Paul L. Caron

Wednesday, July 6, 2011

NALP Reports 'Astonishing' Drop in Law Grad Starting Salaries

NALP logo NALP today issued a press release, Class of 2010 Graduates Saddled with Falling Average Starting Salaries as Private Practice Jobs Erode:

The median starting salary for new law school graduates from the Class of 2010 fell 13% and the mean salary fell 10% according to new research released today from NALP. The research also reveals that aggregate starting private practice salaries fell an astonishing 20% for this class. These are among the most dramatic findings that were released this week from NALP's Employment Report and Salary Survey for the Class of 2010.

As NALP reported in June, the employment profile for this class contrasts markedly from that of the previous class, with fewer employed graduates obtaining jobs in law firms β€” 50.9% compared with 55.9% for the Class of 2009 (see "Class of 2010 Graduates Faced Worst Job Market Since Mid-1990s: Longstanding Employment Patterns Interrupted," available on the NALP website). Moreover, the distribution of those jobs by size of firm shifted, with relatively fewer jobs in the largest firms and relatively more jobs in firms of 50 or fewer attorneys. Over half of the law firm jobs β€” 53% β€” taken by the Class of 2010 were in firms of 50 or fewer attorneys, compared with 46% for the class of 2009. The proportion of jobs in firms of more than 250 attorneys decreased from 33% for the Class of 2009 to 26% for the Class of 2010. This shift is reflected in the salary figures for the Class of 2010.

The national median salary for the Class of 2010, based on those working full-time and reporting a salary, was $63,000, compared with $72,000 for the Class of 2009 (falling nearly 13%), and the national mean was $84,111, compared with $93,454 for the Class of 2010 (falling nearly 10%). However, because many large law firm salaries cluster around $145,000 and $160,000, while many other salaries are in the $40,000 to $65,000 range, relatively few salaries were actually near the overall median or mean.

The national median salary at law firms based on reported salaries was $104,000, compared with $130,000 the prior year (falling 20%), again reflecting the shift in the distribution of these jobs, and also salary adjustments on the part of some firms. Although salaries of $160,000 still prevail at the largest firms, their share has dropped in firms of 101-500 attorneys, creating further downward pressure on the median.

The adjusted mean for all full-time jobs reported was $77,333 (in contrast to the unadjusted national mean of $84,111), and the adjusted mean for full-time law firm jobs was $93,748 (in contrast to the unadjusted mean of $106,444). ...

Medians for government and public interest jobs were virtually unchanged from 2009, at $52,000 and $42,900, respectively. The median salary for judicial clerkships was $51,900, compared with $50,000 in 2009.

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"The U.S. has 5% of the population of the world, but 70% of the lawyers. There are not enough clients to go around."

The second sentence is essentially true, for all practical purposes. But if it were as meaningful as the first sentence suggests, the median salary would not have fallen to anything above zero. Why do lawyers, even recent law school graduates, make anything at all?

There is in fact a constant need for lawyers, and new ones, too, in the U.S. -- ones with the experience, skills, judgment and maturity to serve the many clients that have legal needs. That's why senior legal professionals make as much as they do in private practice.

What are not required are roughly two thirds of current law school graduates who will never have those things either because they are not talented enough, educated well enough or will simply never get the opportunity to be trained properly.

One thing is for sure, however: The U.S. will always have a far greater percentage of the world's lawyers than proportional to its population. There is in fact no reason that per capita measures are at all meaningful, and not only because of cultural differences or the fact that "there are too many lawyers in the U.S." A far more appropriate measure would be to compare the percentage of lawyers in the U.S. versus the rest of the world to the percentage of the world's GDP generated by the U.S., which is about 25%, just as a starting point. Then factor in the disproportionate U.S. role in global finance, trade, technology, and other fields that rely heavily on legal advice for their development and growth.

And while there are cultural factors that may or may not be moving in this sort of discussion -- such as the fact that, the very real problem of excessive and unjustifiable litigation notwithstanding, Americans are more individualistic and more invested with real rights that most of us would not want to give up then, say, that fifth or so of humanity in the equation than lives in China. Lawyers help people do those things.

There are too many law school graduates, too many law schools and too many lawyers. Too many laws, also. But this topic deserves sensitive and thoughtful treatment, not the slinging of factoids that compare apples to oranges.

Posted by: Ron Coleman | Jul 7, 2011 9:39:26 AM

1. There isn't a first-year associate lawyer alive who is worth $100k.

2. Law schools do not train lawyers; they educate wannabee law professors.

3. Why are all of you free-marketeers worried about this anyway? These law schools provide opportunities. They do not guarantee results, i.e., jobs.

4. There is no reliable data supporting the claim that the U.S. has an oversupply of lawyers or too many law grads for related employment. It is well known that not all law grads practice law. The U.S. law degree is the once and future business degree (bye bye MBA).

Posted by: Publius Novus | Jul 7, 2011 8:28:15 AM

"In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women."

- Tony Montana

Posted by: edh | Jul 7, 2011 6:37:21 AM

As noted in the article--these are self-reported statistics. Many graduates with low paying jobs don't bother reporting. The true numbers are almost certainly worse than what is listed here.

Posted by: tim maguire | Jul 7, 2011 5:48:11 AM

I hope the message gets across. Some law school grads sued their university because they couldn't find a job. Bravo!

Posted by: irony free | Jul 7, 2011 5:15:10 AM

And this is only getting worse for the class of 2011, who went through recruiting in at the height of the crash in the fall of 2009 and received an even smaller proportion of big firm jobs.

It would be nice if legal academy finally took some responsibility for this whole mess and either lowered their prices or improved their pedagogy for the benefits of students.

Posted by: Jim | Jul 7, 2011 5:04:46 AM

This analysis is still probably missing a ton of data. We'll never know what law grads really make until the Law School Transparency folks' disclosure rules are implemented by law schools.

Posted by: anon | Jul 7, 2011 2:54:32 AM

Could have been worse. Could have been "unexpected"!

Posted by: Steven Den Beste | Jul 6, 2011 10:14:34 PM

The reality is that a lot of people who have law degrees do not practice law, so the salaries paid at law firms is misleading.

The U.S. has 5% of the population of the world, but 70% of the lawyers. There are not enough clients to go around.

The average lawyer makes about $30,000 a year, less than a school teacher.

Posted by: SCC | Jul 6, 2011 10:03:07 PM

but first you have to get a job. This is about full time jobs. I wonder what is the employment rate in the law for the 2009 and 2010 graduates?

Posted by: PTL | Jul 6, 2011 8:20:18 PM

As Prof. Henderson's research indicates, the NALP results are not a mere blip on the radar screen.

The age of overpriced law schools that engage in gluttonous/wasteful spending to increase reputation on the backs of student tuition and taxpayers must end. The status quo is unsustainable, and immoral.

Best way to acheive change is to get this sort of information out to potential law school students and those that advise them, so as to hasten the reduction in applicants to such schools...

This includes new (unnecessary) public schools that will soon be forced to charge big tuition dollars in light of the California budget situation...

Chemerinsky's and Seto's wonderful institutions are prime examples.

Posted by: Bad News | Jul 6, 2011 1:57:18 PM