finch

    February 2, 2014 at 6:02 pm

  12. Finch – can you supply ten year out salary data on lawyers from rank 25-50 law schools? This is a serious question.

    Also, you don’t opportunity costs. Three years out of the labor force adds on $100k for people. If you can actually show me huge 10-year-out differences between average (not elite) attorneys and other jobs, I’d really be grateful.

    Finally, the soc BA is really stacking the deck in your favor. Soc majors are disproportionately oriented toward low paid work like social work, teaching, non-profits, activism, etc. But that doesn’t reflect other majors or career tracks.

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    fabiorojas

    February 2, 2014 at 6:54 pm

  13. I will have to look into the salaries, will keep you posted. Also, I agree that it stacks the deck :).

    As a counterpoint, I would assume that soc majors would also get into areas of law that are low paid.

    Thanks for the discussion.

    Like

    T. Finch

    February 2, 2014 at 7:15 pm


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