Lawyer Employment Data Day at the Labor Department

I nearly forgot that not only did the ABA unleash the class of 2012’s employment results on Friday, March 29, but also the BLS updated its Occupational Employment Statistics data for wage and salary lawyers as of May 2012.

Bust out the party kazoos!

The goodish news: Employers hired 11,000 lawyers total and the legal sector only 1,500 since 2011. Paralegals did a lot better with 15,000 new jobs total and 15,000 in the legal sector. (Some sectors may’ve added/lost some jobs.)

No. W&S Lawyers & Paralegals

The badish news: The median real hourly wage and 10th percentile wage for both occupations fell by about 1.5-2 percent nationwide. The bands in the following chart represent the 10th to 90th percentile of hourly wages for workers, but for lawyers the upper limit is so high ($90 in 2012) that it goes off the scale.

W&S Lawyer & Paralegal Hourly Wages (2012 $)

As has been the case for a few years, the top 25 percent of paralegals had a higher hourly income than the bottom 10 percent of lawyers, and the top 10 percent of paralegals had a higher hourly wage than the bottom 25 percent of lawyers. Here’s a blow up:

W&S Lawyer & Paralegal Hourly Wages (2012 $) (Blow Up)

Note that the OES data packs full-time and part-time workers together, which means some of these people’s annual incomes are higher/lower than they appear. The current median lawyer real hourly wage ($54.58) is at record low going back to 1998. For paralegals it’s tied with 1999 at $22.59.

If you’re wondering what non-wage-and-salary lawyers made last year, get in line. If the bottom 10 percent of lawyer jobs paid less than $26.11 per hour, also a record low going back to 1998, and they were likely short-term contract workers, then things aren’t looking good for self-employed new lawyers. I suppose the thing to do is check the ABA data for part-time long term lawyer jobs in the solo and 2-10-person firm categories. Another potential flaw in the ABA data is that they don’t do much for people holding multiple jobs.

If the BLS data were really good, I’d give a time series of the percentage of paralegals that have J.D.s. I’ll bet that the percentage is much higher than it was several years ago, indicating the vile cancer of credential inflation is metastasizing throughout the legal profession. Then again, if it’s low, then we can assume that lawyers aren’t getting legal jobs at all, which means more credential inflation. Heads I win, tails anyone who disagrees with me looses. Three cheers for unfalsifiable claims!

My prediction for next year, i.e. May 2013, is that the number of jobs added will be about the same as last year, and wages will either decrease by 2 percent again or stay the same. Realistically, the lawyer market can’t get any worse than it is right now, so it probably won’t.

Anyone else care to make a prediction?

6 comments

  1. I refer all legal employment predictions to Mr.T, as I also pity the fools that are para-legals with JD’s:

    The fact these numbers feel positive is Kafkaesque.

    It’s Party Kazoo Time!

  2. I love the OEC data….. but it varies dramatically from the Occupational Handbook data by a lot. The Occupational Handbook states that, circa 2010, there were roughly 730k lawyers. The OEC states there are roughly 580-590k lawyers.

    I am willing to bet that the discrepancy between the the two sets of data is leading to right skew in the distribution of lawyer earnings in the OEC survey, meaning that the wages being presented are artificially inflated by the smaller count.

    Interestingly as well, for most occupations I could map between the OEC and Occupational Hand Book (over 80%, the difference being explained by the OEC and Occupational Hand Book themselves in that their methodologies lead to cutting of some jobs that either one surveys), there is little difference in absolute number of jobs reported (let alone statistically significant difference in jobs).

    The only other occupation with a glaring difference was General Dentists (93k for OEC vs. 130k for Occupation Hand Book).

    So, to sum up, the wage date being displayed by the OEC is overly optimistic.

    1. Alex, the discrepancy between the OOH and the OES data is due to the latter excluding self-employed lawyers, i.e. all the partners and solos of various incomes. The real question is why there’s such a discrepancy between the OOH and the Current Population Survey, which finds more than a million lawyers. Might be that the OOH excludes unincorporated solo practitioners, but I doubt it.

      As a result, the OES data, which are based on the payroll information the BLS collects from organizations employing lawyers, is probably both accurate and precise.

  3. Matt, agreed. There is a large discrepancy between the CPS and OOH, and for more than just lawyers, examples being dentists at 180-190k in CPS vs. 150k in OOH, and physicians at around 900k in the CPS vs. around 700k in the OOH.

    I wonder if the CPS data relies on ones general profession, as opposed to actual area of employment. Someone could be in business services and still claim to be a lawyer, as it is more a professional as opposed to vocational designation. Likewise for a physician working as an executive in a hospital, as opposed to in the operating room.

    That being said, clearly if the OES data is for lawyers who are employed, then this is with a high probability leading to right skew in the income distribution of the data, i.e., lawyers make less, possibly much less, than what is being represented by the OES data, given that the number of impoverished solo-practitioners is quite high, and the number of litigation, tort superstars are quite low.

    1. Alex,

      The CPS is a survey sent to households, so if people list themselves as lawyers, that’s what the CPS says they do.

      I was looking through the most recent OOH, and unlike the previous edition, it doesn’t have a PDF breakdown of the specific industries lawyers are in, including self-employment. Pity.

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