September 05, 2007
Law grad income distributions
This should also get tagged with "Bad Science".
Bill Henderson, who maintains the blog Empirical Legal Studies, has a post on the income distributions of the graduating class of 2006. The post prominently features a graph with two dramatic spikes, one around the $45-50k income level, and one around the $135-145k income level. The median is $62k, but there is no clustering around that point.
The conclusion drawn from this graph is that there are a few people--perhaps 20%--of graduates who "make it", securing high-paying private practice careers, the majority are stuck making less than $60k, quite a dramatic difference. There are relatively few graduates making between $60k and $120k. This reflects the gap in compensation between most public service type jobs--ADA, public defender, legal aid, city attorney, etc.--and your standard major firm compensation, which this year looks to start at $145, with the very top firms at $160 (there's a small bump there on the graph).
The implication of this conclusion is that if you graduate from an elite law school--we're talking top ten here--you stand a reasonable chance of "making it". The term carries more than simply metaphorical import, as even graduates of third-tier law schools are likely to be burdened with tens of thousands of dollars of debt, which is almost impossible to pay off at a $50k salary while maintaining even a middle-class lifestyle, which the graph and post suggest is what most law school graduates are likely to earn. Anderson thus calls for a radical reformation of the legal profession in general and legal education in particular.
I tend to agree that change is needed, but the graph and figures he cites are not necessarily grounds for change. The data is all self-reported. Though a bit more controlled than your random internet poll because law schools keep track of who has reported and who hasn't, this is still rather unscientific. If the reports are evenly distributed across all 196 law schools that produced graduates last year, that would help, but we really don't know that. We also don't have any idea which people are reporting. 50% is a pretty good sample size for doing statistical analysis, but only if that 50% is randomly selected. One possible interpretation is that the people who report their salaries are either proud of them or annoyed about them, ergo you get the high fliers and low earners.
NALP reports that of the 44,000 graduates of the class of 2006, they have employment information about 40,000 of them, and 56% of those are working for a private firm. 14% are working in business--and heaven only knows what ungodly sums they're making--and almost 10% are judicial clerks. There are about 700 federal clerks, so if you throw in the desirable state clerkships that's about 3% of all graduates. These people have the ability to make plenty of money once they get out, but for this reporting year, they're making $50k.
But just reading the graph is pretty instructive. By my quick counting, 40-50% of graduates are making north of $100,000, and an additional 20% are making between $60,000 and $100,000. And I suggest you knock off three to five points from the peak on the left and add them to the peak on the right, as clerks finish their terms and start making real money. Furthermore, 5% of graduates chose to go into public interest, which as everyone knows, pays crap. But you don't go there unless you chose that, and public interest concerns are sexy enough that they can afford to be choosy a lot of the time.
Supreme Court clerkships are for the fortunate few, but respectable jobs with firms are for the above average. There clearly aren't enough sexy jobs to go around--just like not everyone gets to be an astronaut when they grow up, neither does everyone get to work for Wachtell, Lipton, Rosen & Katz. But as long as you don't mind working for a rather obscure, state-oriented firm doing construction contracts and transactional work, you can get a job.
