If it’s in The Wall Street Journal, it has to matter (even if it doesn’t, if you follow my meaning). 

So it’s probably incumbent on us to offer, briefly, our thoughts on the front-page story this morning, "Hard Case:  Job Market Wanes for US Lawyers," reporting that for the great majority of law school graduates unable to land jobs with BigLaw, the prospects are bleak.  Consider:

"A slack in demand appears to be part of the problem. The legal sector, after more than tripling in inflation-adjusted growth between 1970 and 1987, has grown at an average annual inflation-adjusted rate of 1.2% since 1988, or less than half as fast as the broader economy."

And there’s more bad news to spread around:

  • New-JD output is growing:  In 2005-2006, 43,883 JD’s were awarded, up nearly 16% from 37,909 in 2001-2002.
  • There are more ABA-accredited US law schools:  196 today, up 11% since  1995.
  • Student loan overhangs are growing, now averaging about $55,000 for graduates of public law schools and $85,000 for private school grads.
  • For a variety of reasons (some arguably laudable, such as tort reform), solo and small-firm lawyer income has been declining in real terms for a decade or more.
  • According to ABA data, there was one lawyer for every 572 Americans in 1971 but one for every 264 people by 2000.

The WSJ‘s Law Blog also has a companion story, and the overall tenor of the comments is a schizophrenic mix of jubilation and gratitude that the story is finally being told, contrasted with some genuine tales of disillusion and even misery.  Read them at your peril.

But to me the real story is that there’s a BigLaw market and there’s a non-BigLaw market.  They are two separate markets, bifurcated, that do not speak to one another.  More precisely, candidates for the first vs. the second local maximum on the curve below are drawn from entirely separate cohorts.

NALP Salary Data

This is from the Empirical Legal Studies site (courtesy of my friend Prof. Bill Henderson) and shows the distribution of 22,665 salaries of full-time employed law school graduates as tracked by NALP.  The first local maximum represents about 22% of all reported salaries, in the $40-$50,000 range; the second local maximum reflects another 17% of reported salaries in the $135-$145,000 range (remember, this is 2006 data, so it predates the $160K bump.)

That is not to say law schools couldn’t do a better job of actually disclosing what happens to their graduates, which is what the front-page WSJ article expends a lot of ink on.

That, in fact, is in line with the philosophy of the US securities laws (which I love, in case you didn’t know—at least pre-Sarbanes-Oxley):  “You can do anything—so long as you disclose it.”

Related Articles

Email Delivery

Get Our Latest Articles Delivered to your inbox +

Sign-up for email

Be the first to learn of Adam Smith, Esq. invitation-only events, surveys, and reports.

Get Our Latest Articles Delivered to Your Inbox

Like having coffee with Adam Smith, Esq. in the morning (coffee not included).

Oops, we need this information
Oops, we need this information
Oops, we need this information

Thanks and a hearty virtual handshake from the team at Adam Smith, Esq.; we’re glad you opted to hear from us.

What you can expect from us:

  • an email whenever we publish a new article;
  • respect and affection for our loyal readers. This means we’ll exercise the strictest discretion with your contact info; we will never release it outside our firm under any circumstances, not for love and not for money. And we ourselves will email you about a new article and only about a new article.

Welcome onboard! If you like what you read, tell your friends, and if you don’t, tell us.

PS: You know where to find us so we invite you to make this a two-way conversation; if you have an idea or suggestion for something you’d like us to discuss, drop it in our inbox. No promises that we’ll write about it, but we will faithfully promise to read your thoughts carefully.