A Tale of Two Job Markets for Law School Grads

My co-blogger Bill Henderson (Indiana) has done more than anyone I know to puncture the myth of the rosy job prospects for most law school graduates.  His post on the bimodal distribution of starting salaries for the law school class of 2006 includes this chart from NALP, which he accurately calls the Best Graphic Chart of the Year:

Despite the headlines of $165,000 starting salaries at elite law firms, the data report a $62,000 median salary with two clusters:  $40,000-$50,000 and $130,000-$140,000.  As Bill notes:

Half of the graduates make less than the $62,000 per year median--but remarkably, there is no clustering there. Over a quarter (27.5%) make between $40k-$55k per year, and another quarter (27.8%) have an annual salary of $100K plus.

In his Friday post, Bill traces the history of the bi-modal salary distribution pattern with salary data from the law school classes of 1991, 1996, and 2000.  He explains How the "Cravath System" Created the Bi-Modal Distribution:

What are the market forces that have created this peculiar salary structure? In my working paper, Are We Selling Results or Résumés?: The Underexplored Linkage Between Human Resource Systems and Firm-Specific Capital, I posit that the runaway $160K mode is a confluence of two factors: (1) the continued growth in the corporate legal services market, primarily due to the growing scale and scope of transnational corporate activity; and (2) law firms' nearly universal adherence to the "Cravath system," which purports to hire the best graduates from the best law schools and provide them with the best training.