The Faculty Lounge

Possible West/Foundation sale, fewer law students next Fall, and why law education should look to dental education

On Thursday, Thomson Reuters announced that it may sell its law school publishing business, comprising the West and Foundation Press casebooks. I suspect that part of the motivation to dump casebook publishing is the near certainty that the market for casebooks is about to become smaller.

Casebook sales are a function of the number of law students, and that number is likely to shrink. And soon. One of the best early predictors of law school matriculants is the number of LSAT tests given. On Friday, supposedly secret (but readily available here) data show that year-to-date tests are 16.7% fewer than last year and a whopping 25% fewer than two years ago. Could it be that Thomson Reuters sees that fewer law students mean fewer casebooks sold?

The high likelihood of fewer students is, of course, a major strand in the current discussion of the crisis in legal education. I’m currently writing about the lessons law schools can learn from the way dental schools survived a similar crisis.

Dental school enrollment decreased by 34% in response to

an over-supply of dentists,

the decreased profitability of general dentistry, and

the curtailment of federal funds to dental schools.

Sound familiar?

Twelve percent of dental schools closed, the equivalent of more than 20 law schools going under today. But dental education stabilized and, arguably, became stronger and I believe legal education can, too, especially if law schools and our accreditors learn from the experience of dental education.

My research suggests that dental education responded to the crisis by

Implementing more practice-relevant curricula,

Basing assessment on outcomes not processes,

Revamping accreditation standards to let schools experiment with different educational methods and different missions,

Demonstrating the value to practitioners of academic research, thus enhancing the status of research faculty,

Improving the relationship between schools and their universities, which made school closures less likely, and

Developing sustainable revenue models that reduced reliance on student tuition revenue, making dental education more affordable to students

I will have more to say about the lessons for survival that law schools can learn from the dental schools’ experience as my research develops. But for now, the potential West/Foundation sale is objective evidence that the probable decline in the number of law students will have real consequences throughout all of legal education.

Unknowns: Selection Bias?

In Job Statistics: What about Unknowns?, I began exploring the distribution across law schools of the rates at which law-school graduates do not respond to the employment surveys sent out by law schools for NALP and ABA reporting purposes.  I noted that most schools with "unknown" rates of 5% or higher have LSAT 75th percentiles of entering classes in the bottom two quintiles (bottom 40%).

A common problem with surveys is selection bias. For example, most law-school graduates that report their employment status do not report their salary.  As you might expect, graduates with high salaries may be more likely to report salary information than those with lower salaries.  But what about persons who don't respond to employment surveys?  Are persons who are unemployed more likely to throw the survey in the trash?  As I discussed earlier, one of the argument for counting unknowns as unemployed is the assumption that the unemployed are less likely to respond to employment surveys. 

But is that true?

Having already noted the divide in the rate of unknowns at a 157 LSAT 7th percentile , let's begin by looking at the relationship between a school's entering LSAT profile and its reported employment rate.  As the chart below shows, law-school employment rates tend to fall as LSAT falls.  That said, notice also that the range of variation increases as LSAT falls (which is what one would expect in the range shown (unknown rates between 0.55 and 1.00).

Does the Economics of Law Practice Matter to Law Schools?

I return to the mysteries of law-firm economics after a hiatus to attend to three speaking engagements and complete the academic term (in other words, as an excuse to interrupt grading my Contracts exams).  A belated shout-out to my colleagues Anne Klinefelter and Andrew Chin, and to the editorial board and staff of the North Carolina Law Review, for an exceptionally well conceived and executed Symposium on Social Media (which was one of those speaking engagements)--watch for the Symposium issue of the NC L. Rev. coming this spring for some refreshingly novel and interesting takes on what is elsewhere becoming an overworked topic.  (You won't see a paper from me in that issue.  My topic at the conference, legal ethics in the social media environment, has already been admirably well explored in print and online by others.)

I want to stress how much these issues of practice economics actually matter to legal educators.  Virtually all of our students attend law school with the general aim of practicing law.  A great many end up in private law firms, large or small, or (usually a bit later in their careers) in corporate law departments.  The demand for lawyers in such positions (that is, for individual and corporate legal services) fundamentally affects our students' prospects for gainful employment. 

A bit more specifically, the overall demand for such services affects the overall availability of legal employment, and the distribution of that demand across different categories of work affects the availability of different kinds of legal jobs.  Thus when, as now, there is a significant contraction in at least one portion of the private sector--and here I'm referring to the large number of BigLaw layoffs in 2009 and 2010, and the contemporaneous and continuing substantial reduction in the rates of new hiring at larger firms--recent graduates with strong conventional qualifications who previously filled those BigLaw positions are now competing, and vigorously, for positions in smaller firms and government for which there was previously less such competition.

Put somewhat differently, there are fewer law jobs for recent graduates, and appreciably fewer such jobs at the higher end of the pay scale.  It's hardly rocket science to suggest that this affects the economic value of a law degree:  From behind the proverbial veil of ignorance, a student's chances of securing a job that supports the cost of three years' tuition, living expenses and forgone income and work experience are substantially less today than they were five years ago. 

This is by no means the whole story, of course.  Some prospective law students have far brighter economic prospects ex ante than others.  And economics is certainly not the only reason why people consider law school (though we have empirical data confirming the common-sense apprehension that a substantial number do weigh it as a substantial factor in their decision). 

But if the economic value of a law degree is falling overall (and I suggest to you that it is irresponsible to imagine otherwise), in a rational market you can expect fewer people to pay the rising cost to obtain it.  It is far too early to say "I told you so," but there have been double-digit decreases in law-school applications across the board this year over last (though we must bear in mind that last year saw record increases in law-school applications and LSAT administrations as college seniors confronted a horrific job market with an effort to settle into a three-year holding pattern). 

This is having some obvious effects on the legal academy.  The ability of law schools to continue to charge high tuitions--and continue to pay their faculties salaries far higher than those typical in the arts and sciences--depends on making the end product (the law degree) worth it.  Since many universities share in their law schools' economic surpluses, the universities care too.  Legal employers have been complaining  about the utility of the education with which their entry-level employees arrive for well over a generation, but for the first time in memory it would be fair to say that many law schools are listening, and questioning their mission.

One thing I am NOT suggesting is that legal employers know exactly what they need, and how we could be supplying it.  I'll try to explore in future posts why things are nowhere near this simple.  But that leaves everything up for grabs:  What questions should we be asking, and how should we be seeking the answers?  This is an obviously difficult inquiry, and I will try to suggest in future posts that it's even harder than it seems.  But make no mistake:  we are near the front end of a period that I believe will prove to be the most fraught with rapid change that the American legal profession has ever seen.

What a great time to be a part of things!

--Bernie

Accent Reduction Classes

As a U.S. inhabitant with an accent, I was intrigued to see a workshop being offered in the Continuing Studies Curriculum at Stanford on Accent Reduction for Non-Native Speakers of English.  The workshop description is as follows:

"This workshop is designed for individuals who are already proficient in English, but who would benefit from reduction of their foreign accent. It provides an approach to accent reduction that is systematic yet not overly technical. Key concepts will be introduced and then applied to language-specific pronunciation issues. Special emphasis is placed on practical exercises that will serve as a guide for continued improvement after the workshop is over. Topics covered include: a quick, basic, and useful introduction to where and how speech sounds are produced; individual sounds of American English in isolation, with close attention to typically problematic consonants and vowels; difficult combinations of sounds; word stress; intonation; and pronunciation differences between formal and casual speech. Each topic is accompanied by practical exercises and feedback throughout the workshop."

(From Stanford Continuing Studies Catalogue)

I have never seen these kinds of workshops offered before by universities and was wondering if there is a high demand for them and what the target market is eg professionals?  blue color workers?  parents dealing with unfamiliar school systems?

And I may just have to take issue with the first sentence of the workshop description where it refers to individuals who are 'proficient in English' but who would 'benefit from a reduction of their foreign accent'.  To my mind, it is the Americans who have the 'foreign' accents if the baseline is being 'proficient in English'!  (And that's tongue in cheek for anyone who wants to complain ....)

N and Salary Reporting

The ABA Journal website put up an article yesterday (November 21, 2011), ABA Committee Readies Law School Placement, Salary Questionnaire, at its early December 2011 meeting, the Council of the Section on Legal Education and Admission to the Bar will consider competing job-placement reporting proposals. One issue is how salary data should be reported. The problem with salary data is that the selection bias.  As I discussed in So You Want To Be a Rock 'n Roll Star? and Go To Law, even the national NALP salary surveys over-report salaries. Students with jobs are more likely to report job status, but are more likely to report salaries if they have high-paying jobs.

In a November 8, 2011 Memorandum to the Council, Reporting of law School Placement Data, the ABA Questionnaire Committee suggests: reporting only state-wide salary information, by job category:

* * * We do not propose reporting school specific salary data. Rather we will use NALP salary information which will be aggregated on a state-wide basis for each field (if available) on our Placement Data Summary. This will avoid the problem of upward scaling of salary information at the law school level due to the fact some of the school’s graduates do not report their salary information and those who do report tend to be those at higher salary levels. The aggregated state-wide approach collects salary data from graduates of all ABA-approved law schools employed in a state in any particular job category. (Emphasis added.)

As reported last week (ABA Committee Appears Poised to Approve New Law School Disclosure Requirements), the Standards Review Committee proposes that each law school make its placement data, including salary information, available on-line.  Under the SRC proposal, schools would also have to disclose the number of graduates reporting salaries.

By definition, the number of graduates reporting salary for any given school are lower than the number from all schools, and thus more unreliable. The lower numbers of school-level salary reports will make it hard to break reported salaries into job categories. So far as I can tell, the SRC does not propose that each school report salaries by category, or even show the distribution of salary reports by category. (See update below.)

But state-level salaries ignore differences among cities, as well as the difference between urban, suburban and rural  salaries.

Update: A member of the Standards Review Committee told me that the SRC proposal would require law schools to provide full-time salary information by category whenever at least 5 persons have reported a salary in that category: (i) number of persons reporting salary; and (ii) 25th, 50th & 75th percentiles of salaries.

The information would be organized according to

• Employment "status"--Bar passage required, JD preferred, other professional, and non-professional, and
• Employment type--law firms, by size of firm, business & industry, government, judicial clerkships, academia, and unknown.

Placement and Accreditation

This is what we know about placement and the ABA standards.  On Sunday, November 6, 2011, Professor Ralph Brill (Chicago-Kent) sent out on LawProf a link to a draft proposal to amend the Interpretations to ABA Standard 301 (quality of program) to add minimum placement benchmarks.  As I reported last week, by the afternoon of November 8, 2011, the draft had been pulled from the ABA server.  As Dan Filler reported, Scott Norberg, the Deputy Consultant on Legal Education explained that

The posting was of a subcommittee draft for an earlier meeting, not December, and the matter was not acted upon by the Council and is now off the table. Once we realized it was mistakenly still on the website, we pulled it off because it could be misleading.

But Norberg did not stop there.  Instead he also said:

The Council is still considering the use of placement data in accreditation reviews. We plan to be more explicit in reviewing placement data for how it may reflect on any aspect of a law school's program, from quality of the academic program to the adequacy of career services. We do not at this stage propose to change any Standards or to establish a benchmark placement rate for schools as a compliance matter. (Emphasis added.)

The old draft may be "off the table," but it seems that the ABA is considering requring something more than better, and more available, reporting of placement data. It may be misleading as to the ABA's current thinking, but it does suggest how the ABA might connect placement data to the Standards.  I have put up a copy of pertinent portions of the September 22, 2011 subcommittee draft. Note that:

• the original file on the ABA site contained suggested changes to other aspects of the Standards;
• I have extracted the portions that related to placement, edited the title, and saved them as a separate file; and
• I leave it to the ABA and its committees to make the other portions available if, as, and when appropriate.

The subcommittee suggested amending Interpretation 301-3 to add placement rates to the list of items to be considered in deciding whether a law school has met Standard 301(a), which provides:

A law school shall maintain an educational program that prepares its students for admission to the bar, and effective and responsible participation in the legal profession. (Emphasis added.)

The subcommittee also suggested adding a new Interpretation 301-7 that would have imposed minimum placement rates.   Here's the executive summary:

• Imputed unemployment rates: Both graduates reported as "unemployed, seeking," and those whose job status is "unknown," are treated as unemployed.
• Relative benchmarks.  The benchmarks for imputed unemployment rates would not be absolute, but rather would be relative to one of two alternatives:
  • no more than one standard deviation below the average for graduates of all ABA law schools (Approach A); or
  • no more than 15 percentage points below the average for all ABA law schools in the two states in which most of a school's graduates took the Bar (Approach B); and
• Alternative compliance method. A law school that does not meet the benchmark can still show that
  • employers find its graduates "adequately prepared for entry-level employment " and
  • the school devotes "satisfactory ongoing efforts" to help its graduates find jobs.

Suggested Interpretation 301-7 raises the question of the purpose of legal education.  Unsurprisingly, it treats law schools as trade schools. After all, the ABA is a trade organization.  Putting greater emphasis on preparing students to be practicing lawyers is perhaps the dominant theme of the changes in the Standards that are being considered by the Standards Review Committee. Broader missions are laudable, but most law students are mortgaging their futures so that they can get jobs as lawyers. It does not matter that the traditional approach to legal education has left practice skills to the profession.  For at least a generation, the profession has been growing increasingly concerned about law-school graduates not being "practice ready."

I doubt that suggested Interpretation 301-7 would satisfy the scam-bloggers, the Senators, and others who sympathize with the emerging "Occupy Law Schools" movement. Among other things, the ABA standards count a graduate as employed, regardless of whether the employment is full-time or part-time, or whether the job requires a JD or an admission to the Bar (update:  or a JD is preferred).  Most graduates with substantial law-school debt will not be pleased to finding themselves tending a bar, rather than practicing before the Bar.

I will discuss the methodology of suggested Interpretation 301-7, and look at some data, in later posts.

The Missing Link: Possible ABA Placement Benchmarks

Sunday afternoon (11/06/2011), Prof. Ralph Brill (Chicago Kent) sent out an e-mail over the lawprof list about a proposed revisions to the ABA Standards that would add job placement benchmarks to the ABA Standards. Brill said that the Council of the Section of Legal Education and Admission to the Bar was consider to consider the proposal at its December meeting. He also gave a link to the list of the members of the Council. 

Don't try to find the proposal on the ABA website. Brill provided a link to the proposal on the ABA server, but that link no longer works.  I know that it did work, because I downloaded the proposal at about 12:30 CST on Monday (11/09/2011). But, when I checked the URL at about 7:00 pm on Tuesday (11/08/2011), I got the bad link message. Given that the link had worked earlier, the message seemed particularly ironic:

Our Apologies

This page is not available.

So.  The proposal was there.  Now it's not.  I suppose there could be many explanations:

• When I downloaded the pdf, my browser deleted it from the server.
• There is a bad spot on the hard drive.
• Oops! We didn't want the public to know about that before the meeting.
• The Council got some heat about proposing new Interpretations of the Standards without going through the usual process. Presumably, the Council planned to give notice, and an opportunity to comment, before it adopted the proposal. But what about the ongoing review by Standards Review Committee?

Perhaps the oddest thing in all of this is that, so far as I can tell, the blog-o-sphere has not weighed in on this.

Catching My Eye

Catching my eye this week is a paper recently posted to SSRN by law prof Mark Osler (pictured), currently at St. Thomas (Minnesota) and formerly at Baylor (sic 'em Bears!).  Osler's paper is titled Wisdom Not My Own:  Rules, Principles, and the Teaching of Law.  Here's the SSRN abstract:

Is it possible to not only give our law students knowledge, but the hope for wisdom?

This short essay argues that such a project is not only possible but desirable. We want wisdom (the ability to make principled choices) from those in the vocation of law, after all, especially in roles such as judge or prosecutor. The key to teaching towards wisdom is to allow students to work not only with rules but principles, and to model the sacrifice required to follow principle in our own public lives as law teachers.

The paper is already generating some buzz among my Campbell colleagues, and I'm looking forward to reading it.

Law Schools: Reform Them? Or Regulate Them?

Some thoughts here, penned by Washington and Lee law professor Ben Spencer.

Welcome to the Blogosphere

In recent days we've been joined in the blogosphere by The National Law Journal's Law School Review (A Forum On Legal Education).

From Karen Sloan's initial post dated October 27:

Welcome to The National Law Journal's Law School Review, which is an online forum examining the current state and future of legal education. We want to address the question, "Are law schools in crisis?" If the answer is yes, what are the most pressing problems and how should educators and regulators address them? If the answer is no, what is it that law schools are doing right? Is this enough to ensure their future viability? We have assembled a panel of experts to share their thoughts on the subject (see the roll call of contributors on the right), and we hope to create a robust dialogue and exchange of ideas.

The list of contributors includes William Henderson, Brian Tamanaha, Michael Olivas, and others. 

You'll find the home page link here.

The wisdom of regulating lawyers (vox populi edition)

The New York Times recently published an Op-Ed piece from a fellow at the Brookings Institution extolling the various social miracles that would transpire if we eliminated legal education and bar licensing as a condition to the practice of law.  You can see it here (“Are Law Schools and Bar Exams Necessary?”).  Three Letters to the Editor commenting on the Op-Ed are reproduced here.  Each takes a distinct point of view that is as polemic as the original Op-Ed.  Together they comprise a very good and admirably succinct background to a debate on whether law licensure is necessary, what its costs and benefits are, and how well our existing system takes those costs and benefits into account and appropriately balances any tradeoffs.  Those among us who teach Professional Responsibility may find this a valuable resource to ground class discussion on the subject.

While in my own view there is a great deal more, and a great deal less, to each contributor's position than their statements suggest, I offer only one comment on these materials here.  Conspicuously missing from any of the position pieces (except obliquely in the first Letter to the Editor) is any assessment of the significance of what is in my view the single most salient factor influencing this debate--the fact that it is extremely difficult for nonexperts to determine with any accuracy the quality, efficiency or even need for most of the professional services lawyers provide.  Put slightly differently, the eventual result of and the buyer's satisfaction with professional services are exceptionally noisy quality signals.  It is little short of astonishing that the "economist" from Brookings who gave us the original Op-Ed should have assumed this issue away, and instead assumed that crowd-sourced lay assessments would adequately inform the market and police for quality and competence. 

Law is hardly unique in this regard, of course.   Medicine is another obvious example of professional services whose quality and need are very difficult for lay buyers to judge in most instances, both before and after the services are provided.  And this phenomenon is a matter of degree for any service involving skill and expertise--think of the extent to which most of us are forced to rely on the judgment of our auto mechanics, plumbers and electricians.

Which is not to suggest that our current requirements for law licensure, or our policing of licensees, are currently optimal in any particular respect.  But the world rarely makes any issue of importance as simple as we all might wish.

Bernie

College Tuition in the News

MSNBC news story here.

TIME magazine story here.

And any college/university that participates in federal student-aid programs must provide on its website a net-price calculator no later than this Saturday, October 29, 2011.  Additional reading here and here.

(Astute readers will notice I'm including this post under the "fear" category.)

Adventures in Staffing II: The End of the Partnership Track?

In my prior post on this topic (here), I suggested that rapid and accelerating changes in the way that legal process work (the gathering and organization of documents and information) is staffed and priced has significantly influenced the extent of the associate layoffs and the reduction in entry-level hiring among larger law firms in the last few years.  The result is that most large law firms have far fewer partnership-track associates today than they did, say, five years ago, and that seems unlikely to change substantially anytime soon, even as the economy recovers.

But another factor is also changing the structure of BigLaw:  Decreasing reliance on “up or out” promotion.  By way of background, from the early 20^thcentury until roughly the 1970s, larger law firms only rarely hired laterally at any level, and grew almost entirely from within.  They did so by hiring an annual class of talented associates right out of school (or brief government service such as judicial clerkships), trained and tested them for a relatively fixed period, and at the end of that period promoted a few to equity partner and let go virtually all others still remaining. This retention model, often referred to as the Cravath System for the firm credited with conceiving it in the 1920s, has long been emulated at virtually every larger law firm in the United States, and still at least in theory comprises the paradigm law-firm retention strategy today.  (The hopelessly insomniac among you can immerse yourselves in the details of this story in my article with Dave McGowan here.)

It has been widely observed—including by any number of BigLaw partners over the years—that many of those who did not make partner were skilled and able, valued by the partners who passed them over, and valuable to the firms that let them go.  Why, then, did larger law firms almost universally adopt a promotion policy that required them to jettison competent and valued workers in whom they had invested substantial time and training, at turnover costs that grew higher and higher as partner-associate leverage increased?  The most plausible theory suggesting some lurking rationality was advanced by Ron Gilson and Bob Mnookin in a 1988 Stanford Law Review article that (oversimplifying here for space and coherence) analyzed “up or out” retention as a means of managing strategic misuse of “firm-specific capital”—that is, investment in skills and knowledge that is appreciably more valuable at the firm where it was created than it would be anywhere else.  (This takes a fair amount of explaining, but the theory is not only cogent, it is consistent with the available empirical data.  Hats off to the authors.)  Examples would be a senior associate’s relationships with client personnel or knowledge of clients’ business operations, information infrastructure, organization and business patterns and preferences.

Generally speaking, a firm’s ability to develop firm-specific capital is associated with the stable, broad-based, long-term client relationships it is able to maintain.  Such relationships between larger law firms and corporate clients were extremely common through the 1960s, and then began to erode fairly rapidly as those clients began to spread their work around to multiple law firms on a project-by-project basis (“hire a lawyer, not a law firm” became the general counsel’s watchword), and to move more of it in-house. 

As the amount of firm-specific capital generated by most firms declined, so did “up or out” retention.  The late 1980s proved the high-water mark for partnership-track associates as a percentage of all lawyer-employees at large firms. From this point, associates continued to increase in number and remained the largest single category of licensed employees, but comprised a falling percentage of firms’ lawyer-employees overall, with the principal percentage gains in the “other” (non-partner, non-associate) ranks.  Partnership-track associates comprised 60% of large-firm lawyers in 1987; 55% in 2001; and 48% in 2010.  The extent of lateral hiring at all levels increased from the 1970s on as well.

In other words, as one (at least theoretical) incentive for “up or out” promotion declined, so did “up or out” promotion.  Two- (or multiple-) tier partnerships proliferated, and the number of non-partner (or non-equity “partner”), non-associate indefinite-term lawyer-employees steadily rose.

What does all this mean for the future of BigLaw?  The two trends discussed above portend a gradual transformation, already well underway, from large numbers of “up or out” partnership-track associates and accompanying high levels of turnover to much more modest numbers of entry-level hires and a partnership “track” of indeterminate length.  Larger numbers of nonpartners who prove themselves sufficiently skilled and hardworking will remain indefinitely (or move laterally to similar indefinite-term positions at other firms), and equity partnership will be reserved for those who actually attract and control substantial paying law business.  It is possible that the partnership “track” as such will vanish altogether, to be replaced by more generalized paths of advancement in responsibility and compensation based on accomplishment, skill, and success in business generation.  Whether or not we see the end of the partnership track at many firms, however, I predict that this trend combined with the evolving staffing model for legal process work discussed in my last post will result in distinctly smaller numbers of highly compensated entry-level hires in BigLaw for many years to come.

To be clear, I don’t view this evolution as “good” or “bad”; it will be good for some and bad for others.  But like it or not, it’s what’s happening in our profession.  I will elaborate on the likely “winners” and “losers," and on how these forces relate to the current controversy between BigLaw and the Academy over training—who should be training whom for what—in subsequent posts.  Stay tuned.

Bernie

The Problem with Reporting Starting Salaries

In a recent post, The Depth and Breadth of  Misleading Employment Numbers by Law Schools (And How to Solve It), Brian Tamanaha (Washington, St. Louis) focused on what statisticians would call the selection bias in salary reporting. For most law schools, graduates who report employment status do not report their starting salaries. In general, students with high starting salaries are more likely to report salaries that students with low starting salaries. As a result, the reported salary ranges are higher than actual salary ranges. 

Prof. Tamanaha also posted a chart that showed that lower-tier law schools tend to have a smaller proportion of reporting graduates that supply salary information. That said, reporting rates vary widely, and the range of variation (variance) increases as law-school rank decreases. By the nature of proportion sampling, the variance is "heterogeneous"--it is not constant across the range of the other variable. As a numbers guy, I'd rather see a chart of proportion reporting by LSAT score of the law school's entering cohort that just graduated, with a logistic fit line.

Prof. Tamanaha suggest that lower-tier schools don't try to get better information, because they don't really want to know what salaries their graduates are actually getting. I don't that that is true.  At least at my own school (South Texas College of Law), the Career Resources office aggressively follows up with graduates who do not report employment status, or who don't give salaries. They even contact employers to try to get salary information.

But Prof. Tamanaha if correct in noting the disconnect. At my own school, South Texas, about 26% of the 2009 and 2010 graduates who reported employment status also reported salary. It would be helpful if schools also published the such proportions. It might also be useful to report the distribution of salary-reporting graduates by employment type.

But why not report the ranges of salaries by employment type? If, as we suspect, the problem is under-reporting by graduates in lower-salary employment types, the number reporting (the "sample") will be much lower-- the "N" would be low--so the reported salaries would be less reliable.

What to do about that? Prof. Tamanaha noted an entry on the Forbes website, Law School Graduates Do Not Make $160,000, that discusses a report that Forbes commissioned (bought) from Payscale on the salaries of graduates of 98 law schools that were in Payscale's database.  The Forbes article includes the median salaries for the 98 schools.

The NALP conducts an annual survey of law firms asking for information about associate base salaries. The annual NALP Associate Salary Surveys are available for purchase from NALP, but most law-school Career Resources office probably have a copy.

According to the 2011 Associate Survey (press release), the national median starting salaries by firm size, and the number of reporting offices, are as follows:

NALP 2011 Associate Salary Survey Median Starting Salaries by Firm Size
Firm Size	Salary ($)	N	%
2-25	073,000	29	07%
26-50	086,000	25	06%
51-100	091,000	48	11%
101-250	110,000	64	15%
251-500	125,000	85	19%
501-700	120,000	119	27%
701 or more	160,000	70	16%
All Firms	115,000	440

 Even the NALP survey show a selection bias, with larger offices making up a disproportionate part of the survey;  62% of the reporting offices are offices with 251 or more lawyers. 

In addition to the national data, the NALP surveys break out salaries by firm size for metropolitan areas with populations in three ranges:  (i) 1.5 million or smaller; (ii) from 1.5 to 5.0;  and above 5.0 million.  That data shows the number of reporting offices for each category.

The NALP survey also gives starting salaries for some 28 cities.  But, the survey only gives overall associate starting salaries for those cities, together with the number of reporting offices, which often are small--for example Baltimore, 2010, 5 offices.

Robert Half Legal also has a free 2012 Legal and Professional Salary Guide. with ranges for starting salaries by size of firm:

Robert Half Legal Starting Salary Range by Firm Size
Firm Size	Salary Range ($)
below 10	47,000-64,000
10-35	56,750-80,250
35-75	66,750-97,750
75-plus	82,500-134,250

The Salary Guide then includes index scores for a number of cities, with 100 being 100% of the national salaries, to let you calculate salary ranges for those cities.

Robert Half Legal Selected City Index Numbers>
City	Index
Chicago	122.7
Houston	104.0
Los Angeles	124.5
New York	141.0

Thus, for Houston (multiplier of 1.04) and New York (multiplier of 1.41), the putative salary ranges for large (75+) law firms would be $85,800 to $139,620 (Houston) and $116,325 to $189, 294 (New York).

What about the ABA? The ABA has decided to start direct electronic reporting of comprehensive placement data for each responding graduate, beginning with the Class of 2011 9-month data in February 2012.  If that information includes both starting salaries and location, the ABA should be able to compile overall salary information by employment type and firm s size, both nationally and by region or by metropolitan area.  Aggregating salary reported for graduates of all law schools will not eliminate selection bias, but it should raise the number reporting salaries by employment type or by size of firm.

FERPA, The First Amendment And Student Self-Regulation At UVa

When the editors of the Cavalier Daily discovered that one of the paper's writers had been plagarizing, the incident triggered an Honors Committee avalanche that would be a great fact pattern for a course in education law.  The WaPo has the details here.

Adventures in Staffing: Are Junior Associates an Endangered Species?

The Wall St. Journal and WSJ Law Blog reported Monday that a survey conducted for the Journal by the Association of Corporate Counsel found that over 20% of the in-house law departments surveyed (over 350 of them) flat-out refused to pay for first- and second-year associates at large law firms.  This continues a trend that began several years ago, and accelerated considerably after the abrupt economic downturn in late 2008 as more in-house buyers of BigLaw services responded to sudden budgetary pressures by finally taking a hard look at what they had been paying for.

Above the Law responded to this data uncharacteristically by missing the point.  Elie Mystal, ordinarily a very acute observer of BigLaw, dismissed the in-house refuseniks as “stupid.”  He reasoned that clients’ refusal to pay overpriced junior associates for the “work that a conscientious high school student could perform” that is often their lot would simply force this work up the line to even more expensive midlevel associates.  He concluded:  “It’s entirely possible that 20% of clients don’t understand that having a midlevel do work more suitable for a trained monkey is actually worse than having a first-year do it.”

But of course clients do understand that, and so do the law firms they hire.  Clients who are unwilling to pay first-year associates’ rates for borderline clerical “legal process” work (loosely defined as the gathering, review and organization of documents and information) would certainly refuse to pay significantly higher rates for a fifth-year associate to provide the same services, and large law firms are smart enough not even to offer that as an alternative.  As discussed in detail in an article Prof. David McGowan and I posted in draft on SSRN a year and a half ago, and published in the Columbia Business Law Review last spring (2011 Colum. Bus. L. Rev. 1, available here), the result of clients’ heightening scrutiny of the staffing and pricing of legal process work has resulted in increasing volumes of that work being outsourced to much less expensive third-party services both abroad and domestically, and “downsourced” (a term McGowan and I believe we coined) within BigLaw to non-partnership-track “staff,” “discovery,” and contract attorneys paid much lower salaries or wages and billed out at much lower rates.  And since by 2007 legal process work had become a significant part of many junior associates’ workloads, the rapid reduction of the amount of that work available to associates billing at full freight has been a major factor in BigLaw’s unprecedented reductions in force and falling hiring rates from late 2008 through 2010.

The data are still coming in, but entering associate classes at AmLaw 200/NLJ 250 law firms this fall look like they will typically be 30%-50% smaller than they were in 2005-2007.  While a cyclical (recession-based) overall reduction in demand for high-end legal services explains part of this transformation, I believe that a significant and still growing part of the change is structural, and results from the change in the staffing and pricing of legal process work reflected in the trends discussed above.  What this means is that rates of hiring at larger law firms for highly compensated partnership-track associates are likely to remain much lower than they were in, say, 2007 for quite a long time.  While this is producing some wrenching short-term dislocations in the entry-level job market that are both tragic and widespread, it is at least as important to consider the possible longer-term effects not only on clients and law firms, but on prospective and current law students, law graduates, and law schools.

To keep this and future posts to a manageable length, I will consider these issues in a series of posts in the coming week or two, and dare to share some predictions.  Stay tuned.

Bernie

ABA Standards Review Committee November Meeting

Today the ABA Standards Review Committee posted materials relating to its upcoming (November 11-12) meeting.  The materials include this Memorandum, from Jeffrey E. Lewis, Chair, Standards Review Committee & Dean Emeritus and Professor of Law, Saint Louis University:

The Standards Review Committee of the ABA Section on Legal Education and Admissions to the Bar is holding its first meeting of the academic year on November 11-12, 2011, at the Ritz Carlton Chicago. I am the new chair of the Committee; along with six additional new members, I will be joining seven continuing members of the Committee.

On Friday, November 11, the Committee will hold an open forum from 9:15 a.m. to 3 p.m. The Open Forum will provide the members of the Committee an opportunity to hear personally from those organizations and individuals who have an interest in the work of the Committee as it continues the comprehensive review of the Standards of Accreditation.

The majority of the time allotted for the forum will be assigned to invited organizations. Other interested individuals and entities are invited to speak during the last hour of the forum and will be allotted five minutes during this final hour on a first come basis.

The Committee will listen to interested constituents on Friday, as indicated. On Saturday the Committee will review and discuss the current work product. No action on any substantive matters will be taken at this November meeting.

Requests to speak should be sent to JR Clark, JR.Clark@americanbar.org, by October 31, 2011. (Emphasis added.)

The SRC also posted the drafts of the Standards (with Reporter's Notes at the end of each chapter).  As indicated in the Memorandum, there are no action items at this meeting. 

With regard to Interpretation 301-6, the Reporter's Notes on Chapter 3 indicate

Interpretation 301-6, dealing with bar passage rates, was the subject of a SRC subcommittee. The subcommittee submitted proposed recommendations for changes in current Interpretation 301-6 specifically to raise the bar passage rate from 75% to 80% and from no more than 15 points below the pass rate in the jurisdiction to no more than 10 points below. After discussion, there was no consensus on making the change from the current requirements as set out in Interpretation 301-6. The SRC agreed that Interpretation 301-6 should be converted into a Standard and should become Standard 303 with other Standards renumbered accordingly.

Chapter 3, p. 37 (emphasis added).   The existing draft of Interpretation 301-6 does not change 75%cumulative or -15% first-time benchmarks for Bar passage rates (Chapter 3, pp. 2-4), nor does it upgrade 301-6 from an Interpretation to a Standard.  Again, the existing draft is only up for discussion at the meeting.

According to the 2011-12 SRC Meeting Schedule and the Section's Calendar, upcoming meeting dates of the SRC and the Section Council are:

• SRC meeting, January 14-15, 2012
• ABA Midyear meeting, February 1-7, 2012.
• Council meeting, March 16-16, 2012
• SRC meeting, April 27-28, 2021
• Council meeting and June 8-9, 2012
• SRC meeting, July 13-14
• ABA Annual meeting, August 2-7, 2012.

 

The Demand for Law School

The number of persons applying to for Fall 2010 seats at ABA law schools fell by by ten percent or more.  According to the LSAC's "LSATs Administered," 26,812 persons took the LSAT in June 2011 , as compared to 32,973 persons in June 2010--a year-over-year drop of 18.7%. But how closely does the number of June takers, follow the total number of takers for that admission year (June, October, December and February)?  The correlation coefficient (R) for takers is 0.907, or a coefficient of determination (R-squared) of 0.823. The correlation coefficient (R) for percent changes is slightly lower, at 0.853 (R-squared = 0.727).

In looking at

• the LSAC Volume Summary, 
• the various LSAC Technical Reports for various years on LSAT Performance with Regional, Gender and Racial/Ethnic Breakdowns, and
• The ABA's statistics on Enrollment and Degrees Awarded,

I noticed some interesting patterns in the annual numbers for LSAT takers, (preliminary) ABA applicants, and first-year enrollment in ABA law schools:

Live Blogging "Critical Perspectives on Tax Policy" Conference at Emory Law - Part 3

The second and final day of the "Critical Perspectives on Tax Policy" Conference at Emory is under way.  

This morning, Tony Infanti (Pitt) presented "A Critical Perspective on International Equity." In that paper, he argues that tax issues are embedded in larger foreign policy and development issues.

Sarah Webber (Business, Dayton) presented "Earned Income Tax Alternatives: A Comparative Look at Other Developed Nations' Response to Working Poor Assistance."  She examines the tax benefits provided by G8 countries, as well as Norway, Australia and New Zealand, for families and low-income workers.  Professor Webber looks at the extent to which other countries have adopted aspects of the U.S. EITC program, and considers alternatives to a U.S. model.

Devin Fergus (History, Hunter College) spoke on "Reagan's Tax Eaters: College Students and the Origins of Today's Student Debt Crisis."  He is at work on a book and a documentary film on the subject.  I was captivated by Professor Fergus's explanation of how federal law, rates of inflation, the rise of conservatism in America - among other factors - have contributed to a true economic crisis in the financing of higher education.

The current project of Palma J. Strand (Creighton) is "Give the Kids a Break: Using Tax Policy to Support Care for Children."  She investigates poverty and economic inequality experienced by women and children.  Professor Strand argues for tax benefits for care-providers.

Camille Walsh (Interdisciplinary Studies, U. of Washington Bothell) spoke on "Racial Consciousness and 'Taxpayer Citizenship' in 20th Century School Funding Debates."  This is the topic of her book manuscript, Racial Taxation: School Finance and "Taxpayer Citizenship," 1869-1973, in which she argues that the historic disaggregation of racial and class identities in education-related litigation arose, in part, out of an interconnected set of ideas about property tax, citizenship, and a right to education. 

After lunch, Nancy Knauer (Temple) will offer reflections on and lead a discussion about "Critical Tax Theory: Earning a Place at the Table."

The conference is a great size -- 19 participants -- which has allowed for ample discussion.  The schedule also has included several unhurried breaks and meals, which has encouraged informal interaction.  Sometimes conferences can be too big or too programmed, but conference organizer Dorothy Brown (Emory) struck the right balance (and knows how to pick a great restaurant!).  

Some Questions for Entry Level Canddiates Regarding Teaching

Eric Muller's amusing anecdote got me thinking about the differences between the worldview of those professors teaching at elite law schools, and those of us teaching at nonelite schools.   

My advisers at Michigan and UCLA were (and are very much still) fabulous in every way.  When I began on the entry level market a couple of years ago, they gave me shrewd advice about the job talk and about how to sell my scholarship. 

One thing that they didn't really discuss, though, was teaching.  My advisers were (and still are) fantastic teachers but I think that they might have underestimated a little bit how much those schools outside the top 100 really value teaching. 

As one who doesn't inhabit the same circle of godly influence as Eric's Yale professor, I would recommend that entry level candidates at schools outside the top 100 schools might want to think about how to package themselves as potentially good teachers.  Along those lines, perhaps thinking about answers to these questions might be useful: 

1.  Why do you want to teach?  And, specifically, why do you want to teach students who, based on LSAT and GPA, are very different from the sorts of students whom you knew during your own law school days?  More pointedly, why do you want to teach students who may require more time (and often, a lot of more time) and effort from you than you and your classmates in law school may have expected from your professors?   

2.  What is your proposed pedagogical style?  Socratic?  Lecture?  Or a combination of both?  Multiple choice or written exam?  Why one and not the other?   

3.  Perhaps in deliberating answers for questions 1 and 2, you can incorporate an answer to this question:  What did your best teachers in law school do that was so right and what did the worst do that were so wrong? 

4.  What do you do with an uneven class where some students are getting the answers quickly and others are struggling terribly? 

5.  What would you do to help the school raise its bar passage performance? 

None of the questions are meant--in any way--to suggest that teaching at a third or fourth tier law school is a chore.  It isn't.  The students are often, if not generally, terrific learners and wonderful human beings.  And I can't help but think that their LSAT scores, if lower than those of students at elite law schools, are partly attributable to other factors, like being the first person in their family to attend college, without being privy to a lifetime of Kaplan prep centers and a household full of lawyers, doctors, and professors who can afford the countless benefits conducive to professional success.