September 25, 2007
Law grad income distributions: more data
A few weeks ago I posted about a study showing two spikes on the income distribution curve of recent law school grads. Now there's a Wall Street Journal piece (free for today, at least) on very much the same thing, but with more information and better research.
The author looked into the marketing practices of law schools and found--as has frequently been alleged both online and off--that they're being perhaps a big disingenuous. The article reports that the real income for the bottom 75% of lawyers has increased only nominally or seen a real decrease for the past few decades. For people who land jobs at large firms--which are defined as being more than 50 attorneys--this are great. Starting salaries are higher than ever, and they keep going up. But for everyone else, salaries are either growing with inflation or flat.
Some of this has to do with the economy. The 1980s boom fed pretty much directly into the dot-com boom, and both caused an explosion in demand for legal services, a demand which has largely returned to normal levels. Very large firms have found huge demand for international legal services, but only the largest firms are capable of capitalizing on such opportunities, as only the most visible and reputable firms get any of that business. No one's going to entrust a $500 million dollar deal to a solo practitioner.
Some of this also has to do with legislative reform. Personal injury lawyers are having a really tough time of it. Tort reform not only limits the maximum liability in many states, but also restricts class actions and the ability of out-of-state plaintiffs to sue, both of which were major money makers. While one can make an argument that this is in fact redressing a social ill of too many ambulance chasers--an argument to which I am not unfriendly--personal injury lawyers make up a significant percentage of the lawyers in the country, especially for those who didn't go to a top-30 school, the vast majority of lawyers.
Finally, the number of new lawyers has skyrocketed. About 35,000 degrees were awarded in the early 1980s. About 45,000 degrees were awarded last year. The increase has been fairly steady. This means that top firms can be more selective in hiring top talent. But with student debt increasing an average 18% in the past five years, more students need lucrative jobs just to survive.
This could get interesting. Notre Dame is in that top tier, but only just.
