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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, July 24, 2017

California Bar Cut Score, Lawyer Salaries Are Second Highest In Country: Anti-Competitive Or Pro-Consumer Protectionism?

California Bar ExamFollowing up on my previous post (links below):  Michael Simkovic (USC), Is California’s Bar Examination Minimum Passing Score Anti-competitive?:

The deans of almost all ABA approved California law schools have jointly expressed concerns that California’s minimum passing score (‘cut score’) on the nationally uniform, multiple choice, Multi-State Bar Exam bar examination is excessively high.

These leaders of legal education note that California has a higher cut score than any state except Delaware, no justification has been provided for this unusually high cut score, and some parts of California may have a shortage of lawyers.  Moreover, although law graduates from California score better on the MBE than the national average, they are less likely to pass the bar exam because of California’s unusually high cut score. The case for bringing California’s cut score into line with those of other leading legal jurisdictions such as New York has been most forcefully stated by UC-Hastings Dean David Faigman. 

Amid concerns about possible anti-trust lawsuits against the State Bar, the Supreme Court of California has agreed to supervise the state bar of California and may set a lower bar cut score.

High cut scores are not the only signs of possible anti-competitive protectionism in California. California is among the few states that, without exception, forces experienced attorneys licensed in other states to sit for reexamination prior to relicensing. ...

Data from the U.S. Bureau of Labor Statistics, Occupational Employment Statistics shows that California lawyers earn more, on average, than lawyers in any jurisdiction except Washington D.C. ...

Top paying States for Lawyers:

State

Employment

Employment per thousand jobs

Location quotient[ii]

Hourly mean wage

Annual mean wage 

District of Columbia

31,470

44.81

10.16

$87.89

$182,810

California

76,840

4.81

1.09

$77.89

$162,010

New York

72,760

8.00

1.81

$77.53

$161,260

Massachusetts

17,440

5.04

1.14

$76.33

$158,760

Delaware

2,590

5.87

1.33

$75.77

$157,610

While this may be great for lawyers, it is not necessarily an unmitigated good.  It means that legal services likely cost clients more and may be less widely available. 

This could be for benign reasons, for example, because California lawyers provide a higher quality of service, or are concentrated in highly profitable areas of practice.  For example, the technology sector might create demand in sophisticated niche practice areas such as patents. 

On the other hand, high average wages could be a sign of barriers to entry and protectionism which restrict access to legal services. ... These data are suggestive, and not conclusive. However, in combination with seemingly protectionist institutional features, they raise serious questions about California’s unusually strict requirements for entry into the legal profession.

Some have attempted to impugn the motives of law school deans, especially those who lead law schools with low bar passage rates.  But critics of the California bar exam cut score include the deans of Stanford, USC, Berkeley, UCLA, and UC-Irvine, whose graduates overwhelmingly pass the California bar examination on the first try. (see also here).  

The strongest substantive defense of a high bar cut-score may come from studies of the Connecticut Bar by Peter Siegelman and colleagues, which found that academic credentials and bar examination performance help predict subsequent discipline of attorneys (here and here). 

But Siegelman and colleagues found that the baseline rate of discipline was so low to begin with that excluding more individuals from the legal profession would provide very limited benefits to clients.  They noted that lawyers at greater risk of passing the bar exam might have greater rates of discipline because they are more likely to work in small or solo practices where discipline is more common.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/07/california-bar-cut-score-lawyer-salaries-are-second-highest-in-country-anti-competitive-or-pro-consu.html

Legal Education | Permalink

Comments

“These leaders of legal education note that California has a higher cut score than any state except Delaware, no justification has been provided for this unusually high cut score.”

Just as *no justification* is used by federal judges and large law firms in restricting their hiring to a very small percentage of the nation’s law schools, *no justification* has been provided for the median GPA and LSAT scores at elite law schools, and *no justification* has been provided for high median GPA and SAT scores at elite colleges. It is, shall we say, amusing to read a double Harvard, ex-McKinsey law professor arguing against meritocracy. And why even bring up Delaware if you aren’t going to attack ITS cut score? By failing to do so, you’ve just undercut your own argument that high cut scores are the problem in and of themselves. But a high cut score in DE isn’t a problem because its pass rate is still decent (66% last July). This would indicate that a high cut rate is not insurmountable, and that the problem therefore lies not with the cut score itself, but with the test-taking aptitude of the individuals taking the CA bar; a group that includes the graduates of dozens of law schools not accredited by the ABA, to say nothing of the many law schools that are accredited but have switched to an open admissions model in recent years.

“California is among the few states that, without exception, forces experienced attorneys licensed in other states to sit for reexamination prior to relicensing.”

A few states, uh huh. A bit of Googling reveals that the “few” states with no reciprocity includes California, Delaware, Florida, Hawaii, Louisiana, Maryland, Montana, Nevada, New Jersey, Rhode Island, and South Carolina (and Puerto Rico). I’ve not often heard 11 being referred to as “a few.” Per Wikipedia, those states add up to just shy of 30% of the country’s population, and include two of the three largest states we have (CA and FL).

Oh look, BLS stats. Which are calculated from payroll information, meaning that they don’t include solo practitioners. But how many solo practitioners can there be in California? Well, according to this 2011 survey of California bar members, https://www.calbarjournal.com/Portals/1/documents/2011-12_SBCdemosurvey_sumandfacts.pdf, 67% of respondents work in private practice, and 47% of that group are solos. So that’s 31% right there for which BLS has no salary data. As previous studies have shown us, the average solo makes $49,000. And of course a plurality of California law school graduates never manage to crack into the legal profession, meaning they won’t be counted in the BLS salary stats for lawyers. And that survey also shows that only 50% of respondents are in either “law-related jobs” or “jobs where they use their legal education.” Heck, 26% of respondents claim they are unemployed! What I am getting at is that the BLS lawyer salary stats are, by their nature, absolutely shot through with all manner of survivorship bias.

Also per that same survey only 32% of respondents make $150k or more – compare to 48% making under $100k - so that BLS reported CA mean salary for attorneys of $162k isn’t really representative of very much.

Incidentally, that survey has a margin of sampling error of just three percentile points, with a confidence level of 95%.

“On the other hand, high average wages could be a sign of barriers to entry and protectionism which restrict access to legal services.”

Sure, except for the broad, continued assault on the practice of law by non-lawyers: real estate agents doing closings, compliance departments doing rote legal guidance, software doing first-line document reviews, Legal Zoom, Rocket Lawyer, JP Morgan Chase developing software that can “do in seconds” what cost them 360,000 billable hours last year etc. Let’s not pretend that lawyers are the only providers of legal services in 2017, shall we? I mean, entire books have been written on the subject. The bespoke practice of law dominated by lawyers is being consumed by the commoditized business of law, in which lawyers are just the most expensive service provider.

Finally, the same slippery-slope argument that is on display here – rigorous bar exam standards; why have them? – have equally been applied at far too many law schools (admissions standards; why have them?) and are being used to cut lawyers out of their own market (why hire counsel when this non-lawyer person/thing can do an adequate job for a fraction of the time and money?). If the bar exam gets watered down to excuse the watered-down admissions standards in American law schools today (hell, my LSAT score would get me a realistic shot into some of the T14 today), then it gives cover for future clients to look elsewhere. And they will.

Posted by: Unemployed Northeastern | Jul 24, 2017 1:07:23 PM

Do you have any evidence that the results would have been materially different using Census data instead of BLS data?

Census data includes solos and law firm partners (which BLS excludes). If so, by all means, present it.

We know that Solos are typically making north of $100K.
http://leiterlawschool.typepad.com/leiter/2016/08/glass-half-full-author-concedes-problems-with-estimates-of-solo-practitioner-incomes-and-headcounts.html

Posted by: Question | Jul 25, 2017 7:14:33 PM

I just checked. BLS data says California lawyers earn $162K on average. Census data (ACS) says they make $161K on average--basically the same.

Posted by: Question | Jul 25, 2017 7:28:52 PM

Oh, my dear *anonymous* Question,

If you aren't going to grapple with my research on lawyer salaries, you seriously can't expect me to respond to yours. And no one except the author of this article believes that solos make more than $100k. Including my Google search results on the topic, incidentally. Someone needs better SEO tutelage, methinks.

Posted by: Unemployed Northeastern | Jul 25, 2017 10:40:10 PM

Ugh. The troll is back. But this time they are posting under the name Question. Previously they regaled us with their heroic sacrifice of giving up hundreds of thousands a year working in New York to teach law at a mediocre law school in fly over. They bemoaned having to teach mediocre law students because teaching leaves less time for research. Despite previously expressing disdain for law students, they then attacked Campos for supposedly not having pride in teaching law and for not caring about his students.

Now the troll has reared its ugly head to cite to a dubious blog post claiming solos make north of $100k. There were 3,271 unemployed grads from the class of 2016. Question should let all of those unemployed grads know that they are missing out on huge six figure salaries as solos while they wait for an employer to hire them. Don’t forget to tell all the grads working document review for $20 an hour. Hell, think about how much productivity the economy has lost because law grads don’t know about the benefits of becoming a solo.

Posted by: anon JD/MD | Jul 26, 2017 6:15:13 PM