How I Learned to Stop Worrying and Love the ‘JD Advantage’ Category

…Pretty much sums up my response to the National Association for Law Placement’s analysis of the class of 2013′s employment outcomes.

Quoth Executive Director James Leipold:

As the legal services market continues to change at a rapid pace following the dramatic downsizing during the recession, the variety and diversity of jobs that law grads take now is greater than ever. In general, the picture that emerges is one of slow growth, and growth that is a blend of continued shrinkage and downsizing in some areas offset by growth in other areas.

Although the NALP changed its terminology from “JD Preferred” to “JD Advantage” starting with the class of 2011, this year marks the record percentage of JD Advantage jobs.

Percent Employed by Status (NALP)

The good news is that the percent not working (aka the unemployment rate) has fallen to 12.9 percent. The record was 14.6 percent in 1993. I’m confident that record will not be breached, so there’s some good news. Indeed, I think it’s disturbing that the early ’90s recession mauled law practice so badly.

As for the JD Advantageers (seriously, slap a jetpack on them and shoot them into the sky), though, I did a quick correlation analysis for the 2001-2013 period. JD Advantage has a surprising -0.94 correlation with Bar Passage Required and an unfortunate 0.85 correlation with Not Working. This bodes ill for the merits of JD Advantage generally.

As for the correlation between JD Advantage and employer types, again, private practice correlates at -0.94. (Wow.) Business and Industry weighs in at 0.97, but Public Interest comes in at 0.91, which is either good or means that Public Interest has been watered down with people who couldn’t find work in firms.

(I forgot to mention that Business and Industry hit a record 18.4 percent of employer types this year.)

So yeah, strong positive correlations with unemployment is usually something you don’t want when making sense of employment categories. Thus, when Leipold says that the picture is one of “slow growth that is a blend of continued shrinkage and downsizing in some areas offset by growth in other areas,” I caution against seeing growing proportions of JD Advantage outcomes as plausibly representing a positive future for law school graduates.

Leipold, lamentably, disagrees:

It is not true that there are too many lawyers — indeed even today most Americans do not have adequate access to affordable legal services — but the traditional market for large numbers of law graduates by large law firms seeking equity-track new associates is not likely to ever return to what it was in 2006 or 2007, and thus aggregate earning opportunities for the class as a whole are not likely to return to what they were before the recession.

Not too many lawyers? Tell that to the JD Advantage cadre.

Scalia on Law School Sustainability: Concur and Dissent

…Is up on The American Lawyer.

Law School Salary Outcomes in One Uninfographic

More than three years ago, Frank the Underemployed Professional commented:

It’s too bad that there isn’t a good way to numerically quantify the monetary value of having a law degree. If we could do that and plot it over time, I’m sure it would decrease precipitously as the cost of tuition increases.

I thought of Frank when I put together a time-series chart of law graduate earnings for my last American Lawyer piece. It was really only one step away from being a comparison between law school costs and earnings outcomes. So after a little tinkering I think I can give as close an answer as anyone’s going to get.

Behold, on this day I give unto thee the law school outcomes “uninfographic”:

Law School Uninfographic
(Click to Enlarge)

Why an uninfographic? Because it tells so much yet requires even more explanation. The data come from three sources: the National Association for Law Placement’s (NALP’s) Employment Report and Salary Survey (ERSS) (many older years courtesy of moldy paper editions of the Official Guide), the ABA’s Section of Legal Education and Admissions to the Bar, and the Census Bureau’s Person Income Tables. I’ll go through each of these sources.


NALP’s ERSS tracks law graduates’ employment status outcomes, their job types, and their median salaries if they work full-time. It’s been doing this for nearly thirty years, but I’ve only managed to find data going back to 1991.

The salary data are not drawn from a random sample, and for most employment statuses only a minority of graduates report salaries. The median salary is very likely well above what the median graduate earns unless non-reporters and those in part-time positions are somehow earning more than grads employed full-time. Assuming this isn’t the case, the overall median figures shown here are roughly in the top 20-25 percent of total graduates between 2007 and 2012. Moreover, as demand for lawyers slackens, the median becomes even less representative of the class, a phenomenon I suspect is true for the 1990s legal sector recession. Oh, and did I mention that the median salary is also smack dab in the middle of a bimodal distribution?

What follows is a breakdown of each employment status by the range of graduates reporting salaries, the range of full-time workers in that status category, and the range of total workers in that employment status. Again, these ranges go from 2007-2012.

Employed Full-Time (black with circles):

  • 18,400-23,300 full-time salaries
  • 31,100-34,800 full-time workers
  • 35,700-37,500 total
  • 43,500-46,400 graduates

Bar Passage Required (blue with diamonds):

  • 16,000-21,300 full-time salaries
  • 24,900-30,000 full-time workers
  • 27,200-31,100 total

JD Advantage (red with squares):

  • 1,100-2,200 full-time salaries
  • 2,500-4,700 full-time workers
  • 3,100-5,900 total

Other Professional (green with triangles):

  • 670-780 full-time salaries
  • 1,700-1,800 full-time workers
  • 2,000-2,300 total

Non-Professional (purple with x’s):

  • 40-80 full-time salaries
  • 280-330 full-time workers
  • 530-810 total

Not Working (FYI):

  • 900-1,200 Advanced Degrees
  • 1,700-4,700 Seeking Employment
  • 700-1,300 Not Seeking Employment

Not Reporting (FYI):

  • 2,000-3,200 Not Reporting


The ABA Section of Legal Education collects graduate debt data from each law school (black with crosses for public law schools, black with dashes for private law schools), which excludes accrued interest. It then averages these without weighting them by the number of graduates with debt per school. Part of the rapid rise in law school debt is due to some law schools misreporting their 3Ls’ disbursed debts rather than their graduates’ total debts. The larger factor, I believe, is students’ decisions to rely more on Grad PLUS loans, which law students can use for living expenses as well as tuition not covered by Stafford loans.

I thought about using median law school tuition instead of graduate debt but decided against it. On the one hand, tuition data go back further and they show just how much more expensive public law schools have become. On the other hand, mean debt figures include tuition discounts, private loans, and living expenses.

Census Bureau

The Current Population Survey tracks full-time workers by education level attained and age, and it provides specific data on earnings of those who work full time, defined as those working 35 hours or more per week. Shown here is median earnings of full-time workers aged 25 to 34 with a bachelor’s degree (black with x’s). I included it to show a baseline alternative to law school. Unfortunately, it’s an age range and not a starting salary, so it’s not perfectly comparable to the NALP data, but at least it’s a “true” median and not the 75th to 80th percentile due to poor sampling like NALP’s.

Between 1994 and 2012, 73 to 78 percent of 25 to 34 year-olds with bachelor’s degrees who reported earnings worked full-time. Including people in that age range without earnings, it ranges from 65 to 71 percent.


1). Strikingly, law graduates in full-time, non-professional positions make less than the median full-time college graduate in the same age range. Even the 75th percentile full-time non-professional salary (not shown) is less than the median full-time college grad. This is a strong indicator that law grads who do not find good jobs quickly do not benefit much from going to law school. In any given year, roughly 20 percent of all graduates are in a non-professional position or less (i.e. unemployed or not reporting, which I don’t take to be a good outcome).

2). Many graduates in better-than-non-professional jobs earn less than the college median nonetheless. Of course, as we’ve learned from the After the JD research, there’s a lot of attrition for law grads in private practice, with some leaving law entirely for positions that don’t really need legal education. Others find themselves in smaller practices with reduced earnings. The turnover factor increases the likelihood that there are better alternatives to law school.

3). I’m sure I say this every other post, but the Grad PLUS Loan Program needs to die. Although some law grads may’ve benefitted from it instead of taking out private loans (or even skipping law school), its primary contribution to humanity is to bail out law schools by providing them with students who would have been unable to attend for want of money for living expenses and excess tuition. Those students now have much higher debt-to-income ratios and no real choice but to go on IBR, which is turning into a policy piñata. Even if you ignore the discussion of whether law schools absorb federal loans, I’m still astonished that to my knowledge no law school has ever discouraged students from taking out giant sums of money for living expenses.

4). Recent graduate full-time starting salaries have fallen to their mid-1990s level. Looking at the ABA data for 2013 grads’ employment outcomes, it doesn’t look like this summer’s edition of the ERSS will show much improvement. Anyone predicting recovery in demand for lawyers is invited to explain what mechanism will bring that about. It certainly won’t be household spending on legal services that’s for sure.

5). Due to the aforementioned bimodality of the NALP data, the 25th percentile full-time employed law graduate reporting a salary (not shown) was only $5,200 higher than the median full-time college grad in 2007.

By 2012, the gap had fallen to $668.

Assuming a hierarchy of earnings with full-time jobs over part-time jobs over non-reports over unemployment, the 25th percentile salary was the ceiling for roughly 60-66 percent of law graduates from 2007 to 2012. Even I don’t want to believe the outcomes can be that bad.

That’s all I’ve got to say on the subject for now.

The Stagnation in Household Consumption of Legal Services

A while back I reported on the BEA’s comprehensive revision to its GDP-by-industry accounts that overhauled the data on the legal sector’s output. Unfortunately, the new figures only go back to 1997 and it’s unclear when the BEA will update the data from prior years. Although I seriously doubt the comprehensive revision will significantly alter the pre-1997 numbers—and my arguments that are based on them—it’s an annoyance that the GDP-by-industry data can’t be cited without a caveat.

One thing I did find recently, however, is that the BEA tracks household consumption of legal services, and while the dataset doesn’t cover the entire private legal sector, it does go all the way back to 1959. Household legal sector purchases resemble the legal sector itself before the comprehensive revision: explosive growth in the 1980s, stagnation in the 1990s, a brief peak in the mid-2000s, and then deterioration.

I’ve labeled some noteworthy peak and trough years for real household consumption of legal services and the corresponding levels of total household consumption.

Household Consumption of Legal Services

(Source: BEA NIPA Tables 2.5.x, author’s calculations)

In 2012, households consumed less in private legal services than they did in 1988. If you divide this series on a per capita or per household basis, the true peak was probably 1990.

I believe this tends to support my hypothesis that demand for legal services is income and wealth elastic, and with more households at stagnant or lower income levels, they can’t afford to hire lawyers at a price that can sustain small practices. Nowadays, the current-dollar share of household consumption of legal services to total household consumption expenditures is 0.86 percent. In 1990 it was 1.09 percent. If that ratio had held, then today households would be consuming $119 billion rather than $94 billion in legal services.

The only alternative hypothesis is if since the early 1990s households have been substituting legal services with services from another sector, or if they’ve been executing most routine legal tasks themselves. Either way, unless households begin to consume more legal services, I don’t see any way for the legal sector to recover.

Think about that the next time you hear someone say that now is the best time to apply to law school.

Well, If *Moody’s* Says the Lawyer Bubble Has Popped…

…Then it must have popped conclusively, as Quartz puts it:

Law schools aren’t just facing a momentary downturn. The industry has to deal with the fact that the world simply needs far fewer lawyers.

Technology, a shift to flat-fee contracts from billing for time, and globalization have shifted the salary and employment math for students considering law school forever. And the impact has trickled down to law schools, particularly those schools without premier brands or support from large universities, according to an analyst note from Moody’s.

PolicyMic piles on:

It’s official: The law school bubble has popped. What was once a thriving, almost sure-thing is now becoming a risky and increasingly unattractive option for thousands of college grads.

Recent job statistics from Moody’s on Quartz paint a grim picture for recent law school graduates: …

Factors such as shifts in technology, billing methods, globalization and the unavoidable cuts caused by the sub-prime mortgage crisis have meant that the profession isn’t as flourishing and lucrative as it once was.

Problem number one here is, in my opinion, that these articles improperly treat Moody’s conclusions as established facts. They should be saying that Moody’s believes outsourcing, etc., is making law practice less lucrative. Just because it says it doesn’t make it true. Although, the PolicyMic article cites the million-dollar-law-degree paper via Wonkblog as fact as well, so that one’s just a mess.

What’s also curious is the credibility these sources extend to Moody’s—and set aside the whole they-said-those-mortgages-were-AAA+++aaa+ stuff. Moody’s opinion is notable, but it’s not gospel and it’s certainly not the officially designated bellwether for when any bubble pops.

On top of that, Moody’s ominously titled, “Law Schools Challenged to Adapt to Fundamental Changes in the Legal Industry” (pdf), offers a thin argument that:

Significant Industry Changes Will Depress Demand for Legal Education

Like many industries, the legal sector is undergoing notable change driven by multiple factors, including technology and globalization. The move from per-hour billing to flat-fee contracts also negatively affects the demand for lawyers. On April 9, the American Bar Association (ABA) reported employment statistics for the Class of 2013, nine months after graduation. The unemployment rate increased to 11.2% from 10.6% and 9.2% for the prior two years, respectively. (2)

Moody’s doesn’t prove the connection between technology, globalization, and outsourcing and the ABA employment statistics, and it doesn’t quantify the extent to which those factors even exist much less influence the legal sector itself. Nor does it show that people are choosing not to apply to law school because of those factors.

Regular readers will recall that the law school “tipping point” probably occurred four years ago, and I think back then even Big Debt Small Law emphasized graduates falling into doc review jobs more than “technology.” Indeed, I suspect the Moody’s paper is guilty of substituting its own prejudices for non-applicants’ thought processes.

None of this is to say that technology, outsourcing, flat-rate billing, etc. aren’t real phenomena or will be in the future; that’s not my point. It’s just that, contrary to Moody’s argument (if you want to call it that), they haven’t had a measurable effect on the legal sector yet. If they had, then we’d expect legal sector labor productivity to rise rapidly and lawyer jobs to collapse before the number of applicants began falling in 2011.

Output, Productivity, Employment, Applicants (2005=100)

(Sources: Bureau of Economic Analysis GDP-by-Industry tables, Bureau of Labor Statistics (BLS) Multifactor Productivity tables, BLS Employment Projections Program (odd-numbered years average of even years), and the LSAC)

Instead labor productivity in the legal sector has fallen since the Great Recession and while lawyer jobs are scarce (especially entry-level ones), it’s not like hundreds of thousands of attorneys have disappeared. The lawyer luddites haven’t arrived yet.

And by the way, if you want to say that the techno-outsourcing jobs aren’t in the legal sector, then that’s nice and I’d love to see your data, but it’s not Moody’s argument.

You can pick at Moody’s quartile analysis of law school employment outcomes, but I don’t think anyone seriously thinks that the legal sector will start generating substantial demand for new law grads anytime soon. It’s also unlikely that demand for legal education will come back either, which makes the bulk of the report unobjectionable. I just can’t believe Moody’s analysts get paid to write reports without citing any evidence of the forces they claim are influencing law applicants.

Strike that. I can believe it.

NYT Op-Ed Authors Ignore Bloat in Legal Education

…Is up on The American Lawyer.

Memo to law students who think their underemployed, indebted classmates are Lucky Duckies: THIS is how you write about legal education.

‘Liberal’ Law Grad Thinks Unemployed Law School Debtors Not Poor Enough to Matter

Not even a day after learning that David Graeber thinks there’s infinite demand for corporate lawyers, writer Matt Bruenig adds himself to the list of liberals who believe that lawyers are cheaters who get a free lunch while in the real world law graduates are joining the unemployment line. The kicker is that Bruenig himself just graduated from Boston University School of Law.

I’m uneasy criticizing a recent law grad—and I don’t think I’ve ever done it before—but Bruenig’s callousness toward the unlucky in his cohort utterly shocks me.

Responding in The Week to the recent Chemerinsky/Menkel-Meadow NYT op-ed, he writes:

In reality, reducing barriers to entering the legal profession would probably have very little effect on quality, while also blowing up one of the biggest upper class rackets in our society.

In 2012, the median income for lawyers in this country was around $113,000, more than triple the national median income for all occupations. Why such high pay? In significant part, it’s because we have made becoming a lawyer exceedingly difficult, which has the effect of driving up the prices lawyers can charge for their services.

The link is to, of all places, the Bureau of Labor Statistics’ Occupational Outlook Handbook, which says that competition for lawyer jobs will be “strong” due to too many law grads. This is a good indicator that legal services are traded under free market conditions. I’ve seen law professors blatantly (and probably self-servingly) miss that line—but never a law grad. As with other liberals who’ve made similar arguments, Bruenig obviously rejects marginal product theory, the possibility that “lawyers” is a very broad occupational category with wage variation among specialties (which even the BLS link says), or the hypothesis that demand for legal services is income and wealth elastic.

Equally disappointing are the neophyte factual errors he makes in the next paragraph about the prelegal education requirements for a law license.

To gain entry into the legal profession, you must acquire a four-year undergraduate degree, a three-year law degree, and then pass a state bar exam. These onerous credentialing requirements ostensibly act as a gatekeeper, filtering out lower-quality would-be attorneys until we are left with only a small pool of supposedly highly competent lawyers from which to hire. But by keeping this pool small in this way, lawyers are able to capture credential rents — surplus income far above what they might otherwise make. This is good for lawyers, but bad for everyone else.

Filtering out lower-quality would-be attorneys? Tell that to all the law schools that are accepting anyone with an LSAT score and a pulse to keep Moody’s from downgrading their bond ratings.

Contrary to Bruenig’s assertions, according to the Comprehensive Guide to Bar Admission Requirements (pdf), 30 states do not require would-be attorneys to have college degrees to sit for their bar exams, including Massachusetts where Bruenig received his JD. The ABA accreditation standards (Standard 502 (pdf)) do require law schools to admit students who’ve completed at least three-fourths of a bachelor’s degree (with exceptions allowed), but one can become a lawyer in Massachusetts without attending an ABA-accredited school, e.g. the Massachusetts School of Law. (It’s possible that MSL requires students to have bachelor’s degrees but that’s a different issue.) I should also note that Wisconsin grants law grads from its two ABA schools diploma privilege in lieu of taking the bar, an idea Iowa is thinking of adopting. (Update: I forgot to mention that foreign law school grads are allowed to sit for the bar in Massachusetts under certain conditions. Pretty hard to engineer a shortage when that’s allowed.)

Despite being a deregulated market, Massachusetts lawyers don’t earn substantially less than lawyers do nationally.

Median Annual Lawyer Salary (2013 $)(Source: BLS Occupational Employment Statistics, which excludes self-employed lawyers, but I dare you to include them and see if it falsifies my point)

Simply put, if someone really wants to become a lawyer without the expensive, extraordinary signaling power Boston University provides, it can be done, just not necessarily in every state, but even then some states will allow reciprocity anyway.

Citing Erwin Chemerinsky’s $350,000 salary, Bruenig then argues that the legal profession is such a scam that the rents spill over into the legal academy. (Amusingly, even Chemerinsky and Menkel-Meadow in their op-ed acknowledged that rising faculty salaries are a problem.) More likely than legal profession rents, legal academia is in student-debt-fueled bubble that’s deflating. Take away the federal loans and Chemerinsky (or at least law professors generally) will have to take a pay cut. Lawyers would be unaffected.

Bruenig then has the chutzpah to write: “The big scandal in all of this is not that law students are somehow getting a raw deal because of the debt they undertake in their arduous path through the credential gate. It’s that the whole system wastes a ton of money that could be spent on more useful things than lining the pockets of lawyers and law professors.”

Tell that to the 5,229 class of 2013 graduates who reported being “somehow” unemployed as of last February. Many of these people are unlikely to be collecting rents from anyone in their lifetimes.

Bruenig’s proposal, though, is partly correct: Yes, needless lawyer licensing requirements should be reduced, but no, legal services won’t be any cheaper.

I thought about letting up on Bruenig a little given that he pretty much bit his thumb at his chosen profession and his own law school within months of leaving it. Then I read some of the comments where some people challenged him on his errors, and his responses (they appear to be under his name and are consistent with his article, but you can never be sure with the Internet) are flat-out contradictory and simply breathtaking:





I really hope someone was impersonating Bruenig in that comment thread because if he really wrote them—and my intuition says he did—it proves my point. It’s not the million-dollar-law-degree profs or conservatives who think law students should be held to higher intellectual standards than the After the JD researchers. It’s the liberals who are willing to throw law school debtors under the bus to prove their loyalty to the poor they consider deserving. If you go to law school and it goes south, mainstream liberals will not defend you because your poverty credentials won’t be good enough.

You will be alone.

After the JD Wave 0

Last month I wrote an article for the The Am Law Daily about the After the JD project, a longitudinal study that measures employment outcomes for people who passed the bar exam in 2000. I thought it might be interesting to offer, as an appendix, the Official Guide‘s employment outcomes for Y2K law grads (they’re in the ’03 edition). Obviously, this isn’t a perfect fit as some people who passed the bar in 2000 graduated earlier, but the overlap should be fairly significant.

Back in those days, though, the Official Guide wasn’t the treasure trove of knowledge that the ABA’s employment questionnaire reports are now, and it’s certainly not as detailed as the After the JD’s information is. However, for those interested in getting a sense of the legal market many of the After the JD cohort entered into by law school, look no further.

To conserve blog space, the tables will follow the jump.

Continue reading

Class of 2013 Employment Report

[UPDATE: Emory's data are now included in this page.]

Okay, this’ll be short as I have work to do.

The ABA has released its employment data for the class of 2013, which is defined as everyone who graduated between September 1, 2012, and August 1, 2013. Employment data are outcomes as of February 15, 2014, irrespective of interim job changes. Savvy readers will notice that the most mediocre law school ever, Generic University School of Law, made an appearance again. They’ll also note that Emory’s data have been removed from the ABA’s site, which I’m sure will be corrected soon. For those who are truly curious, the ABA has even broken down the employment data for each of Cooley’s branch campuses. There are a few other traps for the unwary, e.g. schools that haven’t received even provisional ABA accreditation, like Lincoln Memorial. Even Peking China made the list. None of these schools have any useful data.

Generally, graduates fared little better this year than last year. 55.3 57 percent were employed full-time/long-term in bar-passage required jobs. This is up 0.2 0.8 percentage points from February 2013.

On the other hand, the graduate unemployment rate grew while the non-response rate declined.

Tables below the jump to conserve blog space.

Continue reading

Site Update: Lawyer Overproduction Page

You can find it here or in the “original research (updated)” menu above. It’s long overdue as I’ve received requests for its sources.

I also delisted the “law schools and law students per capita” page. It hadn’t been updated in around three years, and the lawyer overproduction page pretty much supersedes it. It’s a little sad because that was the first research project I started on this blog back in the summer of ’10. Maybe I’ll come up with a reason to put it back into the mix, but not now.


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