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August 20, 2014

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A lawyer

As to the "but how can outsourcing matter now when it started in 1999?" question:

The first effect of the digital revolution for law firms was to make them rich. The number of documents potentially relevant in litigation (and deal diligence, I imagine) exploded. When I started at big law during the boom, junior associates spent much of their first couple years reading these documents at hundreds of dollars an hour. Today, that work is essentially commoditized and, these days, often directed by clients or third party service providers rather than the firms (at, say, 30 dollars an hour, literally one tenth heat it cost eight years ago.) Predictive coding is obviously the next domino to fall, removing even the commoditized value. It hasn't yet because it hasn't been good enough. I'm much less bullish on predictive coding than many but that's really just a matter of time - I think we're probably five to eight years away from widespread adoption, while some think we are two or three years.

Ben Barros

Brian,

I’m sorry, but I am disappointed in your comment. I would think that you, unlike some of the people leaving comments here, could actually engage the argument that I made. I am fully aware of all of the versions of the structural change argument. The only version of this argument that is relevant to the argument that I make in this post (not some other argument that you or others might assume that I am making) is whether structural change will cause legal jobs to decline in the next few years. That form of the argument is false. I don’t anticipate a quick return to boom times in employment. My analysis does not require a return to boom times. Rather, my analysis is based on an assumption of no growth. Are you aware of anyone suggesting that structural change will lead to actual declines in the number of legal jobs in the next five years? Not arguments that structural change will affect employment. Rather, arguments that structural change will cause employment to go down?

You state that you find my claim of a shortage implausible because of the currently soft market. I acknowledged underemployment in my post. Beyond that, do you have anything to say about the actual analysis? Do you have anything to say on the BLS projections?

I actually don’t think that the “this is the best time to go to law school” arguments will have much of an impact. I think that law school enrollment will pick up when positive news stories about employment become sufficiently common. On this point, at least, we seem to agree. There is a substantial lag, however, between enrollment and graduation. We will have several extremely small classes graduate in a row. I’m confident, therefore, that the shortage will come.

Brian Tamanaha

Ben,

Save your patronizing comment about your disappointment in me, which is irrelevant to the issues you raise (You wrote in this and the previous post that you wanted to not make personal comments, so stick with substance and respond on the merits.). The thrust of your comments, in this post and previous posts, is that people are foolish to not apply to law school out of worries about poor employment prospects. That is the line you and Steve are repeatedly pushing here on FL--including your latest assertion that employment ads for lawyers will go unanswered owing to a lawyer shortage.

My response is that this advice is premature and self-defeating. You have not responded to these arguments. Nor have you said a word about the income earned by your graduates in post-nine-month-after graduation jobs and whether their income is sufficient to support the debt they take on. Perhaps we should start with admitting what we don't know, then the discussion can be more productive.

Ben Barros

Brian, thank you, your response clarifies things. I take it that you cannot argue that the substance of my post is wrong, other than your assertion about underemployment. I also take it that you concede my points about BLS data. I acknowledge that you and others think other issues are relevant to the issue of whether to go to law school. I agree, even if we may disagree on the merits of some of these issues. But neither you nor anyone else has explained why the specific analysis in the post is wrong.

John Thompson

@Ben Barros/1:12 p.m.:

I understood what you were saying as the ABA/NALP FT/BR-at-9-months figure should be increased about 50% to understand what a class' ultimate FT/BR figure actually is, extrapolating from your survey of the Widener classes of 2010 and 2011. If that's wrong, or there's something more I should have gotten from your exploration of what the ABA/NALP data means and doesn't mean, please say so.

I agree that it's true that some people will get FT/BR jobs after the 9-month timeframe. However, I also believe that the bar-passing excess of any class that doesn't get FT/BR jobs at that point will end up in competition with the graduates of the next class, which will tend to hold down salaries until that excess dries up. No such pressure holds down tuition and fees, which in the case of my alma mater have gone up 50% for residents and almost 20% for non-residents. Merely getting the FT/BR job is important, but it is still only one of many considerations guiding how a graduate will view his investment in his JD.

Jojo

Ben,

You hit the mark. Brian T clearly agrees with your crystal ball, and believes that law professor conjecture on the labor market is more reliable data than official publications of the Department of Labor.

It's also clear that salary, debt and living standards conflate what should be myopic focus on whether graduates actually work in a "JD Advantaged" job of any sort at any salary. That's the only relevant measure here.

You win.

JP

Ben, you simply are not reading if you think no one has explained why your analysis is wrong. It is all over the comments.

JP

(In case you need assistance, the problem with your analysis is that it does not consider the relation of debt taken on to salaries earned.)

JM

Ben,

You want some specific arguments as to why your analysis is wrong? That's fair. Try this one:

Some JD grads will never get hired regardless of the state of the economy. They just are not good enough and employers know that. If you ran a software development company, and software engineers were in short supply, would you just go out and hire some dummy who can't break 500 on SAT math but nevertheless got a comp science degree from a city college? What good would it do to hire that individual? Just because he is an engineer by title does not mean he can do the work that you require. Likewise, what good does it do to hire an attorney that cannot research something correctly, and cannot draft anything that you can use. We had a recent grad like that in our office (from a top 100 school)--he literally just could not do anything in this profession. He was fired after a couple months.

So, your quixotic idea that fewer JD's graduating each year will mean that private firms will have no choice but to fill the associate ranks with middle of the pack third tier law grads is completely false in reality. They would prefer to not hire anyone, and either do more work themselves or turn down work.

And please do not argue that these JD's can become solo practioners. They will flame out within 2 years without a doubt. Too much overhead, too much liability, too hard to get clients, too hard to get clients to pay. If they were smart enough to make something like that work, they would have done better in law school.

The employment market for attorneys will eventually expand and contract according to the number of adequately qualified grads each year. This 100% employment phenomenon may eventually apply to grads from top 50 schools, but it will never apply to schools like your own.

MacK

The problem with your argument Ben is that you are assuming that demand for law graduates will stabilise at a level much higher than it seems likely to do, in light of recent trends. Now realistically, at some future date there will come a time when there is something close to a balance between the number of law graduates (and their abilities) and the market for their services - most of the readers on this forum simply disagree: (a) that it will remotely be at the level that you think it will; (b) that it will happen, barring many law schools closing or hard reforms to the student loan system - anytime in the next decade or more; and (c) few really think that legal jobs will go unfilled for a lack of graduates (able graduates may be another matter.

You know, you can still buy one of these, they are not hard to find, supply is more or less in equilibrium with demand - but the level is far from what was expected in the past:

http://www.bigdweb.com/Buggy-Whip-50-Inch-With-18inch-Drop/productinfo/65-5100/

BoredJD

Ben, if you want to write up a post requiring us to assume every premise leading to your conclusion (including those based on a "study" for which the methodology and underlying data has not been produced), that's fine. But then to ask readers to consider that study independently of the context of your other posts, including statements like "I will note for the record that I don't agree that the ABA numbers were fundamentally flawed prior to the law school transparency movement" is being childish.

Ben Barros

JP, I made an analysis of some specific points. No one has explained why that analysis is wrong. People have explained why they think that it incomplete on the issue of the value of law school. That is a different thing. Can't you tell the difference?

JM, I agree with you to a point. I worked with some people from Harvard and Yale who just couldn't practice. They were useless as lawyers. I think this helps make my point by illustrating why it is absurd to expect 100% of law school graduates to have Bar Pass required jobs. I disagree with the insinuation about the abilities and prospects of people from lower-ranked schools. By the way, I never said anything about large firms filling out the ranks with students from lower-tier law schools. Large firms are very credential focused. I think this is a mistake. But there are a lot of people out there (like you?) whose derive a great deal of their self-worth from their LSAT score. That will likely never change.

Adam

JM,

I want to try to narrow the scope of disagreement here. You suggest that some percentage of law graduates are unemployable, and regardless of theoretical need, firms are never going to hire them. I agree with you. Off the top of my head, in the current admissions environment, maybe that number is 15-20%. I pulled that out of thin air; I'd be happy to discuss an alternative number, but I think this is a difficult one to measure objectively across the law graduate population - perhaps a starting point would be the bottom two categories in Frakt's LSAT framework in another post. So, let's call it 20% for now.

And although I might not agree with your "top 50" cutoff, we agree that this percentage is likely to be a sliding scale, with relatively few unemployables from Harvard, and a lot more from Florida Coastal.

If 20% of the 2017 class is unemployable, that implies that the "employable 80%" have a very good chance of getting a job. The number of such grads will be very close to the number of openings, assuming zero job growth. Do you disagree with this?

Some caveats: Just as "employability" ranges across schools, I assume the propensity to hire is not uniformly distributed. It might be the case in 2017 that many of the job openings are in bigger, higher-quality employers who will be every bit as discerning as you suggest. So, there might still be a lot of grads who are "employable", but who will not actually be employed by those best in a position to hire. I don't know how we might measure that in advance, but I don't understand this to be the point you're making above.

Is it the word "shortage" that is unhelpful here? That is, would you assess Ben's post differently if he referred to "the coming adequacy of lawyer openings"? Turning to your last paragraph, I agree that 100% employment is a high standard, and I don't think I'd read the OP quite that way. But with respect to higher-ranked schools, it seems as if prospects for their students will be much stronger in 2017, as opposed to frequently mediocre over the past few years. Does that not seem like a fair reading to you?


Adam

twbb

Well, how's this for a substantive point: extrapolating that the trend (+50% employment after the 9 month cutoff) you noted from two classes at a small law school in one area of the country to the entire body of law schools like you did is statistically invalid representing incredibly unreliable research design.

Considering there are 203 ABA-accredited law schools, you would need the same employment numbers for 133 other schools in order to have a valid sample size with a 95% confidence level and a 5% confidence interval. If you're willing to acccept a 90% confidence level and a 10% confidence interval (not a good practice, statistically), you would still need the same data from 21 other schools.

Ben Barros

twbb, that is a substantive point! The thing is that you don't need anything close to the 50% to get to a shortage, as I explained in the post.

JM

Adam,

Yes, I think we are mostly in agreement. Actually, I am fine with the word "shortage." There may very well be a lawyer shortage AND high unemployment for JD's in 2020.

I agree with the basic effect that Barros is describing. It will certainly be easier for qualified, capable JD's to obtain real legal employment in a few years. This is undoubtedly a good thing. There are far too many good people not finding jobs now.

As for the number of unemployable JD grads, I would put it at closer to 33%, but that is inevitably speculation.

JM

"JM, I agree with you to a point. I worked with some people from Harvard and Yale who just couldn't practice. They were useless as lawyers."

Yet employers find a use for just about 100% of them. In fact, they compete like crazy to hire them.


"I disagree with the insinuation about the abilities and prospects of people from lower-ranked schools."

Fine. The people that hire JD's appear to agree with me though.


"By the way, I never said anything about large firms filling out the ranks with students from lower-tier law schools. Large firms are very credential focused."

And neither did I. I said "private firms" not "large firms." Private firms can be 1-10 attorneys.

"But there are a lot of people out there (like you?) whose derive a great deal of their self-worth from their LSAT score."

There are a lot more people (like you?) who derive their wealth from deceiving young people to pay a lot of money to train from something that does not suit their strengths.

Barry

A lawyer: "As to the "but how can outsourcing matter now when it started in 1999?" question:"

I'm amazed by him using that comment. It's like somebody in WWII asking 'how can aircraft change war so much now, when they've been around for decades?'

A lawyer: "I'm much less bullish on predictive coding than many but that's really just a matter of time - I think we're probably five to eight years away from widespread adoption, while some think we are two or three years."

I think that it'll come much faster - software is extremely duplicable, and the advantages are immense. A 20-person document review, lasting one 40-hr week @ $30/hr will cost $24,000 in labor costs alone, so probably at least $30K. That means that leasing the software at $10K month would be incredibly cheaper (and note, the other costs would likely be there for doing human document review). That software can probably do the job in a day or two, with the major delay being that there would still be human reviewing and checking of the results (which would also happen for a human document review).

In addition, the basic technology is text analytics, which is a huge field, with much money being spent on it.

George Weiss

Professor Barros,

I recently read your post both here, and what I think is the far more interesting one from last year. In the latter, you (very commendably) did a survey of your school's 2010 and 2011 graduates and attempted to provide some of the only available data on outcomes which are not 9 month out data. I think it's pretty nice that someone tried to test the conventional wisdom with data and is willing to give opinions he knows will be met hostility by others-it shows courage-and for those things I congratulate you. Many people remark that posts with the message optimism are self surviving to those in the law school business-while it certainly can be-pessimism is also self serving to those currently in the guild. Thus, I certainly accept your invitation to discuss in good faith.

In any case, the gist of that prior post is that things seem to look a lot better a year and a half or more out then they do at the nine month mark. (Side note-I'm sure you are aware that NALP, noting the lack of long term data, recently did a pilot survey of 2010 grads from a handful of schools about 3 years out-and they hope to release those findings as soon as they can. I'm sure we all are eagerly awaiting that data).

This current post of yours builds on that by saying that because things are better more than 9 months out-and there are not as many underemployed/unemployed lawyers than people think (your conclusion from the previous post), and due to the tremendous decline in JD production over the next few years, the market will become a labor seller market rather than a labor market buyer at some point in the next few years.

Obviously, your argument is much better argued and researched than that-but that is the gist. You even remark in this post that the key to your analysis is understanding the current job market after the nine months mark. My point however, is that the two posts go together-without the conclusion that there are many fewer underemployed/unemployed JDs than conventional wisdom would have us believe-one can not conclude there will be a lawyer shortage in the future-as the possibility for all those entrants into the market from unemployment or underemployment would severely “ameliorate” any such “shortage.” Contrary to what one commentator says above about those people not being able to compete with the new grads when that happens-I would note that while many are not working in law, they can easily keep their hand in law by volunteering even a little and that gets them more experience and relevance than a new JD.

Because the two posts go together, and I disagree with your conclusions in the first post, I am commenting on those conclusions here-as comments to that post are closed and would likely not read in any case. (I just found your posts in the last day or so).

It seems to me that your conclusions from your survey last year about the lack of unemployed/underemployed lawyers using a longer than 9 month time frame suffer from a number of problems, that you certainly flag in your post from last year but, I think, do not adequately address:

First there are serious questions with regard accuracy of even the data you did collect. Your methodology only involved communicating with the graduate when you could not find publicly available data on the person. Thus, when compiling the statistics, you relied on a facebook post or the address the person gave his/her bar authority to send him mail. For one, as stated in the comments to that post by another commentator, that kind of data gives you no information as to what the true nature of the job is and its long term or full time part time status. To be sure, sometimes you can tell from the title-but other times you can not. For example, a person who's facebook or linkedin status reads “works at [government office]” may really be an unpaid intern. The same with those who read “law office of [graduate]” who although a solo-is really a doc reviewer.
It is very interesting that your 2010 and 2011 long term data report 0-that's right 0-temporary bar required jobs. Not a single one! Doc review requires bar passage. Where are the doc reviewers reflected in your data? We can disagree about prevalence-but surely there are some no?
I understand you paid some recognition to these problems in your post-but your recognition went only so far as to say that while there were “some problems” you were “confident” that you got an accurate picture. They did not explain why you felt confident. Will you then forgive those who are not confident?

Second, even assuming your data is complete and accurate-it is extremely limited to the point to make it almost useless without certain anecdotal assumptions. This is mostly because your data does not distinguish between small and large firms and successful and unsuccessful solos. Now again-your post pays some lip service to the problem of failing solos and smalls-but in doing so it appeals not to data but to your own anecdotal experience. (Solos are only 8% of the total 2010 2011 long term cohorts-but your data would also not catch the guy contracting for a solo working an eat what you kill and calling himself employed at a firm, nor the proverbial group of newbies banding together to make a go of it). This starts to get significant when you realize there is also another 10% you couldn't find at all who you invite us to treat as unemployed. You state that most or many of your graduates who are in solo or small firms that you personally know or have talked to claim to be doing well or better. That's nice, but in a post that purports to be on data-this is not data-but your opinion. You can imagine-once again, that others have had different anecdotal experiences. I, for example, am a 2010 graduate of American Law in the DC area. After passing the MD bar, I spent a couple years basically volunteering for a solo where I got a few years of trial experience and general law experience-but who couldn't really pay me (though I got some money-no more than minimum wage-on his appointed cases billing as a paralegal). I also got barred in DC and VA. During that time as I was looking for work but came up empty. Many jobs I applied to-even for “experienced” attorneys, had dozens or even hundreds of applications. Started own firm but couldn't find work with no reputation or particularly good niche. Worked as a contract attorney for a solo who was nuts and was forced to resign. Now freelancing here and there and still looking for work. I am also starting to train in other things as I see the possibility of this never working and I have no other skills. (One job I applied to recently had 700 applications). My only real luck is that I can live with family (which also paid for law school)-as I might be in the homeless shelter/street if I could not. I see many others who graduated years ago who do have not had much better luck online. Guess what their linkedin/facebook profiles state? they don't say contract attorney-they don't say failed solo. They say solo. Now of course, my anecdotal evidence is marred by my (negative) outlook and experience, but I'd wager so too is your outlook colored by naive optimism that everything is going to eventually be ok. And crucially here, your data on after nine months outcomes are no good without anecdotal assumptions about solos and small firms-which are questionable at best and fanciful at worst.

So given the strong possibility of a large hangover of people to zoom back into the market-I don't see a shortage any time soon, and (possibly) see a glut continuing for some time. (As to your other posts from last year on the job market, I agree that those who make the structural argument make too many assumptions and the legal market down the road is subject to far too many variables. I also agree that the BLS data is of very limited value here).

While I applaud your attempts to study the subject of the current and future market, and definitely applaud your good faith, I do believe there are significant gaps in our information, and that you in particular have filled them with optimism-when one could just as easily fill those gaps with pessimism. As such, I wouldn't expect those who disagree with you to come running to your objective analysis just yet. Let's hope the new long term project at NALP will shed more light on the subject.

twbb

Ben, my point still stands; how do you even know that over the entire population of law schools the post-nine month employment figures might be LOWER? Or it at least might be lower than your 25% alternative. You do not have enough data points to do a proper statistical analysis.

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