Thursday, July 18, 2013
NY Times, WaPo, Others Debate The $1 Million Value of a Law Degree
Following up on my prior posts (links below):
- New York Times DealBook: Debating, Yet Again, the Worth of Law School, by Steven M. Davidoff (Ohio State):
This data refutes some of the arguments made by those who say law school is a “scam.” It is no surprise that this study would be attacked by many of the same people. After all, the law school scam industry has been bountiful for some, just like being a Kardashian.
To be fair, this criticism is also well intentioned. These commentators are springing to the defense of real law students who cannot find jobs. But it is simply that, and when the rhetoric dies down, perhaps this paper will turn to a more serious and needed study of what is going on in the law market and what the true value of a law degree really is. (And yes, in fair disclosure, my bias is that of a tenured professor at a major law school.)
In particular, even beyond its salary points, the paper by Professors Simkovic and McIntyre makes a number of new points that should inform the debate. Bureau of Labor Statistics data on lawyer salaries is often cited to justify the assertion that law school is not economically justified based on current lawyer salaries.
The study’s first major point is that these Bureau of Labor Statistics figures are probably biased downward. The reason is that the numbers do not include the salaries of self-employed lawyer, who are not only sole practitioners but also mostly law firm partners....
The study’s second major point is that loan default rates for law graduates are much lower than for college graduates....
The study’s third major point is that about 40 percent of lawyers currently do not practice law. Much has been said about the number of law school graduates who are not finding law jobs, and surely there are many who do want law jobs but cannot find one.The full-time employment rate for law graduates who obtained legal jobs was only at 56.2 percent last year, according to the American Bar Association. But given these figures, it appears this has always been the case, and it is hard not to conclude that many lawyers do not go to law school to be lawyers (again, no one has really looked to see if this is true or not, though). Indeed, according to the Simkovic-McIntyre study, 50 percent of senators and 10 percent of chief executives at large companies are lawyers....
Ultimately, that is what the debate over law school boils down to these days. Will the recent turbulence persist, or will the historical data win out? If the current figures represent the new normal, something about law has changed and there will be fewer jobs going forward.
But that may not be the case. The market may recover, as markets tend to do and as the population grows. There may even be more legal jobs if, for example, the Dodd-Frank Act becomes a full-employment act for lawyers.
As for the argument that technology has changed everything in the law market, I was struck by a quote in a study from the Harvard Law Review in 1901, decrying modern technology by stating, “[t]he stenographer and the typewriter have monopolized what was his work … and he sits outside of the business tide.”
This quote from a hundred years ago shows that claiming change is afoot – bringing obsolescence and wholesale disruption in the law market – is a century-old phenomenon. The question is whether this time is different.
- Washington Post: Ignore the Haters. Law School Is Totally Worth the Cash, by Dylan Matthews:
[Simkovic-McIntyre] find that law school grads get a median earnings bump of $32,300 per year, and a mean bump of $53,300 a year. The premium grows as the years pass:
The biggest weakness of the study, undoubtedly, is that it doesn’t include classes that graduated during the recession. It can’t, as there just isn’t information, but it’s totally fair to argue that something has changed that the current data don’t capture. But Simkovic and McIntyre demonstrate pretty convincingly that the case that way too many people are going to law school is, at best, speculative. It requires arguing that longstanding trends in earnings numbers are all of a sudden stopping because of the recession, without much evidence that a change that large is happening.
There’s a case to be made there. But if the last few decades were not, in fact, an anomaly, law school remains a really, really good investment for most students.
- Jonathan H. Adler (Case Western), On the Value of a Law Degree (The Volokh Conspiracy)
- Business Insider, Study: A Law Degree Is Actually An Amazingly Good Investment
- Stephen F. Diamond (Santa Clara), New Research Demonstrates Long Term Value of a JD, Law School Critics Take a Big Hit
- Michael Froomkin (Miami), Study Finds the Net Present Value of a Law Degree is Highly Positive (Discourse.net)
- Frank Pasquale (Maryland), Simkovic and McIntyre on Law School Outcomes (Balkinization)
Prior TaxProf Blog coverage:
- What Is the Economic Value of a Law Degree -- $1 Million? (July 17, 2013)
- More on The $1 Million Value of a Law Degree (July 18, 2013)
- What Is the Economic Value of a Law Degree -- $1 Million or $100,000? (July 19, 2013)
- More on The $1 Million Value of a Law Degree (July 20, 2013)
- Merritt on The $1 Million Value of a Law Degree (July 21, 2013)
- Diamond on The $1 Million Value of a Law Degree (July 22, 2013)
- Tamanaha: How 'The Million Dollar Law Degree' Study Systematically Overstates Value (July 23, 2013)
- Tamanaha: How the 'Million Dollar Law Degree' Study Understates Risk (Part I) (July 24, 2013)
- Tamanaha: Why the “Million Dollar Law Degree” Study Fails (Final Post) (July 25, 2013)
- Rasmusen: Critics of The Economic Value of a Law Degree Are Making the Paper Better (July 25, 2013)
- Pasquale and Simkovic Respond to Tamanaha (July 25, 2013)
- The American Lawyer: Paper on Law Degree's Economic Value a Non-Sequitur (July 26, 2013)
- Simkovic's Response to Tamanaha (Part 3) (July 26, 2013)
- Tamanaha: Short Term Versus Long Term Perspective (July 27, 2013)
- Harper, Diamond: The $1 Million Value of a Law Degree: Distraction, Astronomy, or Astrology? (July 28, 2013)
- Simkovic Responds to American Lawyer Op-Eds (July 29, 2013)
- Diamond Responds to Tamanaha (July 29, 2013)
- Rasmusen: The Economic Value of a Law Degree and the 'Typical' Law Student (July 29, 2013)
- Simkovic's Response to Tamanaha (Part 4) (July 30, 2013)
Will refrain on commenting on what I feel is a thorough yet incomplete study, but...
solid Dr. Evil reference, bro.
Posted by: LOL, no | Jul 18, 2013 9:43:56 PM