Paul L. Caron

Monday, April 1, 2019

Good News For Lawyers As Employment, Income Increase Again

Stephen F. Diamond (Santa Clara), Good News for Lawyers as Employment Increases Again; Silicon Valley Lawyers Get a Hefty Pay Raise:

Continuing a decades old trend, employment of lawyers increased yet again from May, 2017 to May, 2018, in the latest data released today, March 29, 2019, by the Bureau of Labor Statistics of the U.S. Department of Labor. (The data excludes partners, who are not defined as “employees,” and may also exclude some solo practitioners.) 

Nationally, there were 642,750 people employed as lawyers as of May 2018 compared to 628,370 a year earlier, representing an increase (net of retirements, deaths, and changes of employment) of 14,380 lawyers [2.2%]. ...

Incomes were up, yet again, as in every year but one over the last two decades. The mean wage as of 2018 was $144,230 [+1.6%] and the median was $120,910 [+1.3%].  ...

I began tracking this data several years ago because it contradicted the dour narrative being peddled by the so-called “law school scammers” who attempted to claim that the legal profession was collapsing. While demand for legal education grew significantly in the first decade of the new century, it dropped dramatically in the early years of the second decade.

But the labor market itself, as indicated by the BLS data, indicated a fairly stable occupation, with incomes and employment growing in almost every year over the last two decades.

The demand for legal education has begun to rebound recently with double digit increases in LSAT test taking now being reported by the Law School Admissions Council.

Legal Education | Permalink


In addition to the BLS data, other evidence supports the argument that the labor market for lawyers is strong. According to NALP, over 90% of the class of 2017 was employed earning an average salary of $95,321. The only peer reviewed study to look at the value of a law degree found that on average, JD holders earn about one million dollars more over a lifetime than those only possessing a terminal bachelor’s degree. Simkovic & McIntyre, The Economic Value of a Law Degree, 43 J. Legal Stud. 249 (2014). Several follow up studies have also confirmed the exceptional value of a law degree and an LLM.

Posted by: Overwhelming | Apr 2, 2019 3:59:41 AM

Yeah, here's the Class of 2017 NALP breakdown:

At that link, we learn that only 88.6% were employed ten months after graduation, not over 90%. And what a picture that paints: the national U3 unemployment rate, for an adult population wherein not even 4 in 10 people have any college degree, is under 4%, and the U3 for law grads nearly a year after graduation is 11.4%. You should really lead with that in your marketing.

Note how Overwhelming, who is totally not Mike; he just only ever cite Mike! [rolls eyes] uses mean salary instead of median. That's because the median salary, which is a more representative stat, was vastly lower, $70,000. The corresponding median salary for the Class of 2008 was $72,000, which works out to $85,632 in today's dollars (measuring from the March 2009 employment reporting date for the Class of 2008).

Oh, and there's this bit of reality, too: " During the same period [2013 to 2017] the number of jobs secured by the graduating class has dropped by 7,626 (more than 20%) to 30,104 from the high of 37,730 measured for the Class of 2013"

To summarize, fewer law school grads are finding jobs, and they are making less money at those jobs. And before Mike cuts in to crow about the $190k NYC market rate salary, other NALP data shows that barely a plurality of large law firms have even gone to $180k, and that if you look in real dollars at the $160k market rate set back in 2007, it works out to just a few hundred dollars shy of $200,000 today (to say nothing of the Cravath bonus schedule, which stated at $45k back then and like $15k today). The last decade's worth of data is very clear: the return from law school for even the most successful graduates is declining. Fact.

Posted by: Unemployed Northeastern | Apr 2, 2019 8:24:36 AM

Employed is not equal to 100 minus unemployed. There's also a category called not in labor force.

Apples to apples (using standard definitions of employed, not in labor force, or unemployed) young law graduates are doing much better than most recent entrants into the labor market.

Average income matters. There's always a chance of a big pay day, and a lot of lawyers have some good years and some bad.

Posted by: Employed vs. unemployed | Apr 3, 2019 6:42:52 PM

For anyone curious, Steve's source (BLS) also informs us, inter alia, that

- There are actually 1.3 million active lawyers in the US; their payroll information doesn't even cover HALF of them

- Competition for jobs will remain strong as law schools still produce far more graduates than jobs for them (the latter number has been on a downward trend all decade)

- In real dollars those Silicon Valley lawyers made about 15% more in 2009, ten years ago. Those "hefty raises" in the headline are only such if you don't look back more than a few years. No small deal considering how much Silicon Valley COL and law school tuition have increased over tuition since 2009.

Posted by: Unemployed Northeastern | Apr 4, 2019 8:34:57 AM

"Apples to apples (using standard definitions of employed, not in labor force, or unemployed) young law graduates are doing much better than most recent entrants into the labor market."

This is simply, objectively wrong. I defy you to show me this apple to apple data. Go ahead.

"Average income matters."

If Bill Gates walks into a freight elevator with 75 homeless people, on average they are all billionaires. This is why labor economists use median figures (and adjust for inflation over time, etc.).

Posted by: Unemployed Northeastern | Apr 7, 2019 10:49:05 PM